Contractor or Employee? The Costly Mistake Wellness Studios Keep Making
A studio owner wanted to fire a toxic team member—only to find out they’d been misclassifying them as a contractor for years. The result? Legal leverage lost, thousands paid in settlement, and weeks of stress that could’ve been avoided with the right agreement.
Why This Happens
In the wellness world, hiring “contractors” seems easier and cheaper—but most business owners don’t understand the legal test behind that label. Simply calling someone a contractor doesn’t make it true in the eyes of the law.
How It Gets Messy
When relationships with staff break down, misclassification gives workers legal leverage. If they’ve been treated like employees, they can file complaints or threaten audits—and suddenly, you’re forced to negotiate from a weak position.
What Could’ve Prevented It
A strategic hiring process and an industry-specific agreement aligned with how work is actually performed. When your contracts match your operations, you stay legally protected—and in control.
Key Takeaways
✔️ Calling someone a contractor doesn’t make it legal
✔️ Misclassification can trigger audits or settlements
✔️ Laws vary by state and center on control and behavior
✔️ Working with an industry-specific lawyer avoids costly mistakes
🎧 Don’t let a misclassified contractor hijack your business. Press play now.