For small music schools, deciding whether to classify someone as a contractor or an employee can be a difficult decision. I encourage you to consult a professional, but let's cover some basics so you can feel more confident when having that conversation.
The concern is that if you classify someone as a contractor but they meet certain characteristics of an employee, you could be in violation of labor laws.
Key Considerations
Nature of the Worker’s Commitment: The first question to ask is whether the person you're paying works primarily for your school or splits their time between multiple businesses. If they work for other companies or are clearly independent, they are likely a contractor.
Control Over How Work is Performed: Does your school dictate how the teacher performs their job? For instance, if you require them to follow specific teaching methods or adhere to strict procedures, they may be an employee. On the other hand, if you simply provide space and help find students but don't control their teaching style, they are more likely a contractor.
Financial Control: Who controls the financial aspects of the relationship? If you pay them regularly (e.g., bi-monthly) like you would an employee, that could indicate an employment relationship. Contractors, by contrast, typically submit invoices for their work and may have greater autonomy over their payment schedules. Additionally, consider things like reimbursement for expenses. For example, if a teacher buys reeds for woodwind instruments themselves, they are likely a contractor. But if you provide these materials or reimburse them for such costs, this leans more toward an employee relationship. Conversely, just because a teacher is using your studio's piano, that alone doesn't make them an employee. However, if you provide instruments for them to take home and use outside of the studio, that might suggest an employee relationship.
Benefits and Perks: Are you providing benefits like insurance, paid vacation, or other perks? Employees typically receive these kinds of benefits, while contractors handle their own insurance and time off.

Looking to the Future
Now that we've covered the basics, it’s time to consider your long-term plans. If you're hoping to increase a worker’s hours and eventually bring them on full-time, hiring them as an employee may be the right path. On the other hand, if you simply want to expand your roster of teachers or add more instruments to your offerings, a contractor might be a better fit.
Finally, always consult a trusted advisor to ensure you're in compliance with all applicable laws and regulations in your area. We’d love to consult with you on this topic and many other important ones for your studio’s needs, so reach out today to get connected!
Comments