Employee Misclassification in Massage Therapy

Mar 17 / Tania Velásquez
OriginalLy published on March 17, 2017


The profession of massage therapy has changed dramatically since I got my license in 1994. After finishing school, you'd get your feet wet working at a spa or chiropractic office for a year or so to gain some experience.
Eventually, you'd build up a clientele and go into practice for yourself or expand into another more lucrative scenario. Outside of large luxury hotel spas, it was mostly mom-and-pop style practices. The market was straight forward. Entry level work paid relatively well. The economy was solid. It was the Clinton years.
Having a thriving word-of-mouth business was an attainable goal for any MT worth their salt. It still is, but the playing field has changed dramatically with the momentum of technology and a widening market.
The growing massage industry is an awesome thing. It's creating more jobs with more variety and is a sure sign people are making massage therapy part of their lifestyle. It's feel-good healthcare everyone deserves access to.

Booming demand, little supply


In a 2015 article (recent enough), MSN Money referenced massage therapy as #5 on a list of the 10 fastest growing jobs in the US. There is clearly more demand for massage than ever. If so, why does our profession continue shrinking at an alarming rate?

Consumption of our services is on the rise, yet there is a smaller pool of talent to choose from. That may mean more opportunity for the rest of us, but we can't possibly fulfill all the supply for the increasing demand. We need more hands on deck!

Before I continue, Alice Sanvito makes excellent statistical references to what I am addressing in her Facebook note: Massage Therapy: A Profession in Crisis? (It includes an insightful and thought provoking public discussion. I encourage you to check it out. It echoes all of the realities discussed in this blog post and is what prodded me to write it). Alice writes:

 The statistics look grim: nationwide, 25% of massage schools have closed in the last 10 years and there has been a 50% drop in the number of students graduating from massage therapy programs during that same period of time. Spas and franchises say they are turning clients away because they are understaffed."

A seasoned view

Though many of us dinosaurs still practice, we also like doing other things like evolving our practices, teaching, and/or developing continuing education websites cough-coughPinpointEducationcough. We still enjoy learning and building upon our work every chance we get. Personal improvement is an essential part of being a pro, no matter what you do.

With all of these cool new industry developments in place, we are still left with the problem of a shrinking workforce and I'm not exactly surprised. Massage therapy as a career choice is not like it was
back in my day. But it should be and can be even better. There's no excuse. A big part of this deficit has rampant worker and wage misclassification at its root.

"Employer misclassification of their employees as independent contractors is a widespread phenomenon in the United States. The IRS estimates that employers have misclassified millions of workers nationally as independent contractors. While some employers misclassify their workers as independent contractors in error, often employers misclassify their employees intentionally in order to reduce labor costs and avoid paying state and federal taxes."

A wake up call

Newer MTs are being taken advantage of because they don't understand their rights. They've resigned them to a false status quo and borderline illegal practices disguised as normal business procedures. If you find yourself in any of the situations described this article, it is important to speak up bravely when you feel ready. You deserve to love your work.


It takes only a handful to start the ball rolling in the right direction. I understand we are kind and giving people by nature who generally prefer to avoid confrontation, but you can and should demand fairness. Sometimes a risky confrontation is necessary to underline your worth. I'm here to straighten up the facts and hopefully encourage the next generation to stand up for themselves. Knowledge is power and there is strength in numbers.

A crossroads of the future of massage 

I want to highlight the positive aspects first. Running a business from the top-down-to-the-bottom is not all rainbows and puppies. The following 3 scenarios offer MTs the opportunity to be self-employed as independent contractors without having to worry about the headaches of actually running a business:


  • Outcall massages are no longer considered a luxury reserved for the wealthy. At almost anytime of day, a client can instantly have an affordable in-home massage. They just press a button on an app. No need to go back and forth about scheduling. No need for cash. All of their payment and location information is securely stored.
  • Mobile chair massage is huge. Corporations are making in-office massage therapy a major star in their employee perks packages.
  • And in case no one noticed, massage franchises keep popping up everywhere. More people have access to massage therapy through affordable rates and membership fees. Some business hire MTs as employees but fill in the gaps with independent contractors, especially if there isn't a budget to consistently pay employees during slower times. 


These are winning set-ups for MTs, the business who hire them, and the clients. An IC has the freedom to work as they choose. A company contacts them on a client's behalf to provide a service. The IC can decide whether they want to work with them. The IC performs the service and the company handles everything else. Everyone earns their cut.  It's convenient and a very cool implementation of technology.

The big plusses

As an independent contractor, the responsibilities of meeting overhead costs, record keeping, billing, collections, laundry, marketing, client retention, all sit on someone else's shoulders. MTs just agree to show up to any gig they choose for a pre-set amount of time.

They get paid for a job well done and are free to do whatever else with their time. There is variety. They can see private clients, spend time with family, pursue other interests, have another part-time job, or read a novel in the park until the next call for work comes through. Few fields offer this kind of flexibility.


This means MTs with entrepreneurial spirits who may not have the strongest business sense can still be independently successful by partnering with companies who hire massage therapists as independent contractors. On the other hand, business minded people who may not exactly have the background or desire to offer actual physical massages can contribute to the workforce by handling the hands-off details. Everyone does what they do best. Everyone wins.


The perks of being a W2 employee (not IC) are predictable schedules, salary, and paystub management. There is great freedom in not having to go out and hustle for your next buck. There is security in knowing you will be getting paid whether it's busy or slow. As an employee you are compensated for fulfilling certain job requirements and representing a business brand. There are clear mutual expectations in this working relationship.

Here's where it began to go wrong

In the first paragraph of this post, I made reference to how good things were for us circa 1990s-2000something. We had a minimum standard of wages and it was good. Enter the economic recession of 2007.


Once the recession hit, people no longer had the expendable income to budget for non-vital care like massage. There were job layoffs and other life uncertainties. Business were closing shop. Wages were cut while inflation soared. Priorities had to shift. There was a major temporary change in our overall economy. Up next is what happened with the massage profession as a result of the recession.

Tipping as wages

One way massage establishments were able to stay in business was by doing something very clever: they kept wages low while encouraging a tipping culture similar to what is done in the restaurant industry. They could shell out less money for skilled labor and subsidize MT employment costs by encouraging customers to leave gratuity instead of paying full wages.


You started seeing franchise advertisements for $45 massages. This was a great for introducing more people to massage and getting a greater volume of clients through the door. But somewhere along the line someone started getting shafted.


Once upon a time, a therapist could earn a fair percentage for their services. After the recession, the market standard rate for massage services dropped out of survivalist necessity. However, many wages didn't recalibrate when the US economy started to improve again. Therapists continue to make as low as $12-15/hr base wage in some places.

If a client tips $10, that comes out to $25/hr which isn't bad. But if you consider inflation since the mid-90s and tuition fees it isn't great either. Remember, this is if a client tips. That amount doesn't stretch at all if you're located where I am in New York City or anywhere with a high cost of living. MTs pay good money for education and accrue student loans to earn their credentials. More importantly, tips should not be appointed in place of fair wages.


The truth is clients do not always know to tip and should not have to. This is technically healthcare service. When was the last time you tipped your physical therapist, nurse, or dentist? We're lucky it isn't considered a weird taboo for clients to tip sometimes, but we should never need to rely on them to pay the bills. Sadly, that's not the case right now and MTs are growing more and more bitter about this situation.

Less and less people are wanting to join the workforce as MTs because of these exact pay scale horror stories. Many have opted to drop out because it's not a sustainable income model over time. Let's not mince words: the wages in a tip-reliant scenario can feel like they suck in some set-ups. But as you will see, you indeed have choices.

The recession has been officially over since 2009

There may have been a recession but we are not in one anymore. Yet many businesses did not resume paying employees a living wage since it was officially declared over. They already programmed MTs to jump through tipping hoops to round out their income. If therapists aren't demanding better for their time and talents, why should an employer bother paying them accordingly?

Let them misdirect the financial supplementation onto the customer. The tipping culture in MT has become a win-lose situation and employers are not the ones losing. They are cashing in on a good economy and the booming massage industry while employees keep settling for less. Why?


No wonder there's a fleet of disgruntled MTs who lose passion within a couple years. Business models like these leave them short changed and deflated. Then they warn others against this profession because of their negative experience. No one enjoys feeling undervalued with a heap of loans to pay off.

These types of business don't care and will just replace any MT with the next new clueless graduate desperate for work and experience. Don't be one of them. Realize there are many MTs doing well right now and benefitting from the current boom. Those are the ones who practice practice practice and do their homework. Those are the ones who choose environments where they feel appreciated.

NEWSFLASH: This should not be the norm

Yes, we all have to start somewhere but wherever that somewhere is, make sure you are respected and paid a decent wage to start. I started off at $10/hr way back then, but I considered access to a gym and a lovely outdoor premises to be perks (they were at the time).

A massage business is nothing without its massage therapists keeping clients happy and returning for more. Remember that. This is a people business and you are a major player. 


Tips are nice, but should never be expected in this line of work. They should especially not be used to subsidize wages that are part of employment. We are health service professionals. It's not your client's fault if they do not tip because they should not have to. Tips are not guaranteed wages, but somehow newer MTs are being duped into believing so. Demand better wages commensurate with your experience, just like every other job or welcome to the burnout mill.


For the record, not all establishments are like this. Most are wonderful and set great examples by creating healthy jobs. I'm not talking about those. As for the ones I'm referring to, you know who you are.

Independant contractors (ICs)

We just spoke about being an employee, which greatly differs from being an independent contractor. The IRS clearly outlines the differences between the two here. These definitions aren't just ideological verbal distinctions. Blurring the lines between the two is actually in violation of tax law and business can be penalized and ordered to pay back taxes for misclassifying their workers.

Would you believe it if I told you an overwhelming number of massage business blur these lines to keep their costs low and keep a tight lock on your independence as an IC? Most MTs don't even realize how they are being undermined as self-employed professionals.

The controls certain companies will attempt to place on you as an IC technically qualifies you as an employee in the eyes of the IRS, which means they better be covering your taxes! And if not, they may be liable to back pay them for you. This is important for you to know. You have choices and leverage.


This is what defines an employee

"Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed."

For example, let's say a company chooses to work with you as an IC for an onsite chair massage event. In this scenario:

  • You are likely expected to bring your own supplies which you have paid for as a self-employed MT, but they cannot tell you which brand you must use (unless they supply it and you are only providing your manual skill).

  • You are responsible for arriving prepared and on time and providing the service to the client, of course. However, it is technically the company's client. They rightfully earn their cut for getting you work and arranging the whole thing, and you get yours for providing good service. Cool. But they cannot tell you how to do your job, rather they choose to hire you because they like and trust the work you already do. You are not required to change a thing and they are not required to hire you in particular again.

  • You are paid for each gig as it is completed. You represent the hiring company for a prearranged amount of time and respect boundaries, but you are still your own business entity because you are paying your own taxes and/or using your own supplies. That is where the business transaction ends. Win-win. You don't have to deal with the hassle of scheduling, advertising, and paperwork and they have good faith in your representation and talent. Teamwork!

Real life scenario

Now, let's say one of the individuals you are working on at the aforementioned event really loves your technique and wants your information to schedule a 1-hour massage. No matter what the hiring company says, you are 100% allowed to give them your card directly!

I know many try to forbid this, but they can't because you are not their employee. You are an IC and you are not directly competing with the service you were hired for. An onsite chair massage is apples and oranges to 1-hour private massages.

As long as you are paying your own taxes, you are allowed to reap the reward for being a talented self-employed professional. But you are not allowed to try to steal the corporate client or directly solicit individuals. That is bad tacky karma, so please respect the boundaries of your hiring company. Just be sure they understand your rights as a self-employed professional. You may need to remind them.

The art of misclassification

But my company said I need to go through them first before accepting a private client.

No. No you don't. And I assure you that will never happen. A potential client isn't going to play the HR middleman game just so they can be granted your info. Life gets busy and people forget. Who is anyone kidding?! We are an instant gratification society.

You earned that opportunity and have every right to it without needing a babysitter's permission. There is nothing wrong here except for a company blocking your ability to thrive outside of that gig. You are self-employed. Remember that.

If your IC hiring company is trying to control whether you can give your business card to an individual who requests it for a different service, they have just blurred the tax line. This is only allowable if you are their employee. In that case, you must be payed a consistent salary and they need to be reporting your wages as such on the proper tax forms and give you a W2. The IRS does not take kindly to this and neither should you. Uber keeps getting sued and is in hot water for this exact type of misclassification.

Guess what else you don't have to do? Show up to "mandatory" meetings. As an employee, your time must be paid for at mandatory meetings. As an IC, if you are required to show up for a meeting outside of any service you provide, you are entitled to a stipend for your time and should ask for one. Pass the information on.

But I already signed a contract!


Consider this a reminder to read contracts thoroughly before signing them. (An upcoming article will be about the bogus jurisdiction of non-compete agreements and how the stipulations have gotten ridiculously out of control. Spoiler alert: do not sign one.)

You also have the right to add an addendum to any contract. Even if you did sign a contract, however, the law might be above it according to what the New York State Department of Labor says here:

"Even if your employer hired you to work as an independent contractor, the law may still consider you an employee. This means you may qualify for unemployment insurance (UI) benefits... Employees also may get certain fringe benefits. For example: an allowance or repayment for business or travel expenses.

—NYSDL

The art of misclassification

But my company said I need to go through them first before accepting a private client.

No. No you don't. And I assure you that will never happen. A potential client isn't going to play the HR middleman game just so they can be granted your info. Life gets busy and people forget. Who is anyone kidding?! We are an instant gratification society.

You earned that opportunity and have every right to it without needing a babysitter's permission. There is nothing wrong here except for a company blocking your ability to thrive outside of that gig. You are self-employed. Remember that.

If your IC hiring company is trying to control whether you can give your business card to an individual who requests it for a different service, they have just blurred the tax line. This is only allowable if you are their employee. In that case, you must be payed a consistent salary and they need to be reporting your wages as such on the proper tax forms and give you a W2. The IRS does not take kindly to this and neither should you. Uber keeps getting sued and is in hot water for this exact type of misclassification.

Guess what else you don't have to do? Show up to "mandatory" meetings. As an employee, your time must be paid for at mandatory meetings. As an IC, if you are required to show up for a meeting outside of any service you provide, you are entitled to a stipend for your time and should ask for one. Pass the information on.

But I already signed a contract!


Consider this a reminder to read contracts thoroughly before signing them. (An upcoming article will be about the bogus jurisdiction of non-compete agreements and how the stipulations have gotten ridiculously out of control. Spoiler alert: do not sign one.)

You also have the right to add an addendum to any contract. Even if you did sign a contract, however, the law might be above it according to what the New York State Department of Labor says here:

Obvious disclaimer: I'm not an attorney

You better run all of the above by a lawyer in your area. I'm just a tiny dancer trying to stir up trouble for anyone taking advantage of MTs. Remember there is an MT shortage, not surplus so I suggest ya'll get on top of the game. You have an upper hand, so stand up for yourself. This is my PSA for the next generation.

Beware the shady MT

I believe there are more symbiotic A+ employers than there are ones in the scenarios described above. However, there are enough to merit addressing this issue. There may be some shady businesses, but we all know there are shady therapists, too. You know who I'm talkin' 'bout. Employers are not immune to getting burned.


The shady MT is the one who goes into a job attempting to steal clients from their employer. They're the ones who ride the coattails of the employer doing all the hard work to get clients through the door. But this rarely works because successful businesses are about successful relationships. The shady MT ruins the party by making potential employers paranoid about every MT's motives. It's a small world and if shady MT thinks they are going to make it this way, they are wrong. Word travels fast and that's the kind of ship that sinks.

Dear massage therapist employers,

Look. I understand you try keeping tight controls on your independent contractors to deter shady MTs, but the shady MT is going to try and run a crooked game whether you have rules in place or not. That's because they just rude and shady. The overwhelming majority of MTs are honorable and hard working and you should not let a bad apple spoil the bunch. There is no need to treat well-trained independent professionals like chattel.


If an MT does a great job for you and someone wants to hire them for a different service, let them thrive! They are not your property and you ain't paying their taxes or living expenses. Don't worry, karma gets shady MT in the end. It's about team trust.


There are risks we all take in business. But acknowledge the people who represent your company well. Or pay their taxes.... geez, sumthin... Really, how many clients do you think are actually going to be satisfied with the ethical low of a shady MT? Most will report the shadiness to you when there is a good professional relationship (I would assume there is, and if there isn't perhaps that is something you may want to work on). Chill.


The truth is, you want to hire good therapists. Duh. A client may become loyal to them because they truly helped them in some way. Occasionally one of these therapists will want to expand. Almost always, they've been excellent employees and aren't shady MTs. What are you gonna do? You can't exactly prevent clients from wanting them (and umm, there's Google).


Here's what you can do without be an unrealistic curmudgeon or resorting to legal pettiness that likely won't hold up in court: offer them a bonus, reward them with lunch on Fridays, movie passes, or a paid day off. Sponsor a CE class. Offer to rent them a room as an IC at your location. Maybe open another location and put them in charge. Pay for a gym membership or hold a weekly yoga class for employees. Happy employees tend to stay where they feel valued and respected. Wouldn't you?


Eventually, they may decide to go elsewhere, but you can't control that. It's just life and you will continue to have great employees when you are a good employer. Most clients will remain loyal to your business because they like your vibe and the personalities you attract there. But sometimes you must let your babies go :)


Dear employers, it would be a good idea to temper the control-freak practices. They are highly responsible for disillusioning some really good therapists and burning them out. Without therapists, your business wouldn't be in business, so chill with placing bogus permissions on grown professionals. MTs are noticing when wages don't feel right in accordance with expectations and as a result our population is thinning. No one wins in that scenario. Not even you.

Dear massage therapists,

You cannot fault a business owner for wanting to both save money and earn more profits (there is a difference between that and being a scrooge). If you are not happy in your work situation, it is your responsibility to grow a pair and speak up, and yes that involves risk and possibly moving on. Or you can't exactly complain for enabling it.

You can succeed on your own in a variety of ways. That's what is so great about this work. You have a win-zone. Not everyone knows the law, but now that you know you can pass the info along. There is strength in numbers.


And by large numbers everyone needs to be bringing their professional A-game to the table. MTs can't be showing up misinformed and whiney with bad attitudes, and hope to motivate employers to invest in them. This is not that kind of work. If you expect everything on a platter, you will be disappointed. We earn our stripes. This is a unique manual art and you better enjoy it, otherwise it ain't workin out. We must bring our personal best to expect fair renumeration for it.


It's important to understand what employers put into running a business in order to provide steady work opportunities. They invest a lot of resources while dealing with the after-hours headaches. Appreciate this partnership and don't burn bridges. Employers work every bit as hard as you do and sometimes don't even take a paycheck so you can have yours. It's a two-way street.


Most of us love our work and do the right thing (preaching to the choir). That's not who I'm talking about. They know who they are.

The future is good :)

It is an exciting time to be a massage therapist. Those of you stepping into the workforce now have more opportunity and validity then ever. Massage therapists were and still are a valuable commodity. There is an explosion of variety and you can earn your living in many ways, or change up your approach at anytime.


We have user-friendly technology at our fingertips that makes it possible to run an entire business on a smartphone. There is an increasing demand for our services and we have an important role to fill in healthcare. Know your rights and know your worth. Please share this article with anyone you think may benefit from it... perhaps even your employer... and keep it in case you're an employer one day :)



References: 

“Facebook.” Letter. N.d. Massage Therapy: A Profession in Crisis? Alice Sanvito, n.d. Web. 18 Mar. 2017.

Misclassification of Employees as Independent Contractors.” Department for Professional Employees AFL-CIO. N.p., 2016. Web. 18 Mar. 2017.

Independent Contractor (Self-Employed) or Employee?” IRS.gov. Internal Revenue Service, n.d. Web. 18 Mar. 2017.

UI and Independent Contractors.” New York State Department of Labor. New York State Department of Labor, n.d. Web. 18 Mar. 2017.

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