Since opening in 2008, Wendy Klein has classified her teachers and front desk staff as employees at Nandi Yoga.

“We’ve chosen a path that feels right for us,” said Klein, the founder and owner of the studio in San Mateo, California.

She explained that prior to starting her business, Klein had been a teacher at various yoga studios. It had been tough making what she had hourly and paying taxes on top of it. With that experience, she had looked into the differences between being an employee and an independent contractor. And she had brought that experience over to owning her studio.

“When we looked at the code, we really felt that it was in our interpretation of reading the code, these were really employees, they weren’t contractors,” she said. “It just felt like that was the right thing to do.”

But that doesn’t mean it’s cheap. On top of paying the hourly rate, Klein said there’s extra costs like paying sick leave. However, they have been able to do this because of where they started – since the beginning Klein has been working out the numbers to make it possible to classify teachers as employees at Nandi.

The biggest thing in deciding whether to label staff as employees or independent contractors comes down to the law. “If you’re going to open up a business, understand the local laws, understand the state laws around what you have to do for employees, and if you’re not sure, pick up the phone and call them and ask them. Understand your city laws,” said Klein. “Follow those laws and keep good records.”

Klein said to watch out for work trades, as those can be a slippery slope. She said since students are technically earning money in return for their work, taxes have to be paid on that, too. But whether it’s calling the state and asking questions, or getting an expert advisor, there are plenty of resources out there for the yoga studio owner. “Make sure you have a good employment lawyer. Make sure you have an employment handbook,” she said. “Make sure you’re following all the proper procedures on hiring people because yoga teachers should be treated with the same amount of respect that any other professional is treated.”

In the end, teachers need to be treated correctly said Klein. She explained they need to make an educated choice on whether or not they want to be an independent contractor or an employee. Plus, studio owners switching from one to the other need to take time to educate staff on the why behind the switch, as well as the advantages and anything else a teacher must know.

All in all, education is key for both yourself and your staff. “Do your homework,” said Klein. “Once you make that step to employees, make sure you have all your ducks in a row, and I think there’s a lot of resources out there.”