The US is the world's largest fitness market, with nearly 37,000 fitness studios or clubs and an annual growth rate of almost 5%. Revenues are growing even more rapidly and are currently estimated at $25.8 billion annually. Among fitness studios, "boutique" gyms are the fastest-growing segment. With many fitness instructors barely scraping by, all this growth begs the question: Where is the money going? In many cases, it's pure profit. Fitness chains like SoulCycle and YogaWorks prepared their books for scrutiny by investors in advance of their high-profile IPOs. Unfortunately, complying with the labor laws doesn't always factor into the equation. The fact that some employees view fitness as a lifestyle, rather than "just" a job, also contributes to employers throughout the industry underpaying their employees and denying them their legal rights. The consequences of widespread abuses throughout the fitness industry will only be exacerbated unless wronged employees speak up. The federal Bureau of Labor Statistics predicts that the number of fitness trainers and instructors will grow 13% before 2022. Unless companies are forced to fairly compensate their employees, they will continue to underpay and overwork their employees, and the next generation of fitness professionals will be subjected to the same routine employment law violations.In this post, our experienced employment lawyers analyze some of the most common employment law violations in the lifestyle and fitness industry.
(1) FAILURE TO PAY A MINIMUM WAGE FOR ALL HOURS WORKED
Many fitness and lifestyle professionals are "piece rate" employees. If you're paid by the class, session, or signup, rather than the number of minutes you spent working, you're paid on a piece-rate basis. But the fact that you're paid by the class doesn't mean your employer isn't required to pay you the applicable minimum wage for all the time actually worked. Instructors at fitness studios are often required to work "floor time" or "desk time" in addition to their scheduled classes or are required to clean up the studio, attend trainings, or review training materials. These requirements all implicate minimum wage concerns and you may have a cause of action for unpaid wages. The short version is this: You must make a minimum wage for every hour you work. Your employer is breaking the law if you do not receive a minimum wage for all working time, including:
- "Floor time" between training sessions or classes;
- Desk shifts before and after training sessions or classes;
- Cleanup times before and after training sessions or classes;
- Mandatory training conducted for the employer's benefit;
- Mandatory classes you are required to take at the employer's facility; and
- Free, public classes offered by teacher trainees to new students.
In our experience, very few employers in the health and fitness industries adequately compensate junior employees for their working time.
(2) FAILURE TO REIMBURSE FOR BUSINESS EXPENSES
California law prohibits employers from shifting their business costs onto employees by requiring employees to use their own property for the employer's benefit. Lab. Code § 2802. Fitness studios routinely violate these requirements. Are you required to get your schedule through a centralized app? Are you required to play music from your phone during class? Are you required to review training materials on your personal laptop or phone? Are you supposed to bring your own equipment to the studio? Are you required to drive your car from studio to studio in the same day? If so, you may have a claim for your employer's failure to reimburse your business expenses.
(3) VIOLATIONS OF "FORCED PATRONAGE" STATUTES
Employers cannot require or coerce employees or applicants to purchase services from the employer ("forced patronage"). Lab. Code § 450. While few employers generally violate this rule, it is routinely abused in the health and fitness industry. Many fitness chains require employees to participate in proprietary, brand-specific training beyond generally-recognized personal or group training certifications. These programs generally require applicants or employees to pay out of pocket for proprietary "certifications" that are not recognized by industry certification bodies and are not required by law. To illustrate, while your employer can require you to have NASM, ACE, or Yoga Alliance certifications, they can't require you to pay them for special branded "instructor trainings" that aren't transferrable across studio brands or throughout the industry. Abuses of this rule are rampant--and expensive. Studio fitness chains have monetized teacher training, converting a job expense into a profit center, and marketing it aggressively to consumers. But the fact that it's also marketed towards consumers doesn't mean it's not job training. If you paid for a branded training program, you may have a claim for reimbursement of your out-of-pocket costs plus penalties. We are actively investigating these claims and encourage you to contact us today.
(4) FAILURE TO PROVIDE REST BREAKS
Non-exempt employees are entitled to rest breaks for all shifts longer than 3 1/2 hours. Rest breaks accrue at the rate of 10 minutes for each 4 hours worked. This rest break must be in the middle of the work period to the extent practicable. If your employer fails to provide authorized rest breaks, you are entitled to an extra hour of pay for each day the break was denied. This means that if you are scheduled for four straight one-hour classes without a break, your employer is liable for an hour of wages for each day without a break, plus penalties.
(5) FAILURE TO PAY "SPLIT SHIFT" PREMIUMS
A shift split is a work schedule that is “interrupted by non-paid[,] non-working periods established by the employer, other than bona fide rest or meal periods.” 8 C.C.R. § 11020(2)(M). Employees who work a split shift are entitled to an additional one hour of pay at the generally-applicable minimum wage. Id. § 11020(4)(C). If you are scheduled for two classes in the morning and two in the evening with a two-hour break in between, you are entitled to one hour of split shift pay.
(6) FAILURE TO PAY "REPORTING TIME" PREMIUMS
Employees who report to work and are provided with less than half the scheduled work must be paid “reporting time pay” of half the day’s scheduled work. Id.§ 11020(12). If you are required to report to work a second time in any one workday and is furnished less than 2 hours of work on the second reporting, you must be paid for two hours of work at their regular rate of pay. Id. Put simply, this means that if you report to work and half your classes have been canceled due to under-enrollment or cancellations, you may be entitled to reporting time pay.
Employment law violations are pervasive in the health and fitness industry. If you are concerned that your employer is depriving you of your rights under the California Labor Code, contact King & Siegel LLP today for a free consultation.