Why Yoga Studios Are Changing Policies—and Why It Matters for Students and Teachers
If you’ve noticed yoga studios changing their policies lately, cancellation rules, raising costs, you’re not imagining things.
Maybe you’ve been told you must cancel class at least 8 or 24 hours in advance or lose your credit. Maybe you’ve seen stricter membership terms. Or maybe you’ve noticed class costs creeping upward.
As both a yoga teacher (10+ years), an LLC business owner (5+ years), and a student of yoga for over 25 years, I want to help you understand why these shifts are happening—and why they matter for studios, students, and teachers alike.
The Bigger Picture: Colorado’s New Law
Colorado is tightening enforcement on worker misclassification. Studios calling teachers "contractors"—while maintaining control over schedules, pay, and teaching class formats—now face hefty fines.
These laws are forcing studios to rewrite policies fast—shifting costs and burdens onto teachers strapped with minimal support.
Starting August 2025, studios that misclassify teachers face fines up to $50,000 per violation (Ogletree Deakins, 2025; Who Is My Employee?, 2025).
That’s why we’re seeing sudden changes: studios are scrambling to adjust their policies to protect themselves legally and financially.
But the impact of these changes falls not just on studios—it falls on students and teachers too.
The Colorado Crackdown
For years, many yoga studios have relied on outdated business models that classified teachers as “independent contractors,” while still treating them like employees—setting schedules, controlling pay rates, and requiring unpaid labor for meetings or cleaning.
Starting in August 2025, Colorado is tightening its enforcement. Studios that misclassify teachers can now face fines up to $50,000 per violation. The state is clear: if you act like an employer, you have to pay like an employer.
This crackdown is good news in many ways—it’s designed to protect workers from being denied unemployment insurance, workers’ comp, and fair wages. But it also means studios are scrambling to adjust.
Some are already rolling out sudden policy changes: requiring teachers to form LLCs, revising contracts, or even canceling classes while they figure out how to comply. As a teacher, you may find yourself wondering: What does this mean for me? Should I create an LLC to keep my classes? Will this actually protect me?
Should I Create an LLC?
On the surface, forming an LLC (Limited Liability Company) can sound like a solution. Studios sometimes encourage—or even pressure—teachers to create LLCs because it shifts financial and legal responsibility away from the studio. If you’re an LLC, the studio can try to argue that you are a “true” independent business rather than an employee.
But here’s the reality:
An LLC doesn’t magically protect you from misclassification fines. Colorado’s updated laws look at the actual working relationship—not just the paperwork. If the studio sets your schedule, controls class pricing, handles payment, or requires you to follow their policies, the state may still see you as an employee.
An LLC benefits the studio more than the teacher. The studio avoids the burden of payroll taxes, unemployment insurance, and other employer responsibilities. You, as the teacher, absorb extra costs—LLC registration fees, self-employment taxes, bookkeeping, and liability insurance.
An LLC may make sense only if you truly operate as your own business. If you teach at multiple locations, set your own rates, directly invoice students, and control your schedule, then an LLC can help limit liability and create tax benefits. But if you mainly teach one studio’s classes under their rules, an LLC won’t change the fact that you’re functionally an employee.
Bottom line: Don’t rush into forming an LLC just because a studio suggests it. If they’re asking you to take on that cost, it’s fair to request higher pay to cover your new expenses. And remember: the law protects workers based on the reality of the relationship, not the label.
Can Teachers Be Fined?
In Colorado, the fines target the employer (the studio) — not the worker. The Department of Labor and Employment investigates employers for misclassifying employees as “independent contractors.” Teachers themselves are not fined simply for accepting work under these arrangements.
That said, misclassification still impacts teachers directly:
You may lose access to unemployment insurance or workers’ comp if you’re injured.
You may end up paying unnecessary business expenses (like LLC fees or self-employment taxes) without gaining any true independence.
So while you personally won’t be fined, misclassification shapes your income security and rights as a worker.
What Can Studios Do to Comply?
Studios have two real options if they want to stay compliant:
Hire Teachers as Employees
Pay hourly (including prep time and meetings) or a fair per-class rate.
Withhold and pay payroll taxes.
Provide unemployment insurance and workers’ comp.
Follow state labor standards like sick leave and breaks.
This is the most straightforward path when teachers are scheduled and supervised.
Contract Only With True Independent Businesses
Teachers set their own pricing and class terms.
Students pay the teacher directly, not the studio.
The studio acts as a rental space rather than a manager.
Teachers carry their own insurance, marketing, and client relationships.
Anything in between is risky. If the state sees a teacher functioning like an employee—even if they have an LLC—the studio could face fines.
👉 Next in the blog, you’d flow into your “Strategies for Sudden Shifts” section. That part gives teachers practical steps (saving communications, unemployment options, collective negotiation) when faced with abrupt policy changes.
Strategies for Sudden Shifts
As studios scramble to adjust to these new laws, you may feel the impact in very real ways: canceled classes, sudden requests to form an LLC, or new contracts that change your pay and responsibilities. These changes can feel disorienting and unfair—but you are not powerless.
Here are some strategies to protect yourself and respond with clarity:
If your class is canceled: Save all communications. If you were being treated like an employee, you may be eligible to apply for unemployment benefits. Documentation matters.
If you’re asked to form an LLC: Don’t say yes right away. Remember, an LLC benefits the studio more than the teacher. If you do consider it, request higher pay to offset registration fees, bookkeeping costs, and taxes.
If terms change overnight: Connect with fellow teachers. There is strength in collective negotiation. One teacher’s “yes” under pressure can set a precedent, but a group of teachers asking for fair terms together has far more influence.
If you’re unsure of your rights: Reach out to the Colorado Department of Labor and Employment or a local workers’ rights group. Sometimes even a short conversation can clarify what’s enforceable and what’s not.
Above all, know this: these laws exist to protect you. Studios may frame compliance as a burden, but the intent is to restore balance to a system that has long undervalued yoga teachers.
Why Students Should Care About Policies
When studios push stricter cancellation policies or drop-in rules, it’s not about punishing you—it’s about protecting teachers who often live off that income. Consider this:
Teachers rely on those kicks of commitment, not last-minute shifts.
Other fitness realms are even stricter: sports activities charge upfront without refunds, fitness studios have fees for late cancels or no-shows. Yoga has lagged behind.
Reasonable policies support sustainability, not just studios—but also the teachers carrying the practice.
When you show up—or cancel in time—you’re helping keep yoga alive.
What Students Need to Know: Why Policies Are Changing
When you see policies like 24-hour cancellation requirements, no-show fees, or stricter membership terms, it’s not about punishing students
It’s about stabilizing revenue in a system where teachers and studios have been on shaky ground for years.
Cancellations matter. Many teachers are paid per student. If 5 students cancel last-minute, the teacher may lose half their pay—even though they prepared the same class.
Other industries are stricter. In kids’ sports, you pay for the entire season up front, with no refunds if you miss practice. Boutique fitness studios charge $10–$25 for late cancels or no-shows (Reddit, 2023). Community centers suspend booking privileges for repeat no-shows. Yoga has been unusually lenient.
Accountability helps everyone. A reasonable cancellation policy (like 24 hours, with exceptions for emergencies) creates fairness: teachers are supported, studios are sustainable, and students commit more fully to their practice.
👉 Supporting these policies means supporting your teachers. It ensures yoga remains available and sustainable in your community.
What Teachers Need to Know Right Now
Value Your Work
Many instructors—especially new ones—accept low pay or inconsistent policies because "that's how studios roll." But behind each 60-minute class is:
30 - 90 minutes of COMBINED class prep, travel, setup, teardown, and admin.
Extensive training: hundreds to thousands of hours, and investment in specialized modalities like prenatal or therapeutic yoga.
I’ve taught classes where the studio kept 3–4 times what I earned—and I carried all the risk, work, and emotional labor. It’s crucial that teachers build awareness of fair contracts, minimum guarantees, and negotiation strategies to protect themselves and improve the profession as a whole.
Too many teachers accept exploitative conditions because they’re told it’s “normal.” and/ or they are so eager to teach a class they don’t question the pay. I’ve taught under multiple models that highlight the imbalance:
One studio paid me a flat $25 per class, plus $5 per student after the fifth student. If 10 students paid $20 each ($200 revenue), I earned $50 while the studio kept $150.
Another paid me a flat $10 per class, plus $5 per student after the second. With 8 students ($160 revenue), I earned $40 while the studio kept $120.
A recreation center paid me $15 per hour, with a standard 90 minute pay for a 60 minute class, regardless of how many students attended. That’s $22.50 per class with them compensating me for only 15 minutes before and after class.
Meanwhile, teachers absorb hidden costs:
Time spent preparing sequences, playlists, and marketing.
This can be HOURS of additional work. So next time you ask your teacher for their playlist… DON’T.Emotional labor of supporting students.
Many students share with their yoga teachers things they don’t say to anyone else. Things which teachers are not qualified nor trained to support. They need to learn how to navigate these situations and direct students to better channels and resources. In personal experience, once I had a student keep me 45 minutes after a 60 minute class only to reject my advice and never return. Now I refer students who would like One-to-One support to book me for a Private Session.The risk of class cancellations with little notice.
How many times have I done all the things for class: playlist, class plan, travel, set up and clean up… only to have no one show up, even if they had signed up! In the years I have been teaching, this alone has contributed to my burnout AND why I am writing this blog right now. Yoga studios without no-show/ cancellation policies are taking advantage of their teachers.
Studios stabilize themselves with class packs, memberships and especially teacher trainings (200-hour and 300-hour programs). These trainings bring in tens of thousands of guaranteed dollars for the studio, while flooding the market with new teachers desperate for experience—willing to teach for very little.
👉 Teachers: stop teaching for free. Stop accepting $10–$25 for a class that earns the studio hundreds. Know your value, and advocate for contracts that guarantee minimum pay, fair cancellation terms, and revenue splits that make sense.
💡 Want the full breakdown in one place?
I’ve put together the Yoga Teachers Survival Guide: Understanding the New Colorado Laws — a clear, practical resource that goes deeper into:
What the August 2025 crackdown really means
The truth about LLCs and whether you need one
How to protect yourself if your studio changes policies overnight
A printable Teacher Survival Checklist you can keep handy
👉 Download the guide COMING SOON and give yourself peace of mind.
Yoga Is More Than Fitness: The Eight-Limb Framework
Yoga isn’t just a movement class. The Yoga Sutras outline a holistic path:
Yamas: ethics
Niyamas: personal discipline
… up to Samadhi: union
Treating yoga as merely exercise, or undervaluing teacher expertise, cuts deeply against yoga’s essence. Supporting teachers, honoring lineage, and advocating for fairness—these are our expressions of living yoga off the mat.
More on this - Keep Reading
A Closer Look at Studio Culture: When Ethics Fall Short
Some of the most subtle—but damaging—dynamics happen inside studios. Let’s talk about two of them:
The Subbing Game & “Sororities”
The "sub request" messages often reflect privilege—not humility. I’ve received those that read like VIP announcements: “I’m off teaching at a festival or retreat; can someone take my beloved well-attended class?” Newly qualified teachers scramble to sub, partly to belong.
Truth is when regular students learn their teacher won’t be there, they opt out of attending. Which turns that “well attended” class into Not-so-Fruitful work for the substitute teacher.
Similarly, many studios carry informal “sororities” of preferred teachers—those with the best time slots, inside connections, and studio clout. This hierarchy doesn’t uplift all teachers; it shields gatekeeping. When specialty-trained, more experienced, and potentially more ethically devoted to the practice are overlooked for those who belong to the sorority, we all lose out on the full spectrum of yoga.
When Expertise Is Undermined
I experienced this personally as a prenatal yoga teacher. After class, a new student asked me which classes I would recommend they could attend as a pregnant person who was also new to yoga—and the studio owner stepped in, saying:
“Oh, any class will do. All of my teachers would be happy to have you in class.”
That response was not only dismissive to me, my training, my teachers and their teachers, my specialized class, but ESPECIALLY potentially dangerous for the student.
Fact is: NOT ALL TEACHERS do feel comfortable having a pregnant student in class. This is due to the lack of training they have recieved from their teacher training. In a 200 hour YTT, the basic training a person has to teach, pregnancy is NOT REQUIRED. If it is included, it’s a minimal couple hours unless the lead teacher chooses to include more comprehensive education.
Yoga ethics, rooted in satya (truthfulness) and ahimsa (compassion), demand we honor both teacher experience and student needs. Misleading a pregnant student into any class is neither safe nor ethical—and minimizes the value of specialized expertise.
The Karma Yoga Problem
Another common practice is the use of so-called “karma yogis”—students who clean the studio, work the desk, or check in classes in exchange for free passes.
Work-trade itself isn’t the issue. The problem is calling this “karma yoga.”
In the Bhagavad Gita, karma yoga is the path of selfless action—acting without attachment to reward, offering work as service to the Divine (The Bhagavad Gita, Chapter 3).
By calling free labor “karma yoga”, studios are selling FREE LABOR as a yoga practice. This goes well-beyond the exploitation of their teachers working so much for such little compesation. It teaches students that whatever work they are doing is equal value for the class they are taking. In turn, it’s devaluing the teacher of that class.
Is signing people into a class for 15 minutes and sweeping the floor equal to the the work that teacher put in?
Is 15 - 30 minutes of work valued at the price of the class?
Let’s break that down. A student may pay approximately $20 for a class. The teacher could be paid as little as $15 for teaching that class.
In this example: 15 - 30 minutes of work equals the 90+ minutes the teacher put in for $5 less value.
👉 If studios want to offer work-trade, they should call it what it is. Don’t wrap it in spiritual language that misrepresents yoga.
The Ripple Effect of Undervaluing
When teachers teach for too little—or not at all—we all lose:
Students learn not to value quality.
Studios justify flat-rate pay for all.
Teachers burn out, exit, or never stretch beyond foundational training.
Valuing every teacher’s background, education, and lineage isn’t elitism—it’s an ethical commitment to quality, safety, and sustainability.
AND honoring the 5,000 year old teachings of yoga.
When yoga teachers allow themselves to be undervalued, it doesn’t just hurt their own paycheck—it waters down the value of all yoga teachers.
Studios, gyms, and rec centers feel justified in paying everyone the same, regardless of skill or longevity.
Students begin to expect yoga to be cheap—or free. Why pay for an experienced teacher when YouTube is free? Why invest in an independent teacher when ClassPass offers endless options with brand-new grads?
Professional teachers who rely on yoga for income are pushed out or burned out. We lose high-quality teachers who have embodied these 5,000 year old practices. This is essentially a version of colonialism, or in other words appropriation of yoga morphed into modern Western “fast fitness”.
This isn’t about hierarchy or excluding new teachers. Every teacher begins somewhere. But teachers should be paid in a way that reflects experience, credentials, and dedication.
👉 If you teach—even as a side gig—remember that giving away your work contributes to the systemic undervaluing of yoga teachers, appropriation of a 5,000 year practice, and Western Colonialism.
🌿 The Yoga Value Ladder
To understand the problem, let’s look at how teacher growth should translate to value—and how it directly benefits students.
Teacher Growth & Value
New Teacher: Enthusiastic, learning. Value: $25–$35/class
Developing Teacher: More confident. Value: $35–$50/class
Experienced Teacher: Safer, adaptive. Value: $50–$75/class
Seasoned Teacher: Trauma-informed, holistic. Value: $75–$100/class
Master Teacher: Transformative, lineage holder. Value: $100–$150+/class
Student Benefits
With a new teacher: energy + surface-level classes.
With an experienced teacher: safety, personalization, deeper yoga.
With a master teacher: lifelong transformation, rooted in tradition.
👉 Studio Reality: Most pay all teachers the same flat rate ($25–$40/class) or same per-student rate and charge students the same (~$20 - 30 /class), regardless of who teaches. This flattens the ladder and undervalues everyone.
🌿 Yoga Is More Than Fitness: The Eight Limbs
The Yoga Sutras of Patanjali remind us that yoga is not just a workout or a 60-minute class—it is a union of body, breath, mind, and spirit. Yoga is a living philosophy, not a product. Policies, pay, and studio culture are not just business issues—they are ethical choices. If we want yoga to remain yoga, we must align our business practices with its spiritual heart.
The Yoga Sutras of Patanjali remind us that yoga is a union of body, breath, mind, and spirit.
Patanjali outlines The Eight Limbs of Yoga in the Sutras. It offers a holistic path that goes far beyond stretching or sweating. When we undervalue yoga teachers, or when studios reduce yoga to “fitness classes,” we’re erasing this depth.
Here’s how each of the Eight-Limbs connects to this holistic conversation:
Yamas – Ethics
These are the moral guidelines of yoga, including non-harming (ahimsa) and truthfulness (satya). When studios underpay teachers or dismiss their specialized knowledge, they harm both the teacher and the students. When teachers undervalue themselves, they too participate in a cycle that erodes truth and integrity in yoga.Niyamas – Discipline
The niyamas are practices of self-discipline and self-study (svadhyaya). Teachers invest years, often decades, into disciplined study and continuing education. Recognizing that investment through fair pay and respect is not just financial—it honors the spiritual discipline of teaching yoga.Asana – Postures
The physical practice is what most people see, but it’s only one piece of yoga. Asana was traditionally designed to prepare the body for meditation—not as a fitness regimen. When yoga is treated only as a workout, the deeper dimensions are lost, and teachers are reduced to “fitness instructors” instead of carriers of a living tradition.Pranayama – Breath
Breathwork balances the nervous system and connects us to life force (prana). Teachers trained in pranayama guide students far beyond physical poses, offering tools for stress, trauma recovery, and emotional regulation. Yet many studios still pay them as if they are only leading squats or crunches.Pratyahara – Withdrawal
This is the practice of turning inward, stepping away from sensory distractions. For students, honoring cancellation policies and showing up to class creates the container for this inward work. For teachers, pratyahara reminds us not to chase approval or comparison in studio “sororities,” but to root in inner clarity and humility.Dharana – Concentration
Concentration is the ability to focus the mind. Teachers spend hours cultivating focus in their students, holding steady space even when life feels chaotic. This invisible labor—emotional, energetic, spiritual—is rarely valued in dollars, but it is the very heart of why yoga classes feel different from fitness classes.Dhyana – Meditation
Meditation is sustained awareness. Teachers who integrate meditation guide students into stillness, something the modern world desperately needs. Supporting teachers through fair policies and pay ensures that this sacred part of yoga doesn’t get lost in favor of fast, high-intensity classes that “sell.”Samadhi – Union
The ultimate limb of yoga is union—wholeness, liberation, harmony. When teachers, students, and studios honor each other with fairness, humility, and respect, we embody this union in our communities. But when we undervalue teachers, exploit students, or reduce yoga to a commodity, we fracture it.
👉 When teachers are undervalued or students resist accountability, it violates yoga’s ethics.
👉 When we honor worth, fairness, and truth, we practice yoga not just on the mat, but in life.
🌿 Yoga Is More Than Fitness – The Eight Limbs in Practice
✨ The Eight Limbs of Yoga and Why They Still Matter Today
Limb 1: Yamas – Ethics
Non-harming (ahimsa), truthfulness (satya).
Today: Underpaying teachers, dismissing expertise, or misleading students violates these principles.
Limb 2: Niyamas – Discipline
Self-study (svadhyaya), contentment, purity.
Today: Teachers invest years of disciplined study. Fair pay respects their lifelong commitment.
Limb 3: Asana – Postures
Postures to support meditation, not “fitness only.”
Today: Reducing yoga to exercise devalues teachers, lineage, and the spiritual roots of the practice.
Limb 4: Pranayama – Breath
Breath regulation, energy balance.
Today: Teachers offer tools for trauma recovery & nervous system regulation—worth more than a drop-in fee.
Limb 5: Pratyahara – Withdrawal
Turning inward, away from distractions.
Today: Respecting class time & policies creates space for this inward work. Teachers, too, must resist studio hierarchies and root in humility.
Limb 6: Dharana – Concentration
Focused attention.
Today: Teachers provide unseen labor—holding steady, safe space—rarely valued but essential to yoga’s difference from fitness.
Limb 7: Dhyana – Meditation
Sustained awareness.
Today: Meditation is part of yoga’s healing depth. Supporting teachers ensures it remains part of classes, not replaced by “high-intensity trends.”
Limb 8: Samadhi – Union
Liberation, harmony, wholeness.
Today: Fairness and respect in yoga communities embody union—while undervaluing teachers fractures it.
Shifting the Paradigm
I don’t want to see yoga studios close. I want them to evolve.
Here is what we can all do to support yoga.
Students: Support cancellation policies, and know you’re investing in teacher sustainability.
Teachers: Don’t undervalue your work—even part-time teaching contributes to systemic underpayment.
Studios: Build models that respect both students and teachers, beyond “flat-rate” and “karma yogis.”
This is the paradigm shift we’ve needed for decades. Colorado’s new law is forcing the conversation—but we can choose to rise together.
Your Next Step
These policy shifts can feel overwhelming — but you don’t have to navigate them alone. That’s exactly why I created the Yoga Teachers Survival Guide: Understanding the New Colorado Laws.
Inside, you’ll find:
A full breakdown of Colorado’s misclassification crackdown
Plain-language answers about LLCs and compliance
Practical strategies for protecting your income
The complete Teacher Survival Checklist (printable for quick reference)
👉 Download your free guide COMING SOON and keep it handy. Whether your studio cancels classes, asks you to form an LLC, or hands you a new contract, you’ll know your options and your rights.
Remember: these laws were designed to protect teachers. With the right knowledge and tools, you can stand strong, negotiate fairly, and keep sharing the sacred work of yoga without being taken advantage of.
Learn from Me — and Take Action
With 25+ years as a student, 10+ years teaching, and 5+ years as an independent LLC owner, I’ve walked this path.
Be the first to download the guide. Join my mailing list!
It’s launching in just a few days.
All content © Anne Catherine Yoga. This blog and any affiliated handouts is for personal use only. Please do not distribute or reproduce without permission. Yoga practices are offered as general education and are not intended to diagnose, treat, or prevent any medical condition. Always consult your provider before beginning any new movement practice.
