Many wellness professionals whose main focus was studio classes have needed to adapt their offerings since the pandemic hit. Now, there are more practitioners, teachers, and retreat leaders teaching online and outdoors or producing self-hosted events.

As these are new formats with new risks, there are new legal considerations as well. You have to account for the safety and protection of both you and your clients around COVID-19. If you haven’t updated your terms and conditions, liability waivers, and insurance yet, now is the time to jump on it.

We connected with Cory Sterling, founder of Conscious Counsel and author of The Yoga Law Book, to discuss key legal considerations for teaching outside a studio context. Cory has served hundreds of clients in the health and fitness space and talks about the law in a fun and practical way.

Legal Considerations For Teaching Beyond The Studio

1. A New Wellness Offering = A New Set of Legal Considerations

Jen: A lot of wellness professionals have found themselves teaching primarily or fully online since COVID hit. What kinds of legal protections should they have in place for teaching online, whether that's via live stream or in a recorded format?

Cory: The most important thing about teaching online is realizing that the services that you are offering are different than teaching in person. You want to communicate your offering, what you can deliver, and what your clients can expect.

If you're able to do that, you really avoid 99.9% of the legal problems that might come up in the course of running your business.

We’ve got clients all over the world who operate health and wellness businesses of different sorts, and I’d sort of divide them into two different types, proactive and reactive.

The proactive clients are the ones who realize that the landscape has changed, and it's probably a good idea to update their legal agreements to reflect that.

And then there are those who - no judgment - sort of just sweep everything under the rug.

In these situations, it’s usually a build-up of issues; withdrawals from retreats, cancellations of subscriptions, people pulling back and asking for their money to be refunded. Eventually, it all boils over, and the business owner realizes that they need to fix their agreements. But at that point, they're stuck in a place where their existing agreements can't really help them.

So, the biggest things we’ve been focusing on are updated waivers of liability, service agreements, privacy policies, terms of service, and online disclaimers. And also on the legal relationships that we have with our teams, either those who are contract workers or formal employees.

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2. The Importance of Updated Liability Waivers and Insurance

Jen: Some people have also transitioned to teaching outside, both in public places like parks or hiking trails, or on private property like meditation or retreat centers. Does a lot of what you’ve just covered also apply here? What other considerations should people keep in mind?

Cory: One thing I’d point out here is that the safety net for all of us, our entire community, is insurance. Whatever we’re doing, we want to make sure that our insurance policies cover us for those activities. Call your insurance broker and ask them exactly what your coverage includes.

Your waiver of liability goes hand in hand with your insurance. When you have a responsibility to make sure that someone’s going to be safe while you’re facilitating an activity for them, it’s hard to know what the scope of damages could be if something goes wrong (in legal terms, the “quantum of damages”).

A great waiver of liability covers you for all of the activities you’re undertaking and all of the associated risks. But it’s only as good as the specificity of the activities that it covers.

Let's say we're teaching yoga. Teaching yoga in a studio is different than teaching a live stream class or providing on-demand content. In part, this is because you're not able to monitor people; you can't view them participating. You also don't know that the space they're in is safe or that they're using props correctly.

There are so many different variables at work, too, when you’re outdoors, teaching in a public space, or combining yoga with other activities. Turn your mind toward making sure that you cover all of your activities, the risks of those activities, and how the environment you’re in may contribute to those risks.

The main idea is: don’t have one liability waiver that you drafted 10 years ago and expect it to work for you now if you’re teaching a totally different type of movement modality in a totally different space and context. It’s the sort of thing that should be dynamic and specific.

3. How to Adapt Events and Legal Documentation For A Post COVID World

Jen: In terms of all of the above, we're often talking about self-hosted classes, workshops, immersions, or trainings - things that are generally organized, marketed, and facilitated by teachers directly to their students. What's changed about hosting these types of events since COVID hit?

Cory: Again, it comes down to the question: “What are the activities and what are the risks?” Now, an added layer to every activity we’re doing is that there is a communicable disease that is very dangerous and very contagious.

The first thing is to make sure that all of our documentation addresses this new layer of risk. It's your responsibility as a facilitator to address this. In the eyes of the law, you have something that's called a "duty of care." This basically means that you have to make sure that everyone doing something with you is going to be safe.

With COVID, we want to update our documents to include everything that's COVID-related, including the risks and outcomes. Put together clear behavioral policies and systems - for example, explicitly stating that participants have to clean their hands, sanitize their equipment, get a COVID test, stay spatially distanced, always wear a mask.

The biggest risk that business owners will come up against with COVID will be negligence, meaning that someone says there was something you should have done but failed to do. If someone is going to make such a claim, you're going to want to have strong evidence to support that you did consider the potential risks and take steps to avoid them.

You can point to the fact that you required a signed agreement, emailed it to all of your participants, posted your policies in your studio, trained your employees, etc. It becomes very difficult for someone making a complaint to defend their legal position and scare you into a settlement.

4. Your Liability When Working Independently

Jen: That makes a lot of sense. Is there anything specific we should keep in mind when we’re working independently as event facilitators? Legally, how is this different from working as a contractor or employee of a studio or a streaming service, for example?

Cory: Off the bat, make sure you’re paying your taxes properly!

But if we leave that to the accountants, think about the questions related to business licensing. Do you have the right corporate structure in place and the appropriate insurance for that entity? Do you have a separate bank account for it?

Legally, the most important principle would be to make sure that your assets are protected. If you have personal assets, like a home or car or investment accounts, in a lot of instances, it makes sense to register a separate legal entity.

In doing so, the operations of your business are different than your personal assets, and the extent of your liability is only to the extent of that legal entity.

5. LLCs as Legal Entities for Wellness Professionals

Jen: I was going to ask about this too - at least in the US, I think a lot of people consider LLCs as a way to do that. Is that often the right kind of legal entity for wellness practitioners, teachers, and retreat leaders, or something else?

Cory: The LLC question is not one-dimensional. You have to look at your earnings, the assets you have, the nature of the risk that’s involved with your business activities, and how your legal structure affects the taxes you pay.

If you're just starting out on your own, it may make sense to be a sole proprietor. If you have substantial assets or you want extra peace of mind, it may be worthwhile to register as an LLC.

Beyond that, the considerations are probably 50% law and 50% tax. From the legal perspective alone, registering as a legal entity is a great thing to do. You just need to weigh that against the associated costs and tax implications.

6. Implications of Working as an Employee Or Contractor

Jen: Thanks, really helpful. Finally, I know there's a lot of legislative shifts happening here in the US around how studios treat their teachers, whether as employees or as contractors. What should people know about this, and how can they stay informed and involved in the ongoing legislative process?

Cory: It’s certainly an issue, and California is the leader in all of this with AB5, so I’ll focus on California.

While there are federal implications regarding the contractor/employee distinction and classification, oftentimes, state legislation will drive the relevant tests to decide whether or not someone is a contractor or an employee.

For example, the state of Connecticut has the exact same test that California’s original AB5 has, which is a three-prong test. In Connecticut, if someone is performing services that are the same as those that your business offers, by law, they are an employee.

The state of Florida, conversely, applies what is called the control test. That’s also what the IRS will use in the event of an audit - they’ll say, “how much control does the employer have over the person who’s doing the work?”

And there are a whole variety of other considerations - what are the hours like? Is the employer allowed to tell workers specifically how to do their jobs? To wear a uniform? Who owns the intellectual property? How do the payment mechanisms work?

It will always be a big picture perspective.

Once we understand that it's a state by state determination, you can Google something like "your state" + "contractor" + "employment law test." Make sure whatever you're reading is a reputable source. Read from two or three sources, and you'll get a good sense of what's going on.

The thing to note with legislative changes is that there's a time lag between when a bill is drafted, when it's read out, when it's voted on, and when it's implemented. It shows how government and law are alive and fluid and how the conversation continues throughout this process.

On that note, there were two important exceptions to the three-prong test that I mentioned earlier when talking about AB5 in California.

One is the "one-off" exception - if someone is driving through town, does a workshop, leaves, and never comes back, that's an exception to the three-prong test.

And there’s also a “business to business” exception - if a business is using the service of another business, it’s technically also an exception to the test.

The takeaway is this: look at your jurisdiction and then recognize that all laws are always changing. In California, we’re waiting for a major decision to be handed down that will clarify a lot of these things further.

Stay informed, stay involved, and hopefully, we'll find a resolution to this that makes sense for our industry!

If you would like to watch the video interview, click below.

Final Thoughts

Any time you make adaptations to your wellness offering, whether it’s to teach outside of the studio or adjust for safety due to COVID, you need to update your legal and insurance documents. This is to protect you and your clients. Being proactive in this sense will help you to manage your business better and be prepared for the post COVID industry that we're all looking to on the horizon.