A sad state of affairs . . .
 

On June 18th the Oregon Department of Labor ruled that all sports officials in Oregon are employees of local associations.

In spite of the fact that each year each official signs an official form noting that he is an independent contractor and despite the fact that all officials receiving more than $600 receive a 1099 the ODL based their final judgment on the concept that umpires receive a "paycheck" of all game fees from a local group.

Oregon has already rules that Officials are independent contractors under workman's comp insurance programs. We do not pay in nor do we qualify for workman compensation claims if injured during a game.

The Oregon School Activities Association and the Oregon Athletic Officials Association have appealed the ruling and have asked to appear before an Administrative Law Judge for a second opinion of this ruling.

What does it mean if you are made to be an employee?

Well first 2.4% of your check will be withheld and applied to Unemployment taxes.

Worse than that the Oregon Department of Labor can, in retrospect, audit all sports associations in the state and bill for unpaid Unemployment Taxes (with penalty and interest) back an undetermined length of time.

Because the Oregon Legislator meets every other year NOTHING can be done through that body until 2011.

While this plays out the OSAA has stepped forward to pay all fees, fines and penalties for any current official that is caught in this dilemma.

While Maryland just based legislation to assure that officials will be considered independent contractors both Oregon and Washington appear to be headed the opposite direction.

Sad,

very sad. that's incredibly stupid - nobody makes a living being an official, so there is no way an association should be taxed. this is awful.

I think right now states are panicking about revenues. Anything that promises a net positive revenue stream is fair game. It doesn't matter if it's a bad idea, unconstitutional, will be overturned in the long run, or any other consideration. They need cash now.

Your state association has done the right thing. They'll cover their "employees" (ha) while the legal situation clears up. And it will come right in the end, since the ODL's ruling is obviously wrong. So I wouldn't get too bent out of shape over this.

Not surprised, Tim. It's going to be hitting more States as the budgets are all in need of funding. Here in CT, the HS Varsity pay has topped $100 per game so it's only a matter of time before the State sees this as a source of income for them.

I will retire when this happens - I will not forfeit any of my fee!

So now your local associations will have to carry workers comp for each umpire. The rating modifier will be sky high due to umpire injuries on the job. The paperwork and cost will be emormous. Umpires will have to have therapy after each injury before they can umpire again. Looks like a real nightmare starting in Oregon.

Do your associations pay the officials or do the schools directly pay the officials? Here the schools pay the officials. The association does not touch any money besides dues from officials and school scheduling fees.

-Josh

Well, another advantage to the WI "system" is that we're hired directly by the leagues (for conference games) and by the home schools for non-conference games.

I've always wondered how an association can collect money and pay umpires directly from a central account and still try to consider the umpires independent contractors. I mean, the association decides who works the good games, what criteria is used for advancement, etc. Not trying to be a jerk here, but how are those umpires NOT employees under the law?

Wouldn't surprise me if that miserable Arnold would do that here. He's already cut everything in sight. When he gets wind of this, look out Cali.

If Schwartzenegger would simply work to legalize three of his famously favorite vices--weed, gambling and whores--his state would just be floating in dough.

[QUOTE]Tee it will be interesting to see how many officials (in all sports) retire for the HS season. I am pretty certian you will keep us posted.

How is Oregon set-up for Summer / Fall ball?

What I can envision is that there is no umpire association at all. The coaches simply have a 'list of umpires" and call officials from this list and pay them "under the table"

Summer Tournaments would most likely suffer big time because when a tournament is run the Pres simply calls the association and says I have a 100 games this weekend what's the cost and sends in a check.

if there is no association to call, the torunaments could turn into a mess.

Personally if that type of law passed here in NY my officiating days are over.
In addition to P/R taxes you have Federal taxes and in my case State taxes as well.

A $50.00 game Fee would turn into a net of about $30 - $35.00 taken into account taxes. Also, when you add your total officiating income to your regular salary that would most likely put you in a higher tax bracket.

Also, when you are an employee as opposed to a contractor you are limited in what you can write-off

Another ploy by some states to increase revenues. The government can bail out GM and the banks with billions of dollars and in the same breath "stick it" to officials making a marginal Fee.

You are correct very sad

Pete Booth

You aren't doing that already?

Rich, you do raise a good point IMO. The amount of control that an association can exert over how an official does his job in some areas does seem to blur the line between independent contractor and employee.

Blur? I think it obliterates it. Add in the typical association "restraint of trade" nonsense (officials aren't free in many places to work for the association and also for other groups or for people not willing to pay the association going rate), and I can't possibly understand why officiating associations can have it the best way, from every angle, simply for them?

If I want to work HS baseball in many states, I have no choice but to join the local association, pay whatever due they tell me I have to pay, pay the assigning fee, wear only what uniforms they allow, including association-only hats, etc., etc. How does this make me an independent contractor?

[QUOTE]Yes but being an independent contractor I also can write off expenses which i could not do if I were an employee.

Pete Booth

Ah, I see what you mean now. Yes, that is a good point. Thank you for the clarification.

The only reason we are considered independent contractors is to save the associations a whole lot of cumbersome accounting.

We're employees of the associations.

[QUOTE=PeteBooth;610811]Pete, not totally correct. You can write off anything required for your job & not paid by the employer. The small number of exceptions is more than offset by not having to paying matching social security taxes.

Well,
 

In Oregon officials are already excused from workmans comp through legislative action.

In Oregon schools send a check to each association to cover all games for the season. This includes mileage. The local associations then cut checks under various schedules to their umpires for games worked.

So you have a game fee + milage - an assignment fee for a net check value.

Summer/Fall Ball while not officially part of the high school association are still paid in the same manner. Teams send a season check and the treasurer then writes checks to umpires.

Hope this fills in some of the blanks.

Regards,

It does, but umpires are still employees, for all intents and purposes.

Rich I do not know about your area but here in NY there is a meeting held in Nov / Dec (cannot remember) and the STATE as a whole adopts what uniforms etc we can wear NOT our individual umpire associations.

The state also elects or declines some FED rules.

Here in NY we do not have the 10 run Mercy rule for Varsity (unless both coaches at the Plate conference agree) Contrast that with New Jersey who does have a 10 run mercy rule. There is a 15 run limit for modified and JV. Also, No CR's in ANY division of HS baseball.

if it were up to us we would have a 10 run mercy rule and CR's rule but it is not up to us.

Also, my HS association does not do the assigning. A third party called BOCES (Board of cooperative Educational Services) does the assigning and also the paying. We receive a 1099 from them and have a contract with them.

Our HS association recruits. and trains the umpires and makes certain we abide by the state of New york mandates for meetings attended, and passing of tests etc. We give BOCES a list of eligable umpires. BOCES in turn sends out an availability letter in the beginning of the season which we fill out.

In a nutshell the demands you mention above do not come from my local HS association but from the State of NY.

Pete Booth

Regardless, if I am a true independent contractor, I could simply be licensed by the state and ply my trade with any school or league I want. The association's role would be limited to training, certainly not approving/rating umpires or any compliance issues.

The more I think about it, the more I think Wisconsin has it right. I register with the WIAA and I get my own games. I am not required to join an association AT ALL. (BTW, I belong to 3 associations, but that doesn't help my schedule or my standing.)

We don't have to join an association in my area. I belong to one, but that is mostly for training, I don't get any games from mine. Varsity dates in the larger conferences are usually assigned by a conference commissioner. The school districts have people that find their own officials for sub varsity contests. I do a lot of varsity in basketball and always found my own games with the smaller schools, which were generally assigned by the school AD. The games I work in the local 4A conference are assigned by a commissioner.

I am always amazed at how much power some of these associations seem to have in some areas of the country. I have never paid an assigning fee. Our uniforms are dictated by the state athletic association. I know that if the state of Iowa ever told me I was an employee instead of an independent contractor and tried to take social security, unemployment insurance etc. out of my fees, I would would hang up my whistle and mask.

I'm in the same boat as Mike. We have commissioners and ADs to deal with, as well as a few assigners for some out of the way stuff and summer ball. Nobody gets a cut of my game check except my wife.:D

[QUOTE=socalblue1;610814]The "matching social security taxes" are still being paid, just not directly by the employee. I'd gladly pay my employees an extra 8% (rounded, ...) and have them pay the government so I didn't have to do the paperwork. IOW, treat it just like Federal and State Income Tax withholdings.

And, there's 7 or 8 "tests" to help determine whether a person is an employee or a contractor. How they get paid is only one of the tests. (And, it's not a "bright line" that you evaluate each test and if you meet 5 of the 8 you're an employee, for example.)

I suspect *somebody* gets a cut - it just may not be somebody from the umpire association. I mean, commissioners get paid a salary, which probably reduces game fees by a few dollars. That's not really what's at issue.

I've seen umpires, for whatever reason, held back from varsity assignments for no good reason. I've seen associations where even returning professional umpires would be saddled with JV/Freshman ball until a certain number of years were served in the association. That's the restraint of trade I'm talking about. Nobody could legitimately argue that a person who worked multiple years in the minor leagues couldn't fall into a varsity schedule easily.

If anything good comes out of these efforts, it will mean the end of associations controlling every aspect of umpiring -- assigning, payment, negotiation of fees, collecting "assigning fees" from every game, training requirements, etc. I'm as busy as I want to be and most of my assignments are from the groups themselves and I get a check when I walk on the field.

Used to be in Eugene, OR, the associations charged the schools for training officials, assigning games, and cutting the checks to pay the officials. What a racket.

No longer can the assignor be an "official" part of an association, but that's how OSAA has the system set up since joining a local association is required under its by-laws.

In NC, you have to belong to an association sanctioned by the NCHSAA for the sport you wish to work in. There's no requirements on who you can work, as I live on the border between two associations and I made the choice (right choice) to work for one over the other. You are not supposed to take assignments from another association unless the other assoc. goes through your booking agent (sometimes in border areas assignors get in a pinch and need help).

Our uniforms and procedures are spelled out from the NCHSAA office. In my association, the booking agent takes a booking fee (one game fee) for the year but he handles no money for game fees. The schools provide us with a check before each game. That is not uniform across the state as the "other" association near me does things differently. The assignor does not collect a booking fee directly from the umpires. He withholds the first game check and pays the umpires from his office as he collects all money from the schools and then distributes to umpires.

I would hate to see us treated as employees. Too much of a headache with that and really our association is not setup for the paperwork involved. I truly wonder how many assignors would keep at it given the amount of paperwork and bookkeeping they would have to do if this came to pass.

Lawrence

Mmmm.
 

I defend your right to have an opinion.

That being said:

Most associations in Oregon are assigned by an individual Commissioner.

The individual commissioners establish their fees by local group.

In PDX our commissioner is paid 10% of each game check. The same commissioner currently assigns both the high school season and the summer season. He also happens to assign non-D1 colloege games in the Northwest (he has retired from that gig).

In PDX we also have an elected position of Treasurer. This is a paid position and is funded by charging schools a check writing fee. The schools love that as across Oregon IF school districts wrote checks for officials they would write 250,000 per year.

In PDX for a baseball season we have about $500,000 pass through our group.

The Commissioner gets input from umpires aboput the quailty of new (young guys) that he wants to move up the chain. He is the sole evaluator of our umpires at the varsity level.

We are paid about every two weeks and are receive a 1099 in January each tear.

Tax Evaders
 

So I'm guessing by some of the previous posts that not very many of you pay SE taxes on your "independant contractor" income. Your game fees are reduced already, and if money is the only reason you are officiating, please retire.

Are they suppose to?

Uh....yeah. It's income. It's like any self-owned business.

I forgot to state Uncle Sam gets his cut of my game checks as well. :D

Can this 15.3% be written off or reduced in any way or is it just Federal, State, and Local that can be written off or reduced by expenses.

You only pay self-employment taxes above a threshold - net income over $400. All deductible expenses are removed before you calculate the SE tax.

Labor law usually has tests to determine if you are really a contractor or just an employee in disguise. They are there to keep employers from not fulfilling obligations to employees and the tax man (unemployment, FICA, witholding, workman's comp, etc. etc. etc.) or, in other words, to keep employers from screwing employees.

Signing a form that says you're a contractor doesn't get anyone off the hook.

What you probably be doing is having the officials hire the association as a booking agent.

Plus, 1/2 of that SE tax is a deduction itself -- whether or not you itemize.

And, the $400 limit Rich mentions is *total* SE income -- not per payer.

It's hard for some to believe, but once all proper deductions are removed, it's pretty hard to make a lot of money doing this. I do pay SE taxes yearly, but the number isn't going to make anyone gasp.

Having lost a fair amount of weight this season, I had to buy all new baseball clothes and will have to buy all new basketball and football clothes. All deductible, and it's possible that for the first time EVER, I'll lose money this season.

No doubt about it - tourism would explode. Just about all (if not all) states have already legalized gambling in the form of the lottery, which is nothing more than a tax on people who are bad at math.

Rich:

If you are taking all of the legal deductions that you are alllowed and you are still having a taxable profit on your Schedule C, then you have to be doing something wrong. I can not remember the last time that I had a taxable profit on my Schedule C.

MTD, Sr.

Are you an accountant? That is some great advice:rolleyes:

I am not an accountant, I am a structural engineer; but I have been filing a Schedule C for officiating since 1982, and have made it a point to know what can be deducted and what can not be deducted. The one deduction that officials can not use is the home office deduction because it is impossible to meet the 100% requirement of the rule. But the mileage deduction just about wipes out one's game fees alone, unless one walks to all of his or her games.

MTD, Sr.

I use a CPA. I do deduct for a home office. I work three sports and the office contains only uniforms, supplies, literature, DVDs, and files that pertain only to adjudicating those sports.


Still, with an annual officiating income of around $13,500, and utilizing all legal dedcutions, I pay some taxes on that income.

I think you have to show a profit occasionally (the specifics are in the regs -- something like 2 years out of 5,...) or you risk it getting classified as a hobby.

Bob:

You are correct about the two years out of the previous five years, BUT!!!

In June 1996, I particated in the ABL tryout camp at Emory University in Atlanta. And one of my partners was an IRS agent who was located in Washington, DC, and I asked him about that rule. He told me that before the IRS invokes that rule, it looks at a number of factors: 1) The gross income generated by the business; 2) The type of business; and 3) The type of deductions that are germane to that particular type of business.

The IRS realizes that the officiating of amateur sports is a travel intensive business. It is not unusal for a sports official, i.e., to have gross officiating income of $7,500 in a year and have a mileage deduction of $9,000. Just last year (2008), the mileage deduction was $0.505/mile the first six months of the year and $0.585/mile for the last six months of the year. The IRS agent went on to compare the type of deductions that sports officiating generate compared to gross income with a person whose business was buying and selling coins: If the coin dealer consistently claimes a gross income of $500 or $750 per year and expenses of $10,000 per year, that type of Schedule C is going to raise a HUGE RED FLAG with the IRS.

MTD, Sr.