Part-time professional musicians, typically known as “sidemen,” have been a big part of the live music business for decades, if not centuries. The nomadic nature of these musicians represents the ultimate spirit of independence, entrepreneurship and self-employment. And in many band situations, these transient relationships are the only feasible way to conduct business.
Making sure that Independent Contractor status is clear is a vital necessity. The best way to do this is in writing with Independent Contractor agreements that have, ideally, been notarized or witnessed; then, the spirit of these contracts needs to match the wording.
From the Colorado revised statute Section 8-70-115, there are nine articles that need to be fully disputed to make the case for a valid independent contractor relationship:
Article I – Is the sideman required to work exclusively for you?
If a band leader is demanding an exclusive relationship, guess what? You are probably flirting with employee status. The sideman must be free to play with other groups at their choosing. Make sure your wording clearly reflects this notion.
Article II – Do you tell the sideman how to perform?
The exact wording is: “Establish a quality standard for the individual; except that such person can provide plans and specifications regarding the work but cannot oversee the actual work or instruct the individual as to how the work will be performed.”
In short, do you micro-manage your sidemen? Do you obsess over how they play every note? Do you require them to play specific gear? Believe it or not, the DOL could put some of your OCD behaviors under a microscope…
Article III – Do you pay bandmates a salary or hourly rate?
Independent contrators cannot be paid this way! They should be working for a flat rate (a “cut,” as most usually do). It would also help your case if your agreement clearly states that sidemen could share in losses as well as gains.
Article IV – Do you ever let band members go? How do you let them go?
Here, the wording is: “Terminate the work during the contract period unless the individual violates the terms of the contract or fails to produce a result that meets the specifications of the contract.” Hopefully this one is vague enough that the DOL won’t even bring it up in a hearing…
Article V – Provide more than minimal training for the individual?
Most musicians have been studying their craft for a big chunk of their lives – without any help from you. Do you send them off for additional training, or require them to train under you? Highly unlikely, but be mindful of this article none-the-less…
Article VI – Provide tools or benefits to the individual?
This can be a tricky one. Have you ever lent an amp to a sideman, or guitar strings? Stand your ground because this article states that “materials and equipment may be supplied.” But even a “band uniform” (T-shirt) could be construed as “providing tools.”
The “benefits” that the DOL is looking for are things that might be a band leader’s business deductions and given to the sideman. If the DOL wanted to get technical, that band T-shirt could be construed as a benefit too.
Article VII – Dictate the time of performance?
This is one of the stickiest areas to cover and the one the DOL will most likely want to pursue. For a few suggestions on how to refute this, please see my previous entry and a more detailed one coming next. Also, realize that this article includes the wording: “except that a completion schedule and a range of mutually agreeable work hours may be established.”
With a little forethought, your IC agreement wording can establish “time and place” as part of a much larger contract (as it should). My next entry will allude to some wording that may possibly help. But be prepared for the DOL to harp on this issue.
Article VIII – Pay the individual personally?
The best way to show the DOL that you are dealing with independent contractors is to pay them as independent businesses (dba’s, LLC’s Corporations, etc.).
An individual can technically be a business (sole proprietorship) with their name alone, but a dba (“doing business as”) is a better way to demonstrate you are paying a business entity instead of an individual. Paying a Limited Liability Company (LLC) or corporation would draw even clearer lines for the DOL.
Article IX – Do you combine your business operations in any way, shape or form with those of your sidemen?
It might be tempting to “share” the cost of a PA system, but a band leader would be better off owning that system outright (or renting those services). The DOL is looking for “separate and distinct” business operations. Review every SOP you do and make sure that you are blatantly compliant.
As mentioned earlier, dictating “time and place” is one of the most convulted elements in the conversation. But it should be very easy to demonstrate that you, as band leader, are not controlling this. We’ll take a look at “time and place” in more detail next…