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Ask Rhee Gold

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Hi Rhee,
I am toying with the idea of making my teachers part-time employees versus independent contractors. A neighboring studio owner contacted me about a teacher of hers whom she pays as a contractor (1099 income) threatening to report her to the Labor Department about her payment practices. How should we proceed? Any guidance would be most helpful. —Lesley

Hello Lesley,
I’m glad you asked this question because I think a lot of our readers may be in the same boat as you on this issue. Although I am not an expert in tax laws, it is my understanding that all employees, whether part-time or full-time, should receive W-2 forms. What’s important is to distinguish whether the people on your staff are employees or contractors.

Speaking simplistically, someone who works the same day(s) and hours every week (even if it is only a couple of hours) is considered an employee, while someone who is brought in occasionally (for example, a master teacher or guest choreographer) would be a contractor. According to the Department of the Treasury/IRS Employer’s Supplemental Tax Guide (Publication 15-A), another primary factor is whether the business owner has a right to direct and control how the worker does the task she’s hired for. If so, the worker would be considered an employee.

An exception would be if the worker has established a corporation with a Federal Identification Number (FID), in which case your checks would be made payable to that corporation and not the worker. This is most common when such people teach at several schools or are master teachers. (For more info, read “What’s in a Title?” in the July 2009 issue of DSL.) 

I have gained this knowledge from school owners who have had difficulties with the IRS because they paid their full- and part-time employees as contractors. Most didn’t understand the law and some were trying to avoid paying the additional taxes associated with employee payroll. What usually happens is exactly what you described: an employee goes to the Labor Department or attempts to collect unemployment, and it opens a huge can of worms for the school owner. In some cases, the IRS will require payment of back taxes for the years when teachers who were paid as contractors should have been filing as W-2 employees.

Avoid these issues by consulting an accountant or another expert on the tax laws to discuss your particular situation and then begin the process of transitioning your contractors to employee status. I wish you and your friend the best on this. —Rhee

Dear Rhee,
I attended your Project Motivate seminar in Michigan with my sister and mom, who own a dance studio together. We found the seminar very informative. On our way home we came up with one more question. You talked about not letting your students’ accounts get behind. We do remind parents that they need to stay current with their accounts, both personally and with email. But what do you do about those parents who ignore your reminders and drop off their children to dance without coming into the studio? We don’t mind confronting the parents, but when they use their child as a pawn to hide from us, that is hard to deal with. Eventually we do get them to pay, but sometimes it’s several months later. What do you suggest? —Michigan

Dear Michigan,
I agree that children can be the victims when parents are delinquent on their tuition payments, and in such situations I sympathize with both the school owners and the kids. The parents at your school do not respect your payment policies, nor do they understand that you have financial commitments to meet that require that they pay their bills in a timely manner. When they registered their children at your school, they were making a commitment to abide by the policies and payment plans you set forth.

When parents are more than two months behind on tuition, I suggest making a phone call to remind them that it is the school’s policy that their children cannot attend class until all outstanding balances are paid in full. Making a phone call protects the children from the embarrassment of coming to the studio and discovering that they can’t take class.

You should offer these parents a payment plan or any other option that you can arrange in order to allow the children to keep dancing. However, if the parents are unable or unwilling to pay for your services, under your terms, then you must respect your own policy and your clients who are paying their tuition in a timely manner by requesting that the children not come back to class.

One way to avoid this circumstance altogether is to offer parents the option of automatic payment via debiting their checking account or charging a credit card. This allows you to collect monies due to the school on an agreed-upon day of the month. If the client’s credit is good, this is an option that allows you to completely avoid the issues associated with late payments. Consider making it a policy that any parents who have not paid tuition for two months must go on the automatic withdrawal system after they’ve paid their outstanding balance.

Your clientele must regard paying for their children’s dance lessons as a commitment like any of their other expenses, and you should not feel guilty if they choose not to do that. All the best to you. —RheeDear Rhee,
I have a school with a little more than 200 students. Registrations are still coming in, so I know I should feel good, but the start of the season has been hard because of my competition team dancers and their parents. I work with about 30 kids who participate in five competitions per year. We are known for our strong talent and we usually come out on top at most of the competitions. I have to be very careful about who represents the school when we compete, so I can’t put students who aren’t up to par on the stage. We are known as a winning school and it has to stay that way for my business. I have tried to explain this to the parents of the kids who haven’t made it on the team and they just don’t understand. How do other teachers handle this issue? Or do you know of any magical words I can use? So far I have lost seven students because they didn’t make the team. —Sandy


Dear Sandy,
You asked for my help, but I’m not sure you’ll like my response. Is it more important to you to be a winner than to do what is right for your students? In determining who is good enough for your team, are you taking into consideration only the winning tricks they can do? Is potential or passion in the mix? Have you thought about how you might be having a negative influence on the development of self-esteem in the students who don’t make it onto your elite team? As teachers, we can’t be focused on what’s good for our egos at the expense of what’s right for our students.

I am sure you will continue to lose students who do not meet your winning standards. How would you feel if your son was on a baseball team with a coach who never played him because he wasn’t good at bat? You would probably think that your son will never improve unless he gets the chance to be at bat. How will the dancers who don’t meet your standards ever get stronger if you don’t expose them to the learning experiences that come with performing or competing?

In my opinion, it is time to get rid of any embarrassment you might feel if your kids don’t win. Instead, sit at the competition thinking about how much good you are doing for all of your students who have the passion, not just the ones who will bring home a trophy. Please! Good luck. —Rhee

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2 Responses to “Ask Rhee Gold”

  • I don’t know if you remember me Rhee, I talked to you at the Costume Preview in New Jersey and told you about my situation with competition kids. I read above about the teacher who only wants to use the best kids for competition. I was in that same situation. I was known as a “winning school” I had some very good dancers and that was the demise of my school. Besides having one of my best dancers and his mom open their own school down the street,and taking all of my best dancers, my enrollment went down in the recreational classes because I was spending too much time on the competition kids. So I went through 3 years of hell. During the last 3 years I took your advice and concentrated on the recreational kids and for the first time , in I don’t know how long, I have the biggest enrollment I have ever had. And my competition team is doing ok, we may not be the best anymore , but honestly I can sleep better at night now.

  • Alison McCarthy:

    My mother owns a studio that is a family-style competitive school. ALL dancers who have parents support and dedication are invited to join a competive group. We hold auditions every year to group the dancers. but also take into consideration their past years habits like attitude, aptitude and attendance. Our groups are decided based on many considerations. First is compatible skill level – this may produce smaller groups and not make good business sense when trying to maximize limited studio time, but students are generally happy and stay, because they are challenged at an appropriate level – rather than too challenged where they don’t feel good about themselves or under challenged because you have put the elite dancers with less capable. We have found it works – with the exception of the 2 or 3 students a year who want to dance with the elite, but have not done the pre-requisite studies to warrant it (ie: group is doing series of fouette turns and they have yet to own a double pirouette, or they cannot do a russian, or switch split, etc..) This division starts to occur in students between the ages of ten to 12 and up. Mostly because their years of different application and/or addidtional classes (2xweek vs 5xweek) become apparant.
    Having said all that – that is where we take on the past years habits into consideration. For instance; In the last two years student A has been competing what she cannot do at the begining of the year she masters it enough to have predictable outcomes and improve on the technique, whereas student B has shown little improvement over the same amount of years and still has trouble with the step practised all year. Student A is given the benefit of the doubt and put in a higher skilled group, whereas Student B is not. The key is to build up the trust before hand so that there as few misunderstandings as possible. What we need help is to how kindly deal with the delusional…any ideas????

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