Creative pros often hate the words work made for hire (WMFH). I mean, clients try to sneak that into contracts regularly, and it means you, the creative pro, have to carefully watch out for it, lest you sign that bad-boy and end up making the client the author and owner of what should be your copyrights. But this post isn’t about how your copyrights are affected with a WMFH contract—it’s about other surprising legal effects of such an agreement.
Now, before I go any further, I’m only talking about California law here. If you are in another state, the rules (probably) aren’t the same. BUT (yes, big but), if you ever work in California or for a company in California, you might want to pay attention.
There is another side to WMFH agreements in the Golden State. If you are a sole proprietor business—that is, not an entity of some kind, like a corporation or an LLC—and someone hires you as an independent contractor, and the signed contract includes a WMFH clause, then you are statutorily an employee, and the employer has to follow the laws regarding unemployment, disability, and workers compensation insurance as if you were a regular employee. According to the California Labor Code (Section 3351.5(c)), if a person is hired to create a commissioned work and the parties agree in signed writing “that the work shall be considered a work made for hire, as defined in Section 101 of Title 17 of the United States Code,” then, boom, the hired person is a statutory employee. Moreover, the California Unemployment Insurance Code (Section 686) says almost precisely the same thing. Every code that deals with unemployment, disability (including paid family leave), and workers comp has something about WMFH.
Anyway, failure by the employer to follow the rules means the employer may suffer a hit with substantial fines and even jail time! Yikes!
“So what?” you may be thinking, “Only the state cares, but it doesn’t affect me,” but you’d be wrong. Those are rights to which you are entitled under California law. Also, the law is unclear  about other benefits that employers in California must supply to employees. It may be that you, as the employee, are entitled to other things… like being paid as an employee rather than an independent contractor, having limits on time/overtime, etc.
If you live and generally work in some other state but come to California for a WMFH project, you would likely be considered a statutory employee under California law  (and maybe even if the company is here, but you aren’t). Also, if you physically work here, your pay would (probably) be subject to California’s personal income tax withholding  (sorry).
Most importantly, if you are a California resident or business that hires assistants or other independent contractor workers and you have a WMFH clause in the contract you have these people sign, you also need to know these rules. There are ways to avoid some of these issues (for example, maybe an assignment clause instead of a WMFH), but there are downsides to other options. Talk to an attorney to get the best advice for your particular situation.
 The law doesn’t explicitly say one way or another; a court could make the analogy and apply the same rules to pay, time off, etc.
 Id. (That means, the same source as I just cited, for the non-nerds).
Leslie Burns became a lawyer (licensed in California) after a career as a commercial photographers’ rep and consultant. Not surprisingly, her San Diego-based legal practice is centered on artists, especially photographers, whom she helps with copyright, small business, and other legal issues arising in their lives. She believes strongly in preventive and mindful lawyering, understanding that the best (and cheapest!) kind of legal help is the kind that prevents harm later. Learn more at Burns the Attorney or follow her on Twitter @burnsthelawyer.
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