A licensed massage therapist is a valuable asset to any company that offers healing through massage. Trained for hundreds of hours before gaining a license, a massage therapist often starts her career working for a spa, hospital, health center or clinic. Employment is not usually salaried, but instead, it’s based on the independent contractor agreement signed by both the therapist and the employer. Some entities issue the agreement, while others ask the therapist to supply one. Either way, the massage therapy independent contractor agreement is binding to both parties and covers the parameters of the working environment.
The Therapist’s Career Path
As wellness attained through healing rather than via medication takes center stage in our society, massage is, in its many forms, gaining a foothold. Commercial outlets have sprung up in strip malls and shopping centers throughout the country, and their longevity attests to the success of this approach. Many graduates of massage therapy institutions turn to these enterprises to gain experience with the public.
While many of these businesses have an employer-employee structure, smaller entities hire independent contractors. This exposes newly trained massage therapists to the intricacies of the business world as they work independently, but under the roof of another’s business.
Many massage therapists prefer to remain independent contractors even as they move up the career scale. Doing so provides independence along with the structure and acumen needed to run a business. Their job is to give a massage. The business owner’s job is to promote the business. This divide comes with a cost, but the independent contractor’s agreement outlines the responsibilities of both parties and prepares the therapist for both tasks.
Playing by IRS Rules
An independent contractor, regardless of profession, assumes multiple governmental responsibilities. Even though you receive an end-of-year statement of earnings via an IRS 1099-MISC issued by the company retaining your services, strict bookkeeping is required. Income taxes, health insurance, social security and Medicare contributions are not deducted from the agreed-upon fee paid to the contractor. Instead, the contractor must pay self-employment tax, which is then deducted when the annual 1099 form is compiled.
Your 1099 IRS filing also includes a Schedule C outlining your business expenses and deductions, which adds to your bookkeeping duties. However, the more expenses, the less your income tax bill. Most independent contractors pay quarterly taxes to avoid a big hit when filing in April.
Because massage therapists are expected to be available at specific times and places, most are employees instead of independent contractors. And federal and state governmental agencies are suspicious of businesses that control a massage therapist’s time yet classify them as independent contractors to avoid paying benefits.
The Fine Line
To work as a massage therapist in an independent contractor capacity, you must be able to set your own terms to some degree. Your hours of work and your finances are under your control. You’ll use your own equipment, supply the oils and creams you prefer, the amount of money you receive, and how much is paid to the established business, as spelled out in the ICA. If you work on a freelance basis, you contract your own business.
You may have to pay rent for the space you use and the supplies the business provides. These details are laid out in the ICA. If the business uses your services on a consistent basis, and the majority of your income is derived from that business, the IRS may consider you an employee.
Employee ‒ Independent Contractor Checklist
The answers to the following questions clear the fog that clouds the definition of employee and independent contractor.
- Do you rent your space, set your own schedule, and have the ability to accept or reject appointments set by the business management?
- Can you set your own fees regardless of what the business charges?
- Are you offered any benefits such as insurance or vacation time?
Your answers to these questions determines whether you are classified as an independent contractor or an employee.
Face-to-Face With the ICA
An independent contractor’s agreement clearly defines the responsibilities of the business as well as what’s expected from the independent contractor. While you may be excited to be offered a station at a well-established business, do not sign the agreement immediately. Take it home. Study it. Get to know what’s expected of you and what the business supplies. Understand the financial responsibilities undertaken by an independent contractor as well as the time demands.
An ICA isn’t set in stone. If you disagree or are not comfortable with some of the terms, go back to the business and negotiate them. An independent contractor is “independent” and can set his own hours as well as work outside the business.
You are not an employee and cannot be given household duties within the confines of the business establishment. Discussing terms that don’t suit you shows you have strength and aren’t afraid to stand up for yourself. It also puts the business on notice that you understand the difference between being an employee and an independent contractor.
Details of the ICA
In addition to stating the names, addresses and the life of the agreement, the ICA refers to the duties the contractor is obligated to perform. This is usually spelled out in the company’s employment handbook. Be sure you’ve read it completely and agree with what is expected of you and determine if it crosses the line between employer and independent contractor.
Compensation is also outlined, either as an established fee for a set type of service or as a percentage of the total fee collected. It also states the frequency of the payment.
Other details include apparel and if you’re expected to wear and maintain company-identifiable uniforms or supply your own. The use of space and supplies is also outlined, and if there is a cost, it’s also stated. The agreement cannot limit where the massage therapist can work when off-premises or for whom he can work.
The terms of the agreement can be indefinite, or the ICA can be renegotiated or terminated after a specific time period. If there is a disagreement, the process of proceeding legally is stipulated in the agreement and agreed upon. Proper notice of ending the agreement is established for both parties. Signatures of both parties are required to complete the agreement.
The Bottom Line
Your state regulations, federal guidelines and the IRS all have a say in defining the role o an independent contractor and how he operates. These guidelines also serve as notice to those businesses that try to circumvent supplying government benefits to workers by paying them as independent contractors.
An independent contractor typically has little legal control if the business closes. You may lose your supplies and service payments while the business owner sorts through his problems and the doors are locked.
The bottom line to working as an independent contractor is control. If the business insists you use their brand of oils or creams, for example, then they are dictating the terms, and, as an independent contractor, you can refuse. If they organize your schedule, provide training, handle client payments, and advertise you as the in-house massage therapist, you’re performing as an employee, and it’s time to renegotiate your terms.