WA State laws regarding the debate over whether or not a massage therapists is an employee or independent contractor are pretty clear yet many remain confused.
WA Labor and Industries provides this 6 part test to help you determine the status.
Take the six-part test. The following six-part test will clarify if you are an independent contractor or a covered worker. You are an independent contractor if you:
1. Work free from direction and control both in fact and contract.
2. Pass one of the following:
-Perform a service which is outside the course of their business, or -Perform the service away from all their business locations, including all their job sites, or
-Are responsible, both under the contract and in fact, for the costs of the principal place of business from which the service is performed.
3. Pass one of the following:
-Engage in your own business to provide the services which are of the same nature as those performed under the contract, or
-Provide a principal place of business that qualifies for an IRS business deduction; the place must be used regularly and exclusively for business purposes.
4. File a business tax return under IRS rules.
5. Have an active account and an active unified business identifier number (UBI) with the Department of Revenue.
6. Maintain your own set of books and records showing business income and expenses.
Free from direction and control means that the IC has complete control over everything they do from how they interact and work with clients, independent pricing and policies and everything else related to a massage business.
Perform a service which is outside the course of their business or perform the service outside of their locations. This pretty much says it all, yet many try to get around it. If you are a massage therapist and have a massage business, you cannot hire a massage therapist as an IC.
Note: Chiropractors and other healthcare professionals may want to hire you as an IC and would be OK under this provision but paying massage therapists a percentage of the fee or splitting fees is also illegal under the kickback laws in WA State.
What should you do if you are mis-classified or not sure?
If you feel you are being treated as an independent contractor and you do not pass the six-part test you should talk to the person you are contracting with and explain your concerns. You can get a reference guide online at www.Lni.wa.gov/IndependentContractor or you can call our outreach team at 360-902-4599
If you feel you are being mis-classified, reporting the owner puts the owner at great risk. If found to be mis-classifying employees as independent contractors, the owner may be held responsible for back fees, workers compensation and will be held accountable by having to pay those back to the state which could put them out of business. Before you report the owner to Labor and Industries, consider using this information and handout from LnI to educate the massage business owner about the laws so they can change the business structure.