Escorting: Legal Requirements

[Larry Storch]

I have been speaking with a friend who has been working for an agency for some time. She has been having difficulty with obtaining appointments as the owner/phone girl has been directing clients away from her and onto other escorts. There is definitely some personal issues between the two of them, but this is interfering with her ability to earn a living. She wants very much to go independent, but wants to do things as legal as possible. I know that obtaining a business license is always a good idea and is possible in the city she wants to open her business in. Is it as simple a matter as getting a license, securing a location (this may be the only difficult part as running a common bawdy house may apply here) and advertising? She has no desire to obtain a criminal record and is not involved with drugs or anything which may attract the attention of the police. She just wants to earn a living doing something she enjoys and has been working at for a couple of years now.
I don't know how many times a thread like this has been started, I did a search here and found some info, but not very much. I want to help her and thought that this would be the best place to ask this as the amount of knowledge and experience here on both sides of the equation is vast and invaluable. If this has already been covered here then perhaps a link directing me in the correct direction would be of help. Otherwise, I would appreciate any information anyone has which can help solve this problem.
I have researched as much information on line as possible regarding the 'legalities' of this type of business and see that it basically gets down to the following no-no's : Procuring, Soliciting in Public, Under-Age Prostitution, Living on the Avails of a Prostitute and Common Bawdy Houses. Beyond that it appears that escorting isn't illegal, it is more on HOW you conduct your business.

 

[HubbaHubba]

Honestly, it might not be so much "a personal issue" between them so much as the fact that your friend is probably not tipping the phone girl. At many agencies in Vancouver, escorts will get more jobs sent their way if they tip the phone girl $20-40 per job.

It's just one of the reasons I think being independent is better.

Tip the phone girl for doing her job? She's taking an order for cying out loud....lol
I could see how that entire set up could be very frustrating.

 

[HubbaHubba]

Well that's my opinion too - but if you want to get lots of jobs, that's the way it works at many agencies.

Crazy....who knew telephone girls could be so underhanded

 

[HubbaHubba]

Well, it makes sense from their perspective, right? If a client calls up and doesn't have a request for a particular lady, but simply requests a skinny blonde, and the agency has 3 skinny blondes, why wouldn't the phone girl recommend the escort that consistently gives her a tip?

I totally get what you're saying. The agency should just not allowing the phone girls to start their own business within a business. That's really what they are doing and if I was an owner I wouldn't allow it. Much easier to replace a phone girl than a good escort. Interesting information though Holly, thank you for sharing that.

 

[Pillowtalk]

I couldn't tell, but it sounds like the owner is the phone girl? In that case, simply find a new agency or go independent. Find a more reputable place. The tipping will probably still go on, but at least she will know about it up front.

I think also there are some un-agency type places for somewhat independent sps. There is an agency advertising here that claims "independent" in the titles, so I assume this is a group of indys sharing space and advertising and reception duties?

 

[island-guy]

If she wants to be completely legit she also has to get a GST/HST registration number and charge and submit GST/HST to the government. She also has to declare all her income on her income taxes.

I haven't seen or heard of a single SP charging and remitting GST yet, and eventually if the government wanted to make trouble for them (ie: Conservative Majority government) all they would have to do is audit their businesses for GST and income tax purposes and audit their personal income taxes as well.

An SP living in a $300,000 condo filled with expensive stuff would have a hard time explaining how she got it all with a declared income of less than 40,000 a year. Remember that cash gifts and tips are taxable and any gifts over 10,000 have to be specifically declared seperately.

They put Al Capone away for a long time on tax evasion charges and that's how they could lock up the vast majority of SPs if the government ever felt like they wanted to do it.

 

[Pillowtalk]

If she wants to be completely legit she also has to get a GST/HST registration number and charge and submit GST/HST to the government. She also has to declare all her income on her income taxes.

I haven't seen or heard of a single SP charging and remitting GST yet, and eventually if the government wanted to make trouble for them (ie: Conservative Majority government) all they would have to do is audit their businesses for GST and income tax purposes and audit their personal income taxes as well.

An SP living in a $300,000 condo filled with expensive stuff would have a hard time explaining how she got it all with a declared income of less than 40,000 a year. Remember that cash gifts and tips are taxable and any gifts over 10,000 have to be specifically declared seperately.

They put Al Capone away for a long time on tax evasion charges and that's how they could lock up the vast majority of SPs if the government ever felt like they wanted to do it.

Which would kind of leave you in a bit of a pickle, wouldn't it? No sps to see?

The tax evasion accusation is both lame and tired. People like to make the claim, but have no proof. Actually, accusations and claims without proof are kind of common around these island guys, lol. I doubt the sps are going to show you tax returns and business info just to satisfy your need to know. But, just to say, if an sp is in that condo and it is bought and paid for by her, then the only way to do that is to claim income.

So sad to say, you lost your point.

 

[oh3421]

I totally get what you're saying. The agency should just not allowing the phone girls to start their own business within a business. That's really what they are doing and if I was an owner I wouldn't allow it. Much easier to replace a phone girl than a good escort. Interesting information though Holly, thank you for sharing that.

In fact, it is much easier to replace a good escort than a good phone girl
Good help is so hard to come by these days...

 

[Larry Storch]

Thanks for the replies, but I kinda need to un-hijack this thread.

Just to clarify, the phone girl is the owner so there should be no need to tip her as she is already receiving the usual fees.

Getting a license is no problem, there are already agencies operating within the city limits. She is more concerned with the legalities of opening an incall, as legally it may be viewed as running a common bawdy house. It seems that the police do not worry about agencies having an incall as long as they are not getting involved in any of the activities I mentioned in my OP. I assume that it would also apply to someone doing this independently.
I would like to know what has been the experience of any of the independent escorts who post here. Have you had any difficulties with an incall? Personally I can't see how there would be a problem as the city will issue a business license. How can they do that if it is illegal?

As far as taxes go, she doesn't want to do anything to attract the attention of the CRA so everything will be reported and GST/HST will be remitted.

Thanks again for any info you can provide. I just want to see her being able to support herself with a minimum of drama and legal hassles.

 

[HubbaHubba]

A lot of agencies encourage the ladies to tip the phone girl. It isn't behind the scenes in some cases.

Those agencies should pay the phone girls what they are worth and not shift the burden to the SP's. They pay fee's to the agency to cover all that stuff.
Oh well.....

 

[vancity_cowboy]

Those agencies should pay the phone girls what they are worth and not shift the burden to the SP's. They pay fee's to the agency to cover all that stuff.
Oh well.....

sheesh... get real man, this ain't the girl guides we're talkin about here

 

[HubbaHubba]

sheesh... get real man, this ain't the girl guides we're talkin about here

What are you talking about? So the girl should have to "tip" someone because they answered the phone and did what they are paid to do? You must be a union worker

 

[vancity_cowboy]

What are you talking about? So the girl should have to "tip" someone because they answered the phone and did what they are paid to do? You must be a union worker

i like a piece from a good sp as much as the next guy, but this industry is rotten to the core when you start hearing about the details in the background

 

[island-guy]

Which would kind of leave you in a bit of a pickle, wouldn't it? No sps to see?

The tax evasion accusation is both lame and tired. People like to make the claim, but have no proof. Actually, accusations and claims without proof are kind of common around these island guys, lol. I doubt the sps are going to show you tax returns and business info just to satisfy your need to know. But, just to say, if an sp is in that condo and it is bought and paid for by her, then the only way to do that is to claim income.

So sad to say, you lost your point.

Not sure who put the watermelon up your butt, but I was just answering the question that was asked, about being completely legal. I pointed out what would have to be done and then pointed out that many don't bother with worrying about it.

I think that the fact that the government doesn't bother to do anything from the income tax or sales tax angle just shows that they aren't likely to change any other laws to tighten up against prostitution, either.

 

[island-guy]

We don't charge GST/HST on top of our prices. They are included in the prices. That's why you haven't "seen or heard of a single SP charging and remitting GST."

Unfortunately, including GST/HST in the price is technically illegal, if you make over about 40,000 / year (or did they bump it up to 50k now? been a while since the max mattered to me) as is not providing receipts with the gst/hst registration number on them. Of course, if it IS being remitted, then the fine for those minor infractions is pretty much a warning not to do it again and maybe a minor slap on the wrist.

 

[Pillowtalk]

Unfortunately, including GST/HST in the price is technically illegal, if you make over about 40,000 / year (or did they bump it up to 50k now? been a while since the max mattered to me) as is not providing receipts with the gst/hst registration number on them. Of course, if it IS being remitted, then the fine for those minor infractions is pretty much a warning not to do it again and maybe a minor slap on the wrist.

Be sure and ask for a receipt next time, if this is such a concern for you.

I know when I pay for things at a store, I want the total, not the breakdown. It's on the receipt, sure, but who cares. So I would not expect the barber, the shoe repair guy, the mechanic, or the sp to quote the subtotal, taxes, then the total. Just the total, please and thank you. What they do with it after that is up to them. Maybe the barber reports all their (mostly cash) income, maybe they don't. I don't come out and accuse them of not doing it, nor do I assume that they don't just because they could if they wanted to.

 

[Pillowtalk]

What are you talking about? So the girl should have to "tip" someone because they answered the phone and did what they are paid to do? You must be a union worker

The hidden costs of working. No doubt the sps who tip 40 bucks a call, rather than 20 get more. And the ones who don't know about the tipping get little action. No wonder agency sps are often trying to upsell. They could easily leave the encounter owing someone money, yet the guy paid 200 or 300.

 

[MrBrown]

While not all escorts pay their income taxes and GST, many do. I do, and so do several ladies that I know personally.

We don't charge GST/HST on top of our prices. They are included in the prices. That's why you haven't "seen or heard of a single SP charging and remitting GST."

You are completely right that trying to avoid paying taxes is a bad idea. Not only is it unfair to everyone else, you'll always be worrying that it may come back to haunt you. I couldn't handle the stress of that. It's better to just do everything legally and feel secure that nothing is going to crop up later and ruin your life.

Now I have a real reason to fight the damn HST

Seriously, I am surprised to hear that you and others are paying taxes though it is really between you and the tax man.
The trick in many professions is to find the right balance of what to declare and what not to declare.

If you can get away without paying taxes such that you meet your financial goals sooner and retire (let's face it, this career is not forever) all the better.

 

[island-guy]

Be sure and ask for a receipt next time, if this is such a concern for you.

I know when I pay for things at a store, I want the total, not the breakdown. It's on the receipt, sure, but who cares. So I would not expect the barber, the shoe repair guy, the mechanic, or the sp to quote the subtotal, taxes, then the total. Just the total, please and thank you. What they do with it after that is up to them. Maybe the barber reports all their (mostly cash) income, maybe they don't. I don't come out and accuse them of not doing it, nor do I assume that they don't just because they could if they wanted to.

Goofball, the question asked was what do they have to do to be legal. I answered it. I'm sure that they'll be happy to know that if you happen to be the CRA agent reviewing their file, then the rules will be different.

 

[Larry Storch]

Its amazing how a thread can go so far off the rails so fast! However I am able to glean some information out of it all. Thanks for posting.

So it would seem that these are the only requirements:
*Check with the municipality regarding their bylaws about an escort business.
*Check their business zoning requirements and adhere to them.
*Obtain a business license.
*Keep CRA off of your back.

Keeping a low profile and not disturbing/annoying the neighbors would also be a very good idea.

She may be looking at setting up in a small one bedroom apartment in a nice clean building. The location will be for work only and not used as a residence. I think this is a good idea as it may offer a bit more security as she would have to buzz them in and there are people close by. She may want me to act as her contact person, but we haven't decided on anything yet. And that leads to yet ANOTHER question: What has been the experience of any SP's who have had to call the police? Do they arrive with an attitude of: "Well what did you expect. Look what you are doing for a living" ?