Yes, this business (a massage parlor / spa) is breaking the law by employing this woman and paying her under the table.

You can massage that a little bit.

I sent you a massage via your website @Dave Holland.

Take several photo's and send to city inspector of what you have observed.Similar situations regarding massage clients coming to apartments or other types of home based business is not zoned, and should be reported, it causes undue traffic of people, and it's not legal if it's not zoned for this type of business.

I started a wellness company five years ago where I do personal training and massage therapy.  

Of course, the reporting companies may massage the numbers on their end.

Having been historically, since WWII, known as a military town rife with red light districts, X-rated movie theaters, "friendly ending" massage parlors, drugs, thugs, and gang activities for decades, they are now loving and arms wide open to the TOT and relishing in the fact that they are the "Northern gateway" to San Diego and the first stop that folks can make after leaving Orange County and traveling through Camp Pendleton with no other options.What with all the traffic congestion starting miles North of Oceanside on I-5 and extending on some weekends all the way south to the city of San Diego along with the fact that it's the only coastal  North/South thoroughfare you can use to get here is starting to make Oceanside a much more desirable choice for many travelers and tourists.

Sorry I didn't see your massages till today.

Im Swedish, and the deal is in swedish currency, I'm doing my best to convert it into dollars. 

Once a week one of them will come over and clean your house, do your laundry, cook you dinner, give you a bath and a massage....