Employee or contractor?

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Here at Music Northwest, we just underwent an audit by the Oregon Employment Department. One of the things we found out was that the line between hiring a musician as a contractor or an employee is very clear. If the distinction is not made perfectly clear, you may find yourself with some taxes due. And it's different in every state.

Information on contractors in Oregon can be found here: http://egov.oregon.gov/EMPLOY/TAX/docs/uipub201.pdf

When we get other states' and provinces' links, we'll post those.

Musicians and dancers performing in Oregon have distinct exceptions to the contractor rules. Here's an excerpt from http://egov.oregon.gov/EMPLOY/TAX/docs/uipub202.pdf:

MUSICIANS
Musicians are employees of the person or organization engaging their services and compensation to them is taxable wages unless the musicians are hired under a proper written contract. The contract must expressly designate one or more of the musicians as responsible for the filing of wage reports and the payment of taxes.
The contract should cover the entire time of the musicians’ engagement. A new contract is needed for every new engagement even if it’s for the same musicians.

DANCERS
Dancers are employees of the person or organization engaging their services and their compensation is taxable wages. Rarely do dancers qualify as independent contractors.

MISCELLANEOUS ENTERTAINMENT
Disc jockeys, comedians, musicians, and other entertainers who do not qualify as independent contractors are employees of the person or organization engaging their services and their compensation is taxable wages.

We hope this helps. We're thinking about creating a simple one-page contract that bands and venues can download and use to cover their ...um....ass. Is that anything that anybody would find useful?

[bandinfo]

Here is an excerpt from the Revised Code of Washington (RCW) [url=http://apps.leg.wa.gov/RCW/default.aspx?cite=50.04&full=true#50.04.148]
http://apps.leg.wa.gov/RCW/default.aspx ... #50.04.148[/url]

50.04.148
Employment — Services performed by musician or entertainer.

(1) The term "employment" shall not include services performed by a musician or entertainer under a written contract with a purchaser of the services for a specific engagement or engagements when such musician or entertainer performs no other duties for the purchaser and is not regularly and continuously employed by the purchaser. The contract shall designate the leader of the music or entertainment group. A music or entertainment business or a leader of a music or entertainment group shall be considered an employer and not a purchaser of music or entertainment services.

(2) Any musician or entertainer who performs for a music or entertainment business or as a member of a music or entertainment group is deemed an employee of the business or group and the business or the leader of the group shall be required to register as an employer with the department.

(3) Purchasers of services under subsection (1) of this section shall not be subject to RCW 50.24.130 relating to a principal's liability for unpaid contributions if the services are purchased from a business or group registered as an employer with the department.

(4) The term "music or entertainment business" or "group" as used in this section means an employer whose principal business activity is music or entertainment. The term does not include those entities who provide music or entertainment for members or patrons incidental to their principal business activity, and does not include an individual employing musicians or entertainers on a casual basis.

[1985 c 47 § 1.]