employee or indepentant contractor and more

[rev72]

I am a massage therapist in Illinois. I started working at a salon about five months ago. The owner made me sign a contact that states that I have to be there 40 hour a week and I get paid a 60/40 commision, or I can pay $400 a month rent. My question is am I an employee or indepentent contractor. I do not have a key to the business and all the advertising that has been done for me is under her businesses name. She makes the majority of my appointments. She supplies the massage table the oil heater and the hydroculator and heat pack. I do supply my own lotion and sheets though. When I first started there, she told me not to give out my phone number anymore, just use the salons phone number. Then she collects the money for the massages and pays me when ever she feels like it. Then she ran advertising for the salon and takes what ever amount she wants to take out that week for advertising even though I did not agree on some of the advertising that she has done. And in the phone book ad that she is charging me for it just has the name of the salon not my name. Then she is always leaving me at the salon by myself, so I have to be there so I can answer the phone for her and take her messages and make some appointments for her.
And she did not inform me and the nail tech that they were going to be totally tearing up the road in front of the salon and as a result makes a lot of noise and stop traffic from getting to the salon. And she is always smoking in the room next to the massage room, which causes the massage room to smell like smoke all the time. So am I an employee or indepentant contractor and can she have a not compete cluase in the contract, and what can I do?????

 

[Michael Wechsler]

Originally posted by rev_72:
I am a massage therapist in Illinois. I started working at a salon about five months ago. The owner made me sign a contact that states that I have to be there 40 hour a week and I get paid a 60/40 commision, or I can pay $400 a month rent. My question is am I an employee or indepentent contractor. I do not have a key to the business and all the advertising that has been done for me is under her businesses name. She makes the majority of my appointments. She supplies the massage table the oil heater and the hydroculator and heat pack. I do supply my own lotion and sheets though. When I first started there, she told me not to give out my phone number anymore, just use the salons phone number. Then she collects the money for the massages and pays me when ever she feels like it. Then she ran advertising for the salon and takes what ever amount she wants to take out that week for advertising even though I did not agree on some of the advertising that she has done. And in the phone book ad that she is charging me for it just has the name of the salon not my name. Then she is always leaving me at the salon by myself, so I have to be there so I can answer the phone for her and take her messages and make some appointments for her.
And she did not inform me and the nail tech that they were going to be totally tearing up the road in front of the salon and as a result makes a lot of noise and stop traffic from getting to the salon. And she is always smoking in the room next to the massage room, which causes the massage room to smell like smoke all the time. So am I an employee or indepentant contractor and can she have a not compete cluase in the contract, and what can I do?????

To begin, it sounds like you are an employee -- the key is how much control over your work the individual has. The less control the more likely you are an "independent" contractor. The more control, the more likely it is you are an employee. I'm not sure how it makes a difference here and why.

With regard to non-compete, it would be absolutely ridiculous, IMHO, to try such a thing in this instance and, if it were enforceable, I cannot imagine it would be for any significant period or geographic area. To do so would be an unconstitutional restraint. In many cases non-competes are unenforceable and used to scare those employed from moving elsewhere. Non-competes are usually used in situations where there are valuable items that need to be protected, e.g. trade secrets, customer lists, and the higher the level the employee the more enforceable. How could a business survive if a high level employee could steal the valuable private and confidential assets of a company to use to start a competing entity?

Such is not the case with lower level employees who don't have access to private information, e.g. a cashier. I'm not sure how this person thinks she can significantly restrain your trade as a massage therapist and I'd laugh if you receive a non-compete with very harsh terms unless there are some significant trade secrets to which I'm unaware that might change the outcome here.

 

[Michael Wechsler]

Someone wrote to me the following in email:

In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.

It is critical that you, the employer, correctly determine whether the individuals providing services are employees or independent contractors. Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors.

To determine whether an individual is an employee or independent contractor under the common law, the relationship of the worker and the business must be examined. All evidence of control and independence must be considered. In an employee-independent contractor determination, all information that provides evidence of the degree of control and degree of independence must be considered.

Nonstatutory Employees
If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute ( statutory employees ) for certain employment tax purposes if they fall within any one of the following four categories and meet the three conditions described under Social security and Medicare taxes , below.

1) A driver who distributes beverages (other than milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission.

2) A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company.

3) An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done.
A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer s business operation. The work performed for you must be the salesperson s principal business activity. Refer to the Salesperson section located in Publication 15-A, Employer s Supplemental Tax Guide for additional information.

Statutory Nonemployees
There are two categories of statutory nonemployees: direct sellers and licensed real estate agents. They are treated as self-employed for all Federal tax purposes, including income and employment taxes, if:

Substantially all payments for their services as direct sellers or real estate agents are directly related to sales or other output, rather than to the number of hours worked and
Their services are performed under a written contract providing that they will not be treated as employees for Federal tax purposes.