Dear Employers and professionals that have an independent contractor business relationship with Massage Therapists.
The previous blog was intended to help massage therapists understand the nature of the Franchise system and employment in general. Now here is the other side of the coin.
There are many environments where massage therapist are employees. The most common employment environments are spas, franchises and independent massage therapy clinics. Chiropractors are also employers of massage therapist but also tend to provide independent contractor relationships with massage therapist. Traditional health care environments such as pain clinics, hospitals and so forth also employ massage therapists.
Business relationships structure as independent contractors are not employer/employee relationship. These are essentially rental agreements for use of space and services. This is a HUGE difference.
There is a lot of confusion in the massage community about pay rates. Independent contractors are often confused with employees. There is a huge different between these two career pathways that is related more to structure rather than function.
Structure: Employees- Employees must, at the very least, receive minimum wage for hours scheduled to work. Employers must withhold a variety of income based taxes and pay portions of the taxes for the employee. Employers must follow federal and state laws related to employee relations mandated by the Department of Labor and safety related to the mandates of the federal agency of Occupational Safety and Health (OSHA).
Structure: Independent Contractors- Independent contractors are self-employed. Instead of having an independent office setting independent contractors will essentially rent space from another professional (like a chiropractor or spa owner) and provide massage services as a cooperative system of care for shared clients. Independent contractors typically pay the facility /business a percentage of the massage fee charged in exchange for massage room and other shared services such as the receptionist. Other than this relationship there are no other financial obligations. It is more like a rental agreement.
Function: Employers --- Employers are responsible for all facility liability, costs (overhead) marketing and general business operations. The massage therapist employee is only responsible for job description duties such as providing massage services, maintaining workplace policies. Employees are provided all supplies and are held accountable for professional behavior and job performance. Employees can be paid an hourly wage, hourly plus commission, by the service provided but the hours worked divided by the wages received must never be less than minimum wage and at year end the employer must provide the employee a tax related form called a W-2
Function: Independent Contractor----There is absolutely no obligation on the part of the business owner to pay any sort of minimum wage, guarantee any income, and withhold any taxes. The independent contractor cannot be told what hours to work, what to wear, how to behave. The massage therapist function as an independent contractor must pay all taxes and the percentage paid to the business owner is handled as a business expense.
A huge issue in the massage community is that business owners who engage in independent contractor relationships with massage therapist treat the massage therapist as an employee and to add to the confusion, the massage therapist thinks they work for you. They do not.
Massage therapist functioning as independent contractors often report earning by what they charge for massage. This is the foundation of the confusion between independent contractor earnings and employee earnings. Massage therapist functioning as employees earn an hourly wage and/or a commission and are not in a business for themselves. An hourly wage is paid regardless if massage is performed. Independent contractors only earn money when doing a massage and then that income is gross income from which business expenses are deducted such as the percentage paid to the contractor of the massage therapist.
First I will address those who contract with massage therapists.
· Please be clear about the relationship with the massage therapist. Many think you are hiring them.
· Please be ethical in the relationship and do not treat the independent massage therapist as an employee.
· Please be clear with the massage therapist about what type of professional relationship you want to have. Clearly define the expectations you have for behavior, skills, scheduling, cleaning duties for the rented area, responsibilities for shared services such as receptionist and advertising.
· Please be clear with the massage therapist about what type of interactive networking you expect such as interoffice referrals.
· Do not indicate in any way that you are paying the massage therapist a wage. Even if the receptionist collects the money for services rendered remember the check written back to the massage therapist is what they earned as an independent contractor with the fees deducted for facility use and shared services.
· Be patient and diligent about explaining the wage pay structure. It is confusing when there is a wage baseline and then a commission for services provided. A sales commission is a sum of money paid to an employee upon completion of a task, usually selling a certain amount of goods or services.
· Employers sometimes use sales commissions as incentives to increase worker productivity. Some employees work on commission, either in addition to a salary or hourly wage, or instead of a fixed salary or wage .
· Please be very clear when explaining to massage therapist employees how pay is figured. Is it base wage plus commission, base wage or commission whatever is higher, commission only so long as it meets or exceeds minimum wage.
· If the employment environment is conducive to gratuities than make sure massage therapy employees understand how the tip system works. And yes is would be appropriate to have either a lower base wage or lower commission than in a non-tipping environment.
Employers please consider paying wages as follows: Hourly base of minimum wage+ commission per massage performed and add-on provided.
Massage therapist employee AT ENTRY LEVEL paid hourly +commission.
Example: $8. 00 per hour + $12.00 for every massage given + $3.00 or every add-on (i.e. essential oils, paraffin dip) + an expected 15% gratuity per massage provided. Base salary 40 hour workweek $16320.00 +commissions based on 5 massage sessions per day $15000 = 32,000 + tips $2500 = $34,200 before taxes. Cost to employer $42,000.
This is a fair and viable wage. This pay schedule allows for pay increase for additional training, experience and loyalty. For example commission can incrementally be increase to as high as $16.
Also employers, it is reasonable to expect, using this type of pay schedule that employees perform other tasks if not performing massage. These tasks include housekeeping, laundry, some types of marketing based activities and so forth. It is not necessary to pay people to only sit.
Please do not pay based on hourly rate or commission whichever is higher. This removes the incentive to work because it appears as if the commission gets lost and it does.
Massage therapist employee AT ENTRY LEVEL paid hourly or commission whichever is higher.
Example: $8.00 hourly =minimum base of $16,320. Commission $15 per massage at 5 massage sessions per day, 5 days a week = $18 750.00 + 15% gratuity $2500.00 tips =$22,000. Cost to employer $26000.00 ----Does not generate a viable wage. This is where the problem occurs
OR--- Pay as follows
Employee pay based on straight hourly wage:
Massage employee in a pain clinic would likely receive an hourly wage of $12 (entry level) -$15 ( experience) per hour plus some benefits such as sick days or access to health care insurance. No commission on massage sessions provided. No gratuities. Yearly income before taxes for full time 40 hour work week = $ 28,000-30,000 per year plus $3500.00 benefit package. Cost to employer $42,000.
· Make sure than employee understand that they can contact the Wage and Hour Division of the U.S. Department of Labor in order to file a complaint against his or her current or former employer. The Wage and Hour Division is responsible for monitoring employers’ compliance with the FLSA and related laws in terms of employee compensation.
The massage treatment rooms need to be at minimum 9’ x10’.
Do not expect the massage therapist to perform more than 7 actual massage hours in an 8 hour work period.
Schedule massage sessions 15 minutes apart.
Provide 60 minutes of breaks during an 8 hour work period- such as two 15 min. breaks and a 30 minute meal break. Note: depending on state law employers may not have to pay hourly wage for meal break—but a good employer will.
Do not expect massage therapists to up-sale for products or services. Use specific sales staff or receptionist to do this.
Make sure the receptionist is fully trained and can explain massage services.
Make sure the receptionist does not exert favoritism during scheduling.
Make sure that front office staff is respectful and service oriented.
Make sure that the facility is safe.
Do not allow gossip, drama, workplace relationships and other detrimental group dynamics.
Do not allow a difficult person to disrupt the work place- client or employee.
Make sure you have a for real massage expert on staff that is committed to being current with massage research, the political environment and trends in massage.
Expect that you will have to provide in house training for new hires. Education around the country is too uneven to expect consistency. You can pay less during this training period.
Use recorded training DVD's to set expectations about what massage draping, protocols and add-ons should be like and gage performance against this standard. Otherwise there is too much opinion involved.
Do not expect massage therapist to perform like robots. Each will have some individual skills but you can expect the each massage therapist provides a massage session that reflects the integrity of the business model.
Make sure that employee concerns are addressed. Communicate openly with employees and have at least a monthly staff meeting.
Have a suggestion / complaint box and pay attention to each issue.
Do not hire more employees that demand requires. Make sure each massage therapist is booked before adding staff.
Expect that a massage therapist should have retention clients after 6 months. If they do not then something is lacking in their performance. You do not have to retain an under performing employee.
Be more patient with client retention for male massage therapist. There is a gender bias in the massage profession. Make sure male massage therapists are supported.
Provide support for ongoing education.
Make sure that all information about massage dispensed is accurate. Do not perpetuate myths.
Make sure massage therapists are working smart by offering support for ergonomics and biomechanics.
Managers must be present and a positive link between employees and owners.
Reward excellent employees.