In 2017, the Fyre Festival failed spectacularly after all sorts of social media influencers touted it as the must-attend party of the year. Documentaries on Hulu and Netflix tell the story in all its gory detail, and you can see the videos that hyped the event that wasn’t.
Despite that epic fail, the use of social medial influencers continues to be a powerful form of marketing. But when contracting with a social media influencer, beware. There are legal traps for the unwary.
For those of you who missed the social media influencer webcast on September 28, here are five tips to help prevent your social media influencer from being misclassified as your employee.
1. Whenever possible, contract with the influencers’ loan out company instead of the influencer as an individual. This is especially important if the influencer is a member of SAG-AFTRA and union pension and health contributions may be in play.
2. Limit control over things you don’t need to control. Yes, you can put parameters around the influencer’s messaging to protect the brand, and it’s ok to require the influencer to follow the FTC Guides, to avoid use of nudity or profanity, to avoid discriminatory or harassing language, and similar reasonable guardrails. But don’t get sloppy and start requiring the influencer to use your equipment or work from your facility. Be careful about open-ended contracts that are terminable at will. Don’t overreach in exerting control over when and where the. work is performed. Consider all of the Right to Control Test factors.
3. Remember that the law decides whether it’s employment, regardless of what the parties agree. And the Right to Control Test is not the only game in town. The Economic Realities Test will apply for determining worker status under federal wage and hour law and some state laws. More troubling, ABC Tests in California, Massachusetts, and other locations raise the bar significantly and make it much harder to maintain an independent contractor relationship. If the law says that it’s employment, then it’s employment. The labels you put in your contract don’t matter.
4. Avoid terminology that sounds like employment. “Retain” the influencer, not “hire.” “Terminate the contract,” instead of “fire.” Pay a “fee,” not a “wage.”
5. Pay by the project, not by the hour, whenever possible. Method of pay is a factor in many of the classification tests, and payment by the hour is one factor that’s suggestive of an employment relationship.
For more tips about how to properly engage a social media influencer, including how to make sure you follow advertising laws and avoid misclassification risks, tune in to the webcast.
You can watch it here on YouTube.
© 2021 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.