The recently filed class-action lawsuit against the indoor cycling chain SoulCycle for allegedly violating California and New York wage laws could have a huge impact on the health and fitness industry. We're fascinated by it and are watching to see how it progresses. The complaint, filed by a former SoulCycle instructor, claims that SoulCycle instructors - who are paid only for the classes they teach - are "required to work above and beyond the time instructing a class." Their duties include training, preparation, communication with customers, meetings, special-event classes and assisting with marketing.

 

We are particularly intrigued because the plaintiff worked at the company for four years. He, after all, has nothing to lose and everything to win. If SoulCycle is forced to provide back pay for all of those additional hours, he could be in for quite a windfall. On the other hand, current employees of SoulCycle - and every fitness business in America - could take a hit if he wins. Not that we think SoulCycle is 100 percent correct in how they pay their instructors (if what the suit alleges is true). For example, a strong argument could be made that special-event classes and marketing activities should be compensated hours. But training, preparation and communicating with customers are part of being an instructor. In fact, doing those things well is, in a sense, more vital to being a top-flight instructor than the act of teaching the class! If someone thinks they should be compensated for those activities, then they are likely in the wrong business. So what happens if SoulCycle loses? The impact would be felt at every club where group fitness instructors and personal trainers are employees rather than contractors. The whole employee vs. contractor thing is already a hot issue between the IRS and health clubs, and it would only get worse as more clubs protected themselves by converting employees into contractors. Instructors and trainers would have to show up, teach and leave. There would be no worries about additional duties, because contractors are in business for themselves. The other option for club owners would be to accommodate this notion of paying for everything. Everyone would have a low hourly wage and get paid, say, an extra half-hour to prep and an extra half-hour to schmooze with members. But they'd take home exactly the same amount of money, if not less. Superstar instructors wouldn't like it, nor would personal trainers who get paid on a percentage of the revenue they generate. We don't know what SoulCycle pays, but our guess is that they pay in line or better than their competitors. Their facilities are high-end and exclusive. Their classes and their instructors are highly regarded. We imagine that most of their instructors feel like fitness rock stars. This lawsuit could force them to be treated like everybody else. That wouldn't be good for SoulCycle's instructors. And it wouldn't be good for our industry.

Rob Bishop & Barry Klein is Guest Contributors of Athletic Business.
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We addressed this issue 10 years ago when we transitioned all our contractors into employees. Instructors are paid for 15 minutes beyond their class time (10 minutes before and 5 minutes after). Then we have a (much lower) secondary rate for any work done that isn't in direct contact with members, including mandatory meetings, yearly company competencies, shadowing other instructors, marketing and communications. Large chains are just figuring out that you can't tell an employee that their time is both mandatory AND unpaid? Seriously, WTF?
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If they are hourly employees, then every minute they spend working is billable. If they are salaried employees, then no.

If they are checking emails or text messages from SoulCycle's clients--then that is billable.

If they are an independent contractor and these folks are their clients, they can bill however they would like; however, if they are an hourly employee, they get paid by the hour-whether at the facility or on a mountaintop.
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I don't see how they could be contract employees given the fact that they have to teach on a specific day and time. If a company dictates when they are to be there and what a day, hence a class schedule, then by definition they are an employee. You cannot dictate the hours of a contract employee.
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Actually you can dictate the hours of a contract employee. Referees are almost always contract employees and they are told when and where to show up. They can't just show up willy nilly at their discretion. The same could be said for fitness instructors. The fact is that every state has specific laws regarding this and they differ by state.

Also,if you are paying people anytime they check an email, wherever they may be, whatever time that is, in this day of having that ability in your pocket at all times - you will go broke.
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John Macgowan Sunday, 26 May 2013
Understandably the Indoor Cycling Instructor community is watching this with great interest.
Am I reading this right? 'The whole employee vs. contractor thing is already a hot issue between the IRS and health clubs, and it would only get worse as more clubs protected themselves by converting employees into contractors.' Are you saying that the IRS is challenging the contractor status and that clubs/studios who currently use contractors could be forced to change them to employees?

What would you suggest as the best compromise?
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Hi John - What we meant about the 'employee vs. contractor thing' is that health clubs do frequently find themselves under scrutiny from the IRS regarding contractors. Many clubs use contractors for group fitness classes, personal training and other roles. The 'thing' is that the rules surrounding contractors can be open to interpretation. We believe that some clubs and boutiques might respond to this legal challenge by converting employees into contractors, but if they do so they must understand how their relationship to their instructors must change. If/when the IRS challenges their use of contractors then they had better have their ducks in a row. As for a compromise solution...as mentioned in previous comments, maybe clubs can pay 90 minutes for a 60 minute class? Maybe they can pay a smaller hourly wage that is applied to every legitimate work hour with a bonus for having a given number of people in class? The other big thing to us is for everyone to be on the same page. We can't say whether it's legal or not, but if these instructors knew what they were signing up for - 'you're going to teach classes while also spending X hours a week on these other duties' - then we'd like to think that they simply wouldn't take the job if they didn't like the terms.
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Mark L Masters Tuesday, 28 May 2013
I have a mix of staff. Some are paid hourly but at two rates for office work and for teaching classes.
Some teach only private clients according to their schedule which they arrange with the clinet and are private contractors. Some who work iin repair shop, facility maintenacne teach classes and do pprivate lessons get a salery do make the payroll planning easier and which they feel is fair but it is also flexible for them.
Anyone in our business should however accept that there will be some time spent at 'work' that you may not be paid for. Generally working in our business beats anyother profession and that is part of the traide off. If you want a strict pay for every minute at work get a factory job and clock in and out.
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You argue: 'But training, preparation and communicating with customers are part of being an instructor. In fact, doing those things well is, in a sense, more vital to being a top-flight instructor than the act of teaching the class! If someone thinks they should be compensated for those activities, then they are likely in the wrong business.'

Guys, you just made the case for paying instructors for prep time and client communications. In labor law terms, this isn't even a close one. Blue collar workers have been paid for years for 'doffing and donning' their work gear - and the fitness employer is just as surely reaping the benefits of the trainers' pre-and post-workout activities. The real problem here is archaic US wage and hour laws designed for a 1930's economy, and virtually impossible to make fit our New Millennium service industries and our 24/7 communication tools such as the iphone.