The late George Groesbeck didn’t want Montana’s music to die.
Upon learning about a largely unheard of state law that requires musicians to either be treated as a bar employee or formally file for independent contractor status, the state representative from Butte was concerned – too much paperwork, too many rules for the free-living musician’s lifestyle and too many questions over how the law would affect the state’s music scene.
Bar owners and musicians alike have said the law would have severe consequences on live entertainment if the Department of Labor and Industry begins imposing fines, which state officials have said they are prepared to do in amounts up to $1,000 per day against both the employer and musician.
So Groesbeck set out to enact legislation to exempt musicians from the law. When he passed away in December, his friend Pat Noonan of Ramsay, freshly elected to his first term in the House, made sure Groesbeck’s plan didn’t fizzle out. Groesbeck, who was also a musician, died of complications after surgery.
Noonan was the primary sponsor on a bill that, with a couple of small language amendments, easily passed both the House and Senate in Helena. As of last week, the amended version still had to clear the House again, but Noonan expected it would.
“It was something (Groesbeck) really wanted to do,” Noonan said. “It really just allows the hobby musician to play at the local tavern.”
In 2003, Kelly Wild, a construction worker, sued Fregein Construction and the Montana State Compensation Insurance Fund after he was hurt on the job and filed for workers’ compensation benefits but was turned down. Wild then appealed it to the Supreme Court, where he prevailed. The decision prompted a bill passed in 2005 that greatly increased the stringency of independent contractor laws.
Under the law now, independent contractors – musicians, carpenters, outdoor guides and others – are considered regular employees of the business employing them, unless they apply for and are granted an independent contractor exemption from the state. This requires paperwork that most musicians aren’t accustomed to, as well as $125 every two years.
If a musician is playing at a bar without an exemption, by law the bar owner should be treating the musician as an employee like any other – providing workers compensation insurance, withholding state taxes and paying unemployment insurance. This rarely happens, especially since musicians are often passing through town for just one or two shows. It’s also a lot of paperwork for venue owners.
So without the independent contractor status or insurance coverage by the employer, both the musician and venue owner are acting illegally and are subject to fines. Noonan’s bill eliminates this situation by excluding musicians from the law. Initially, the bill cited all entertainers, but the wording was changed to include only musicians with written contracts, who are now considered independent contractors without filing for the status.
While musicians, promoters and bar owners welcome the news, state officials have cautioned against unintended consequences. Namely, if a musician gets hurt while performing and is not properly covered, he or she can sue the venue’s operator. The independent contractor exemption is designed to avoid these circumstances, but Noonan said musicians rarely apply for it, if they know about it at all.
“I definitely get the feeling that most musicians weren’t going down and signing as an independent contractor,” Noonan said.
Andre Floyd, a Flathead Valley musician, called the bill “outstanding.” Floyd has been a vocal opponent of the law, taking his concerns all the way to the governor’s office. He said the new law not only saves the live music scene, but it opens up doors to other employment opportunities for musicians, such as teaching music at schools under contract.
Floyd said questions might come up about the “written contract” stipulation, since the state’s constitution describes a verbal contract as legally binding. Many musicians don’t regularly enter into written contracts, though he does. Either way, he says the new regulations help musicians clear “a big hurdle.”
“I’m just glad to see that cooler heads prevailed,” Floyd said. “That law would have had a crippling effect on the live music scene.”
If other independent contractors hope to get out of the state law as well, their path just got a little more complicated. Noonan said the state Legislature passed a bill this session that changes requirements to receive an exemption from workers compensation coverage in Montana, most likely making it more difficult.
“This will be the last time this happens under this system,” Noonan said.