Should My Dancers Be on Payroll?
Benefits of Paying Your Dancers on Payroll
A common question smaller dance companies pose themselves is whether or not to put their dancers on payroll or pay them as independent contractors. We hope to lay out some benefits that your dancers receive when you pay them as employees — as well as benefits to your own organization.
Financial Benefits of Payroll Employees:
Perhaps the most notable advantage to your dancers of getting paid as an employee versus as a contractor are the insurance benefits received from your employer. Employers must have relevant insurances in place in order to process payroll. Workers Compensation, Disability, and Unemployment are all important insurances that should be available for employees to take advantage of.
Occasionally, companies will offer health or retirement plans as well. Contractors tend to not receive these benefits from employers, as it is expected that they procure these insurances or plans themselves.
In regards to taxes, employees only have to pay the employee owed liabilities on their paychecks while contractors owe a higher self-employment tax at the end of the year. The more income an independent contractor receives, the higher the tax burden at the end of the year.
Emotional/Personal Benefits of Payroll Employees:
A dancer classified as an employee can feel a connection between themselves and the organization they are working for. That paired with the benefits of being on payroll can lead to a greater sense of loyalty and belonging to the organization they are working for. Having a clear sense of the employer and employee relationship can provide the structural motivation to succeed versus an independent contractor who often must find ways to self motivate. This can create a benefit for the employer, as employee status can often create stronger connections among team members.
Legal Implications of Payroll Employees:
From the perspective of the New York Department of Labor, if you are a dance company and are dictating when and where your dancers are performing their services, those individuals are considered employees in the eyes of New York State. Other states have similar definitions, and we urge you to check your local state’s Department of Labors definitions. If found non-compliant, you may be subject to back taxes and penalties.
Pentacle remains dedicated to continuing to provide a high level of support to artists during these extraordinary circumstances. Alongside many other key and respected organizations in the field, we have begun accumulating and curating resources for artists and organizations experiencing income loss and other troubles as a result of the COVID-19 crisis. Find our list of resources here.
NEXTSTEPS | 08.27.2021
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