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The following is for information purposes, and not meant to be legal advice.

Companies often find themselves seeking writers for white papers and technical articles.  What are the employee issues that arise in such situations.

The Employment Development Department of the State of California (EDD), the main body charged with enforcing California labor and employment laws, has aggressively enforced laws that define employees as persons engaged by written contract to create and assign the rights in works of authorship. 

Most companies use a form of agreement that provides for assignment of all copyrights in created workds of authorship to the companies engaging the writers.  Notwithstanding the fact that the agreement may provide for an independent contractor relationship, the writers could be deemed employees under the EDD enforcement guidelines.

An audit by the EDD could result in liability to the company engaging the writer due to the individual being deemed an employee for state disability tax, workers compensation insurance and state personal income tax purposes.  Such a determination by the EDD could potentially lead to suit by effected individuals to receive company benefits such the famous Microsoft case.

It is noted that the individual is not deemed an employee of the company for federal law purposes under Internal Revenue Service (IRS) regulations.  The above interpretration also only applies to persons located in California.  Corporations can contract to create works made for hire as independent contractors supposedly because the individual creating the work is already an employee of the company.  Persons outside of California are not subject to EDD jurisdiction.

One solution to the issues would be to change the language of the agreement to provide that the author retains ownership of the copyright and grant the company a license in the copyrighted materials.  An exclusive use term license might be sufficient to cover the needs with respect to white papers and technical articles. 

Alternatively, the writers could be made temporary employees, but this solution might not be feasible for budgetary reasons.