Our skating club runs the Basic Skills program at DD's rink and has been paying the coaches and director as Independent Contractors. We are concerned that they aren't really Independent Contractors but the thought of having to pay them as employees, withhold taxes and pay Social Security and Medicare taxes and all the concomitant rigamarole really has us worried. We are very small and I don't know if we could afford it, particularly with class enrollment slipping because of the economy. We do give them all 1099's at the end of the year for tax purposes, but nothing more.

So the question is: How do other clubs pay their BS instructors?

Thanks for your insight.

Group lessons only: I've taught at a number of different programs. All of them have paid me as an independent contractor, giving me a 1099 at the end of the year. (If my earnings were high enough.)

The two clubs I taught for incorporated their own skating school, so my checks came from the Skating School, not the Club checking account. I think it made it easier for accounting purposes, and let them figure out if their skating school was profitable.

Club freestyle session fees were collected and rink rental fees paid from the Club account. On those sessions, the instructors collected payment from the skaters directly. I never had to pay a commission on a Club session. (Only on rink-run freestyle/public sessions)

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I've never worked for a club, but every skating school I've worked for has paid me as an independent contractor.

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Of the 4 rinks I have worked for past or present, 3 paid 1099. The other paid me as an employee. That rink has changed ownership, so I don't know what they do currently.

Kay

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You can consider them independent contractors but you might want to run your contract or whatever agreements you have with them by a lawyer or tax expert. The law is very specific about what constitutes an independent contractor and there have been clubs that were not careful about that and were hit with some VERY substantial fines.

joelle

This is exactly what we are trying to avoid - obviously other clubs are doing it, but how? How do they word their contracts so as to make their coaches and skating directors contractor?

You really should have an attorney help you out because it's very easy to cross the line. Our board wanted to help pay coach's'continuing ed costs and found we could not do that - it would make them employees.

Joelle

Some good rules of thumb are:

1) do they bring their own equipment? ie. teaching tools and supplies?

2) do they have independence to conduct their job without supervision? for example, are their teaching methods precribed or open to the coach's decision, does the rink/club control the work schedule and the number and timing of breaks?

3) do the coaches offer their services to other employers or potential employers?

4) is the relationship ongoing or for a specific period or service?

But - you should get some legal advice on this if you are putting your club at financial risk.

It could be a financial nightmare for a rink or club to suddenly discover they had to pay unemployment, social security, workman's comp, were liable for a coach's injuries, or had to meet various fair labor standards. Would be worth changing the contracts, policies and rules, so they could be called independent contractors.

If I were in charge, I would want to show a lawyer the contracts, rules and insurance policies associated with both the rink and the club, and have people present (rink and club administration, and coaches) who could answer questions about how it is all run, and the people present who could authorize having the lawyer reword the contracts, so it wouldn't require more meetings, to keep costs down. Though I suppose the coaches might charge for their time, and their interests might not always be the same as those of the rink and club.

While I was at it, I would make sure the lawyer knew the answers to momsk8er's questions above, as well as: Are there restrictions on coaches teaching for other rinks and clubs? Are there restrictions on moving students found through the rink or club to another rink or the sessions of another club? Does the rink or club charge the student or coach a lesson commission or fee to teach? If the club pays a coach to teach a group lesson, is the money collected by the club, or by the coach? Does the rink/club place coaches on the rink or club insurance policy? Does the rink or club have a web page listing coach's credentials? Is the rink or club "open pro" (meaning any pro with the right certifications and insurance can teach), or does someone choose or audition coaches?

There aren't many things where I believe we must accept the advice of "the experts", but law is too complex to be comprehensible to most of us.