Colorado Unemployment Law – talent agency not an employer

Posted by: Oct 08, 2015By Brian Stutheit

The Colorado Court of Appeals issued an opinion that Stutheit & Gartland’s client, a talent agency, is not an employer of the actors and models it represents and is not subject to unemployment tax on the talents’ earnings.

Division of Unemployment Insurance Employer Services-Integrity/Employer
Industrial Claim Appeals Office of the State of Colorado and Marbles Kids, Inc.,
Announced October 8, 2015
Cynthia H. Coffman, Attorney General, Krista Maher, Assistant Attorney
General, Denver, Colorado, for Petitioner

Stutheit & Garland, P.C., Brian K. Stutheit, Littleton, Colorado, for Respondent
Marbles Kids, Inc.

Marbles Kids, Inc. is a talent agency that represents individuals seeking acting and modeling work. Marbles is contacted by clients seeking actors or models for assignments. The artists, or in the case of child artists, their parents, sign contracts providing that Marbles will receive a percentage commission on any assignments booked through Marbles. Artists are required to bring vouchers to job sites to be paid for their work. The clients pay Marbles, and Marbles then deducts its commission and pays the artist the remaining amount.

The Division of Unemployment Insurance issued a liability determination that the artists were in covered employment with Marbles, and that Marbles was therefore required to pay unemployment insurance tax premiums on amounts paid to the
artists. Marbles appealed.  A hearing officer who seemed to us to disregard Marbles’ arguments and the facts at the appeal hearing held that an employment relationship existed and that Marbles was responsible for paying the tax. The hearing officer decided that because Marbles was paid a commission on each artist’s pay, the artists were working for Marbles.   Marbles appealed to higher authority.

The Court of Appeals said: “We acknowledge that Marbles generally derives a benefit from the artists’ efforts when they perform acting or modeling jobs for Marbles’ clients. However, the existence of that benefit does not mean that the artists were performing services “for the benefit of” Marbles so as to constitute employment.”

One unemployment tax grab defeated.