Tricky situation for small day spa
I loved reading your article regarding W2 v 1099. It was very informative, and I thank you for writing it. However, I am in a particularly tricky situation as a new business owner of day spa in CA. Do you have a suggestion or recommendation on which I should consider more than the other. Day Spas don’t easily fit one way or the other, as they are not necessarily “retail” nor “corporate” by definition. Both W2 and 1099 create equal amounts of issues for my industry as there seem to be many gray areas. I know many spa owners can get themselves in a huge bind simply for incorrectly identifying the type of hired help, and it can be extremely costly. Just wondering if you have dealt with many day spa owners and what your suggestions may have been to them in the past.
Thank. I look forward to your response.
Good luck on your day spa business! California is one of the few states that has more employment laws than just about any other. However, if it were me (my spa), I might have an employee to book appointments and greet customers. But I would likely set up my service providers (estheticians, nail techs) as contract service providers. The difference is simple. With employees, they work when you want, how you want and under your supervision. Contract workers aren’t employees. They are independent contractors who ‘show up’ to do work — they work their schedule, using their methods, their tools and make their own decisions about how work is to be done.
If you want control over your business, and want to specify what and how your workers do their job — it’s best to hire employees.
If you’re merely providing a location for others to provide services to your clients in, you may find contract workers a better option. (If you choose to go the contract worker route, it’s best to have an agreement with them in writing.) https://fitsmallbusiness.com/employment-contract-template/
Here’s a bit more clarification from the Department of Labor: https://www.dol.gov/whd/regs/compliance/whdfs13.htm
And here’s a link to California’s Department of Industrial Relations specific to this topic: https://www.dir.ca.gov/dlse/faq_independentcontractor.htm
If you have concerns, you’ll want to contact a labor attorney who works in California. They can provide you with a rock-solid recommendation. I’m not a licensed attorney and can’t give legal advice, only education and resources.