California game lawyer Zachary Strebeck looks at one of the important legal issues that comes with hiring others. The distinction between an employee and an independent contractor can mean the difference between success and trouble the government authorit
Very few people can create all aspects of a modern video game or board game, even the smallest indie title. Designers, programmers, musicians, artists and many other job functions come together to make great games. This leaves game developers just a few options: start a partnership where profits and losses are split, hire someone permanently or hire them just for that project.
I’ve talked before about partnerships. Here are a few important legal considerations that must be taken into account before hiring an artist (or any other position in the gamedev process, really).
Hiring an “employee” brings with it many rules and regulations regarding employment law*, including respecting wage and hour laws, overtime and workers’ compensation insurance.
An employee is defined by the California Labor Code as “”Employee” means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed…”
Yikes. This pretty much covers everyone, doesn’t it?
Not quite. The code excludes so-called “independent contractors” from these rules. An independent contractor is defined as “any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.”
For most small and medium-sized game devs, an independent contractor is the way to go. It allows you to avoid the costs that the employment regulations demand. Determining whether you are hiring an employee or an independent contractor, however, can be difficult. Courts use a variety of factors to make their determination. These are just a few of the “red flags” that could make a court find an employee, rather than a contractor:
Giving specific instructions, rather than just overall specifications, for the completion of the job
Contractor isn’t allowed to subcontract the work out or hire assistants
Contractor is given training in the employer’s way of doing things, and must follow it
The employment arrangement is exclusive, or doesn’t allow time for the contractor to seek other work
Employer determines when, how, where and other aspects of the work process
Keeping this in mind could help to avoid legal trouble in the future!
Next time we will discuss how to deal with intellectual property when hiring an artist or other GameDev professional. In the meantime, if you are looking to hire someone as a contractor, contact a game lawyer for assistance. A lawyer can discuss the situation with you and may be able to negotiate and draft an agreement that gets the deal terms in writing to prevent future legal issues.
*Employment law is its own entire branch of law and is quite complicated. This small post is no substitute for hiring an employment attorney to advise you on these issues. Also, while this is California specific, the concept crops up in many U.S. jurisdictions. Check with a local attorney to be sure.
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