Work For Hire Agreement
Work For Hire Agreement
Work For Hire Agreement
As a business owner, it's likely you've caused a great deal of intellectual property to be created (websites, internal documents, publications, photographs, and so on). But are you certain that you have the legal rights to that intellectual property? You may be familiar with the Work For Hire Agreement, but if you're not sure how -- or when -- to properly use one, you might find that you have less control over your commissioned works than you thought.
The necessity of a Work For Hire Agreement is determined by the status of the relationship between the party commissioning the work (you or your business) and the party creating the work. If the creator is an employee of yours, no Work For Hire Agreement is necessary -- any intellectual property created by an employee for the employer, during the scope of the employment, is legally (and automatically) the property to the employer. Here's an example: I write a lot of website content for the company I work for. If I should quit my job, I have no legal right to remove the content I've created, take it with me, and sell it to another company. Because the content was created at the behest of my employer, I have no legal rights to the work whatsoever -- the work I created belongs to the company for as long as the company wishes to use it.
Of course, this begs the question: How do you know if the person who created a work that you've commissioned is legally considered an employee? If you're unable to determine this on your own, the IRS has a form to assist you in determining employment status. But in most cases, you'll be able to determine whether your worker is an employee or a contractor on your own.
The following criteria indicate that your worker is legally an employee:
Federal and State taxes are withheld from the worker's paycheck.
The worker receives an annual W2 (not a 1099, which is a form provided to contractors).
As an employee, you control how, when, and where the work is performed. You provide the tools for the worker to do his or her job, such as office supplies or a computer.
The worker receives job benefits, such as medical insurance and/or vacation days.
Even after the work has been created, the worker remains under your employment.
If the majority of these criteria are met, it's likely that your worker is an employee. Therefore, any work created by that employee during the scope of his or her employment is, by definition, the property of the employer -- you.
If, on the other hand, the above criteria do not apply to your worker, it's likely that the worker is considered an independent contractor. In this case, any commissioned work is not automatically your property by law -- this is where the Work For Hire Agreement comes in. If a Work For Hire Agreement is signed by both parties at the time that the work is commissioned, the work is inarguably the property of the employer.
The bottom line: As a business owner, it's vitally important that you maintain control over your intellectual property. If you continue to make sure that you have a Work For Hire Agreement in place for any work specially commissioned from outside your company, you'll have a solid legal basis for retaining control of your work.
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