By Steven A. Adelman and Peter Tempkins
You may think the people who set up the rigging for shows at your venue are independent contractors. Perhaps they signed a document called “Independent Contractor Agreement,” and you send them a 1099 at the end of the year. Neither of these determines whether someone actually is an independent contractor, and if you don’t get it right, you could be leaving yourself open to risk.
It is important to understand the basics of Agency Law, which covers the legal relationship between the party doing the hiring, the party being hired, and any third parties who receive the benefit of the work.
The U.S. Department of Labor sets out the basic criteria to consider when trying to identify whether a worker should be treated as an “employee” or an “independent contractor.”
The key, according to the “Economic Realities Test,” is who has control over the way the worker gets the job done. This includes understanding who sets the hours and days worked, who provides the materials used, who dictates the required travel and the routes taken, and who controls the length and method of employment. The presence or absence of a worker’s LLC or the name of the hiring document or the type of tax document they are provided all suggest what the parties believe their relationship is, but their economic realities will count much more heavily in the eyes of the law.
Why it Matters
If an employee is hurt putting up show rigging, then a claim can easily be made under the principal’s or event owner’s workers’ compensation policy. If the injured worker is truly an independent contractor, then he or she can sue the hiring company for compensation for their injuries.
But what if the rigging falls and injures an unsuspecting fan during a show? Who is liable for the claim made by the fan? It depends on who did the work that caused the show rigging to fall and caused the fan to get hurt. And was that work based on actual authority by the principal?
Was the worker wearing a shirt bearing the logo of the venue or the management company, which conveys the impression of authority? If so, the likely target of legal action would be the principal, as it was their event.
Understanding the nuances is important because they determine who can be sued and how people can recover. Getting it right at the outset will serve you well.
HUB International’s team of Entertainment Insurance experts are ready to guide you on all the risk considerations that should be factored into planning for any type of production.
Steven A. Adelman is the head of Adelman Law Group, PLLC in Scottsdale, Arizona, and Vice President of the Event Safety Alliance. His practice focuses on safety and security at live sports and entertainment events throughout North America.