Everyone who works there is a freelance and the owner of the joint wont let you charge less than $40/hr to prevent undercutting the other instructors.
That is an odd setup. I'd assume they'll give you a 1099 tax form each year and that you are actually subcontracted. If this isn't the case then I sure would like to know what kind of business model "the owner" is using. What does he say about insurance?