Monday, September 23, 2013

Professional Staff in a Spa..Employee or Independent Contractor: An Analysis

The employee/Independent contractor scenario in spas and medical spas is very complex. The determination of whether a professional staff member is an employee or independent contractor is not easy to address. One thing that IS clear; the agreement that may be in effect is not the most significant issue. You can cal a professional staff member whatever you want to call them in an agreement, but this does nt control the ultimate determination.

Many owners and professional staff want to be independent contractors but the reality is in many cases, the relationship is not sustainable and the Internal Revenue Service has been looking at the spa industry more closely (possibly due in large part to tipping structures, but they are looking at the industry). The Service has been looking at many “tip” based businesses such as the taxi industry, restaurants and salons and spas.

The IRS has ruled sometimes that an independent contractor was really an employee because the business supplied TOWELS and LINEN! WOW!

A fundamental approach will be based on two key aspects of the relationship: 1. "control" over the professional staff members hours and days of service, and 2. requirement to utilize certain product lines or practice policies and protocols for certain procedures.

These are not easy issues to address because there are conflicting issues and goals. On one hand, the spa needs staff to be available during operational hours. It would be problematic to allow professional staff to decide the days and hours of service. However, providing schedule is a strong element of “control” over the staff member and this tends to be an employment situation.

The second issue is no less problematic.  A professional staff member may support a certain product line that is not offered by the facility. He or she may have a different protocol for a procedure.  The professional staff member may have his or her own protocols for a procedure – even something as seemingly straight forward as micro-dermasbrasion.  An ancillary concern is when there is a mixture of employees and contractors. The contractors may have more freedom to perform services and procedures and they deem appropriate and this can cause staff problems.

I address many such issues every day and please see my website

Paddy Deighan J.D. Ph.D

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