Gym operators hiring personal trainers –make sure you consider the options and understand the legal consequences of getting it wrong

Commercial gyms may engage personal trainers to work with their clientele and add value to the overall membership experience. Gym operators need to consider their approach to engaging personal trainers to maximise profits and minimise legal issues. This article discusses the options available to gyms and the issues that can arise.

How to engage personal trainers for a commercial gym

There are three main approaches open to gyms seeking to bring on PTs:

  • hiring as employees
  • engaging as independent contractors
  • renting gym space to personal trainers

Personal trainers as employees or contractors

Many operators now seek to avoid employing PTs, instead promoting a system whereby the trainers run their own business from the gym. PTs promote their services personally and split their revenue with the gym on a negotiated basis.

The benefits of this system are obvious, as the gym saves money on wages and avoids the administrative burden associated with employing staff in an industry with relatively high turnover.

However, the arrangement is not without risk, particularly in respect of the punitive sham contracting provisions found in Australian employment law. Legal advice should be sought before making the decision to classify a worker as an independent contractor.

Personal trainers paying rent to use gym space

A more “hands off” approach by operators is to rent out their gym space to PTs for an agreed ongoing fee.  This arrangement is little more than a licence to use the gym, leaving PTs to operate their business and collect their own fees from clients among the gym’s patrons.

For operators opting to collect a licence fee, the arrangement must be carefully documented to address issues such as insurance, damage and disputes.

The importance of gyms and personal trainers getting the documents right

No matter which approach a gym opts for, it’s critical that the necessary documentation is drafted correctly. Failing to seek legal advice or attempting to piece together documents from examples found online can prove costly in the long term.

Pointon Partners has extensive experience in assisting gyms and personal trainers with their business structuring. Please contact Michael Bishop or Ben Drysdale to discuss.

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