Massage Therapy Employee vs Subcontractor

My company is looking to update our policies of employment and compensation of massage therapists.  We are a partnership that has two receptionists and 4 massage therapists who rotate days and times.  Of the four therapists, one prefers we take out the taxes and the other three do not.

Our policy from the beginning has been...we are providing a table, sheets, creams, advertising for the therapists and they receive 50% of each massage we give them.  The rest is used for rent of space, costs of upkeep, pay for receptionists, advertising, equipment, massage creams, etc.  As owners we are also massage therapists and perform massages on a daily basis. 

So due to some behavior problems within this structure of employees vs subcontractors, we are seeking to update how we pay and what is our responsibility as owners to the therapists for taxes, their behavior when working, etc. 

So in the vast knowledge of my fellow therapists, what are you willing to share about how you do business without giving away secrets...

Is my company method outdated?

What is the responsibility of our company toward compensation of both of the above models?

Please post comments for me asap if you are willing to share your expertise in these matters.