I read an interesting blog post by Emily Bushaw and Shannon McDermott in the Perkins Coie blog about a law in Washington State and independent contractor musicians. The Washington Employment Security Department (ESD) has been auditing, resorts, hotels, and nightclub, looking at performing artists. The agency has been taking the position, under this particular State law, they are employees unless they are performing under a written independent contractor agreement.
The law covers businesses such as nightclubs, hotels and restaurants. The written contract itself must contain certain items. The contract must apply to a particular engagement or set of engagements. Importantly, the entertainer cannot be permanently or continuously employed by the entity and there must be a designation as to who is the leader of the band. There are other similar statutes in a handful of States.
Now, employers in Washington State who run nightclubs and similar places must look at their relationships with their performers and test those relationships against the tests set forth in the law. If they do not match up satisfactorily, then the employer cannot treat such a performer as an independent contractor. If the employer deems the person meets those tests, then it is incumbent upon the employer to draft an appropriate written agreement that also meets the tests and ensure it is signed.
There is an object lesson here that goes far beyond the musician or performer issue described above. On the one hand, a written agreement, as good as it might be (and I have drafted dozens) will not withstand scrutiny if the conditions “on the ground,” i.e. how the contractor actually delivers the services, are different or vary from the provisions in the agreement. However, a well-drafted agreement (compliant with the laws of the State(s) where the employer is situate) will set a baseline of proper clauses that comply with the law and set the stage for the individual to have the best chance of being deemed an independent contractor.
Born to run…