2012: A Year of Rewards and Risks

Five tips to help club operators be prepared for legislative threats 

U.S. Senator Robert P. Casey, Jr. (D-PA); Helen Durkin, IHRSA's executive vice president of public policyBeing a successful club owner, you’re no doubt ready for the January rush and the new members who will soon be arriving en masse at your club. The new equipment is in place. Your front desk is stocked with pamphlets and blank membership contracts. Staff has been prepped about what to say and how to say it, the towels have been fluffed, and you’re ready to go.

Meanwhile, your state’s legislature is also gearing up for the coming season, and they, too, are preparing for a flurry of activity.

            Legislatures have a lot to tackle this year, and while the health club industry is no stranger to the legislative process, it appears that this session is going to be particularly busy. States are still grappling with massive budget shortfalls and rising demand for consumer-protection policies, which means that clubs remain ripe targets for lawmakers.

            So, are you ready for that? 

Let’s start with your front desk. A new member signs a contract and agrees to allow you to renew their contract automatically at the end of each term. It saves both parties the cost and hassle of re-signing at the beginning of each new term. Now, what if you were required by law to send that member—and every other member— a notice of renewal 30 days prior to the end of the contract date?

            Think about it. There’s the cost of the paper, the envelopes, and the postage. Then there’s the cost of additional staff time to prepare the mailings. And don’t forget the stress of sending out renewal notices virtually every day. It’s a logistical nightmare!

            Despite the operational challenges the process imposes, state legislatures have a penchant for proposing legislation that would impose this unwieldy process on clubs. Since 2006, IHRSA has faced an average of four bills per year that would constrain automatic renewals, with a record of 10 bills filed in 2009.

            The actual ramifications of such legislation are difficult to quantify, due, in no small part, to the fact that IHRSA has successfully defeated every attempt to restrict or prohibit automatic renewals. “We won’t know the full picture unless a bad piece of legislation is enacted, and we’re working very hard to prevent that from happening,” says Amy Bantham, IHRSA’s deputy vice president of government relations. “We’ll definitely be on the lookout for automatic legislation in the coming year.”

            IHRSA will also be equally attentive to, and quick to respond to, a wide range of other legislative moves with implications—either negative or positive—for the industry. But you, too, have an important role to play in protecting and promoting the industry.

Readiness tip 1: Keep informed via IHRSA legislative alerts and respond to calls to become involved. IHRSA will inform its member clubs when advocacy is required. 

Turning to the topic of the price of memberships and services: What if you had to increase those dues and fees because the state imposed—or increased—a sales tax on clubs? As state budget deficits are likely to remain a fact of life for the foreseeable future, there’s a strong likelihood that your state will, at the very least, propose a new tax or a tax increase. Even in flusher economic times, state lawmakers have targeted clubs for additional revenue.

IHRSA successfully fought four sales-tax proposals in Arizona, Georgia, Illinois, and Rhode Island last year. On average, the association wages 3-5 sales-tax battles every year.

The more cash-strapped a state is, the more difficult it becomes for any business or service to keep its head off the chopping block. The fitness industry’s position that, in the long run, healthy lifestyles reduce medical costs related to obesity and chronic diseases becomes less compelling in the face of the need for immediate solutions, such as a tax increase.

Readiness tip 2: Reach out to your lawmakers to educate them about the economic benefits of exercise and urge them to resist taxing healthy lifestyles. IHRSA has the materials and talking points you need. Contact IHRSA Government Relations at gr@ihrsa.org.

Okay, so that was the front desk. Now, let’s move to your main fitness floor, where personal trainers are advising clients and group-exercise instructors are overseeing classes of energetic students. What if personal trainers were to suddenly became unaffordable because the state mandated costly licensure requirements—not just certification—that increased trainers’ wages and proscribed the services they could offer?

            “Goodbye personal trainers,” is right.

Holding fitness professionals to a higher standard and ensuring quality personal training is a cornerstone of quality clubs. IHRSA recommends hiring personal trainers who hold at least one current certification from a certifying organization/agency that’s obtained, or is seeking, third-party accreditation of its certification procedures and protocols from an independent, experienced, and nationally recognized accrediting body.

The bills that have thus far been proposed to regulate personal trainers have been diametrically opposed to current industry practice. In most cases, they would create a monopoly for certifying organizations, and, in every case, would make the cost of becoming a personal trainer prohibitive. Since 2006, IHRSA has consistently and successfully defeated bills in six states and the District of Columbia that would impose burdensome licensure/certification requirements on personal trainers. Last year, in Massachusetts, the association ensured that legislation introduced there was industry-friendly, requiring clubs to hire personal trainers in accordance with the recommendation proposed by IHRSA.

Readiness tip 3: Educate your personal training staff and prepare them to speak out against harmful requirements. 

Now, look around. Do you have an automated external defibrillator (AED) mounted on a wall somewhere in your club? If not, you might well be required to do so if your state makes having one mandatory this year. IHRSA recognizes the importance of staff and member safety, but, often, lawmakers propose measures that fail to protect club operators and employees from dangerous, and unnecessary, liability risks. If a proposal doesn’t include accommodations for key-card clubs, or exemptions for instances in which an AED wasn’t used, there’s a great risk of a costly lawsuit.

Readiness tip 4: Familiarize yourself with your state’s AED requirements. Currently,

11 states mandate AEDs for health clubs, and, each year, at least three additional states consider doing so. Visit ihrsa.org/state and click on your state for more information.

Last, but not least: check out your bathrooms and locker rooms. Are the privacy and safety of your members being protected in the most sensitive areas of your club? A new trend is surfacing across the U.S. to legislate fair use of “public accommodations”—i.e., bathrooms, locker rooms—for individuals who are transgender, or whose gender-expression doesn’t conform to their biological gender.

IHRSA supports equal rights and protections for all citizens, but raises concerns over the unintended consequences of these types of bills. “It’s a practical concern with respect to the privacy interests of club-goers,” notes Bantham. As written, the language in proposals is often too broad and susceptible to abuse, allowing anyone dressed in a manner associated with the opposite sex to access a locker room or, even, gain entry to a health club for the opposite sex.

Readiness tip 5: Since this a relatively new issue, begin by contacting IHRSA Public Policy and let them know what effects this type of legislation might have on your club. This will help IHRSA develop an appropriate response strategy.

As always, IHRSA stands ready to assist its member clubs with a team of state lobbyists who represent industry interests day-to-day. It also relies heavily on the participation of club professionals, such as you, who believe in fostering new opportunities by strengthening the industry’s involvement in the legislative process.