Working out a contract with an employeer is usually a frustrating and confusing process.
There is also alot of confusion over whether the massage therapist should be an employee or sub-contractor.
Basically, what I am figuring out is that many massage therapists are being hired as sub-contractors so that the employer can save money. They won’t have to pay taxes, benefits and unemployment insurance. What is confusing is what constitutes an employee. It is up to the employer to have this figured out because they will be the ones who will be forced to pay back taxes and benefits when they are caught.
When talking with a potential employer, what you need to be able to tell them is what exactly it is that you want. Employeers will try to hire subcontractors and offer a 50-50 split or worse (60 employer-40 subcontractor).
While it does depend on the responsiblities of each party, I think the massage therapist should get 70% of the fee as they do most of the work and if they are good they will be the reason why the client comes back. There should at least be some reward system for getting clients to keep coming back.
Part of the problem is that massage therapists do not know their rights and also don’t think they can ask for more and they end up taking a low paying subcontractor postition that also makes them work long hours, makes them work evenings and weekends and they have no time in between clients.
The recent issue of the Washington Massage Journal put out by the WA AMTA has an article in it by an attorney – John Peick from peickconniff.com. In it he says:
“Common law employee and independent contractor hinge on the degree of control exercised by the “payer” (employer) versus the degree of independence demonstrated by the “worker”. If you can control what will be done and how it will be done, the worker will be a common law employee.”
“Paying a non-employee massage practitioner on a percentage basis for patients referred to the LMP by the payer is illegal.”
He also refers to tax topic 760 and publication 15-A which have to do with the status of a worker. The IRS uses three guidelines to determine if someone is an employee pertaining to “behavior control, financial control and type of relationship.
Under the behavior control he states that “if the massage therapist is being told when to be at the clinic, provided patients , space, materials, etc., the LMP is an employee”. Under financial control – “If the massage therapist was reimbursed for all expenses, makes no investment in the facilities, has patients billed by the clinic, has patients referred almost exclusively through the clinic…the massage therapist will be an employee”.
So basically what I conclude from this article is that massage therapists who are working for chiropractors or other health professionals and are being told when to show up at work and when to leave and the clinic is doing all of the billing to the insurance companies , the massage theapist should be classified as an employee.
If an employer has classified an employee wrong, they have to see IRS publication 1976 concerning Section 530 – Employment Tax Relief.
Related posts:
- Sub Contractor vs Employee One of the most difficult things to figure out is...
- Independent Contractor vs Employee One of the most difficult business decisions you may be...
- Massage and Chiropractors Massage and chiropractic care is a great example of complementary...
- Working as an employee Working as a massage employee in a Spa or other...
- Massage Employee or Massage Business? As a massage therapist you have the choice of going...
ACTUALLY…the risk increases to breaking federal laws if the employer (like a chiropractor) hires “subcontractors” instead of employees to save money and then decides to bill the insurance companies of their patients for work that they had “subcontracted out” to another business (the LMT). Now it’s not only IRS hunting them down but fraud, abuse, fee-splitting, and receiving illegal kickbacks that are punishable by law. LMT’s really need to starting learning the business part of being a massage therapist. As soon as an insurance company is billed for services with an LMT providing services, that LMT is held accountable for the decisions they have made, even if they were ignorant to breaking the law. This is happening around the country as we speak and insurance companies are frowning upon us even though in most cases the LMT is not the one to blame. It makes our profession look extremely unprofessional.