HB 4748

The langauge of the redraft of HB1844, known as HB 4748, falls short of fixing the unintended consequences befalling artists of all disciplines and others who are freelancers. (Basically the new redraft is Senate Budget Amendment #260). HB 4748 was redrafted AGAIN on July 30th by the House Chair of the House Ways and Means Committee and is now HB 4944.

The language of HB 4748:

SECTION 147I INDEPENDENT CONTRACTORS

(a) An individual whose work is performed solely in his/her place of residence shall be exempt from the requirements of M.G.L. c. 149, 148B(a)(2), but not sections (a)(1) and (a)(3). This section does not apply to individuals who work with or for the individual.

(b) The exception provided in paragraph (a) of this section shall not apply to an individual who has been coerced, threatened or intimidated into establishing an independent business nor shall it apply to individuals who telecommute or work remotely from home.

(c) Each individual seeking this exemption shall register with the Secretary of State and shall be issued without a fee. The registration shall contain, at a minimum, the following information: name of the individual seeking the exemption, the nature of the independently established business, the address of the residence at which the work is performed and proof that the address listed is the applicant's legal residence. The Secretary of State shall issue regulations necessary to ensure registration under this section. The document shall be typewritten, printed or in such other form as the Secretary of State shall prescribe. The document shall be executed by the individual seeking the exemption. The registration shall be renewed every three years.

Many artists of all disciplines have studios/work places outside of their home and have to often go off site to make their work (photographers, filmmakers, dancers, musicians, visual artists). There are other problems with this redraft as well, but it is best to focus on the above reason. (ie artists often hire other artists to work on large projects when they needs other skills sets, and this language does not allow this to occur, etc- we have included at the end of this page more detailed info on the problems with this language). It does not address the Intellectual property ownership issues. This is key for our community. This language is clearly not a solution.

How to find your state representative (on the form it says Rep in General Court) and your state senator (on the form it says Senate in the General Court): http://www.wheredoivotema.com/bal/myelectioninfo.php

Background on the issue: The 2004 independent contractor law change, as many of you know, is negatively impacting our community and many other communities. (Refresher info on the Independent Contractor issue: http://www.artistsunderthedome.org/MAindependent_contractor.html)

To be informed of Massachusetts Legislation that impacts artists of all disciplines and arts small businesses and nonprofits- join the ArtistsUndertheDome.org's free listserv and also see their section on pending Massachusetts legislation.

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General Concerns of HB 4748 (the redraft of HB 1844)

It does not address the Intellectual property ownership issues. This is key for our community.

Our community’ general concern is that, although this amendment/new redraft is clearly trying to solve the unintended consequences from the 2004 law change, it does not solve the Independent Contractor law problem for artists, or any other freelance worker in fields that generate intellectual property (e.g. artists, photographers, writers, designers, interior decorators, engineers, etc.) or involve the professional manipulation of information (e.g. accountants, lawyers, business consultants, medical coding experts, insurance adjusters, etc.). Our community is concerned that a partial solution to a problem, whether in legislation or elsewhere could to end efforts to fully fix the problem. If this legislation as it is now written passes it could be used to claim victory and curtail needed opportunities to truly fix this problem, potentially for years to come. This could be a case where a poor fix is worse than no fix at all for not only our community, but for others who have become unintended consequences of the 2004 law change.

Nor does this amendment “fix” that this law will still be in direct violation of federal copyright law.

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Point-by-point Analysis of HB 4748 (the redraft of HB 1844)

Comments on section (a):

1) There are no individuals that we know of that work for others and perform the work *solely* in his/her place of residence. Freelancers nearly always need to meet with their clients at the client site or at a work site (e.g. a photography shoot site or a writer may need to do research at a library, at archives, or need to interview someone) to determine what work is to be done, to review the work to be performed or to complete the final delivery of a creative project. Given the wording of this amendment, as soon as an artist steps outside their home to perform part of the work they would be in violation of the law.

2) Although it is true that many artists do have live/work studios or work from home (think writers), many artists of all disciplines also often work in studios or private offices independent of their residence to ensure their children, spouses, and friends are not exposed to hazardous materials (e.g. photographic processing chemicals, volatile paints), due to having delicate works in progress, or the need for sound proof spaces (think musicians, sound artists, opera singers), or they have non home offices due to the intensive focus demands of the creative process. So the phrase "in his/her place of residence" excludes many artists and other creative workers that are equally deserving of exemption to those that inflict the hazards of their work on their loved ones.

3) As written this legislation could have unintended consequence of driving artists out of their studios and back to their homes which may be illegal for them due to zoning laws of where they live, and it could create financial hardship on landlords who rent studio space to artists. This could also hurt business/entrepreneur incubator sites (UMass Boston has one for example) or co-working environments. (Co-working is a style of work, which involves a shared working environment, sometimes an office yet independent activity. Unlike a typical office environment, those co-working are usually not employed by the same organization. Typically it is attractive to work-at-home professionals, independent contractors, or people who travel frequently who end up working in relative isolation.)

Many of these landlords are artists themselves who rent studio space to other artists to help pay the mortgages or rent on their own studio space. (This is especially true in mills and inner-city commercial buildings that have been converted to studios all over our state.). We need to point out that in some cities and towns it is illegal to have any business at your home residence. Some cities and towns have no live/work zoning or may only have it in certain areas- it is done on a town/city basis and not on a state level. Boston has done much work on this and has created many overlay zones for people to have live/work spaces. Our community is actively trying to change zoning laws to allow more people to have live/work spaces or to legally work from their home. It is a very slow process as it can’t be done on a state-wide level.

4) The final sentence in section (a) states that creative independent contractors cannot hire other independent contracts to help them complete their projects. Many creative works, especially large works, can only be developed through collaboration between multiple creative workers, many with unique individual specialties.

Comments on section (b):

5) Any creative worker that contracts work for another entity could be interpreted as telecommuting or working remotely from home. So the second part of section (b) nullifies all of (a) unless the artist is working only to create their own product, in other words, not working as an independent contractor at all.

6) We have no objection to the first part of section (b). We understand that there are circumstances in which an independent contractor might be pressured into establishing an independent business. We wonder, however, if there are much better laws already on the books that provide that protection to the individual worker.

Comments on section (c):

First thank you for acknowledging that many of those who are independent contractors would not be able to afford a fee to file and also locating this “requirement” with a “neutral” state agency/office- the office of the Secretary of State. We do have some concerns:

7) Given that the request for exemption is simply a letter stating that the independent contractor claims to be an independent contractor, with no other requirements that need to be met, and no legislation-required evaluation, section (c) creates both an unnecessary additional unfunded mandate on the government (recording, issuing, and tracking exemptions) and an additional "gotcha" pitfall for the unknowledgeable.

This legislation, will perhaps be well-understood by large corporations, unions, and Commonwealth departments, it will neither be known about it, nor understood by the vast majority of artists and other creative independent contractors. In the absence of a well-funded education plan to repeatedly publicize this law, the requirement could become highly problematic. This is one of those situations in which the burden should be placed not on the individual contractor to apply for an exemption, but rather on those who believe they are being injured by an illegal independent contractor to request investigation. In practice, this is the only circumstance in which an independent contractor would be investigated, whether they had applied for an exemption or not. This could cause an immediate class of law-breakers based solely on ignorance. (Think of all the those graduating college with art, music, web design degrees...)

8) How would this impact artists of all disciplines and other independent contractors who do not live in our state but do work in our state? And how would they find out about this requirement?

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Impact on Western, MA as a case study:

The original legislation and HB 4748 are particularly devastating for western Massachusetts. Few people make a living in just one job in the Berkshires. Everyone works multiple jobs, often as independent contractors. Many work as consultants and independent contractors* outside the county and often outside the Commonwealth, because the jobs don't exist in the county. The original legislation has had a devastating impact particularly on the creative professionals that had moved to the Berkshires for the culture and beauty that helped inspire their creativity, but now find that not only are their no local jobs, but their remote consulting and contracting jobs are drying up because of the legislation.

This legislation might have been well-intended for the construction and service trades represented by unions, but it has been devastating to the workers in the creative, information, and consultive economies. In addition, it has been devastating to the volunteer service opportunities in the Berkshires on which local creative professional relied to gain their first foothold in a new prospective client.** It must be fixed or Massachusetts will lose many of the industries and cultural workers that have made the Commonwealth famous.

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Sidebar notes

* These independent contractors that work remotely from the Berkshire-area include photographers, painters, writers, composers, health-care coding consultant, PR consultant, marketing consultant, independent insurance adjuster, software engineers, product designer, interior decorator, strategic planning consultant, accountant, human resource benefits consultant.

** Struggling companies (newspaper, museum) have had to turn down offers of pro bono work by local artists due to this law. The artists wanted to offer their work for free, both in support of the respected institution and with the expectation that the visibility of their pro bono work would help their career in the long term. This pro bono work did not take paid work away from anyone. Neither institution could afford to hire someone to do the work. So the work just didn't get done and the artists didn't get the opportunity for free publicity.