Dept. of labor audit

[MNicolai]

I'm curious as to how designers work when under a USA (or any other) contract. Are they employees of the theater ?, or independent contractors ?. They rarely bring their own "tools" - I.E. Console, instruments, dimmers, etc.... And they are usually working a technical schedule as determined by the venue. Who has experience with this ?, and what was your situation ?.


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That's a bit different than when you're on a call list for the venue, supervised/managed by the venue's staff, and you work there a few days a week, most weeks out of a month, for a few years total. That's the case that I believe is at the core of this particular discussion in regards to overhires.

When I do design work (non-USA), I'm hired by the client, independent of the venue, providing my own tools, my drafting software, and working on my own schedule while I coordinate with the client's schedule. As far as my clients are concerned, the person who pays me doesn't care about my paperwork or process so long as the right things happen at the right times during their shows, and without too many speed bumps getting our way up to opening night. It'd be a hard case to make that most designers fall under anything other than independent contractors, except where they choose to be employees or predominantly design for the same clients show after show after show, using the client's resources to draft/implement their design.

 

[lwinters630]

It falls under "normal course of business". If retail store hires manager, sales staff as employees. They could contract a cleaning service as an independent contractor. Because it is not in their normal course of business.

You cannot hire an independent contractor, you have to contract them. Yes it's words but they will hang you on it.

If you have a theater that rents out its venue to out side groups, they can bring in their own lighting designer and use yourequipment. But if you hire LD, sound operator and stage crew, they're employees.

The Gray...... If you have a fully equipped theatre. Fully staffed and produce 80% of your own. But then you contract a rental, who by contract, wants a specific LD. You better have a clear contract with the LD. Even reference the other rental contract. But still be able to prove the LD has other customers, advertises (business card, Web page, sign on truck) certificate of insurance and company name. The more proof you keep in a file, the better.

Remember the government just play by the rules, they write them.

 

[BillConnerFASTC]

Its difficult to discuss with such a wide variation in experiences. Just the concept of a lighting designer being the board op is foreign to my experiences.

 

[MikeJ]

Its difficult to discuss with such a wide variation in experiences. Just the concept of a lighting designer being the board op is foreign to my experiences.

I think that really depends on the situation or event. There are plenty of "lighting Designers" that are completely useless "artists" who say crap Like "that color blue is just a little too happy; a little darker...a little more... STOP! Perfect. No, wait. I think I hate that. Start over."
For a lot of non-theater work, I think that some clients have figured out that they can just express their concepts directly to the programmer, and avoid the middleman. Programmer/board op/production company, tags on a small design fee, and everyone is happier.

This though, is highly dependent on the market, a lot of places, a tech will never touch a board, a programmer will never touch a fixture, and a Designer will never touch a thing.

 

[BillConnerFASTC]

I think that really depends on the situation or event. There are plenty of "lighting Designers" that are completely useless "artists" who say crap Like "that color blue is just a little too happy; a little darker...a little more... STOP! Perfect. No, wait. I think I hate that. Start over."
For a lot of non-theater work, I think that some clients have figured out that they can just express their concepts directly to the programmer, and avoid the middleman. Programmer/board op/production company, tags on a small design fee, and everyone is happier.

This though, is highly dependent on the market, a lot of places, a tech will never touch a board, a programmer will never touch a fixture, and a Designer will never touch a thing.

Q.E.D. - Our experiences are different.

 

[thomp01d]

Employee misclassification is a huge problem in the entertainment business. If I as an employer interview and hire a worker, provide tools, instruction on processes, control of time/place/methods -generally the worker is an employee and must be paid accordingly. Additionally, many employers abuse overtime regulations - if you make less the DOL weekly minimum, you are entitled to OT pay, regardless of exemption. (The US DOL is assessing a raise in the minimum as well - it it happens, it'll be in 3-5 years.)

Signing a contract or agreement doesn't change the relationship, if the actual business relations ship is that of employer/employee. Rule of thumb: are you the customer? If you're contracting with a person or company for services rendered, you can have a vendor/contractor (W-9) relationship. If you're paying someone to perform work for your company, you should probably be paying on a W-4.

An example is designers: if a designer is contracted, they are generally paid a fee upon completion of the Services and a satisfactory work product is provided. This is a legal relationship. A technician is given a call time, run sheets, supplied tools necessary to perform the required tasks, and has a clear job description. This is an employee.

 

[DuckJordan]

Quick question, Overtime issues, Is there a legaly set overtime number? or are companies allowed to pay half rate to their employees for OT

 

[SteveB]

OT is a state by state issue, unless the organization meets the requirement that would allow the Fed DOL OT requirements to kick in. In NY State it's essentially based on the minimum wage, which is $12 hr. for OT. You have to paid be at least that.

If your theater/company does interstate commerce worth more then $50,000 pr some such, then the Federal law kicks in, which is weekly rate divided by 40 hrs., determines the hourly rate, then it's 1.5 times that per hour. As note, some governmental employees (state, fed, whatever) are now covered under the Fair Labor Standards Act, which is the governing law.


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[Jay Ashworth]

In short, if you want to pay less than 1.5 times someone's hourly rate as OT, expect to involve counsel.

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[SteveB]

In short, if you want to pay less than 1.5 times someone's hourly rate as OT, expect to involve counsel.

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Understand though that in NY, they are only required to pay you $12 an hour as your OT rate. The law does not require them to base your OT rate as 1.5 times whatever you happen to making per hour on the call. So if you are making $24 hr., you may not get $36 as an OT rate, they are not required to do that, unless the employer meets the federal guidelines for the FLSA.

 

[Jay Ashworth]

Huh.

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[SteveB]

Huh.

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Note that the NYS minimum and OT laws are varied and depends on the industry you work in, exempt/non-exempt status, etc... but typically and as applied to the theater business,
the state labor law only requires an employer to pay the minimum wage, currently at $8 hr. If you make more then that, good for you. Plus they only require OT to be paid if you work more then 40 hrs in a work week and then the OT rate is 1.5 times the basic hourly rate, so OT is at $12 an hour.

If your employer pays you $24 per hour, they are not, according to NY State law, required to pay you OT at 1.5 times that rate. They only have to pay you OT at the state minimum, which is $12 hr.

Or a company might meet the federal requirement for the Federal Fair Labor Standard Act .

The current FLSA definition of a private company to meet the federal requirement is: "A company/organization with annual dollar volume of sales or receipts in the amount of $500,000 or more". Most governmental organizations are covered, as are schools. Private college ?, not sure. In general, the company must as well be engaged in "interstate commerce"

The federal law that applies to non-exempt employees in certain industries (theater/entertainment is covered AFAIK), states that the employer must pay OT at a rate determined by their weekly salary - which determines their hourly rate, then 1.5 times that hourly rate for hours worked past 40. So if the company qualifies, your $24 hr. rate gets you $36 per hr. past 40 hrs. worked.

If you work for a non-profit organization, they are exempt from paying you OT based on the federal guidelines, as the courts do not consider a non-profit "to be engaged in commerce" . Whether the non-profit then falls under the state guidelines is determined on a state-by-state basis as per local laws governing OT (if any).

http://www.insidecounsel.com/2013/03/18/labor-non-profits-and-the-flsas-overtime-provision

http://www.dol.gov/whd/flsa/

 

[JD]

Simple rule of thumb- Who wants to be 1099 vs W2?
If it is the pseudo-contractor who wants this be suspicious! They probably do not intend to file the income.
Any person in their right mind would rather pay 7.5% FICA on a W2 then pay 15% on their 1099 income.
A true business with lots of other expenses will function more effectively on 1099 as they can remove all of their expenses. The "lone person" is a different story.
Be especially cautious if you are entering a situation where you will be providing more than 10% of that individual person's income.

 

[BillConnerFASTC]

Simple rule of thumb- Who wants to be 1099 vs W2?
If it is the pseudo-contractor who wants this be suspicious! They probably do not intend to file the income.
Any person in their right mind would rather pay 7.5% FICA on a W2 then pay 15% on their 1099 income.
A true business with lots of other expenses will function more effectively on 1099 as they can remove all of their expenses. The "lone person" is a different story.
Be especially cautious if you are entering a situation where you will be providing more than 10% of that individual person's income.

Why would you care if you - or the employer - file the 1099? All of my income is 1099, and yes I file quarterly and pay all of the FICA and other compliance. And if you have any doubt, the governments - city, county, state, and federal - are very anti-business and make it just extra difficult to make these payments. And I'm not sure I can make any more expenses tax exempt than anyone else.

 

[JD]

Why would you care if you - or the employer - file the 1099? All of my income is 1099, and yes I file quarterly and pay all of the FICA and other compliance. And if you have any doubt, the governments - city, county, state, and federal - are very anti-business and make it just extra difficult to make these payments. And I'm not sure I can make any more expenses tax exempt than anyone else.

When it comes to 1099 fraud, it is usually the recipient who triggers the initial audit by not showing the income. If an individual asks to be paid 1099 I usually dig a bit deeper. In my case, it is usually musicians or paid choir members we are hiring in for a service. One shots are very common and most are 1099. Still, with little overhead, this person should be happier if they are a regular to be paid W2 where they are only responsible for 7.5% FICA as compared to 1099 where they are responsible for 15%. All the extra work is on my end anyhow. Still, if more than one gets popped for non-payment of taxes, they tend to check out the company writing the checks. Currently, I have 3 paid choir on W2.