Employee/IC confusion

[mike m number 4]

I just got a job at a local Massage Envy-type place, and I have some questions about their wages. They told me I am an employee, and will take taxes out, however I will be paid by the client, not the hour. I thought if you got paid by the client (and were not required to be on the premises when there were no clients) that made you an independent contractor?

They said that if there were no clients booked on a particular shift, then I would get minimum wage x the number of hours for that shift. For example, if it's a 5-hour shift, then I would get $7.25x5=$36.25. That seems fair, since they're making me come in even though there are no clients. However, if there are, for example, 2 clients scheduled with a huge gap in between, they would not pay minimum wage for the time I'm not working and have to stay there. If I make $15 per client (for a 1-hour massage), and have two massages, then I would get "minimum wage" for that shift ($36.25) because it is higher than the $30 for the two massages. But if they each tipped $5, then I would just get $40 for the entire shift.

I guess I always thought that one got paid min. wage when they weren't working on a client and were required to be on the premises. Am I wrong?

 

[Carrie K]

Employee/IC confusion

Minimum wage is what you are guaranteed to make for your time at work. In your example, $36.25 is minimum wage for a 5-hour shift. If you do two massages @ $15 each and are tipped $5 on each one, your pay of $40 is greater than minimum wage and your employer is not required to supplement your wages. However, if you only had 1 massage during that shift @ $15 + $5 tip, your employer would have to pay you an additional $16.25 to ensure you were making at least minimum wage.

 

[The Joker: Midnight Clown]

Employee/IC confusion

I just got a job at a local Massage Envy-type place, and I have some questions about their wages. They told me I am an employee, and will take taxes out, however I will be paid by the client, not the hour. I thought if you got paid by the client (and were not required to be on the premises when there were no clients) that made you an independent contractor?

You would be paid either minimum wage or on commission, whichever is greater. They are required to pay you AT LEAST minimum wage (when you figure in the number of hours you work per pay period), so they are covering you that way in case your commission doesn't bring you up to minimum. One benefit is that you know what your absolute minimum paycheck will be, no matter how bad of a pay period you have. As an IC, if you have no clients, you get no money.

As an employee, ME takes the financial risk, supplies products, can ask you to do things other than massage clients (clean, laundry, etc), and tells you when to work.

As an IC, YOU take the financial risk, supply your own products, just show up to massage (typically, unless other other things were agreed upon in your contract) and you make your schedule.

If you search this site for "independent contractor vs employee" you should come up with some more information, as what I gave you was pretty basic.

 

[M.3]

Employee/IC confusion

I actually took a job with this kind of a set up.
I really didn't like it at all.
I was there 6months and never made commission...and it was 40%!!
I found out later that they "liked" me sooo much as their receptionist and cleaning person that the other staff members did not book massages for me - they booked them with the other therapist! :irked:
Now I just need to do 2 massages to earn what I was getting there all week part time.

Anyway - at minimum wage you are earning next to nothing.
A much better arrangement is the minimum wage PLUS commission with the stipulation that you can go to a higher commission only rate at some point in the future.

 

[Monsieur Rick]

Employee/IC confusion

I just got a job at a local Massage Envy-type place, and I have some questions about their wages. They told me I am an employee, and will take taxes out, however I will be paid by the client, not the hour. I thought if you got paid by the client (and were not required to be on the premises when there were no clients) that made you an independent contractor?

How you get paid has nothing to do with your legal status. Whether or not taxes are withheld and the duties/requirements of the position determine your employmee/IC status.

They said that if there were no clients booked on a particular shift, then I would get minimum wage x the number of hours for that shift. For example, if it's a 5-hour shift, then I would get $7.25x5=$36.25. That seems fair, since they're making me come in even though there are no clients.

That is one way to comply with the law. You can't have your time taken up without being compensated. However, that does not mean an employer is required to pay you Min. Wage for sitting around.

However, if there are, for example, 2 clients scheduled with a huge gap in between, they would not pay minimum wage for the time I'm not working and have to stay there. If I make $15 per client (for a 1-hour massage), and have two massages, then I would get "minimum wage" for that shift ($36.25) because it is higher than the $30 for the two massages. But if they each tipped $5, then I would just get $40 for the entire shift.

Correct. That is often referred to as "Greater of Hourly vs. Fee per Service (or commission if you rate per service varies). Perfectly legally, just not too enriching at Min Wage and $15 per session. We use a similar pay plan in NYC, but at much higher rates.

I guess I always thought that one got paid min. wage when they weren't working on a client and were required to be on the premises. Am I wrong?

The law simply requires that you be paid no less than minimum wage * hours at work. How your employer gets you there is between you and your employer. Tips do count since most states have a Min. Wage for Highly tipped Employees, which is around $3 an hour.