The following information has been culled and edited from an article written for Media Inc. I am actually unaware if it has as of yet been published.
The Washington State Department of Labor and Industries (L&I) recently created these acknowledgements and clarifications specifically for the Entertainment Industry:
The Entertainment and Production Industry employs many who:
1) work for short periods
2) work for many different employers
3) have highly specialized skills
4) often work without close supervision but who do work under the overall, highly-coordinated direction of the employer.
L & I therefore established the following guidelines for determining if a worker in the Industry is an independent contractor. These guidelines in no way change the six-part statutory test and all employment situations are subject to L&I review. However, Industry employers and their accountants are urged to review the following guidelines and make adjustments as necessary.
Entertainment and Production Industry Guidelines
1. A worker in the Industry* is assumed to be an Employee of the hiring entity unless the Employer establishes that s/he is an independent contractor. (Simply signing a waiver or agreement is not enforceable).
2. A worker in the Industry will be deemed an Employee if s/he has no UBI number. (A UBI does not, in and of itself, make
one an independent contractor).HOWEVER: A ruling in a court case on these issues concluded: 'Our first ruling specifically denied the State's claim that we must have UBI #s for designers whose scope of work passes the State's Exception Tests for employees. The Administrative Law Judge ruled that "Although a UBI number is generally an indicator of independent contractor status, it is not an element of the exemption tests found in RCW 50.04.140, and is not dispositive. Nonetheless, the record establishes that all eleven of these designers...worked on flat-fee bases and were substantially free of the Appellant's control in designing the Appellant's costumes, music, lighting, sound and sets. The designer's relationship to the Appellant was akin to that of services merchant to customer."'
3. A worker in a classification covered by a valid collective bargaining agreement will be deemed an Employee when working under the terms of that collective bargaining agreement.
4. If a worker has a UBI, but is not working under a valid collective bargaining agreement, the worker will be deemed an Employee if the Employer controls the details of how, when and where the work is performed as well as the final work product. Specifically, if the Employer (and not the Worker) has the:
a. Authority over the final work product
b. Ability to determine the attributes of the work product, such as size, length, content, presentation.
c. Authority to determine the hours and the location of the work.
d. Authority to determine the sequence of the work.
e. Authority to change the methods of operation.
f. Responsibility for providing tools, materials and equipment for the work (other than minor tools and equipment, such as musical instruments, routine wardrobe, cell phones and “kits”).
5. Additional factors establishing that a worker is an Employee are, if s/he has:
a. No authority to hire others to perform the work (That is, to legally hire, not just recommend for hire)
b. No continuing liability for the product after quitting the work.
c. No authority to proceed without instruction, assignment or supervision.
6. Factors that do NOT, in general, determine whether a worker is an Employee are:
a. Working for more than one employer.
b. Working on a short-term basis (including even for a few hours).
c. Filing schedules of expenses with the IRS as a business. (Inasmuch as there has been a widespread practice of misclassification in the Industry for IRS purposes as well)
d. No payment of benefits.
e. No actual close supervision. (It may not be necessary in light of the specialized skills of the workers.)
An employer (“Producer”) may find itself contracting with a genuine independent sub-contractor (“Sub”) who has employees of his own. In these cases, the Producer must make sure the Sub has the proper business licenses, and if the Sub is bringing its own workers, make sure the Sub has an Industrial Insurance (workers’ compensation) account and is current with premiums. The Producer has ultimate responsibility for maintaining a safe workplace and could still be held liable for any workplace safety violations. (Again, the presence of a UBI or a “waiver” is not determinative of independent contractor status.)
For more information on “independent contractors,” go to www.LNI.wa.gov
and search for A Guide to Hiring Independent Contractors in Washington (or go directly to www.LNI.wa.gov/pub/101-063-000.pdf
. The department of Labor and Industries is committed to creating a “level playing field” for all employers. An L&I auditor could visit your place of business in the very near future and examine your books and records. If an employer is using an “independent contractor” who does not fit the criteria above, he/she will be considered an employee and you will be liable for unpaid premiums, penalties and interest.
It is important to note that both the IRS and Employment Security have their own sets of guidelines, and that many Producers find it much simpler to simply treat the entire cast and crew as employees rather than try to navigate the various sets of guidelines.A Washington Employer’s Obligations:
• Apply for a Master Business License and UBI from the State.
• Submit quarterly reports for all employees, their hours and earnings.
• Make workers compensation and unemployment compensation premium payments to the State for his employees based upon the report.
• Abide by wage and hour laws.
• Abide by laws covering the employment of minors.
• Keep a safe workplace.Some Examples of Employees in the Industry:
An actor is given a fitting time, a specific wardrobe, a call-time, a script, a location to report to, direction for her performance, a specific mealtime and wrap time. The producer controls her work. The actor must be classified as an employee and covered by L & I.
* * *
An electrician is called for a job by a gaffer, yet hired and paid by the production company. S/he is given a call time and call location by the production company.
The gaffer supervises the electrician in setting up the lighting, as determined by the Director of Photography. The electrician helps execute the set-ups using his/her experience and technical knowledge. The production company rents the trucks and lighting gear, tells him/her when to break for meals, when to return from meals, and when to wrap. The electrician must be classified as an employee and covered by L & I.
Again - information extracted from an article prepared for Media Inc.