Court of Appeals Victory Clarifies Employment Status of PCSO Musicians
Tonkon Torp's successful pro bono representation of the Portland Columbia Symphony Orchestra (PCSO) led to an Oregon Court of Appeals victory that is music to the ears of nonprofit arts organizations.
At issue was whether PCSO's musicians are independent contractors or employees of the orchestra for purposes of employment taxes. Most of PCSO's musicians are paid a flat fee per service, and some are purely volunteers. The Oregon Employment Department had ruled that the musicians were "controlled" by PCSO and therefore employees of PCSO. In addition to immediate tax liability, this administrative ruling had potentially significant ramifications for other employment matters such as wage and hour laws.
lawyer Robyn Ridler Aoyagi successfully persuaded the Oregon Court of Appeals to reverse the Employment Department's decision. Aoyagi argued, and the court agreed, that the musicians were independent contractors under Oregon’s complex multi-part test for independent contractors. Relevant factors in this case included that the musicians own and maintain their own instruments, spend most of their practice time alone, play music with other orchestras and the like, may hire their own replacements, and collaboratively agree on most of the practices and procedures necessary to the practical functioning of the orchestra.
The Court of Appeals' decision is significant beyond PCSO. Many nonprofit arts organizations like PCSO operate on slim budgets and rely on independent contractors and volunteers to carry out their artistic missions. If those artists are legally classified as employees, many of these organizations would be unable to continue operating. Each organization is different, and the Court of Appeals' decision recognizes that it is important to understand and take into account the particular organization and specific circumstances of each case to determine whether individuals are really employees or actually independent contractors. That's why it is imperative for organizations like PCSO to understand the complexities and nuances of Oregon's employment laws to avoid inadvertently triggering unnecessary tax liability or wage and hour obligations.
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