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As a massage therapist, are you classified as an employee or an independent contractor?

Often massage therapy students assume they will begin their own practices once they are licensed, but for many of them (especially those with student loans to pay!), being an employee makes more sense, at least at first.

Ann’s Cautionary Tale

Ann worked every day at a salon as a massage therapist. She was told that her schedule was 10 a.m. to 6 p.m. Tuesday through Saturday. She was classified as an independent contractor. She brought her own equipment and tools to the salon and left them in her massage room.

One Friday she came to work excited that it was payday, and instead found armed federal agents at the salon. These agents took possession of the salon and its equipment due to tax fraud and nonpayment of taxes by the business.

Ann told the agents she was due to collect her paycheck and she owned the equipment in her room. The agents insisted she would have to go through the court system to collect any funds and her equipment. Because Ann was classified as an independent contractor, she did not have the employment protections that an employee would have had to assist her in this matter. She lost her last paycheck, her massage table, supplies and personal tools.

Forget About Protections

Many businesses classify massage therapists as independent contractors—but many of these therapists are actually being treated as employees.

Initially classifying therapists as independent contractors appears like a good deal. Businesses save money on social security contributions, workers’ compensation insurance, liability insurance and administrative costs of payroll. However, the business gives up considerable control of standards and business practices, which may cost more in financial loss due to the instability of the work performed and the standards to which it is performed.

The massage therapist appears to benefit with more freedom than employees have, and they do not have taxes and social security contributions taken from their wages. Unfortunately, those classified as independent contractors are also denied access to employee protections and benefits such as social security contributions by the employer, workers’ compensation insurance protection and unemployment benefits. In the end, they pay more in self-employment taxes and social security contributions as an independent contractor, as well as having the total financial burden for insurance, equipment and supplies.

How Is An Independent Contractor Different?

In order for massage therapists to be classified as independent contractors, they must have independence to determine their schedule and maintain control of their finances. There should be an agreement that clearly outlines the job expectations to be performed, including timelines and compensation.

Generally, massage therapists are independent contractors if they are used on a temporary basis, utilize their own equipment and supplies and are paid a set amount for a job.

The Employee Relationship

Businesses that violate any aspect of the control and independence essential to being an independent contractor have established an employee relationship with the massage therapist. Generally, an employee relationship has been established if:

  • The business gives a massage therapist a schedule to follow.
  • The massage therapist works for the business on more than an occasional, temporary basis.
  • The business controls the financial aspects of the massage services.
  • The business restricts when and where a massage therapist works.
  • The massage therapist receives a significant amount of their regular income from the business.

Benefits of Classification as an Employee

Having an employee relationship benefits both the business and the massage therapist. The business can control the standards of performance, the dress code and the schedule for work duties. The business can also control the standard of equipment, supplies and materials used in the business by the massage therapists.

Employees benefit by having workers’ compensation insurance protection, unemployment benefits, employer-made social security contributions and the security of regular income. They also can avoid taking care of equipment’s maintenance needs.

Understanding employment classification and properly classifying employees will minimize risk of penalty and fines, as well as provide stability in business practices.

 

About the Author

Dee VickersDee Vickers, L.M.T., B.C.T.M.B., M.Ed., is a board certified massage therapist and practices massage at Opulence Massage in Memphis, Tennessee. She is the Director of Gould’s Academy of Massage in Memphis, Tennessee. She offers continuing education classes approved by the National Certification Board for Therapeutic Massage & Bodywork in business practices through Massage CE Education.

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