Posted by Mr. Q at 6:00 AM Monday, February 25, 2013
Labor Code section 3351.5(c) and California Unemployment Insurance Code Sec 686 and 621(d) both state that companies who commission workers under "work made for hire" agreements are considered "employers" under California law. In other words, if the state determines your company has "employer" status, the company may be required to obtain workers compensation insurance for the programmers, or pay payroll taxes or in some cases, provide employment benefits. The California standards differ from those typically used by the federal government to establish employer-employee status. Although there are some advantages to obtaining code under "work made for hire" rules, your company can also acquire rights by having the programmers sign assignments of copyright (scroll down to "transfers").