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Workers Compensation for Tattooers
By Marisa Kakoulas
Needles and Sins Blog
Tattoo artists on TV have not just shone a spotlight on the artistry within the industry but also some of its business practices. Putting on a pretty tattoo, pocketing the cash for it, and staying under the government radar doesn’t work any more, at least not for very long, and especially not for those with sizable client lists. It’s not just about complying with health & hygiene laws and making sure to pay the tax man. Studio owners and individual artists need to be aware of the full spectrum of government regulations that impact tattooing. [I won’t even get started about artists not having health insurance.]
One issue that’s been a topic of increasing discussion is whether tattoo artists are independent contractors or employees — a question that has a huge impact on costs and benefits to studio owners and individual artists and also legal liabilities. I’ve gotten a few calls from tattooers with tons of questions because they have gotten calls from their state labor departments with their own list of questions. [I don’t practice employment law and so I don’t advise on it. And this post definitely shouldn’t be taken as legal advice.]
Insurance companies are also paying more attention to these employee issues in the industry. I was sent a link to an article, written by attorney Einhorn Harris, that talks about the tattoo artist as employee or independent contractor question from Professional Program Insurance Brokerage (PPIB) (who are Needles & Sins sponsors). PPIB offers workers compensation coverage and wanted to put the article on my radar. Although published in 2013, it is still a good read for how it breaks down these labor issues in the tattoo industry.
Harris explains how tattoo shop owners are responsible for withholding income taxes, withholding and paying Social Security and Medicare taxes, and paying unemployment tax on wages paid to an employee. However, if the tattoo artists who work at the studio are considered independent contractors, generally, the responsibility to report income and pay taxes falls on them and not the studio owner. The IRS doesn’t take too kindly to having businesses misclassify their employees, so tattoo studio owners who do so may find themselves staring down an audit and some hefty penalties. Determining that proper classification really depends on the facts and circumstances surrounding each shop, but the key factors are about control. Here’s how Harris sets it out:
1. Behavioral control – Which, for Tattoo Shops, would include such inquires as whether the Tattoo Shop Owner controls, or has the right to control, what the Tattoo Artist does and how the Tattoo Artist does his or her job. For example, when to work, where to work, what tools or equipment to use, what routines or procedures must be used, and requiring use of specific tools, equipment and supplies;
2. Financial control – Are the business aspects of the Tattoo Artist’s job controlled by the Tattoo Shop Owner? Such as, how is the worker paid, whether expenses are reimbursed, and who provides the tools, equipment and supplies; and
3. Relationship of the parties – Are there written contracts between the Tattoo Shop and Tattoo Artist? are there employee type benefits? (insurance, vacation pay, etc…), what is the intent of the parties and how do they perceive their business relationship to each other?
Based on these, and other factors, if artists are employees, they can be covered by workers’ compensation. Taking the definition from NY’s Workers’ Comp Board, “Workers’ compensation is insurance that provides cash benefits and/or medical care for workers who are injured or become ill as a direct result of their job. Employers pay for this insurance, and shall not require the employee to contribute to the cost of compensation. Weekly cash benefits and medical care are paid by the employer’s insurance carrier, as directed by the Workers’ Compensation Board. The Workers’ Compensation Board is a state agency that processes the claims.”
Tattooing requires a physical ability to do the job; when hands, eyes, and backs are out of whack, tattooers may not be able to make a living, so being protected by this type of insurance can be a pretty big deal.
In the end, studio owners and artists should be having serious conversations about their work relationships. It may not make for flashy reality TV, but it can avoid real life drama in running a business.