Welcome to AccelPro Employment Law, where we provide expert interviews and coaching to accelerate your professional development. Today we’re featuring a conversation about worker classification in the entertainment world. Our guest is Anthony Panebianco, a Senior Associate at DarrowEverett.
Classifying workers is complicated enough. In the entertainment world, it is made more difficult because many performers would rather be classified as independent contractors even though the law says they should be employees.
Panebianco has a good deal of personal experience with this issue. As a classically trained pianist, he is a performer himself. As chair of the Cape Symphony, he often hires performers. And as an attorney, he has many creatives and performers for clients.
He describes the pitfalls, and how to avoid them, for companies wishing to hire entertainers and for entertainers looking to land gigs.The supplemental materials and episode transcript are available below.
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Interview References:
Anthony Panebianco’s DarrowEverett profile
1:50 | Inflation Reduction Act of 2022, H.R.5376 § 117-169 (2022).
2:38 | Adams, Andrew and Panebianco, Anthony. (2023, April 26). The Show Must Go On: Entertainer-Employee Classification Takes Center Stage for Venues. JD Supra.
8:49 | Massachusetts General Law Part I Title XXI, § 149-148B (2014).
10:33 | Guidelines for Determining Worker Status Performing Artists. New York Department of Labor (2021).
11:45 | Worker status: employees and independent contractors. California Assembly Bill No. 5 , § 296 (2019).
TRANSCRIPT
I. SETTING THE STAGE FOR PERFORMERS’ CLASSIFICATION
Matt Crossman, Host: We’re going to dig into performers and how to classify them in just a minute. But first, let’s lay the groundwork for why this is an issue. How to classify workers has been a huge issue in recent years because of the rise of the gig economy. Along with that has come government oversight. What is the Inflation Reduction Act and why does it matter for employee classification?
Anthony Panebianco: The Inflation Reduction Act came about in August of 2022, and it has some very particular language that provides additional support to the IRS—$45 million is going to be allocated to enforcement.
That enforcement has yet to be seen, but it’s going to be implemented. And one of the ways that it can be implemented is in the enforcement of how individuals are classified for tax purposes. It makes a difference for employers, it makes a difference for employees, and it makes a difference for the IRS, how they’re classified. So with this new viability of enforcement, employers really need to be on the lookout for what to do here.
MC: And that’s true across all types of work. You wrote a fascinating piece about how to classify entertainers that I wanted to dive into.
I want to read a quote from your piece: “While every venue wants to put on a good show, the exposure for venues to misclassify performers should create pause before scheduling such acts.”
My assumption before I read your piece was that the vast majority of actors, musicians, et cetera, would all be contract workers, and so this really wouldn’t be that big of a deal. Clearly that’s not the case. For venue owners, HR execs, and anyone else who might hire performers, what are some issues they need to think about when deciding how to classify them?
AP: I think you’re correct that most venues and most performers view themselves and the relationship that they have as independent contractors. But in truth, when you apply the law directly to the facts of the case, how the performers are hired, how they perform, what control they have, they don’t actually qualify in every instance as an independent contractor.
And that’s where employers and employees—the performers themselves—should be wary of simply going by what the standards have been for the industry. They should really be looking at how the law applies to them specifically.
If you have a band that’s touring around the country, and they come in for one evening, they tend to be independent contractors. But if you have a DJ that comes in every Friday night at the same time, they might qualify as an employee. They would tend to think of themselves as independent because they perform at other venues, they have other interests, they’re really independent in the music that they provide or what they control.
But they can become an employee, and that triggers different ways of allocating different benefits that the employer would have to provide. It makes a difference. For all of our clients, whether it’s performer side or employer side we ask them to look at the totality of the relationship with the individual or the groups to see how it truly is defined and should be defined.
MC: “Totality of the relationship”—I like that phrase because it goes exactly into how complicated this is. One of the complications of worker classification is the myriad tests. California has one test. New York has another test. The federal government has one, the IRS has one. For simplicity’s sake, let’s talk about the standard ABC test and take that one letter at a time.
I’ll read you A, and I want to hear what you think in terms of performers. A, “is the performer free from control in the performance of services?”
AP: Like all the other tests this has parameters to it: Do they have a set timeframe that they have to go on stage and perform by? Is it something like a theater stage where we know that they’re going to start at 8 o’clock, they have intermission at 9:15 and they’re done at 10?
Are they free in the manner in which they’re able to produce, provide, go about their business of making a performance? The quantity of control that a venue or an employer may have influences that first part of that test.
MC: All right, B, this seems like a big one to me, so I’m going to follow up with a question after I read it to you: “Is the service provided different than the service that the company provides?” If you’re hired to sing on, say, a cruise ship, that’s different than if you were hired for the exact same job at a concert hall. Am I interpreting that correctly? And how does that apply?
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