S4715

An Act concerning independent contractor status of certain creative professionals and supplementing Title 34 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. Notwithstanding R.S.43:21-19(i)(6), a creative professional who satisfies the requirements of subsection b. of this section shall be considered an independent contractor and shall not be required to satisfy any additional test to be deemed an independent contractor.

b. A creative professional shall be considered an independent contractor for purposes of the “unemployment compensation law,” (R.S.43:21-1 et seq.); “Temporary Disability Benefits Law,” P.L.1948, c.110 (C.43:21-25 et al.); State wage payment law, P.L.1965, c.173 (34:11-4.1 et seq.); “New Jersey State Wage and Hour Law,” P.L.1966, c. 113 (C. 34:11-56a1 et seq.); P.L.2018, c.10 (C.34:11D-1 et seq.); and “New Jersey Call Center Jobs Act,” P.L.2019, c.470 (C.34:21-8 et seq.), when the hiring entity establishes the following:

(1) the individual performs services pursuant to a written agreement identifying the project or creative professional engagement, scope of services, term, compensation, payment schedule, cancellation terms, ownership or permitted use of intellectual property, and any reimbursable expenses;

(2) the agreement concerns a particular performance, production, exhibition, commission, residency, class, workshop, course, series, design assignment, or other defined project and does not require continuing or indefinite availability. A series of separate, defined creative professional engagements with the same hiring entity shall not, solely on that basis, constitute continuing or indefinite availability;

(3) the individual retains substantial discretion over the creative, artistic, interpretive, instructional, or professional manner and means of performing the services, consistent with the collaborative nature of the creative professional engagement;

(4) the individual may propose, establish, negotiate, or voluntarily accept a clearly stated rate or method of compensation, which may be calculated by project, commission, performance, rehearsal, class, day, hour, royalty, percentage, be based on an amount customarily paid by the entity, or another mutually agreed method, except that the method of compensation shall not, standing alone, determine classification;

(5) the individual may accept or reject a creative professional engagement without loss of unrelated opportunities, retaliation, or other penalty;

(6) the individual is not prohibited from providing services to other persons or entities, except for reasonable restrictions concerning confidentiality, conflicts of interest, or the integrity of a particular production or project;

(7) the individual holds themselves out, or has the practical ability to hold themselves out, as available to provide artistic or creative services to others through evidence which may include a portfolio, repertoire, professional biography, website, social media presence, performance or exhibition history, professional training, teaching practice, grant or commission history, membership in a professional organization, or other evidence of an artistic practice;

(8) the agreement identifies any license, assignment, or work-made-for-hire provision applicable to material created during the creative professional engagement and the individual retains ownership of preexisting material, methods, repertoire, designs, curricula, and other intellectual property except to the extent that particular rights are expressly licensed or assigned in writing, consistent with federal law;

(9) the individual is not engaged through the agreement merely to perform substantially the same continuing duties, under substantially the same conditions and supervision, as employees of the hiring entity; and

(10) the individual is engaged directly or through the individual’s bona fide business entity and is not supplied through a staffing agency, labor broker, or similar intermediary established to avoid employee classification.

c. The following shall not, standing alone, constitute control or direction or otherwise disqualify a creative professional engagement under this section:

(1) establishing performance, rehearsal, installation, exhibition, class, workshop, or project dates and times;

(2) specifying a venue, audience, project objective, deliverable, deadline, duration, or budget;

(3) providing customary direction from a director, conductor, choreographer, curator, editor, designer, producer, educator, or other creative collaborator;

(4) requiring coordination with performers, designers, educators, production personnel, students, community participants, or other collaborators;

(5) requiring adherence to a script, score, choreography, curriculum objective, exhibition plan, production concept, or technical specification;

(6) requiring compliance with safety, accessibility, child-protection, licensing, insurance, grant, venue, educational, or legal requirements;

(7) requiring reasonable reports concerning completion of deliverables, attendance, grant compliance, participant outcomes, or project expenses;

(8) providing equipment, materials, studio space, rehearsal space, classrooms, performance facilities, exhibition facilities, or specialized technology appropriate to the creative professional engagement;

(9) the creative professional engagement supports the mission or programming of the hiring entity, occurs at a venue owned, operated or selected by the hiring entity, is funded in whole or in part by a grant, or generates revenue for the hiring entity; or

(10) the individual has entered into one or more prior creative professional engagements with the same hiring entity, provided that each engagement is separately defined and otherwise satisfies the requirements of this section.

d. A teaching artist may be deemed an independent contractor pursuant to this section when engaged for a defined residency, workshop, course, master class, or series and when the artist retains substantial discretion over artistic content, technique, or instructional method.

(1) The establishment of a school calendar, class time, student-learning objective, age-appropriateness requirement, accessibility standard, background-check requirement, or student-safety policy shall not, standing alone, establish employee status.

(2) This subsection shall not apply to an individual engaged as continuing faculty or staff to teach the hiring entity’s regular year-round curriculum under ongoing supervision and employment-like conditions.

e. A creative professional shall not be deemed an employee solely because the individual:

(1) operates under the individual’s legal name;

(2) has not formed a corporation, limited liability company, partnership, or other entity;

(3) does not maintain a separate office or commercial location;

(4) does not employ other individuals;

(5) does not maintain business insurance not otherwise required by law or contract;

(6) does not possess a business or occupational license not otherwise required by law;

(7) did not provide paid services to multiple clients during the period under review;

(8) earns artistic income intermittently, seasonally, or in combination with other employment; or

(9) uses tools, equipment, materials, facilities, or technology supplied by the hiring entity when those resources are customary or reasonably necessary for the particular creative professional engagement.

f. (1) Nothing in this section shall determine copyright authorship or ownership contrary to federal law.

(2) A hiring entity shall not rely on a general employment, invention-assignment, or intellectual-property clause to obtain rights in a creative professional’s preexisting material or work unrelated to the defined creative professional engagement.

(3) Any assignment, exclusive license, or agreement that a commissioned work is to be treated as a work made for hire shall be stated conspicuously in writing and shall specifically identify the work and the rights being transferred.

g. (1) This section shall not apply to services that principally consist of:

(a) general administration, clerical work, bookkeeping, fundraising, marketing administration, ticketing, or routine office operations;

(b) front-of-house operations, food service, security, custodial services, ordinary maintenance, transportation, delivery, or construction;

(d) work governed by a collective bargaining agreement where application of this section would diminish rights under that agreement.

(2) A worker shall not lose employee status merely because the hiring entity describes routine operational services as creative or project-based.

(3) This section shall not apply to services performed by an individual who is under 18 years of age.

h. (1) The hiring entity shall bear the burden of establishing that the requirements of this section are satisfied. Upon that showing, the individual shall be presumed to be an independent contractor.

(2) The Department of Labor and Workforce Development may rebut the presumption by demonstrating, by a preponderance of the evidence, that:

(a) a material condition of this section was not satisfied;

(b) the written agreement was a willful misrepresentation or misclassification, or did not reflect the actual relationship;

(d) the relationship was, in substance, continuing employment rather than a creative professional engagement, except that a circumstance identified in subsection c. of this section shall not, standing alone, be sufficient to make that demonstration.

(3) An individual’s acknowledgment of independent contractor status shall be relevant but shall not, by itself, waive any statutory right or determine classification.

i. (1) A hiring entity shall not discharge, refuse to engage, blacklist, threaten, or otherwise retaliate against an individual for:

(a) declining to enter an independent-contractor agreement;

(b) requesting clarification of classification or compensation;

(d) exercising a right under State or federal law.

(2) No provision of an agreement may waive the protections of this subsection.

(3) A violation of this subsection shall be subject to the remedies and penalties provided by section 1 of P.L.2019, c.375 (C.34:1A-1.19).

j. (1) Except in cases involving fraud, coercion, retaliation, or willful misclassification, or a substantive failure to satisfy the requirements of this section, the Department of Labor and Workforce Development shall provide a hiring entity with written notice identifying any deficiency in the documentation required pursuant to this section.

(2) No penalty under a law to which this section applies shall be imposed solely because of the identified deficiency if the hiring entity corrects the deficiency within 90 days after receiving the notice.

(3) A documentation deficiency identified in the notice shall not, standing alone, cause the creative professional to be deemed an employee or otherwise disqualify the creative professional from independent-contractor status under this section.

k. No later than 90 days following the effective date of this act, the Department of Labor and Workforce Development shall develop a model agreement, plain-language guidance, and compliance materials in consultation with arts and cultural organizations, individual artists, labor representatives, teaching artists, educational institutions, and legal and tax professionals.

l. Nothing in this section shall be construed to alter or eliminate any statutory exemption from coverage under, or exemption from the requirements of, a law to which this section applies, or to affect any right or protection provided under any other State or federal law.

m. As used in this section:

“Arts and cultural organization” means:

(1) an organization exempt from federal taxation pursuant to section 501(c)(3) of the Internal Revenue Code of 1986 whose primary purpose includes the creation, presentation, performance, preservation, exhibition, teaching, promotion, or support of arts, culture, history, humanities, or cultural heritage; or

(2) a public entity, educational institution, library, museum, community organization, or other hiring entity engaging an individual for a discrete arts or cultural program, performance, production, exhibition, commission, residency, workshop, course, or project.

“Creative professional” means an individual, including an emerging professional, who provides services requiring artistic, creative, interpretive, cultural, instructional, curatorial, design, or specialized production judgment. The term includes, but is not limited to:

(1) actors, dancers, musicians, singers, conductors, composers, arrangers, choreographers, directors, playwrights, dramaturgs, comedians, spoken-word artists, storytellers, puppeteers, magicians, and other performing artists;

(2) visual artists, craft artists, photographers, illustrators, muralists, sculptors, filmmakers, media artists, animators, and digital artists;

(3) writers, poets, literary artists, translators of creative work, editors of creative work, and other creators of original expressive material;

(4) scenic, costume, lighting, sound, projection, graphic, exhibit, and other designers whose services principally involve independent creative judgment;

(5) curators, cultural bearers, tradition bearers, folklife practitioners, and artists working in community-based or culturally specific practices;

(6) teaching artists providing arts instruction through a defined workshop, residency, course, master class, or series; and

(7) project-based stage, production, and technical professionals to the extent their services principally require independent artistic, design, interpretive, or specialized professional judgment.

“Creative professional engagement” means a finite performance, production, commission, exhibition, residency, workshop, course, series, design assignment, artistic collaboration, or other defined project. “Creative professional engagement” shall not include an indefinite obligation to perform continuing general operations or to remain available to the hiring entity.

“Hiring entity” means an individual or entity that engages a creative professional, including, but not limited to, a business, nonprofit organization, public entity, educational institution, municipality, library, museum, or community organization.

2. This act shall take effect immediately and shall apply to any written agreement entered into, renewed, replaced, or amended on or after the effective date.

STATEMENT

This bill establishes standards for certain creative professionals to be considered independent contractors.

The bill defines a “creative professional” as an individual, including an emerging professional, who provides services requiring artistic, creative, interpretive, cultural, instructional, curatorial, design, or specialized production judgment. The term includes, but is not limited to, individuals working in the performing arts, visual arts, literary arts, theatrical and production design, folk and traditional arts, arts instruction, and certain project-based stage, production, and technical professions.

Under the bill, a creative professional is considered an independent contractor if the hiring entity establishes that the individual satisfies the bill’s requirements. Among other requirements, the individual is required to perform services pursuant to a written agreement identifying a defined creative professional engagement; retain substantial discretion over the manner and means of performing the services; propose, establish, negotiate, or voluntarily accept a clearly stated rate or method of compensation; be permitted to accept or reject engagements and provide services to other persons or entities, except for reasonable restrictions concerning confidentiality, conflicts of interest, or the integrity of a particular production or project; holds themselves out, as available to provide artistic or creative services to others through certain evidence of an artistic practice; and not perform substantially the same continuing duties, under substantially the same conditions and supervision, as employees of the hiring entity. Further, the individual is required to be engaged directly or through the individual’s business entity and not supplied through a staffing agency, labor broker, or similar intermediary.

The bill also requires a written agreement to identify any license, assignment, or work made for hire provision applicable to material created during the creative professional engagement.

The bill provides that certain features of a creative professional engagement do not, standing alone, constitute control or direction or otherwise disqualify the engagement from independent contractor status. The bill further provides that certain features of a creative professional do not disqualify the individual from independent-contractor status.

Notably, the bill does not exclude a creative professional solely because the professional works with an established company or has entered into multiple engagements with the same hiring entity.

The bill does not determine copyright authorship or ownership contrary to federal law.

The bill does not apply to services performed by an individual who is under 18 years of age or services that principally consist of certain general administration; front-of-house operations, food service, security, custodial services, ordinary maintenance, transportation, delivery, or construction; continuing duties ordinarily performed by employees under the same supervision and conditions; or work governed by a collective bargaining agreement where application of the bill would diminish rights under that agreement. A worker will not lose employee status merely because the hiring entity describes routine operational services as creative or project-based.

The bill establishes a presumption of independent contractor status when the hiring entity demonstrates that the bill’s requirements are satisfied and provides that the Department of Labor and Workforce Development may rebut that presumption.

The bill prohibits retaliation against an individual for declining to enter an independent-contractor agreement, requesting clarification of classification or compensation, filing a complaint, or exercising a right under State or federal law. Except in cases involving fraud, coercion, retaliation, willful misclassification, or other substantive failure, the Department of Labor and Workforce Development is required to provide a hiring entity with written notice identifying any deficiency in the documentation required pursuant to this section. No penalty may be imposed solely because of the identified deficiency if the hiring entity corrects the deficiency within 90 days after receiving the notice. A documentation deficiency identified in the notice will not, standing alone, cause the creative professional to be deemed an employee or otherwise disqualify the creative professional from independent-contractor status.

Finally, the bill directs the Department of Labor and Workforce Development to develop a model agreement, plain-language guidance, and compliance materials in consultation with certain stakeholders.