Employment Law for Medspas: How to Hire, Stay Compliant, and Protect Your Business

In this guide, employment law expert Iggy Garcia breaks down the essential steps, safeguards, and common pitfalls every practice owner should know. Based on a recent Aesthetic Visionaries session, Iggy shares a step-by-step roadmap for hiring smart and staying compliant. From W-2 vs. 1099 classifications to onboarding best practices, you'll learn what you need to know to grow your team with confidence.

Meet the Expert

Meet Employment Law Expert Iggy Garcia — Guiding Medspas on Hiring and Compliance

Iggy Garcia is a shareholder at Ogletree Deakins, one of the nation’s top employment law firms. With deep experience advising businesses of all sizes, he specializes in helping entrepreneurs and growing medspa practices navigate complex topics like hiring, classification, compliance, and workplace policies.

His approach is practical, clear, and built for real-world application. As he puts it: 

“Hiring isn’t just about adding headcount — it’s about building the right team, the right way, so your growth strengthens your business instead of exposing it to risk.”

Why Employment Law Matters for Medspa Owners

Employment law might not be the most glamorous part of building a practice, but it’s one of the most important. If done incorrectly, hiring can open the door to legal claims, wage violations, and tax headaches that are much harder (and more expensive) to fix later.

Iggy Garcia emphasizes that even well-intentioned business owners can slip up if they don’t understand the basics. That’s why it’s essential to lay the groundwork early by:

• Understanding the legal difference between 1099 contractors and W-2 employees
• Creating compliant job descriptions and onboarding materials
• Setting up proper payroll and recordkeeping systems
• Avoiding informal “under the table” agreements that can lead to serious tax issues

Before You Hire at Your Medspa: Essential Legal Foundations

Before you post a job listing or schedule interviews, make sure your business is legally prepared to hire. According to Garcia, this groundwork is often skipped despite it being one of the most important parts of protecting your medspa.

Here’s what to have in place before hiring:

• An EIN (Employer Identification Number) and registration with your state’s labor department
• Workers’ compensation insurance and awareness of your local wage laws
• A basic employment agreement or contractor contract tailored to the role
• Clear role definition, including duties, hours, and expectations

Without this foundation, Garcia warns that even a well-meaning hire can turn into a compliance risk. From wage violations to tax liabilities, it’s far easier to set things up properly before that first paycheck goes out.

Hiring Your First Medspa Employee: What to Know Before You Make the Leap

Hiring your first employee is a big step — one that sets the tone for how your team, your culture, and your business will evolve. But rushing into it without a strategy can lead to legal missteps and operational strain.

Garcia recommends medspa owners slow down and think through a few essential decisions before making that first offer.

The three core areas to consider before you hire:

• Define the role clearly
  A detailed job description doesn’t just help attract the right candidate — it also protects your business. Garcia advises including responsibilities, hours, required qualifications, and compensation expectations. This description should guide both your interviews and your onboarding process.
• Choose the correct employment classification
  Will this be a W‑2 employee or a 1099 contractor? Part-time or full-time? Garcia warns that misclassifying the role can lead to tax issues, wage claims, and compliance violations. If you're unsure, consult an employment attorney before extending an offer.
• Be realistic about your current needs
  Not every growing business is ready for a full-time hire. If the workload is limited or specialized, consider starting with a 1099 contractor — just be sure they meet the legal criteria. As your needs grow, you can transition into a part-time or full-time W‑2 hire.

Avoiding Common Medspa Hiring Mistakes and Legal Pitfalls

Even well-intentioned medspa owners can make hiring mistakes that open the door to serious legal and financial risks.

Watch out for these compliance red flags:

• Paying under the table
  Informal arrangements might feel easier upfront — but Garcia warns that if something goes wrong, you could be liable for unpaid taxes, wage violations, or even discrimination claims. Always document and report wages properly, even for short-term or occasional help.
• Misclassifying workers
  Treating a 1099 contractor like a W‑2 employee can result in major legal exposure. Classification matters, and the law often sides with how the relationship functions, not what the contract says.
• Skipping documentation
  Verbal agreements leave your business vulnerable. A written contract protects both parties by clearly outlining responsibilities, pay structure, and legal terms — and it becomes essential if a dispute arises.
• Overlooking progressive discipline
  If you need to terminate someone, Garcia stresses that documentation is key. Written performance plans, follow-ups, and warnings demonstrate that the decision was based on conduct or performance — not bias.
• Ignoring state-specific laws
  Garcia reminds owners that employment laws vary widely by state. From wage requirements to termination procedures, what’s legal in one state may be risky in another. Always check your local laws, or consult an attorney, before making policy decisions.

1099 vs. W‑2 Medspa Employees: What Owners Need to Know About Classification

One of the most common legal missteps for growing medspas is misclassifying workers. Should that injector or front desk support be a 1099 contractor — or a W‑2 employee? The answer depends on how the relationship is structured, how much control you have, and what kind of work they’re doing.

According to Iggy Garcia, the classification process isn’t about labels, it’s about facts. If a worker is functioning like an employee, the law may treat them as one, even if you’re calling them a contractor.

What’s the difference between W-2 Employees and 1099 Contractors?

W‑2 Employees typically:

• Work under your supervision and on your schedule
• Use your tools, equipment, and treatment spaces
• Are trained by you and integrated into your daily operations
• Receive benefits like PTO, healthcare, or bonuses
• Require you to withhold taxes and comply with wage and hour laws

1099 Independent Contractors generally:

• Set their own hours and decide how to perform the work
• Use their own tools, materials, and supplies
• Often serve multiple clients or employers
• Are responsible for their own taxes and benefits
• Require minimal oversight or training from your team
  
  

Why employment classification matters

Misclassification can lead to serious legal consequences — including back pay for overtime, unpaid taxes, and even discrimination claims. In legal disputes, courts look at the level of control, training, duration, and how central the person’s role is to your business.

✔️ Pro tip from Iggy Garcia: When in doubt, consult an employment attorney familiar with your state’s laws. The cost of a legal consult is minor compared to the risks of a misclassification lawsuit.

Insurance and Legal Protections Every Medspa Owner Should Have

In a medspa setting, bringing someone onto your team means giving them access to more than just a role; it’s access to your brand, your clients, and your reputation.

That’s why it’s critical to protect your business infrastructure and intellectual property from day one. Iggy Garcia emphasizes that too many medspa owners skip this step; only to realize too late that they opened themselves up to unnecessary risk. 

One of the first and most important ways to reduce that risk is with the right insurance coverage.

Insurance Coverage for Growing Medspas

At a minimum, your medspa should carry general liability insurance, which covers things like property damage, bodily injury, and medical expenses that could occur on-site. This is especially important in the aesthetics and wellness space, where patient interactions carry inherent risk.

Depending on your practice size and services, Garcia recommends also exploring:

• Professional liability (malpractice) insurance for licensed injectors or medical professionals
• Workers’ compensation insurance, which may be legally required once you hire W‑2 employees
• Directors and Officers (D&O) insurance, if your business has a board or external investors

Insurance helps protect your physical and financial assets, but it’s just as important to protect what makes your business unique. That includes your client lists, marketing strategies, and internal processes.

How to Protect Client Lists and Confidential Information

As you hire, team members may gain access to sensitive data; don’t assume this information is automatically protected.

“Your client relationships, your materials, your hard-won reputation—those are worth safeguarding from day one, whether someone works for you a month or a decade.”
-Iggy Garcia

To help reduce the risk of IP loss or client poaching, Garcia suggests:

• Confidentiality agreements to prevent unauthorized sharing of sensitive business information
• Non-solicitation clauses to stop former team members from recruiting your staff or clients
• Non-compete clauses to limit competitive work after they leave (where legally enforceable)

Yes, You Need an Employee Handbook

A common mistake for medspa owners? Waiting until you have a big team to create an employee handbook. But even if you're only hiring one or two people, having a handbook in place from the start sets expectations, defines your culture, and protects your business.

Iggy Garcia stresses that handbooks aren’t just for large corporations; they’re a critical tool for any business that wants to grow responsibly.

“An employee handbook isn’t just rules, it’s your culture on paper. It tells your team who you are, what you stand for, and how you succeed together.” — Iggy Garcia

Why employee handbooks matter:

• Set the tone for your culture. Define the kind of workplace you’re building and communicate your values from the start.
• Establish workplace policies. Include expectations around conduct, PTO, dress code, and communication.
• Protect your business legally. Include required policies such as Equal Employment Opportunity (EEO), anti-discrimination, and procedures for reporting harassment or misconduct.
  

A well-written handbook is just as valuable for your team as it is for you. It helps everyone stay aligned and accountable — and prevents misunderstandings before they happen.

Planning for the Worst: How to Handle Termination Safely

Letting someone go is never easy, and if it’s not handled properly, it can put your medspa at legal risk.

Iggy Garcia stresses that when it comes to terminations, documentation is everything. If a former employee claims they were fired for discriminatory reasons, your best defense is a clear, consistent paper trail that shows otherwise.

Use progressive discipline to protect your business:

• First warning: Document any verbal conversations, even with a simple email follow-up
• Second warning: Provide written notice with clear performance feedback
• Performance Improvement Plan (PIP): Outline specific goals and a timeline (usually 60–90 days)
• Termination: If there’s no improvement, proceed with final documentation and offboarding

Garcia explains that this approach shows you made a good-faith effort to help the employee succeed and gives your business a strong legal defense.

As he says, “Juries understand terminations — they just want to see that the employee had a fair chance to improve.”

Final Thoughts: How to Grow Your Medspa With Confidence and Compliance

Employment law may not be the most glamorous part of growing your medspa, but it's one of the most important. From choosing the right classification to protecting your client list, every decision lays the foundation for how your business grows.

Iggy Garcia reminds us that the biggest risks often come from doing too much informally or waiting too long to put policies in place. But the good news? With just a bit of preparation, you can build a compliant, professional team that reflects the care and excellence your medspa delivers.

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This blog post is for informational and educational purposes only and should not be construed as professional legal advice. The information provided is not a substitute for obtaining advice from qualified legal experts who can provide feedback specific to your situation and state and/or federal law. Any reliance on the information in this blog is at your own risk, and the author assumes no liability for any damages or issues that may arise from its use.