Monday, January 23, 2017

Employee or Contractor?

Some studios offer work under independent contractor arrangements rather than hiring artists as employees. “1099” v. “W-2”. In most cases this is a bad deal for artists. Here are some facts:

The IRS has clear rules on classifying employees and contractors. It's not a decision you make - the nature of the work itself and the conditions are what determines things.

Understand what classification really applies to you - don’t be lured in by a higher rate if all of the tax, Social Security and Medicare payments will fall on your shoulders at tax time. Do you work at their studio with their machines and software? Show up for work at the same time every day? You’re an employee, and employee rules apply.
The IRS looks at three types of evidence to classify employees and contractors:
  • Behavioral - if worker is provided with instruction, they’re an employee.
  • Financial - if worker is paid by the hour or by the day, they’re an employee.
  • Relationship - if a worker is doing tasks similar to other employees, they’re an employee.
And, even if your inner lone wolf chafes at being an employee, consider this - employees enjoy protections that contractors do not, including:
  • Overtime laws
  • Meal breaks and rest periods
  • Anti-discrimination laws
  • Ability to collect unemployment when out of work
  • Right to bargain collectively
Bottom line - it’s not up to you or the employer to decide on your classification. The IRS has already done it. Read about it.


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