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What’s the difference between an independent contractor and an employee, anyway? How do you decide which workers should be classified as one or the other?

It’s a tricky dilemma, especially since employee misclassification can lead to potential lawsuits.

“Due to the emphasis on employer misclassification, many clubs—have been audited and pressured to reclassify certain workers as employees,” says Helen Durkin, IHRSA’s executive vice president of public policy. “In addition to group exercise instructors, clubs that classify tennis and golf pros and personal trainers as independent contractors may be asked to prove their status if audited. Since an improperly classified worker costs an employer an average of $3,701 in back taxes, the financial implications of wrongly classifying employees are significant.”

The Independent Contractors briefing paper contains information that will help clarify any of your concerns, protect your club and its workers from harm, and provide you with answers to the following questions:

  • What is the difference between employees and independent contractors?
  • How do most clubs classify group exercise, fitness, and racquet sports instructors?
  • What criteria should an employer consider when classifying workers?
  • What if it is unclear whether workers are employees or independent contractors?
  • If a club classifies an employee as an independent contractor, how can it ensure its classifications will withstand an audit or an employee claim of misclassification?
  • If I determine independent contractors were misclassified, what can I do?

“Since an improperly classified worker costs an employer an average of $3,701 in back taxes, the financial implications of wrongly classifying employees are significant.”

Helen Durkin, JD, Executive Vice President of Public Policy

IHRSA

IHRSA's public policy team works with our legal team to produce valuable resources for our members, but it’s important to keep in mind that the information in this document should not be considered legal advice.

If you have questions after reading this briefing paper, you can always email IHRSA to see if we have additional information, but sometimes your best next step will be to seek the advice of a qualified attorney. If it does come to that, feel free to share the briefing paper with your attorney. It could cut down on your attorney’s bill since it starts the research process for them.