Employee vs. IC - Setting Rates

[Candy Hearts]

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[fixer29]

I really didn't follow your post, but chalk it up to early morning for me (was in the office until very late last night).

I saw somthing in your post that I can comment on.

Is it possible to raise your prices to $55/hour (esp. since you just moved) and if you choose the lady you spoke with - have her charge the same and go ahead and give her her 70%?

Just make sure she chips in for the linen fees and a few things like that, since you have some extras she wouldn't be getting elsewhere.

If you really like her, it may just be re-structuring the agreement a bit so she sees you want to be fair by giving the 70%, but that you will need her to be fair by paying a definite portion of the bills.

Just random thoughts.

 

[superstar dj]

My gut instinct is that it wouldn't work I don't mean financially, I mean personality wise. You have had a good idea of what you want, and she has a totally different idea of what she wants. It sounds like already any *give* is going to have to come from you.

No, places that employ MT's do not raise their rates so that the employee makes as much as someone self-employed. Employers tend to have higher rates because employees are expensive, and wages are only about half the expense. An employees wage is generally quite a bit less. They don't have the same amount of work, so the reimbursement shouldn't be the same.

I agree with Pueppi that if you decide to give her the 70%, she is going to have to incur several expenses in the form of fees back to you, in order to be worth the bother of having to share your space. And honestly, someone who *begins* negotiations by laughing at you is probably not someone who would be a whole lot of fun to share your space with. She'll have more demands, and laugh at other proposals you make. This will be a "dual relationship". I don't think 2 MT's can share a space and have it be strictly business at all times. You need someone in there you truly LIKE.

 

[Gary D]

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[yakevinhoo63]

Rates are set by what you think your services are worth, not based on your costs. Unless you are in the wine business, but that is another story.

When you start to treat your therapists differently - paywise - you invite headaches.

Employees and ICs have different rates of pay, but if you do it right, at the end of the quarter both should have about the same amount of money in the bank, net of taxes. Employees give up some freedom in exchange for stability and some benefits. ICs don't want to give that up, so they don't get the upside.

Employees are more expensive (which is not to say you pay them more), but are necessary to do what you aspire to do.

This MT reminds me of when I worked in retail back in High School. A customer would say "This camera is $300 here but only $200 at the Big Box store". My boss would tell them to go to Big Box and buy it. "But they are out of them," replied the customer. To which my boss would say "When I am out of them, my price is $100!"

"When I had my own place, I charged $60 an hour and kept it all"

Great, get your own place and charge those rates. If you work for me, here is the deal.

 

[Sora Rumbleton]

Another thing the IC isn't considering, whatever she makes from you (as an employee) will be MORE than what she brought home as an IC. Before I moved here to Southern California, I ran my own business for almost three years. I probably really only took home about 20-30% the total fee for a massage after paying business rent, bills, washings, advertising and so on.

Here, I work for a woman as an IC and she pays me 60% (which is really high for this area) and I take home the ENTIRE pay. The only thing I cover is my lotions, laundery and face cradle covers.

So, if the IC wants 70% and she is an employee, she will be taking home a lot more money than when she was working for herself. However, if you are supplying everything and all she has to do is show up, she should not be paid more than 50-60% and she will still be making the same as when she had her own business. (actual take home pay)

Or if you want to keep her as an IC, think about if that 30% will add up to about what you would normally charge for rent. If she supplies everything, then the 30% may be enough to cover your rent and bills---ONLY if she brings in good business.

Having an employee is more expensive and really a big headache. A friend of mine owns a spa and he recently changed his IC's into employees. The amount of paperwork he had to fill out was incredible and it ended up costing him more in the long run.

If you want someone who will do what you offer, then you should be able to find a massage therapist who is an IC who will perform those services. Just because a therapist is an employee won't make them any more reliable and you can still fire an IC just the same.

 

[Pompal 09.]

Food for thought

Does having employees perform massage raise the price over a massage by an independent MT who works solely for him/herself?

No. Massage is priced by service and what the market will pay in a given area. It has nothing to do with the employment status of the practitioner. In my town, sole proprietors charge the same as spas & salons. Clients aren't interested in picking up your costs. They may be more likely to tip an employee, but you can't count on that either.

A new client gave me the contact info for an MT who worked in this area (15 miles away), but lost the space she was working out of because the salon stopped offering massage. This MT lives about 30 minutes away and has practiced for 9 years. I called her and she told me she would only work as an IC. I told her I was looking for employees, and she asked what I was offering. I told her and she laughed. She would require 70% as an IC or no deal, pretty much her standard rate. She told me she charges $50 to $60 per hour.

Anyone who demands 70% isn't interested in working for someone else. Save yourself time and stop the interview, if an MT states that requirement. The most I've ever seen IC's get paid is 60%, and 50% is much more common, especially if you are providing the clientele and covering all supply & advertising costs.

 

[Wonders]

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[The Taoist]

I would prefer employees over IC's. Here is my reasoning:

I have a unique offering of services. If someone sees a brochure of mine, calls up and requests "abc massage service" and I am busy, I want someone else in my place to be able to do that service. Couldnt IC's say, "oh, I dont do feet," or "I dont do sessions over 60 minutes," or "I dont like to do hot stone massages."


Or am I wrong in my thinking? Could IC's fit the bill so to speak?

I still think you could work with an IC on this, just talk about this in the interview process. If you were painting your house, you would hire a contractor who would paint what you wanted, you wouldn't hire one who would paint the front of your house, but not the back, right?

 

[Jacky C]

I still think you could work with an IC on this, just talk about this in the interview process.

Except if the IC just decided one day that she had done too many feet lately and didn't want GL to book any new foot sessions for her, as an IC she has the right to say that.

If Gratelakes then came back and said "Nope, sorry you have to do feet, (IOW: you have to do what I tell you,)" the way I understand it, that person just became "employed" and she would be in violation of the labor laws.

 

[Taken nme :)]

Employee vs. IC

I was an employee in a health club back in IL for 2 1/2 years. 60% cut by the end (started at 40%, now I believe the company is on an hourly wage), with eveything provided (sheets and loations). I'll I would do was show up for my scheduled shift, which I had to be there the whole time for even if I didn't have a clients.

Now I'm an IC, actaully a SIC (sub-contractor) with two other women. We are on a rent basis per shift, but work under the owners name, setting the prices to the area we live in (he has other locations in the area where prices are higher). I suppy my own sheets, lotions and pay 3% on top of my rent for credit card services. I actaully make more in the long run being a IC then an employee even with all that I have to supply.

So I canunderstand were she is coming from. But if she is working for you in an area were prices are set to the location, then she should come on under those prices. If not then she's too greedy

Hope this helps some, reading it from someone who has worked both sides.