Taking the initiative

in support of you.

As the leading global network of spa industry professionals, one of our objectives is to educate our members on important issues that impact our industry. Below you will find more information on the FICA Tax Tip Fairness, the Cosmetology Licensure Compact and the Interstate Massage Compact (IMpact).

All three initiatives have the potential to have a great impact on the spa industry. Please take some time to read through the information and links we have provided so that you can become more familiar and learn how you can support these important projects.

Modernization of Cosmetics Regulation Act (MoCRA)

The U.S. FDA’s implementation of the Modernization of Cosmetics Regulation Act (MoCRA) passed by Congress on December 29, 2022, affects all manufacturing and selling of cosmetic products, including those in the spa and wellness industries. While MoCRA should not change the day-to-day activities of most spa and wellness providers, it is important that the products your company sells comply with MoCRA to avoid potential FDA interference and penalties.

Contact regulatory and legal compliance specialists sooner rather than later to ensure your company has met its compliance goals. 

To view a webinar explaining how MoCRA impacts the spa industry, click here. The FDA’s website is also a great resource for additional details. ISPA will continue to push out relevant MoCRA updates in the months ahead.

New California Law to Ban Drip Pricing and Junk Fees

Senate Bill (SB) 478 will go into effect July 1, 2024 for California and has the potential to greatly impact the spa industry. This law is designed to increase transparency for consumers in the purchasing process by eliminating charges and fees, such as service fees and surcharges. This new law will ban junk fees drip pricing which is defined in the legislation as “advertising a price that is less than the actual price that a consumer will have to pay for a good service.

To learn more about Senate Bill (SB) 478, click here. During a recent ISPA Town Hall Legislative Session, panelists shared insights, creative ideas and information about how various ISPA member spas will be tracking the impact of these changes implemented as a result of this new legislation. The Town Hall can be viewed here. 

ISPA serves as an education resource for its members; however, it is important to note that ISPA recommends seeking legal counsel when evaluating the impacts and any necessary changes that may need to be made within your business due to your state’s legislative changes.

Federal Funding for U.S. Massage Schools at Risk

On October 31, 2023, the U.S. Department of Education (DoE) released its final rule on . This new rule will have a substantial impact on the educational landscape within our massage therapy profession, most significantly the elimination of the 150% rule.

The current rule allows for massage schools and programs to provide clock hours up to 150% above the state minimum requirements for licensure, without having any negative impact on the student’s eligibility to receive Title IV Federal Financial Aid. For example, in a state that only requires 500 clock hours of education to obtain a massage therapy license, schools have been allowed to offer 700 clock hours and still receive federal funding.

The new rule would eliminate the 150% rule, requiring all clock-hour programs to teach only the state-mandated minimum hours. For states where the minimum is under 600 hours, massage therapy schools and programs would be classified as “short-term programs”, making them only eligible for direct loans instead of Title IV Federal Financial Aid.

Click here to learn how best to take action.

FICA Tax Tip Fairness

Employment-based spas and salons have been subject to unfair disparities in the tax code for decades, and the industry is deserving of equitable access to the existing 45 (b) tax tip credit which will create tax parity allowing spas and salons to thrive.

What is the 45B FICA Tax Tip Credit? It’s bipartisan, bicameral legislation which directly helps women, minorities and small business owners while shrinking the tax gap and increasing tip reporting compliance. Our industry is the second most heavily tipped industry behind restaurants, and this bill would boost retirement security of spa and beauty establishment employees, and help marginalized communities build a better future for themselves and their families.

For more information about the 45B FICA Tax Tip Credit, click here.

For templates and information on how to contact your members of Congress click here.

For a step-by-step guide on how to reach out to your members of Congress, what to say, and how to share this information with others, click here for the 45B FICA Tax Tip Outreach Toolkit.

The Interstate Massage Compact (IMpact)

The Council of State Governments is partnering with the Department of Defense and the Federation of State Massage Therapy Boards to support the mobility of licensed massage therapists through the development of a new interstate compact. This additional licensing pathway will create reciprocity among participant states and reduce the barriers to license portability.

The Interstate Massage Compact has been finalized and is available for enactment.

To view a map of the United States that displays the progress of the legislation across the country, click here.

To view the Interstate massage Compact Model Legislation, click here.

For more information and frequently asked questions, click here.

WATCH: Exploring the Massage Therapy Licensure Compact ISPA Town Hall

The Cosmetology Licensure Compact

The Council of State Governments (CSG) partnered with the Department of Defense (DoD) and a coalition of state boards of cosmetology to support the mobility of licensed cosmetologists through the development of a new interstate compact. This additional licensing pathway will create reciprocity among participant states and reduce the barriers to license portability and employment.

The Cosmetology Licensure Compact model legislation is complete and available to states for consideration and enactment. The final model legislation and additional information can be found here.

For more information and frequently asked questions, click here.

Gainful Employment Rule

The business of for-profit career colleges is in jeopardy as the United States Department of Education has proposed new rules that would impact the ability of these schools to offer their students financial aid including loans and grants. These new rules are based on a debt to earnings ratio which gathers annual income of graduates from for-profit career schools and assesses loan payment debt. The rules are saying that the student loan debt should be no more than 20% of their discretionary income annually.

These new rules will affect massage, cosmetology and skincare schools by removing their ability to offer government student financial aid, which 80% of their students utilize.  The issue is these types of careers are typically part time, self-employed and accounts for not just hourly pay but also percentage compensation and tips (which workers don’t always claim) so the debt to earnings ratio calculations simply don’t apply equitably to these professions.

Why should ISPA members care? If the Department of Education randomly – without appropriate data and input – imposes rules such as these, it will dramatically reduce the number of licensed massage therapists, estheticians, nail techs and hair stylists in the coming years which will be detrimental to all ISPA members – Spas, Vendors, Associations, Supply Chains, Consultants, etc.

The deadline to submit comment letters opposing these new rules passed on June 20, 2023. 

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