Well this must be the topic of the moment. An article I wrote YEARS ago about the differences between employees and independent contractors has been generating a number of emails recently. I was also just interviewed by Massage Therapy Journal for an article about compensation issues from the employers' perspective that will be out in a few months. So I've been doing a little bit or reading and research about employment related topics on my own.

One of the articles I ran across at www.NapaValleyRegister.com was about the recent crack down on day spas and salons in California that have been using independent contractors - or at least that have been paying their staff members as ICs - that probably should have considered these people employees. Here is a brief quote from the article:

"Recently, a number of our local day spas and salons were fined for incorrectly classifying workers as independent contractors when in the eyes of state and federal tax officers they are deemed employees. Many businesses were also fined for failing to file the mandatory 1099 forms for all contractors’ they used in their business."

Click here to read the entire article about the California spas and some of the guidelines for what makes someone an employee or an independent contractor in the eyes of the IRS. Click here to visit the IRS' web link for various forms and information related to independent contractors.

Notice where it says businesses were fined for this error? Depending on how big your practice or spa is or how many people have worked with you, this could really add up! When my own business needed to make the transition to employees due to control and work standards, I did it although it was a tough change to make. But ultimately it protected my business and staff. It also made for a more team-oriented workplace where everyone worked together for a common vision and goal instead of many individual and separate ones as people did when we had ICs. Ultimately you'll have to make your own choices about how to set up your business, but I urge you to look into it really carefully before you do.

I'd love to hear your thoughts on the subject and to hear other questions about this and other subjects related to your business. Please post them here or email them to me at Felicia@spalutions.com. Thanks!