Are Recording Studio Engineers Employees or Contractors? (Part 3)
This is part 3 (the finale) of a series on how to classify recording studio engineers as workers, here’s part 1 and part 2 in case you missed them. Each part of the series answers one question and provides guidance to help you decide whether your engineers are employees. If your recording studio is paying audio engineers, specializing in recording, mixing, and mastering, are engineers they your employees or independent contractors? This post focuses on the type of relationship the recording studio and audio engineer have.
Are you expecting the audio engineer to work with you long-term?
When deciding whether engineers are employees or contractors, recording studio owners should also look to the type of relationship. If your relationship with the engineer is expected to be long-term and continuous (like a marriage) rather than for a specific project or period of time, the IRS generally considers this an employee-employer relationship.
**Important note: your contract stating that the engineer is an independent contractor, is not enough to solidify contractor status. Instead, the IRS looks at how you all work together to make that determination.**
Does your recording studio provide benefits?
Providing sick days, vacation, insurance, retirement contributions, and other items will easily alert the IRS that your recording engineer is your employee. Contractors would not receive these types of benefits, but not providing these benefits does not automatically scream “contractor” either. Reimbursing expenses for items used to perform the job, are likely also tied to an employee-employer relationship as opposed to a contractor.
Are the engineers a key aspect of your recording studio?
If you rely heavily on the talent and skills of engineers to produce income for your recording studio, it is likely you also control their activities (see part 1). If this is the case, they are typically your employee, and not an independent contractor.
Do you have questions about whether your engineers are your employees? If so, ask Growth Group on Twitter or comment below.