Monthly Archives: April 2025

04.28.25
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A Parliament of Owls? Senate Committee Seeks Support for Portable Benefits Bill for Contractors

I found this guy while running in the neighborhood

When animals flock together, we use strange collective names to describe them. You’ve heard of a flock of seagulls, a pod of whales, and a murder of crows. But did you know the collective nouns for apes, hippos, and wildebeests?

Fortunately, this wildlife writer does. It’s a shrewdness of apes, a bloat of hippopotamuses, and a confusion of wildebeests.

My favorite, though, is a parliament of owls. The phrase was apparently coined by CS Lewis in the 1950s and stuck. Good for the owls! I wish for them to form a strong government and pass wise laws.

When independent contractors flock together, we don’t really have a good word for that. Contractors generally can’t flock together for employee benefit plans since they’re not employees, even though some states have enacted portable benefits laws as models for what may be viable on a national level.

One impediment to companies providing contractors with benefits is that doing so can be evidence of an employment relationship. Companies are perversely incentivized not to help contractors remain self-sufficient because companies don’t want to risk misclassification claims.

That could change with a national portable benefits bill.

There has been interest for a long time among trade associations and small business groups to allow portable healthcare and retirement benefits for independent contractors. A recently released white paper by Sen. Bill Cassidy, Chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, advocates for a national portable benefits bill.

The white paper proposes various options for providing affordable health care options for independent contractors, including association health plans, health reimbursement arrangements, pooled employer plans, and single employee pension IRAs. For these programs to work, Congress would have to ensure that a company’s participation in such plans is not a factor in determining whether the contractor receiving such benefits is misclassified.

The concept of portable benefits for contractors is one that should have bipartisan support. The main obstacle to such a bill is likely the desire by some for contractors to receive all of the benefits of employees, and so this concept (for them) is only half a loaf.

Once upon a time, we used to have a Congress that would consider half a loaf to be better than no loaf at all. My hope is that legislators will find a way to make this concept work.

It would be wise. Something that a parliament of owls could probably get done.

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© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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04.21.25
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Holy Bat Trap: Here’s How to Protect IP Created by Contractors

Two London police officers had to get creative to break up a gambling ring that was profiting off tourists on Westminster Bridge. The gambling rings would target tourists by setting up rigged games. Police would break up the games, but the wrongdoers learned to tell when the police were coming.

Cue the dynamic duo!

Police officers dressed as Batman and Robin mingled with the crowds, then struck when the time was right. Or as Mr. Kim might say, Sneak attack.

Companies retaining independent contractors can avoid needing to sneak attack if they set certain ground rules up front. One of these important ground rules relates to ownership of IP.

Intellectual property created by a non-employee is not automatically a work made for hire under US copyright law. Instead, an assignment of inventions clause is needed.

Ensuring that your own the contractor’s creations and the IP rights can be critical to getting the benefit of why you retained the IP. Consider the contractor who writes computed code or creates copy for your website. You want to own that IP.

(Or sometimes, like with an IC photographer, you might want to license it and allow the photographer to retain the copyright. But either way, you need to consider these issues in advance.)

But don’t wait until the protectable IP has been created to seek the assignment. Do it up front, in your independent contractor agreement.

Use a present assignment clause. The clause should say that any works created by the contractor and any IP rights arising out of those works are automatically assigned by the contractor upon creation, with no further affirmative act needed to effectuate the assignment. Do not merely say that the IP will be assigned, because that requires future action.

If you plan ahead with a proper assignment clause, you can avoid later trying to chase down the contractor for an assignment of the IP, which may already have been embedded into vital company property, such as computer code. Chasing down a contractor later might be easier than breaking up a gambling ring, and you might not even have to dress up as a superhero or his trusty sidekick.

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© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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04.07.25
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Time Travel?! Check Your Contracts for “Services” Definitions.

I saw this tourist bus in New Zealand. So they finally figured it out. This company combines time travel and leisure, which I assume means that these tourists enjoyed a two-week vacation then returned home on the day they left.

Or maybe they were visiting from the future, which if true, I would have a lot of questions for them.

On a recent business transaction I worked, time travel might have helped the seller. Allow me to explain. The thing to remember is that words matter, just like there is a sharp difference between leisure time travel and leisure time travel. I choose to believe this touring company specialized in the latter.

The seller’s business was to offer technical specialists to its clients as consultants. The specialists had skills and expertise that the clients lacked. The consultants would advise the seller’s client. So far, so good. That’s a good business model.

But what we found as we read the contracts caused some concern. In all arrangements with clients, the seller’s function was the same — to identify and loan out technical specialists, while treating them as seller’s employees. Seller was operating as a quasi-staffing agency.

Even though the arrangements were the same each time, there was some sloppiness in how the “Services” were defined. In what I would call the Staffing Contracts, the seller’s agreements with its clients properly described the Services as identifying technical experts, loaning them out, and treating them as seller’s employees for employment and tax purposes.

But some of the agreements were what I would call Consulting Contracts. In the Consulting Contracts, the seller’s Services were described as providing the technical expertise desired by the client.

What’s the difference? Well it’s as big as the different between leisure time travel and leisure time travel. Suppose the individual consultant gives bad advice and makes a mistake that causes the client to lose money. The client then looks to the seller for indemnity and relief.

In a Services Contract, the client is entitled to no relief for a consultant’s bad advice. The seller did what it contracted to do. It provided the talent. But in a Consulting Contract, the seller contracted to provide consulting services. If the consulting services were provided in a negligent manner or resulted in a loss by the client, the seller might be liable for those damages.

The lesson here is to be careful when defining Services. If you are loaning out talent, be sure to define the Services narrowly.

Poor drafting may result in confusion and unexpected liability. If you find yourself in this situation, try to amend the contract, and see if you can make the amendment retroactive, time-travel style.

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© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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