Precedent: US appeals court rules that orch musicians are legally employees

In what appears to be a breakthrough in employment law, the United States Court of Appeals for the District of Columbia Circuit has ruled that orchestra musicians are to be considered actual employees, rather than independent contractors.

This increases an orchestra’s legal obligations to musicians it engages on a regular basis. It also makes it possible for freelance musicians to form a union group.

From the proceedings: In rendering its decision, the Court reviewed a 10 factor test to evaluate whether the musicians were independent contractors or employees. In focusing on the “control” factor, the Court noted that the orchestra forbids the musicians from doing such things as crossing their legs and requires them to remain “attentive” through a performance. The musicians may not talk during tuning, and one musician reported being reprimanded when she left her seat to talk to another colleague. To be fair, the Court did note that some of the factors leaned in favor of finding the musicians to be independent contractors. However, at the end of the performance, the Court noted the “conflicting evidence” required it to defer to the board and uphold the board’s finding that the musicians were employees.

The ramifications are considerable.

See National Law Review here.

one man orchestra

 

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  • Free-lance musicians have always been allowed to join the American Federation of Musicians. What this ruling means is that the employer (i.e, the orchestra) will have to pay social security, disability insurance, worker’s compensation and unemployment.

    • It also means musicians will no longer be able to claim most deductions, which can total thousands of dollars annually.

      Six of one, half dozen of the other if you ask me.

    • I just read the ruling, and the first sentence reads: “The National Labor Relations Act guarantees employees, but not independent contractors, the right to join a union. In this case, the National Labor Relations Board ruled that musicians in the Lancaster, Pennsylvania, regional orchestra are employees and thus entitled to join a union.”

      So while free-lancers can join the AFM, this ruling speaks to the ability of the Lancaster Orchestra musicians ability to organize and negotiate a collective bargaining agreement. To do that, they must be employees.

      • Andy you said “It also means musicians will no longer be able to claim most deductions, which can total thousands of dollars annually.”

        Since you don’t list what deductions you can or can’t deduct it’s hard to tell you what I know you can.

        You can deduct for clothes as well as dry cleaning unless they supply it for you. You can deduct for maintenance and repairs for tools and or instruments, Hair cuts or styling. Trade magazines. If you also do gigs as an indy contractor you can still get it all.

  • From the article: “The NLRB, the U.S. Department of Labor and various agencies of state government are all turning up the heat on employers in all industries who use independent contractors because many employers continue to wrongly believe that simply because a worker is part time or only retained on a temporary basis, he or she can be properly classified as an independent contractor on that factor alone.”

    I do remember this being addressed during contract negotiations for an orchestra that I used to play in. (I was a member of the orchestra committee and thus part of the negotiation team.) It wasn’t an actual issue in the negotiations, but the negotiator that the union sent to work with us made some good points to the orchestra’s administration, and told them this was something they would need to think about in the future and start preparing for.

    Normally, “independent contractor” refers to jobs like, say, a handyman or landscaper that you hire to work on your house. He gets to decide:
    – what time to show up and what time to go home.
    – when to take breaks, and for how long.
    – what to wear.
    – how to go about doing the job (breakdown & order of tasks, etc.).

    Orchestral musicians don’t get to decide any of that.

  • As noted above – “independent contractor status” has always been used by mostly per-service orchestras to get around paying various benefits paid to bigger orchestra rostered musicians. This ruling is long overdue.

  • Andy, I don’t believe this affects the ability to take tax deductions. I was a free-lance musician for 15 years. I was both an “employee” (getting a W2 at year end) or an “independent contractor” (getting a 1099.) As long as I declared the 1099 income and paid taxes on it, I took every deduction I was legally entitled to. I suggest you contact a tax adviser, who should confirm what I’m saying.

      • Andy, I don’t know of any musician, even ones that predominantly get paid by W-2 that don’t do other work that falls under additional income (1099). You can still write off those deductions.

      • An “employee” can take the same deductions as an independent contractor (sole proprietor filing a Schedule C) on IRS Form 2106.

        • Can an employee claim mileage to work from his tax home.? I don’t think so an independent contractor can
          The same with meals. I am a conductor who is both and I get to claim a lot more deductions as an independent contractor. Also w-2 income falls into schedule a itemized expenses which are only deductible after they exceed a percentage of income. So no you can’t claim the same deductions as a w-2 employee than as a 1099 one

          • Hi Kirk! Fun to see you on here. You can deduct mileage, especially if you don’t have a “regular place of work.” But you are right that Form 2106 is part of Schedule A (itemized deductions), so the deductions only kick in once they become larger than the Standard Deduction (usually $6,300).

            It’ll be interesting to see how this ruling trickles down the industry. The particular organization that you and I used to work for pays orchestra members as employees, but subs as independent contractors. Seems like that needs to stop!

          • And you can deduct meals, too, on Form 2106/Schedule A (if the engagement is away from home). Generally, being paid as an Independent Contractor musician is only advantageous for non-homeowners who do not do enough professional music activity to rack up enough income and deductions to exceed the standard deduction.
            Of course, consulting your own tax attorney is always the best way to get the answers for anyone’s specific situation.

  • Does anyone know how this will affect “pick-up” orchestras? Like opera or ballet orchestras that technically do not have regular members, but hire mostly the same people show to show? Or how about other organizations that only put on a couple concerts a year? Here in NM there are several organizations that are mostly “presenters”, but do hire an orchestra a couple times a year. Will they be subject to this ruling?

  • The next step will be for someone to sneak an exemption from the ruling into law.

    This has happened in other professions where business felt it needed more freedom to hire and discard employees without any consequences or responsibilities.

  • What if you work/file a mix of several W2s and 1099s, since you’re going from gig to gig , can you file a schedule C and deduct mileage etc?

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