Recording artists provide their recording or songwriting services pursuant to "work made for hire" clauses present in the vast majority of recording industry contracts. Under the work made for hire doctrine, the record labels can retain ownership in the ultimate artistic creations and thus ensure maximum profits for the labels. However, in 1982 the California Legislature mandated that persons who create works made for hire are deemed employees for purposes of workers' compensation benefits as well as unemployment and disability insurance. As a result, record labels may face substantial liability under California labor laws. At a minimum, it appears that artists may have claims for unemployment or other benefits. However, the potential also exists that these artists are common law employees of the record companies who are therefore also entitled to minimum wage guarantees. There may also be grounds for artists-employees to rescind existing contracts. The ability of successful artists to rescind their contracts would be especially devasting to record labels who hold favorable options for future works over the artists.
Joseph B. Anderson,
The Work Made for Hire Doctrine and California Recording Contracts: A Recipe for Disaster,
17 Hastings Comm. & Ent. L.J. 587
Available at: https://repository.uchastings.edu/hastings_comm_ent_law_journal/vol17/iss3/2