Similar to how we used to handle it. Pitch thrown, full fee. Short , incomplete, rain or extra innings, full fee.

If scheduled for a game and you don't receive a call and show up, full fee.

No pitch thrown, you get a travel fee.

All games were paid through the association, which made it easier to handle any money problems with a particular game or league.

You may be facing legal problems by having your games paid by your association. We had legal advice that such a procedure would open us up to tax problems.

Tax problems are usually the result of people trying to skirt tax laws. Which is probably a thread that could be discussed forever here. But that was not a problem we had.

It would make it more likely that you would be considered employees of the association, and not independent contractors. (It's just one of several criteria used to help decide the employment status.) This affects worker's comp claims, and tax withholdings.

Your right Bob, and each state has different interpretations of this from what I have found out. I say this because I have been involved with associations in two different states and found it to be different in each, and different for different associations within each state.

Hmmm,
 

The State of Oregon Employment Department is currently outlining legislation that officials in the State of Oregon ARE employees of the Association.

Currently Oregon has viewed sport officials are "independent subcontractors" and have allowed them to be exempt from workmen's compensation fees.

The new ruling will cause multiple challenges:

1) All State Association's will be charged payroll tax.

2) All Officials will be taxed for workman's compensation, state withholding taxes and any other taxes that a local government has voted into place.

3) All officials game checks will also be taxed for the state unemployment claims fund.

At the legislative level we have been fighting this change for two years.

It appears that we are losing.

Why is this happening?

A single basketball referee in Southwestern Oregon lost his job. When he went for unemployment benefits he lists "Sports Official" as a source of income. This set off an alarm within the employment system.

Is there another way to end this?

Sure, we could go back to the way we did it for decades. We are paid now from out local association. All schools send in their fees for the entire year before a pitch is thrown. We have about 5 paydays spread out over the school season. Prior to this system we got a check from the school for each game.

The name on the check was usually: Pay to Salem Baseball Officials Association.

We all would find "special places" that would cash the check when we signed:

"Pay to Salem Baseball Officials Association."

Our school system has noted that they would be required to write as many as 500,000 checks to cover all games fees at all schools levels and they will refuse to add this cost to their accounting budgets.

The State of Oregon has noted that since we receive 1099's at year's end from our "employer" we are, in fact, employees.

Regards,

I guess the answer is for each association to hire an accountant, add another $15.00 per game on their fees, increase the school sports budgets which increases the tax levy, which pisses off the locales, who again blame the sports officials for srewing things up.

Then we will have to bid for the contracts and low bidder will send the best officials to the games (SURE) and we will then be subject to terrible officiating comments and the cycle continues.

And there are still officials that say they do this for fun ???????????????

Crazy world

Good for the State of Oregon.

Associations nationwide have long been able to have their cake and eat it, too. Dictating not just who works, but whether they even have an opportunity to work (by controlling who gets offered games) flies in the face of "independent contractor".

Dictating what uniforms one wears, how soon before game time one must show up, what mechanics one must use, mandatory attendance at training sessions; all are antithetical to the concept of "independence".

I'm not saying those requirements are bad, only that they go a long way toward making you an employer if you penalize people (by denying them work) for not obeying them. If you want to control officials, you should be prepared for the administrative burden that goes with that control. If you don't want the burden, then you should live with true "independent contractors".

Independent contractors aren't independent if they have to depend on the benevolence and, sometimes, capriciousness of a broker in order to work.

I can't tell you how things are where you work but in the associations I belonged to if you did not like what was going on you had the right to vote those people out and do it another way.

But I have also seen some very shady things done also and I have seen some people that never want to do ANYTHING than complain about what everyone else does.

They call it America my friend.

It doesn't sound like your legal advice came from the IRS or a tax attorney. The IRS has told us that has very little to do with the determination as to whether or not an employee/employer relationship exists. Many manufacturer reps who are independent contractors get their checks from one source and it does not infer such a relationship.

Due to a lawsuit against the local basketball association, we conferred with the IRS about our status. We will be making a fewchanges, including having all umpires sign an independent contractor agreement, disavowing any prohibition against working for other associations or directly for leagues and not providing any benefits to the contractors other than available work for a mutually agreed upon compensation. We've been told by the IRS and and our tax attorney that we're good to go.

Garth, thank you for your input. The Internal Revenue Service has consistently defined single source income as one of the delimiters for self-employment.

I find it hard to believe the IRS granted your organization umpires independent contractor status when you did not have the simplest of compliances - the IC Agreement.

Great luck for you and your organization. !

It's worth observing that, based on Tee's account, the situation in Oregon is unusual, and that it is the result of state legislation, not IRS policy. In other words, Oregon seems to be legislating that the official/assignor is de jure an employee/employer relationship for state tax purposes. This would affect only state income tax, workers comp, and other state and local tax programs.

Although this development does not in itself affect the IRS or its code, legislators at every level always seek new forms of "revenue enhancement" that are difficult to label "tax increases." We should not expect that developments in Oregon will go unnoticed, either by other states or by the IRS.

Tee is your association going to lose officials over this new legislation?

Also, will the Fees increase to compensate the officials for the increase in tax

In other words lets assume a $50.00 (under the table) Game Fee. With the new legislation this $50.00 will now be taxed, so will the FEES increase so that the net return to the official remains the same.

Thanks

Pete Booth

IRS/Department of Employment
 

Pete asked:

"Tee is your association going to lose officials over this new legislation?

"Also, will the Fees increase to compensate the officials for the increase in tax?"

What a great question and I do not know how to answer it . . . yet.

First:

There will be no increase of a game fee to cover these costs. The school districts feel that what happens to individual umpires is that person responsibility and not theirs.

The schools in Oregon turned down umpire based requests for an additional $5.00 per game added to our new increase (which is the largest in Oregon history) in an attempt to even our fees to non-school based games. We will make slighly over $50 per game this year for our largest sized schools.

And fees from the state will be deduction to this already too low price.

Second:

We will certainly lose umpires. We fight every year to break even with umpires that leave the area, decide to not umpire and even die . . . this will cripple us yet again.

The basic rule we find in recruiting is that is the economy is good in an area then it is very difficult to get new officials. In areas where an economy hiccoughs we find there to be more bodies looking to officiate.

In closing:

The Oregon State Department of Employment gave the following test to determine if the officials in Oregon are employees:

1- Do you have to pay a fee to work for this association (company)?

2- Does that association (company) train you to perform your task?

3- Does that association (company) write you a paycheck for doing that task?

4- Does that association (company) have a singular contact with the clients you serve.

So in Oregon:

We pay fees for our NFHS packet and a fee to join the association. So we are a company on point one according to the OSDE.

We train all our umpires extensively on rules and mechanics . . . we even train them in game management. So we are a company on point two according to the OSDE.

As explained earlier our association receives payment for all schools before we see a pitch. We are then paid about 4 or 5 times a season by a check drawn on the account of the Portland Baseball Umpires Association (this is how all associations in the state do it). We receive a check from our employer. So we are a company on point three according to the OSDE.

In Oregon the ONLY way you can get an assignment for a varsity baseball game is to be assigned by an association. (I leave wiggle room here for sub-varsity games that are at times officiated by non-NFHS certified officials because there is a shortage of umpires). The associations have exclusive contact with schools in term of assignment of game officials. So we are a company on point four according to the OSDE.

Just as information: The PBUA does have a legally binding sub-contractor agreement that is required from each umpire that works in our association.

Regards,

http://www.irs.gov/pub/irs-pdf/p1779.pdf
http://www.irs.gov/pub/irs-pdf/p15a.pdf
http://www.naso.org/rprt/SpecReptIndCont.pdf
http://www.edd.ca.gov/taxrep/de231aa.pdf

To make officials legally IC's without the hassle of recurring questions, an exception statute will probably be needed.