Archive for the ‘Employees’ Category

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Independent Contractors or Employees: What’s In A Name?

Wednesday, April 3rd, 2013

By Brian Taylor Goldstein, Esq.

Dear Law and Disorder:

I hire musicians to perform, with me. Are they employees or independent contractors? I do not deduct taxes from what I pay them. Should I also make them sign a contract stating that they are independent contractors?

Contrary to what many believe, the distinction between who is an independent contractor as opposed to an employee is not as simple as merely making them responsible for their own taxes (and issuing them a 1099) or making them sign a contract or other document in which they affirm that they are an independent contractor. Like many legal relationships in the arts, “titles”, while not entirely irrelevant, do not in and of themselves carry any legal significance. Instead, determining whether a hired musician (or anyone you hire to provide services for you) is an employee or an independent contract requires an analysis of both state and federal regulations.

A person is an independent contractor only when free from control and direction in the performance of their services. As independent contractors are not covered by unemployment insurance laws, labor standards, or safety and health regulations, each state, as well as the federal government, have established various “factors” concerning the nature of the relationship between the parties which are used to determine whether or not a person is an employee or an independent contractor. These factors include how a person is paid, the amount of control you have over them, where their services are performed, how their services are performed, whether or not they are part-time or full-time, and even whether or not the person you are hiring is “incorporated” as a business or merely uses a “dba” and is a sole proprietor. All factors concerning the relationship between the two parties must be taken into consideration. No one single factor is controlling, nor do all factors need to be present to establish the nature of the relationship.

Not surprisingly, the “factors” can differ from state-to-state, with some states applying a more liberal analysis than others. Whereas, in some states, its almost impossible for anyone to hire an individual as an independent contractor unless the individual is incorporated as a C-corporation, S-corporation, or a limited liability company, other states afford more discretion to the employer to determine how to classify the people they hire. And the federal government has its own set of factors and guidelines. As a result, its not uncommon for the same person to be classified as an independent contractor for federal purposes (IRS, US Department of Labor, etc.) and an employee for purposes of state unemployment law and state taxes.

While all the various factors must be considered, in almost all cases the most significant factor is whether the party contracting for the services exercises, or has the right to exercise, supervision, direction or control over someone they hire. In the case of musicians and other performers: do you hire them to show up and perform their own music in whatever manner they want? Or do you direct them? Do you require them to attend rehearsals? Can they wear whatever they want or do you require specific costumes or clothing? In general, musicians or other performers who are paid to perform and are told/directed what to perform, how to perform it, where to perform, and what to wear are almost always considered “employees”, if not by the federal government, then by most state governments.

The only way to answer your specific question is to apply the applicable state and federal factors and guidelines to your specific circumstances. However, the New York State Department of Labor actually has specific guidelines and factors for determining whether performers are employees or independent contractors. You can find them at http://www.labor.ny.gov/formsdocs/ui/ia318.17.pdf Whether or not you are in New York, this is a good place to start.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ggartslaw.com

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. GG Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, Contracts, Employees, For Profits, Independent Contractors, Insurance, Law and Disorder: Performing Arts Division, Liability, Limited Liability Companies, Non-Profits, Venues | Comments Closed

Commissioners Beware!

Wednesday, January 23rd, 2013

By Brian Taylor Goldstein, Esq.

Dear Law & Disorder:

When a composer/songwriter is commissioned to write a song, who owns the copyright to the song? The commissioner or the writer? And for either party, when the other owns the copyright, what kind of controls and/or royalties does the holder have?

As with just about everything in the arts and entertainment industry, these are issues that should be negotiated between the parties. As there are no industry standards (I know I say that a lot, but its worth repeating…there are NO industry standards!), everything is up for grabs in terms of royalties, controls, ownership, etc.

Unfortunately, it’s not uncommon for the parties either not to have a commissioning agreement or for one party merely to “assume” that commissioning a work automatically conveys certain rights. Nothing could be further from the truth. In the absence of a written agreement, copyright law determines ownership and, in such cases, the law is quite simple: the mere act of payment does not convey any rights or ownership. The only exception would be if an employee is paid to create or write something for their employer or if there is a written “work-for-hire” agreement between the parties. Otherwise, the commissioning fee only pays for the artist’s services. Ownership of the underlying work, including all rights, remains with the author.

So, for example, if a commissioner agrees to pay a composer $10,000 to write a concerto, unless there is a specific agreement between the parties that the commission fee includes performance or recording rights, the commissioner is entitled to nothing other than the joy of knowing he or she has paid for beautiful music. If the commissioner also wants to own the song, or record or perform it, then those terms need to be specifically negotiated and agreed to between the parties. This does not necessarily mean that the commissioner is required to pay extra for such rights. Everything is negotiable. It’s perfectly acceptable, and quite common, to include certain performance or recording rights as part of the commission fee. Its also just as common for the composer to be entitled to royalties or other payments in addition to the commission fee. Even in a case where the commission fee includes an assignment of full ownership, the composer can still ask for royalties as well as reserve performance and recordings rights of their own.

In short, all rights must be specified. If you are commissioning music, know what you are paying for. If you are being commissioned, know what you are selling. Never assume!

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For additional information and resources on this and other legal and business issues for the performing arts, visit ggartslaw.com

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. GG Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Artist Management, Arts Management, Contracts, Copyrights, Employees, Law and Disorder: Performing Arts Division, Licensing, Music Rights, Publishing | Comments Closed

Are We Liable For A Backstage Brawl?

Wednesday, July 11th, 2012

By Brian Taylor Goldstein

Our stage manger slapped one of our actresses during a rehearsal. Are we liable?

Anyone who understands the unique stresses and pressures of the performing arts should expect a certain degree of screaming, emotional meltdowns, tantrums, and other inappropriate behavior. Welcome to the theater. However, physical violence crosses the line and, among other things, can most certainly get your organization sued!

Anytime an individual provides services on your behalf—regardless of whether or not they are an employee, independent contractor, or even a volunteer—you can be liable if they hurt or injury someone “in the course of performing their duties.” Let’s say, for example, that one of your volunteer ushers decides to forcibly eject a patron who refuses to shut off his cell phone, injuring the patron in the process. Your organization could be liable because the usher was performing services on your behalf and was not properly trained or supervised. (The usher could be sued, too, but your organization would be included in the lawsuit.) On the other hand, let’s say you arrange for a volunteer to pick up an artist from the airport and drive him or her to the theater. If, on the way, the volunteer decides to stop and run a few personal errands and gets into an accident, you would not be liable. Once the volunteer deviated from his or her job by running a personal errand, he or she was no longer working on your behalf. Get it? These things are very fact specific.

In the case of your stage manager, was this a personal fight? Just because the stage manager slapped the actress doesn’t necessarily mean your organization is liable if he or she wasn’t acting in the capacity of a stage manager at the time. However, let’s say that the actress refused to follow the stage manager’s directions, a fight ensued, and the stage manager decided, out of frustration or poor anger management skills, to slap the actress. You could most definitely be sued because the stage manager was clearly acting in his or her capacity as a stage manager.

If you had strict written policies prohibiting physical violence, assaults, battery, etc, you could always argue that (1) you had no reason to believe that your stage manager was violent or had assaulted others in the past and (2) that he or she was violating strict company guidelines and procedures. (The stage manager could still be personally sued for assault and battery, but these arguments might get your organization off the hook.) However, now that this has happened, you would most definitely be liable if this ever happened again and you took no steps to prevent another similar incident.

You would certainly be warranted in dismissing the stage manager and refusing to let him or her work with you again. Short of that, at the very least, you should ensure that there are written policies and procedures for all volunteers, employees, independent contractors, and any one else who provides services for your organization. You need to make sure everyone understands that this kind of behavior will not be tolerated.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, Employees, Independent Contractors, Law and Disorder: Performing Arts Division, Liability | Comments Closed

Is A Choral Group Required To Have Workman’s Compensation?

Wednesday, June 20th, 2012

By Brian Taylor Goldstein

Dear Law & Disorder:

We have a non-profit choral group. Our of local public television stations has sent us a contract to record and broadcast one of our concerts this December and they have an item that requires us to have workman’s comp on our entire group. We currently only have 3 staff employees (all part-time) and the performers themselves are not employees. As a non-profit, are we required by law to carry workman’s comp on members of our group?  We are wondering if we can sign this agreement if we don’t carry workman’s comp insurance.

First, and foremost, your non-profit status is unrelated to the issue of workers compensation. Non-profits are subject to the all the same laws, statutes, and regulations as all other businesses. Whether or not you are required to carry workers compensation depends on whether your staff and chorus members are considered independent contractors or employees. This requires an analysis of both federal law as well as the laws of your state. However, in this particular case, such an analysis may be irrelevant.

If you were to enter into a contract with the television station in which you are required to have workers compensation, then you would be agreeing to provide workers compensation whether you are legally required to do so or not. That’s really the whole point of a contract: two parties are agreeing to do things for each other they would not normally be required to do. So, regardless of what the law does or does not require, you cannot just sign the television agreement unless you plan to comply with their requirement. Otherwise, if you signed such a contract and then failed to obtain the workers compensation insurance, you would be in breach.

I suspect that, like many institutions, the television station is using form contracts and boilerplate terms that they themselves probably do not understand. Do not always assume that the other party knows more than you do! Before you do anything, I’d call the station and discuss your situation/concerns with them. Perhaps they will waive the requirement. Perhaps they can agree to allow you to purchase a general liability policy to cover your group in lieu of a workers compensation policy.

However, regardless of whether or not you are “required” to have workers compensation either as a matter of law or by a contract, consider the possibility that if a staff member, a chorus member, or a volunteer were to be injured during a performance or in providing some other service for your organization, your organization could be liable. So, I’d strongly recommend that you obtain a general liability policy to cover injuries to any of your performers, staff, or volunteers who provide services to your organization.

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Arts Management, Contracts, Employees, Independent Contractors, Law and Disorder: Performing Arts Division, Liability, Non-Profits | Comments Closed

How Do I Draft An Engagement Agreement For My Trio?

Wednesday, May 16th, 2012

By Brian Taylor Goldstein

Dear FTM Arts Law,

I am a manager who will be writing contracts on behalf of a trio. They don’t have a corporation and there is no “leader.” They just get together and perform together. How do I handle their engagement fees so that I do not look like their employer? None of the three wants to collect the money on behalf of the others. So, that leaves me to disperse the money.  I know I must be careful not to appear as a producer or employer, so I want to be sure that I write my contracts properly, as well, handle the payment of fees.  So, when writing the actual contract, do I make it out between all three musicians and the presenter?  What if one of them is paid to his/her corporation? Does this make sense?

This makes absolute sense…and the answer is pretty easy! You want each engagement contract to be between the presenter and each of the individual members of the trio. Something like this: “Presenter hereby engages Musician 1, Musician 2, and Musician 3 to perform at ___________.” The same engagement contract would also specify that the engagement fee would be paid directly to you “as the agent of Musician 1, Musician 2, and Musician 3.” You can even sign the engagement contract, provided it is clear that you are signing “as the agent of Musician 1, Musician 2, and Musician 3.” (I know, you said you were their “manager”, but “manager” is a title that describes your duties. For purposes of determining liability, fiduciary duties, and other legal obligations, managers and agents are both legally considered to be “agents”).

Once you collect the fee, you can pay each of the artists directly. For you purposes, it doesn’t matter whether you pay an artist individually or pay the artist’s corporation. Nonetheless, you must issue a 1099 for the FULL FEE. In other words, if the total engagement fee is $3000, and you take a 20% commission, and everything is split evenly, then you would pay each artist $1000 and deduct a commission of $200 from each payment—but you would also issue a 1099 to each artist for $1000. Why? Because you are working for the artists, they are not working for you. If you don’t want to be perceived, either for liability or tax purposes as their employer or producer, then you need to set up the transaction so it is clear that it is the artists are paying you and you are not paying them. Technically, each artist should issue you a 1099 to reflect that they paid you a commission of $200. However, in my experience, as artists are even more adverse to paperwork and forms than managers and agents, it is highly unlikely that the artists will actually issue you the 1099. It doesn’t matter. You would hardly be the first person who received a payment without an accompanying 1099.  So long as you have issued a 1099 to each artist for $1000 and report your commissions on your income taxes, you are fine. It may drive your accountant a bit nuts, but they’ll deal with it!

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For additional information and resources on this and other legal and business issues for the performing arts, visit ftmartslaw-pc.com.

To ask your own question, write to lawanddisorder@musicalamerica.org.

All questions on any topic related to legal and business issues will be welcome. However, please post only general questions or hypotheticals. FTM Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously.

__________________________________________________________________

THE OFFICIAL DISCLAIMER:

THIS IS NOT LEGAL ADVICE!

The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!

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Posted in Agents, Artist Management, Contracts, Employees, Independent Contractors, Law and Disorder: Performing Arts Division, Taxes | Comments Closed

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