Most massage jobs are usually massage independent contractor positions that are created by massage employers. This topic is one that I have talked about frequently on my website and in the blog. I am not a lawyer and in each situation you really should consult an attorney to help you figure out your correct status. Even attorneys will have varying answers to the same situation.
Here are some references to what others are saying about IC vs massage employees so you can start to try to figure out what your status is. (It is my personal belief that most IC positions should actually be paid employees with full employee benefits and that many employers are taking advantage of massage therapists.) It is up to the employer to figure out the correct status as it is the employer who will be penalized by the IRS for back taxes and also the state unemployment taxes that would have to be paid.
Felica Brown says this from her article for Massage and Bodywork in 2003:
By definition, an independent contractor is a business (therapist) that works independently of the business, such as a salon, by which it has been contracted. What this means, more or less, is that the contracting business (salon) has a very marginal amount of control over the smaller independent business (therapist). This statement translates into a set of requirements (see box) instituted by the Internal Revenue Service to determine whether to classify workers as employees or independent contractors. For example, supplies, advertising and equipment should be provided by the independent contractor, not the salon. Additionally, uniforms, schedules and rules are not supposed to be required or imposed.
Ken Cassidy who is an advocate for spa professionals and also has a business kit for spa businesses to help them determine their status. In his article for Massage and Bodywork Magazine” Independent Contractor, Employee, Booth Renter: Which Piece Am I?”
The alarming truth is 90 percent of all businesses in the beauty and wellness professions are operating incorrectly under the wrong classification, which can lead to trouble for both the owner and the renter when facing taxes, not to mention unemployment and/or disability.
In May 2000, the IRS published an educational pamphlet detailing the differences between an independent contractor, employee and booth renter (Publication 3518, Catalog 73164X). Regardless, many are still unknowingly operating illegally. Let’s take a closer look at the three categories in order to become more familiar with the similarities and differences.
Dixie Wall from Massage Today has this to say
The financial control category of an employee usually is seen as an extension of the employers set business structure. Independent contractors are more likely to have non-reimbursed expenses and an investment in the facilities he or she uses. Moreover, the method of payment from the business to worker is paid as a flat fee, rather than an hourly wage.
Future LMT at Massage Magazine has an outline of 20 things to consider to determine your status. Massage and Bodywork Magazine has a short list of things to consider.
The IRS Website has a whole section on employees vs independent contractors.
The best description I have read is in the book “Therapeutic Chair Massage” by Ralph Stephens in which you can read the except at Google Books for free.
So with all of that how can you figure out what status you want and what you want to be paid? What is a fair amount to make? Is it legal to pay a percentage to an employer or to be paid a percentage of the massage fee by the employer as in IC? I have heard so many different stories about different situations that arise. It gets hard to make a decision when you need a job and money but going with your guts you will also be able to know if you think the offer is appropriate for you. It is hard to pass up jobs that you have just an inkling that something that isn’t right. If you have to take these jobs go into them knowing that you will be learning a lot and will have some difficult challenges ahead. Take the time to figure out what it is that you really want to be getting out of a job or IC position and what you need to make to make a Great living or just get by until you find something better. Here are some things to consider:
- Who will provide things like the table, massage oils/lotions, pillows, sheets, laundry service, insurance billing?
- Who will be doing what to get clients on the table?
- Who does advertising, marketing and rebooking?
- Who will book the appointments?
- Who will collect the fees?
- Who will do the insurance billing if any?
- Who does the insurance money come to? You or the employer? Who pays who what and when?
- Who owns the chart notes and client files?
- What do you need to make per hour? How many hours do you need to work each week?
- Who decides what hours you work?
- Who pays taxes?
So being a massage independent contractor or being a massage employee is no simple answer. Figure out what you want and then find a situation that you can live with. I am also curious to hear more stories of different situations out there. Post them here so others can learn!
It is the massage employers responsibility to actually figure this out as they will be the ones who will be penalized if they don’t have it set up right. You can use that bit of info to your advantage.
Use this form at the IRS to determine Your status!
SS 8