[Dixielandjazz] MUSICIANS - EMPLOYEES OR INDEPENDENTCONTRACTORS?

[Larry Walton Entertainment - St. Louis]

There are a couple of reasons why musicians like to be independent sub 
contractors.  The vast majority of musicians are not full time musicians and 
often as is my case work for several different bands and contract to many 
different venues as a music contractor.  In this way I am able to circulate 
and network with different musicians that I might want to subcontract at 
some point.  There are some tax advantages to me in that I can deduct 
mileage, tools(instruments) electronic equipment and other items or costs 
necessary to be able to work.

The other factors are the almost nonexistent benefits from unions or anyone 
else in the business for musicians that freelance or subcontract to many 
contractor/leaders.  If you are young enough the Musician union allows you 
to pay more dues so that you can accumulate a death benefit but if you are 
past a certain age you are not eligible for this benefit.  So there is 
little to recommend being an employee.

The only possible benefit might be workman's comp if there is an injury but 
if the employer does not come up to at least 3 employees for a certain 
length of time there is no workman's comp benefits anyway.  I haven't delt 
with those rules for years so they may have changed.

 I hire musicians for only one job at a time and that is that.  There is 
never a promise of any future jobs from me.  I do not require that they work 
for me exclusively or that they be available on any date.  I maintain a 
subcontractors list.

I do not hire people who have an unproven performance record or that I do 
not know so I don't have to give directions or tell them what to do.  They 
know already.  I do give them the necessary information in order to complete 
the contract such as tempo, the name of the tunes, the key or who will play 
in what order in order to coordinate the work.   They expect to perform in a 
satisfactory way.  They will show up before the job and leave sometime after 
the job.  If they are late or leave early they are paid the same because I 
pay by the job.  The only exception to this is if the overall contract is 
compromised by their action such as if I am required to refund money for non 
performance.  (this has happened a few times over the years.  A piano player 
got sick in the middle of a job once) I am not required to hire them again 
if they fail to perform (late, drunk, whatever) since I do not have 
continuing contracts.

I do not pay any of their taxes and send the required 1099 if they make $600 
or more.

I provide no individual equipment.

I do not guarantee that the sub contractor will get anything if the job is 
cancelled and may in fact cost him money thereby constituting a loss to the 
subcontractor.  He also may have losses in his individual business that may 
or may not be related to me.  It is also possible that I may lose money on a 
job.  I pay on the job and some purchasers of music will take a month or 
more to pay me.  In that case I may lose everything or I may lose the use of 
the money in a timely manner and this may cost me money in late fees, 
additional interest on debt, lost interest paid to me or even the remote 
possibility of bounced checks and legal or other fees to collect money.  I 
have only been stiffed once but since there is always that possibility 
that's all that the IRS requires.

Also most IRS disputes are mediated and never get to a court of law.  There 
are several steps before it comes to that.   There are people who are 
registered with the IRS, not lawyers, that can go with you also. If every 
IRS dispute went to court there wouldn't be enough courts or lawyers (maybe 
there is enough lawyers) to handle it.  Sometimes a well written letter can 
solve the problem too.  Sometimes disputes aren't worth the trouble either

I think it's also a matter of scale too.  I don't know of anyone who does 
this today in St. Louis but at one time there were several contractors here 
who regularly employed dozens of musicians.  They were registered through 
the union and did all the employee/employer paperwork.  If they existed 
today on the same scale,  I think they would be classed as employers.  There 
were musicians who worked 20 or more engagements a month for them.  In the 
late 60's I worked a whole lot for one of them.  Some of the jobs were at 
the same place at the same time every night such as the band on the Admiral 
(a river steamer that had a regular 18 pc band and combos on other decks).

Another difference is if the conductor is an employee too such as at the 
Muny Opera here in St. Louis and the corporation issues all checks.  This 
too can have it's advantage.  Occasionally a venue requires insurance of 
contractors so you can be put on the payroll for one night and as their 
employee you are covered under their policy.  Probably not 100% Kosher but 
it's done.
Larry
St. Louis