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Cooperating with authorities is always recommended, but Herdell advises
that business owners protect themselves before they find themselves being
inspected. "Be very mindful, no matter what their demeanor, that they are
from the labor commission," Herdell explains. "When an inspector comes,
call an attorney. [Inspectors] have a right to see any personnel data, but
they do not have a right to go into any place that is not open to the general
public."
California is not the only state where the independent contractor status
of massage therapists has been scrutinized. Beth Milito, senior executive
counsel at the National Federation of Independent Business, says her organization
has received reports of stepped-up enforcement in many states
across a broad range of industries.
"More and more, both the federal and state governments are trying to
classify workers as employees because they want the taxes," Milito explains.
"You read about the tax gap, between what is owed and what is paid. One
way the IRS can close the tax gap is by clamping down on employees who
they believe are misclassified. You have state initiatives to redefine who can
be an independent contractor, and they're defining it more narrowly." She
warns that even business owners who had accurate legal advice when their
business was formed could now be out of compliance.
Ray Schmidgall, a business professor at Michigan State University who
has worked for the International Spa Association, echoed Milito's concern.
"What's pushing this is that governments need money," Schmidgall says.
"When governments are running deficits, they're going to push harder."
Rebecca Ary, a Seattle attorney who recently handled a thorny case on
whether a worker was an independent contractor, says that those who must
hire an attorney to represent them in a dispute can lower the cost by quickly
getting all the facts out. "Be honest from the beginning," she advises.
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American Massage Therapy Association®
