Legal Question in Employment Law in California
I own a spa and salon and I want some control over the people that work. As a booth renter Im a landlord and have no say so on how the worker have to conduct their business. Im not sure if I want the workers to be a common law employee, non statutory employee, or an independent contractor. I want some say so, and structure but I dont want the stress of paying taxes as you would do for an employee. Also I dont want the responsibilities of having employees.
Please advise.
2 Answers from Attorneys
You cannot have it both ways. If you want to have some control of the people who work in your spa, you will have to accept the responsibilities of an employer. An independent contractor is just that...independent. As such, they are self-employed individuals who work for themselves. They can come and go as they please, and perform their jobs in the manner they choose.
If you wish to control their hours, manner or method of work, impose any sales requirements or services representing your spa, without listing them as employees with the state, providing workers compensation insurance and deducting payroll taxes, and paying them as employees, you run the risk of being audited by the EDD, and/or the Labor Commissioner which could have serious consequences.
The EDD has a lot of information for small business owners, relating to employee vs. independent contractor factors. It would be worth your while to read up on this, to avoid making a major mistake misclassifying the people who work in your salon.
I disagree with Mr. Kirschbaum. There are a variety of ways you can impose some control and standards on the service providers while avoiding them being employees. If you rent stations, you can still require or prohibit many things about how the station is used. You can also exercise some control over independent contractors without them becoming employees as a matter of law. For example, many retail landlords require minimum and maximum hours of operations for store in their properties, and many retail leases limit and require what is sold or what services are provided in a retail space. Similarly there is a large body of law on reasonable requirements and restrictions that can be placed on contractors. You would do well to spend a little money on a few hours of attorney time to come up with a plan, and then stick to it.
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