Employee or Independent Contractor?

Jan 16, 2024 | Legal Issues,

by Attorney Christian Misner, VLAA board member

Big news alert! The U.S. Department of Labor just threw a curveball our way with a new rule dropping on March 11, 2024 – “Employee or Independent Contractor Classification Under the Fair Labor Standards Act (FLSA).” Yeah, it’s a mouthful, but stick with me.

This rule is a game-changer in figuring out if your work as an artist makes you an employee or an independent contractor. The goal? Clear the confusion and give businesses and artists a fair shake.

Let’s break it down into six factors to consider, so it’s not as mind-bending:

• Opportunity for Profit or Loss: Can you make or lose money based on your artistic skills? Do you decide what to charge, choose jobs, and hustle for more work? This leans towards independent contractor.
• Investments by You and the Boss: Who’s putting what on the line? If you’re both investing money into the project, it might be more of a partnership, indicating an independent contractor relationship. Size matters too — you and your patron’s investments don’t have to match, just make sense for your gig.

• Permanence of the Work Relationship: Is it a forever thing or more of a “one-off” job? A long-term commitment might point to an employee relationship.

• Nature and Degree of Control: Who’s the boss? If the company/person employing you is calling the shots, your schedule, supervision, and limits on other gigs, you might be in employee territory.

• Integral to the Business: Is your artistic work the heart and soul of their business, or just a side act? If it’s the main event, you’re looking more like an employee.

• Skill and Initiative: Are you showing off your skills and taking the lead with how the job is done? Are you using your talents to get more work on your own terms? That’s sounds more like an independent contractor.

Remember, and this is critical, no single factor decides – it’s the whole picture. They call it the “economic reality test.” Don’t worry if you’re not sure on where you stand with any particular gig. You can reach out to the St. Louis Volunteer Lawyers and Accountants for the Arts. As always, they’ve got your back!

Now, some quick FAQs:

Q: Can you lose FLSA rights by signing an independent contractor agreement? (We see this happen a lot.)

A: Nope! Even if you sign on the dotted line, certain rights like minimum wage and overtime pay can’t be waved away under the new rules.

Q: Can you be an employee for FLSA but an independent contractor for taxes?

A: Absolutely. The IRS and FLSA have different rulebooks. You might wear different hats for tax and labor purposes. (Good thing VLAA has both lawyers AND accountants, right!?)

Q: Do employees get minimum wage and overtime pay?

A: You bet — unless you’re in a special category (and you might be). The FLSA has your back with minimum wage and extra pay for those overtime hours.

Q: What happens if you’re misclassified?

A: If your boss gets it wrong, they might owe you back pay, damages, penalties, and maybe some lawyer fees (but remember, if you qualify, VLAA may be able to provide you with a lawyer for free). It’s a headache your patron would rather avoid.

This rule change might seem like a maze but stay cool. Check your working relationships, and if things get fuzzy, reach out to VLAA, and get some guidance to help navigate the artistic waters here in the St. Louis region.