What if the majority of your staff left and opened up a competing business right around the corner? Or … tomorrow you found out you’re being sued by a student or instructor who was injured during class?
In order to achieve success, you must not only increase revenue, but also maintain and protect your fitness business to support what you’ve worked hard to build.
In this article, I’ll cover three important areas to face head on in order to protect your business and personal assets — and ensure continued business success.
What differentiates your business from your competition? The answer is intellectual property … your businesses’ trade secrets, proprietary information, and know-how. The legal dictionary defines intellectual property as physical manifestations of creations of the mind. Legally, your patents, trademarks, copyrighted materials, and trade secrets comprise your intellectual property. From a practical standpoint, that’s a fancy way of saying the things you create — your brand, your way of doing business, your customer list — are all part of your intellectual property. Continue reading →
I’m often asked what agreements should be put in place in the normal course of operating a business. A non-compete agreement is an important agreement between the business and each of its employees that every business should use. A non-compete agreement, also known as a restrictive covenant, provides critical protection for your membership business and its assets. The good news is non-compete agreements are fairly simple to execute.
There are essential steps every business owner should take to protect their assets and ensure continued business success. Here are five proactive measures to safeguard the business you’ve worked hard to build.
The explosion of social media ― Facebook, Twitter, LinkedIn and other social networking sites ― has created some unique issues for employers. How can you address employees’ use of social media at the workplace? More importantly, how do you deal with it outside of the workplace? What are employers’ rights and employees’ rights with respect to the use of social media tools? This article will examine some of these issues in this relatively new, but rapidly expanding, area.
In an earlier blog post I discussed a number of contract issues which could lead to problems in your customer relationships (See: Membership Contract Issues to Keep In Mind). However, well before you reach those potential pitfalls, you should know that the contract you are presenting to a customer is a valid, enforceable, legal document containing all of the required “bells and whistles.” What must or should be included in the contract? This article we will examine the “bells and whistles” that make up a valid, enforceable, legal contract.
Even though you may not be thinking about it, you are entering into a contract every time you sign a new member at your business. There are three basic elements required to form a valid contract: 1. An offer, 2. Acceptance of the offer, and 3. Consideration for services provided.
It seems simple. You offer classes, lessons and training in exchange for payment, and the member agrees to use your services and pay for them at an agreed price. In reality, numerous problems can arise when you attempt to memorialize the terms of your agreement in writing. If you are not careful the result of these problems is that you are left with an unenforceable contract. This article will discuss some of the problems Member Solutions has seen and how you can attempt to avoid these issues in your business.
Identity theft statistics are staggering. Each year, more than 10 million Americans have their personal information (name, Social Security number, bank account or credit card number) stolen. Identity theft has far-reaching, harmful effects on victims, and those who fall prey often face an uphill battle to restore their good name.
The first step in protecting yourself, your staff, and your members’ information is knowing the principal methods that thieves use to get the information.
Determining the legal status of the workers providing services for you and your business (such as your instructors, front-desk manager, and website designer) can significantly affect your business’ operating costs and the taxes you pay.
Workers fall into two categories: Employee or Independent Contractor. As you may suspect, an employee is treated differently than an independent contractor. Employers withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on employees’ wages. Conversely, employers do none of these things for an independent contractor.
The first step: you need to understand the business relationship between you and the worker. Making the determination can be tricky and mistakes can be costly. If you are unsure about the business relationship between you and a worker, the IRS has setthree basic categories to help you make your determination:
Ask yourself these questions: 1) Does the company control or have the right to control what the worker does and how the worker does it? Put another way, does the worker have any say in how and when they do their job?
2) Are the business aspects of the worker’s job controlled by the company? In this category, factors like how a worker is paid, whether expenses are reimbursed, who provides tools, supplies and job materials, all factor into the determination.
Type of Relationship
3) Are there written contracts or employee-type benefits such as a pension plan, insurance or vacation pay provided or available to the worker? 4) Will the relationship continue on an ongoing basis and is the work performed a key aspect of the business?
When determining whether a worker is an employee or independent contractor you should weigh all of these factors. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor. Things which are relevant inone situation may not be relevant in another.
Bottom line: if the business controls the “means and manner” in which the worker performs his services more than the worker does, the worker’s probably an employee.
Beware, though. If you mischaracterize a worker (or the IRS finds that you did), you can end up with substantial tax bills, including interest and penalties for failing to pay taxes and failing to file the proper forms. More importantly, because these are withholding taxes, you, the business owner, could be held personally liable for the obligation.
Finally, if you are still unsure after reviewing the categories and questions above, you and your workers have the option of having the IRS decide. Obviously, once a determination is made (whether by the business or by the IRS), you must file the appropriate forms (which may include corrected returns for prior filing periods) and you must pay the associated taxes, interest and penalties. If you believe that you have misclassified someone, you can simply file amended returns for the tax periods in question, and pay any tax liability.
In summary, use the categories and questions provided by the IRS to make your determination or ask the IRS to make the decision for you. Properly classifying your workers is definitely worth the time and effort NOW to avoid loss of time and money down the road.
Disclaimer Member Solutions is not an attorney and does not provide legal advice. Further, the information provided in this article is not, nor is it intended to be, legal advice. It is being offered as a general information service to Member Solutions’ clients and the business blog community. The laws in your jurisdiction may differ. You should consult an attorney for specific advice regarding your particular situation. Andrew S. Kasmen, Esq. is General Counsel and HR Director for Member Solutions.
CLICK HERE to read Andy’s articles on event liability waivers and health insurance plans for you and your staff.
Client Question: I use your Event Manager online registration system and love it. I do have one concern though about liability waivers. We don’t have a written/signed liability waiver on hand regarding our events. Our registrants check off that they’ve read and agree to our Terms and Conditions within the Event Manager application which includes language that our school is held harmless if you are injured. What if someone hurts themselves during one of our classes and decides to sue for damages?
Answer provided by Andy Kasmen, Member Solutions’ General Counsel:
When a person registers for an event in Event Manager, they are required to check the box indicating that they have agreed to all of the terms and conditions listed. Those terms and conditions are set when you create your Event Manager online registration form. If that box is not checked, registration cannot be completed. As long as that box contains a liability waiver/hold harmless and/or assumption of risk provisions, the school is protected.
Having a physical form with the person’s signature is unnecessary. This is similar to a credit card company not having a signed agreement with a cardholder who uses the card but doesn’t pay the bill, or a software company not having a signed agreement with someone who purchases and misuses their software. If, by chance, someone was hurt and filed suit, the terms and conditions sheet (as printed off of the Event Manager form) can be presented as evidence with testimony that this is what a registrant agrees to when registering and the registration cannot be completed without checking the box and specifically agreeing to these terms.
Having the liability waiver is not, obviously, a bar to a lawsuit. Therefore, make sure that you have proper insurance covering you and your business for the event. This will protect you from direct liability in case you are sued.