My staff members are all independent contractors. I get a lot of calls from others who are working as ICs, and from people who are utilizing IC labor in their business, and I’m sometimes appalled at the things I hear.
Independent contractors put up with a lot, most of the time because they need the job and they’re afraid they’ll be replaced. I have heard from many that they are expected to be at their place of employment X number of hours per day, even though they may have no clients scheduled, and that while they’re there, management expects them to do everything from cleaning the building, pulling weeds in the front lawn, doing laundry for the ones who are busy, and so forth, and they’re not compensated. That’s not being an independent contractor; that’s slave labor.
I’ve been told by a business consultant that my business model is crazy, because my therapists keep 70% of what they make. My mission has been to attract the very best therapists I could get, with the intent that if I help them make money, they’ll help me make money. I don’t have any turnover in my staff. In the past four and a half years, I have fired one person who had a really negative attitude; and I hired one couple who was upfront about the fact that they wanted to work for a year to save enough money to move to the beach. Other than that, I have never lost a staff member. My independent contractors are expected to do massage, and keep their personal work area clean and neat, and that’s it. I don’t force anyone to mop the floor or scrub the toilet, or sit there when they don’t have clients. They all throw in a load of laundry when it’s needed, or empty a trash can when it needs it, voluntarily, not because I have asked them to, and I think that’s because they’re treated well and not taken advantage of.
If you are utilizing independent contractors in your business, and you haven’t taken a good look at the law lately, you ought to. Independent contractors are not hourly employees, and they shouldn’t be treated like the maid, the gardener, or otherwise free labor. If you are working as an independent contractor, you ought to read the law, too. It’s posted on the IRS website at www.irs.gov
If your business has a lot of staff turnover, ask yourself why. A spa owner told me just last night that she has 18-20 staff members, but that she has so much turnover she usually ends up doing over a hundred 1099s at the end of the year. That’s the whole staff turning over five times in a year. I suggested she take a good look at the situation and figure out exactly why that is the case. Her split is the opposite of mine; her staff members get to keep 30% of what they make.
A happy staff is a productive staff. A happy staff gives great service, and they attract repeat business. I’m just the ringleader in my office; it’s my great staff members who keep our customers coming in the door, and the reason that 97% of our clients come in from word of mouth referrals. I wouldn’t be successful without them, and I want to give credit where credit is due. So here’s to Carla, Heather, Tracey, Kelly, Jack, Ezra, Marilyn, Deany, Rachel, Jennifer, Mary and Ramona–the people who make my business what it is.
Peace & Prosperity,
Laura Allen
April 1st, 2008 at 3:20 pm
YES! I am an MT (and IC) *and* I teach business practices to massage students. The whole self-employment/independent contractor world can be tough to “get” for people who have always been employed. But it’s critical and there are waaaaaaaaay too many organizations out there taking advantage of ICs — intentionally or accidentally.
A big part of the problem that I see is not truly understanding and embracing ourselves as business people. There are a lot of therapists who think “business” is unseemly at best, not to mention complicated.
But until we do, we will continue to stumble and bumble our way through our business lives. That usually hurts us worse than anyone else.
Thank you for posting this. You have my complete support (and it sounds like you’ve got a great practice too!).
Kelly Bowers, LMT
Washington, DC
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April 3rd, 2008 at 1:36 pm
Oh My Gosh! This is exactely the type of business I want to have! Infact I’ve started a business plan. I have a million questions. If you ever have 2 minutes please respond to my email.
Thank You,
Pam Costa
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April 3rd, 2008 at 4:46 pm
You are a very rare breed. I wish more people had your view and ethics. Unfortunately there is to much greed when business owners see how much money is to made off massage therapist. WE ARE LICENSED PROFFESIONALS the same as chiropractors, nurses and medical doctors. But we are looked at as if we are just laborers. The other hand to this is the people who continue to accept these jobs and allow these employers to get away with this is hurting everyone. I was the LMT/ Office manager of a Chiropractic office where the Chiropractor became very upset to find out that I billed and collected more money than she did and “Your are just a stupid Massage Therapist”. So my plea to Massage Therapists is to VALUE YOUR WORTH!!!!!!!!!!!
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April 7th, 2008 at 8:14 pm
I am an IC. I work at a salon and day spa. i schedule my own clients. I “rent” from another therapist who is in complete control of the massage room in the salon/spa. i love this type of control of my own business and life. i can go on vacation when i want, etc. i always let the ladies in the spa/salon know when i will be available and they get some calls for massages which are referred to me. this way, they know when i will be in and when i will not. i would not have it any other way. good luck to all of you who are and would like to be IC’s.
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April 7th, 2008 at 10:14 pm
I am a business owner/massage therapist and have had ICs working for me for 7 years. I guess I’m in the wrong area for ICs. I pay my MTs 60% for in-house and 70% (+$20 trip charge) for outcalls. They set their own days and hours to work. I am very flexable about their children ( have actually let them bring them to the office if needed), their home lives and anything else I can do to make their work experience with me a great one. ( I even took them on a 5 day Carrabean Cruise last year as a Christmas Bonus) I pay them an hourly rate if I need them to work the front desk (only if they want to). Yes, I expect them to help keep the place tidy and help out with laundry if we really get busy, but I have a full time person who takes care of all of that everyday, so this is not a big deal.
I constantly have trouble getting them to come to work during the hours they have set. If they make enough money in 3 days, they just mark themselves out for the rest of the week. Then, either I am turning clients away, or doing 7 to 8 massages a day. When our business is slow, they complain that they are not making enough money. I don’t understand why THEY don’t understand that this is a service industry. You have to be available at the client’s convenience, not yours. And, since you are self-employed, it is your responsibility to be there to build a clientele and continue it to grow.
I too, wanted to pay the highest and offer the best environment so that the good therapists would stay and help to build a great Massage Therapy Business. I am so disappointed in the general work ethic out there, and the lack of my IC’s to help be a “team”. I could pay them as employees, but by the time I pay all the unemployment, workers comp, social security and have to hire someone to take care of all the paperwork to be filed, I wouldn’t have anything left to pay them, let alone keep my business afloat.
I AM a Massage Therapist, and I know how hard the work is on our bodies and I value every Therapist that comes in my door. I just think that they don’t value me as a business owner or a person who has had to work my self 7 days a week so that THEY can have a decent place to Work.
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Kelly Bowers, LMT reply on April 9th, 2008:
Tina,
You are being taken advantage of, that’s for sure.
You’ve made me wonder how I would interview potential MTs to weed out those with a “week to week paycheck” mentality. I wonder if asking these kind of questions would work:
- How do you envision your massage practice growing over the next 5 years?
- What do you want to build as a massage therapist?
- What is your vision for your massage practice?
- How do you currently market your practice or how do you intend to market your practice?
- What are your long-term goals for yourself as a massage therapist?
- Why did you choose to become a self-employed business owner?
- What are your working towards with your work as a massage therapist?
- What are your plans for continuing education in the next few years?
- Why do you want to work here instead of working on your own and keeping all the income for yourself?
The owner of the practice where I work interviews for massage skills (as many practice owners do). How do we interview for business skills? I think that’s something we don’t always think about.
Do you think it would make a difference if you rewarded your therapists with massage-related gifts?
- Tuition support for continuing education (with an agreement to continue working for you for xx months after receiving the training).
- A gift certificate to Massage Warehouse, an equipment manufacturer, a subscription to a trade journal (Massage magazine obviously comes to mind!)
- A years membership in the professional society of the choice.
- Pay for them to attend a professional conference or convention
- Pay for them to receive bodywork from someone who is very skilled in a modality they are interested in
- Pay for their license renewal
- Send them to a business oriented class like “Taxes and Bookkeeping for Massage Therapists” with Margo Bowman
- Reference books (massage or business-oriented)
These help reinforce your message that you are a massage therapy business.
In addition, I find some schools don’t really turn out MTs with a long-range vision or a business mindset. Can you look at your employee base and draw any conclusions about the schools they came from and which ones seem to be doing a better job at that?
You may be doing all these things and I’m wasting my e-breath. Let me know if any of these things have worked for you if you have tried it because I’m curious. I’m thinking of teaching a workshop for local MTs who want to start group practices (and be the boss) and I’d love to know what does and doesn’t work in the field.
Kelly
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Laura Allen reply on April 9th, 2008:
Kelly brings up some great points about interviewing. However, she is suggesting giving your ICs benefits, which is against the law…part of being an IC is that there are NO benefits provided by the employer, and the IRS is adamant about that. Also, it sounds as if Tina is already being much better to her ICs than they are to her. I wonder why she should reward ungrateful behavior by giving them something else. They are getting a good deal and a good percentage—as I said in the original post, I know people who are getting 30%, and if Tina’s therapists aren’t appreciative of how good they have it, I’ll bet there are people waiting to take their place. I don’t have any staff turnover, but I do have a long waiting list of therapists who would like to work here in the event someone ever leaves or I expand.
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Kelly Bowers reply on April 9th, 2008:
I wouldn’t offer those things as benefits but as bonuses, incentives. I admit this is not an area of the IRS code I’m up on but can we offer one-time gifts/bonuses/incentives for especially good therapists?
Or even as part of our business plan — I want to offer lymph drainage. I have a therapist who is interested in studying lymph drainage. I agree to provide xx dollars towards the cost of the class. The therapist agrees to continue to work here for xx amount of time after the class(es)?
As a one-time thing (and not something offered routinely to every therapist) is it different from taking them on a cruise?
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Laura Allen reply on April 9th, 2008:
Kelly, I”m not a tax attorney, so I don’t want to get into the specifics of advising other people how to handle their tax affairs with the IRS. I think the distinction between “benefit” and “bonus or incentive” might be a grey area.
While it may not rock the boat to give an IC a gift of appreciation occasionally, my point with Tina’s story above is that she apparently has some therapists working for her who don’t appreciate the good situation they’re in–and as you and she pointed out–she’s already taken them on a cruise. I personally would not be giving out any more rewards of any kind for people who are only out for themselves and not helping my business as a team player.
As for paying for a therapist to go take continuing education, it is an inherent responsibility on therapists who want to remain Nationally Certified or professional members of AMTA, not to mention keeping their state licensure, to get continuing education. That therapist has to get continuing education whether you pay for it or not, if any of the above apply to her. Your offering to subsidize it is very generous, and not something I personally would take a chance on doing. Again, I think it’s a grey area of the IC law (and if there are any attorneys reading this, please let us know) Two, she may get into the class and find that she doesn’t enjoy doing it after all, or she may turn out to be not good at it. If I were the IC, I would feel funny about being obligated to stay somehere because the owner did me a favor. How would you place a value on the time? Say you pay 2000.00 towards the training. And let’s say for argument’s sake your therapist makes 40.00 per hour. That would only be 50 hours she’d have to work to pay you off–just a good week with a little overtime. Think it out carefully before jumping into such a deal.
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April 8th, 2008 at 3:29 am
Tina,
You bring up some good points about the downside of using IC labor; they are in charge of their own schedule, and that may not always coincide with your heaviest demand from clients. It sounds like you treat your staff well and being sensitive to their needs, and yet they’re not being sensitive enough to yours.
One solution is to have some part-timers you can call on to take overflow clients (I have a couple of those myself); or alternatively, keep your ICs but hire one therapist as an employee so you can control her schedule. I’ve found that newly-licensed therapists make great staff members; what they lack in experience they make up for in enthusiasm, and they’re more accomodating to your scheduling needs because they’re still hungry to build a clientele.
If you have a whole staff or the majority of them who are unconcerned about helping your business thrive and accomodating clients, it may be time for a little housecleaning. It’s hard to let people go, but sometimes necessary. Contact the closest massage school and let them know you’re looking for part-timers with the potential to grow into full-time. Most maintain a job bank for their graduates.
My own business had been lacking in therapists who wanted to work early morning hours and weekends. When the last IC to join us came looking for a job, I let her know that those were the hours and days I needed to cover and that there was the potential there for her to get a good clientele if she was willing to work those times. So even though she is in charge of her own schedule, for the most part she covers the times I let her know I was in need, and within a month or two she was making a really good living by working those hours.
Good Luck to You,
Laura Allen
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April 8th, 2008 at 2:20 pm
Good comments from several perspectives.
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April 9th, 2008 at 6:49 am
I LOVE Laura Allen\’s business model! I wish I could work for her! I resolve to work for myself, for the most part, because most business owners out there take advantage of massage therapists. The worst pay I must admit to having accepted (briefly, and only in the most desperate of times) or have been offered thus far was $12/hour from a chiropractor in Brookline, MA to do spot massages on his chiropractic clients, $25/hour from a chiropractor in Palm Beach Gardens to do 55-minute full body massages (and he kept $50-$60/hr), and then I was offered something similar from two day spas — one in Jupiter, FL and one in Prosperity Gardens, FL, and I turned them both down, and these people did not take very kindly to me when I declined their offers, but so be it. I have my pride, and my profession to uphold! I understand that some of these spas in Florida are paying some ridiculous percentage, like 37.06% and then, to top it off, they are charging a 20% service fee.
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April 14th, 2008 at 11:07 am
This is a great topic for massage therapists to be discussing. I would love to see associations such as the AMTA, etc. really get behind forums about working conditions for MT’s. I have been a business owner in the past, and value the risk and responsibilities that go with that role, so I realize that therapists need to strive to see things from a business owner’s point of view. On the other hand, I have been a practicing MT for thirteen years, and with the expansion of the field has come a real lowering of stamdards. Some business owners, unfortunately, see new graduates of massage school as an expendable resource. Massage therapists working in these conditions risk burnout or injury, and, as independent contractors, they are left to fend for themselves when the consequences emerge. We can do better! We all need to work together to raise awareness, and to raise the standards of our profession!
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April 19th, 2008 at 11:59 am
Hi Laura and fellow MTs -
This is a big topic for sure. In my work as a spa consultant I hear all kinds of stories about compensation issues, independent contractors vs. employees and so on. Before I worked as a consultant, I was also an independent contractor who later opened a business of my own and became a spa owner and employer of many others. As such I have a pretty broad view of the subject.
There are a lot of variables when it comes to deciding upon pay structures and employee vs. IC status. Every business is different and must look at the factors that affect it – area/location, price of services, target market, cost of the facility’s overhead, product costs, taxes, availability of workforce, and business model and goals. All of these must be considered, among many other things, before deciding upon how and what everyone gets paid.
Sadly, many business owners that I talk to did not take the time to think about any of these issues before they opened up and just decided to pay people “the going rate” or perhaps a little bit more so they could attract a good staff. Then after a few months or more into the business, they aren’t able to draw much of a salary let alone profit. Their debt is climbing as their own morale drops lower and lower.
So as much as I want all licensed therapists to make a ton of money through doing massage, I can’t agree with that happening if it is to the detriment of the owner and business. How I wish that all massage and spa professionals could get a clear picture of the costs, risks and stresses that their employers deal with! (Non-service provider spa/practice owners would do well to switch roles as well.) Having been on both sides of this issue, I know there would be a much greater understanding about the fees/commissions/salaries being paid out and less of a mind-set that most business owners are taking advantage of their practitioners.
The bottom line is that there has to be a middle ground…a place where both owners AND employees/staff can both profit and succeed. That they can all be rewarded and respected for their hard work and investment in the business and industry. And that they all can work together to create massage and spa workplaces that are truly healthy and healing for everyone that comes through the door.
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