Freelancers Fight State’s Independent Contractor Law

I believe that “big brother” is getting too big for his britches. Controlling and now allowing creativity is not how this country developed and grew. What is most important and overlooked is that if one chooses to work independently (forfeit workers compensation and other company benefits i.e. health insurance) and to pay his/her own taxes this is an option that should be allowed. What is free about America if everything is dictated. Bottom line is that I.C.’s or employers/employees pay taxes.

It’s not only writers and graphic designers, but also software developers, tech consultants, and, my industry, freelance translators and interpreters.
I translate for companies whose main business is translation. The thing is, they may have a project in my language pair and area of expertise today, and not have another for 6 months, while working in other areas or languages. It would make no sense for them to put me on full-time.

As someone who’s been an independent contractor (IC) and done business with independent contractors for 25 years (mostly within publishing), this article only touches on what has huge potential for becoming a major problem for IC creatives, but also all ICs.

The afterthought line at the end — “And there’s movement on the federal level to do the same” — doesn’t even begin to describe what’s going on at the federal level. There are multiple bills in Congress right now that will essentially take this Massachusetts law to a national level if they get passed. If that were to happen, it may become very difficult or even impossible for creatives (and many ICs in general) to get clients. As some of the tales in these comments reveal, clients will instead shift toward employed creatives or those hired by services-referral agencies (like temp agencies). Outsourcing overseas, which has already hurt creatives here in the U.S., will be even more appealing.

Why? The risk (again, if Congress passes these bills) is monumental for companies. The penalties for misclassifying someone as an independent contractor instead of employee would amount to thousands of dollars per worker *per incident*, not to mention back taxes. So, a single IC “misclassified” for a 30-day project could be interpreted as being a violation 30 times. Not only that, this law would NOT require intent — i.e., even if the client had done it by mistake, they’d still be immediately liable for the penalties and would have to prove otherwise through an appeal. In other words, the burden of proof for misclassification would shift from the IRS to the client. As a result, most clients will find themselves in a position whereby they can’t afford to defend themselves — or proactively avoid the problem by simply not hiring independent contractors in the first place. Worse yet, small- to mid-size clients are at significant risk because they don’t likely have sophisticated legal counsel at their disposal that’s necessary to navigate what would be complex regulation.

Of course, you ICs out there who contract or sub-contract other ICs, as I do, you have two ways to get slammed in this.

So, please spread the word among the creative professionals in your circles. This situation is serious. Because there are huge tax revenues and penalties at stake, and the government is strapped for cash, they are pushing hard for this. I co-preside over a large publishers and writers association in San Diego, and we’re going to get the word out. Do the same in your associations, groups, or whatever. Also, check out the Coalition to Preserve Independent Contractor Status at ICCoalition.org. Read their statement under “Latest News” about this legislation, called the Employee Misclassification Prevention Act (S. 3254).

Over the past ten years the artist’s community, comprised of photographers, illustrators, artists, musicians and other similar fields have seen their intellectual property become the commerce for corporations who wish to seize control of this property and profit without compensation to the creators of the work. This attempted corporate takeover of our industry has resulted in a loss of revenue to artists as well as a loss of taxable revenue to states such as our own.

The Massachusetts Independent Contractors Law which was initiated by unions, reclassifies freelance creators who produce intellectual property as employees. This creates two dramatically illegal effects to freelance creators. Both result in the illegal confiscation of a creator’s property and copyright licensing revenue. First, it imposes an illegal Work-for-Hire copyright status upon freelance creators – who are also known as “authors” and violates current U.S. Copyright Law. Second it imposes an illegal employee status upon freelance creators – also known as independent contractors, that violates the Wagner Act or the National Labor Relations Act.

Unions have tried in the past to unionize the independent freelancer community but by law they were prevented to so. This new law creates an atmosphere to classify independent contractors as employees who could lose authorship of their work to their employers. Unions could seize on this opportunity that they helped create to demand an artist’s union to protect these newly declared employees. We would have to ask ourselves if we as an artist’s community should allow a situationin which we would be lose authorship of our work that we have currently, for a union to come in demand membership to negotiate on our behalf with large corporations the rights we already have and the freedoms that we enjoy as independents?

In 2004, the Conyers bill was a national attempt by one union (the UAW/GAG Local 3030) to forcibly legislate an unwanted freelance artists union by re-classifying freelance artists as employees for the purpose of collective bargaining. It was defeated when the Illustrators’ Partnership of America (IPA) exposed its irreconcilable legal conflicts with US Copyright Law and the National Labor Relations Act. Now we have another attempt in a different method.

There have been other recent federal and state attempts to weaken creators’ exclusive rights in order to gain a financial stake in their copyrights. The Orphan Works Bill is one example of corporations trying to gain control of our domestic royalties. Artists have already seen their earned foreign royalties diverted to non-profit organizations that have illegally claimed to represent independent contractors’ copyrights. These losses not only deprive artists from their earned income, but deprive states and the US Treasury from revenue by diverting taxable royalties to non-profits.

I believe an amendment to the Independent Contractors Law to those who produce intellectual property is needed immediately and only we need to speak out quickly and with more assertion to our representatives.

Great story. I have been a Photo Researcher, working as an Independent Contractor by choice, in the publishing industry for 20 years. At this point, I am not able to obtain work due to the Independent Contractor Law.

Several of us have been working to amend this law for the past year. We have a blog http://masscontractors.blogspot.com/ where you can follow the progress of any potential changes to the law. We also have a petition http://www.thepetitionsite.com/1/fix-the-massachusetts-freelancer-law that one can sign and make a comment if you would like to see the law changed.

I’m running into this problem now. I took a layoff from a writing job in a department one of the schools in a major area university, which was a good move for me. Now, the university cites this law (and perhaps IRS regulations) to tell me my layoff status makes me ineligible to do any freelance writing for any department or school or program of this vast university. This is ridiculous. It affects freelance relationships I’ve had that preceded my employment. I’m sympathetic with the need to protect against exploitation, but I need a tweak in the law to support my right to freelance.

This report missed two important points. First, the report made it seem that only or mainly artists and people in the so-called creative economy are impacted by the independent contractor law. However, all independent contractors including technical and business consultants are affected. Second, and most importantly, the report made it seem like there is some legitimacy to both views on this law–an opinion stated clearly by Senator McGee–“There’s strong, legitimate arguments on both sides of this issue, so you don’t want to blow up a piece of legislation that’s doing what it was intended to do,”

However, that is just nonsense. It would be trivially easy to change the wording of the law to provide union and construction workers with all the protection the current law provides while also allowing those people who choose to be independent contractors, and whose livelihood depends on them being so, to be able to earn a living. The REAL issue is that the Massachusetts legislature is beholden to the unions, and the unions say no. What we have here is a clear case of political corruption and special interests destroying the lives of people who are being denied the ability to work. That is the real bottom line in this case–nothing else.