WWE News

WWE REPORT: Is WWE missing the mark on independent contractor status?, recent university study puts WWE to the I.R.S. test



Jul 31, 2015 - 12:10:35 PM

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By James Caldwell, PWTorch assistant editor







WWE star Daniel Bryan recently zeroed in on WWE's "independent contractor" classification for its talent roster.



In an interview with the "Busted Open" satellite radio show last week, Bryan relayed a conversation with WWE management over whether they would clear him to return to wrestling. Bryan noted that he said if WWE does not clear him, then he might wrestle somewhere else because he's an "independent contractor, in theory."



The "in theory" clause is interesting. According to the spirit of the classification, an independent contractor would be able to take a booking for TNA, ROH, New Japan, or any other wrestling promotion willing to pay for Bryan's services.



However, WWE's talent contracts restrict wrestlers from taking bookings from other "competing organizations," calling into question just how much "independence" there is in WWE's talent contracts.



This ties in with a recent university study that examined the independent contractor verbiage used by the I.R.S. for tax purposes.



According to a recent study published in the University of Louisville Law Review, a tally of the I.R.S.'s test revealed that 16 of the 20 factors indicate that WWE wrestlers should be classified as employees.



The four factors that do not qualify are (1) the "right to terminate" the agreement for an independent contractor, (2) access to "oral or written reports," which does not apply to wrestlers, (3) payment schedule, which is neutral, and (4) payment of business and/or traveling expenses, which is also neutral because WWE covers some road expenses, but wrestlers are required to pay for other expenses.



One of the key determinants in the 20-factor test is the "Right of Control" test, which is the degree to which an employer controls a worker's performance.



The legal study, which was authored by David Cowley, a J.D. law degree candidate, noted that WWE's classification of wrestlers as independent contractors does not give them labor protection, access to group health insurance plans, or Social Security contributions. Wrestlers also have to pay a 15 percent self-employment tax.



From WWE's perspective, the company does not have to pay Social Security, unemployment, or income tax related to its talent roster.



Addressing the classification would be up to a federal court if a case were presented. The legal review concludes that "should a former wrestler bring a claim ... and have the case decided on its merits, it will lead to a fundamental shift in the way that the WWE conducts business."



A hypothetical hearing would have to weigh whether WWE has taken enough steps to "meet in the middle" between employee and independent contractor status.



As part of the Wellness Policy program instituted a decade ago, WWE has offered talent a "Professional Development" program, health test screenings, and "referrals to consulting health care providers" on a "as-needed basis."



[ LINK: Full Legal Review published HERE at LousvilleLawReview.org ]



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