Key Takeaways

  • Work for hire applies when an employee or an independent contractor creates a work that legally belongs to an employer under U.S. copyright law.
  • Employees’ work is automatically owned by their employer, while independent contractors must sign a written agreement stating that their work qualifies as a work for hire.
  • Independent contractors' works only qualify as work for hire if they fit into one of nine specific categories.
  • Misconceptions about work for hire include the belief that all contract-based work falls under this category—many require explicit copyright assignment agreements.
  • Work for hire does not allow authors to reclaim copyright after 35 years, unlike copyright assignments.
  • State laws, particularly in California, can impact independent contractors under work-for-hire laws, sometimes reclassifying them as employees.
  • Musicians, writers, and creatives should be cautious about work-for-hire contracts as they might lose out on future royalties and rights.
  • Employers should always use clear, signed agreements to define ownership, rights, and payment structures for work-for-hire projects.

Work for Hire: What Is It?

Work for hire is any created work that can be copyrighted like songs, stories, essays, sculptures, paintings, graphic designs, or computer programs. In the U.S., work for hire — shorthand for the term "a work made for hire" — applies if the created piece is part of a person's job or made by an independent contractor.

Instead of the creator keeping the copyrights, the copyright and publishing rights belong to their employer. For example, when a staff writer drafts a blog for his employer, the company becomes the author and assumes the copyrights for the blog. All areas of copyright ownership now belong to the company, including credit for the blog and control of the blog. Work for hire is part of the U.S. Copyright Act of 1976 and changed the go-to rules of copyright ownership. Work for hire applies in two situations:

  • An employee creates work during her normal functions as an employee
  • An independent contractor completes a commissioned piece of work

Copyright protection allows the employer sole rights to use the work for financial gain under work for hire. When a company hires a person and pays for the created piece, they retain copyright ownership under work for hire. The work's creator has no rights to the work under work for hire.

Misconceptions About Work for Hire

Many people mistakenly believe that simply hiring a contractor automatically results in a work-for-hire agreement. However, for independent contractors, a work-for-hire arrangement is only valid if:

  • The work fits into one of the nine statutory categories under U.S. copyright law.
  • There is a signed, written agreement explicitly stating that the work is considered work for hire. Without meeting these two conditions, the creator typically retains the copyright, unless a separate copyright assignment agreement is signed.

Another common misconception is that all employee-created works are automatically work for hire. While this is true in most cases, there are exceptions. If an employee creates a work outside the scope of their job responsibilities or on their own time with personal resources, they may retain ownership of the copyright.

Copyrights: Employees vs. Independent Contractors

Any work created by a company employee during the course of employment is automatically owned by the company he works for. To decide whether a work falls under employee creation, the courts will ask three questions:

  • Was the work the kind the employee was hired to do?
  • Did the work mostly occur during approved work hours?
  • Was the work done, at least partly, to serve the company?

Companies that aren't sure if a person would qualify as an employee or whether the work falls within the employee's responsibilities should get a written copyright agreement. In California, labor laws create somewhat of a loophole concerning contractor work. The law basically states that any person under contract creating any work that both contractor and employer agree to is automatically considered work for hire. Work for hire in California may cause a typical contractor-employer relationship to become employee-employer at the loss of the client. Freelance workers beware: Keep from making freelance agreements based in this state to save yourself a potential legal headache. If you work as an independent contractor, anything you create can only be considered a work for hire if it falls into one of these nine categories:

  1. Contributions to collective works like encyclopedias, magazines, or anthologies. Collective works are many separate and independent works combined into a whole.
  2. Part of a movie or other audiovisual piece
  3. Translations
  4. Supplementary work published alongside work by another author to clarify, illustrate, or comment on. Supplementary works include forewords, afterwords, pictorial illustrations, charts, tables, indexes, bibliographies, and appendices.
  5. Compilations of preexisting material that's chosen, organized, and arranged in a way that the end piece forms an original work.
  6. Instructional works such as literary, graphic, or pictorial creations prepared for publishing for use in instructional activity.
  7. A test
  8. Answer material for tests
  9. Atlases

Even if a contractor's work clearly falls into one of these categories, a written agreement stating a work for hire is needed to protect the company.

Legal Implications of Work for Hire Agreements

Entering into a work-for-hire agreement carries significant legal implications for both employers and independent contractors. Here are key considerations:

  • State Laws Matter: Some states, such as California, have labor laws that can unintentionally reclassify independent contractors as employees if a work-for-hire agreement is used. This can impact tax obligations, workers' compensation, and legal protections.
  • Termination Does Not Void Copyright Transfer: Once an employer gains ownership of a work-for-hire piece, the original creator cannot reclaim rights, even if they are fired or the contract is terminated.
  • Copyright Registration Responsibility: The employer, as the owner of the work-for-hire content, is responsible for registering the copyright if they wish to enforce their rights in court.
  • Work for Hire vs. License Agreements: If an independent contractor wants to retain some control over their work, a license agreement might be a better option. Licensing allows the creator to retain ownership while granting the employer permission to use the work under certain conditions.

Songwriters, Beware

In the songwriting realm, a work-for-hire situation normally comes about when an artist creates music for other media. For example, when composers create jingles for commercials, it makes sense that the company would keep copyrights. Without copyrights, the company couldn't use the jingle in future commercials. When musicians hire songwriters to help record a song under work for hire, the songwriter can lose out in a major way. While she gets paid a one-time fee, which might be substantial, she has no rights whatsoever to future earnings from royalties of that song. If a songwriter's contribution to the final recording is significant, like hooks or lyrics, she should try to obtain written credit early in the recording process. If the musician isn't willing to give credit, don't work with that artist again. Songwriters should always have a lawyer look over any agreements.

Work for Hire in the Entertainment Industry

The entertainment industry frequently uses work-for-hire agreements, but these contracts can be particularly risky for creatives such as musicians, screenwriters, and graphic designers.

  • Film & Television: Writers and artists who contribute to movies or television shows under work-for-hire contracts may lose all future rights to their work, meaning they cannot receive royalties or profit-sharing.
  • Freelance Graphic Designers: Without a proper agreement, a designer might assume they retain copyright, only to find out later that the company they worked for has full ownership.
  • Game Development: Many video game companies hire freelance developers under work-for-hire contracts. Without negotiating terms carefully, these developers may lose rights to their contributions.

Pro Tip: Creatives should negotiate contracts that include royalty clauses, partial copyright retention, or usage limitations to ensure they are fairly compensated.

Work for Hire vs. Copyright Assignment

As an employee or contractor selling work as a work for hire, the copyrights belong to the company from the moment creation begins. When a copyright gets assigned, the rights are sold to another party. You can sell the copyrights to your works as long as they aren't works made for hire. The difference between work for hire and copyright assignment: After 35 years, you can cancel the assignment.

When you create a work for hire, you can never stop the company from using it. Even if you get fired in the middle of the project, the company can use what you created. If a company owes you money for a work for hire and you've finished the project, the company can publish it before paying you. If you have a contracted agreement to assign copyright upon payment, you will get paid before the company can use your work because you control the rights until you assign them. If you wanted to use that work-for-hire piece in your portfolio, you'll have to ask the company first. If you agree in writing to transfer the copyright, but with the provision, you can use the piece in your portfolio. Sometimes in contracts, a work isn't called a work made for hire, but copyrights transfer once you sign. If what you create doesn't fall into the contractor work-for-hire categories, you can assign the copyright with your terms. If you're unsure about a contract or copyrights, contact a lawyer.

When Copyright Assignment Is a Better Option

In some cases, a copyright assignment may be preferable to a work-for-hire agreement, particularly for independent contractors and freelance creatives. The key differences:

  • Work for hire means the employer automatically owns the work from the moment it's created.
  • Copyright assignment allows the creator to sell their rights but includes the option to terminate the agreement after 35 years, potentially regaining control of the work.

When should you consider a copyright assignment instead of work for hire?

  • If you want to retain control over your work in the future (e.g., writers and artists who may later republish or license the work elsewhere).
  • If the work does not fall into one of the nine work-for-hire categories (since an invalid work-for-hire contract could be challenged in court).
  • If payment is structured over time (assignments may allow continued revenue, while work-for-hire is usually a one-time fee).

To ensure protection, always consult a lawyer before signing either type of agreement.

Work for Hire Do's and Don'ts

For companies protecting their interests:

  • Do get a signed, written agreement specifying that something is a work for hire for every time the company wants copyrights to the piece.
  • Do make sure any work-for-hire agreements between the company and nonemployees fall into the nine specific categories.
  • Do consider a copyright transfer agreement when work from an independent contractor doesn't fall into one of the nine categories.
  • Do know state laws regarding work-for-hire agreements to ensure compliance with taxes and workers' compensation laws.
  • Do have agreements notarized if you think it's necessary.
  • Don't forget to include specifics in contracts, including the expected work, payment terms and amounts, and deadlines.
  • Don't rush your contractor to sign an agreement, which will help reduce the likelihood of rebuttal later on.
  • Don't assume both parties agree to specific expectations if they're not written in the contract.
  • Don't hesitate to contact a lawyer to overlook complicated agreements.

For contractors:

  • Do review an agreement completely and thoroughly, making sure all key points are present.
  • Do make sure the agreement clearly lays out the work you're expected to do, the amount you're being paid, when you'll get paid, and deadlines.
  • Do ask for a copy of the written agreement.
  • Do contact a lawyer if you're unsure about an agreement's terms.
  • Don't enter into an agreement if you're not sure what it says.
  • Don't sign a contract without reading all the details.
  • Don't enter into a work-for-hire contract if you're not sure what that means.

Frequently Asked Questions

  1. What happens if a work-for-hire contract is missing?
    If there’s no written agreement specifying a work-for-hire relationship, copyright usually belongs to the creator unless they are an employee.
  2. Can an independent contractor still claim authorship?
    No, once a work is designated as work for hire, the contractor cannot claim authorship rights under copyright law.
  3. Can an employer transfer a work-for-hire copyright?
    Yes, since the employer legally owns the copyright, they can sell, license, or transfer it to another party.
  4. Are all freelance projects automatically work for hire?
    No, only if the work fits into one of the nine specific categories and there is a signed contract stating it is work for hire.
  5. How can freelancers protect their rights?
    Freelancers should negotiate contract terms carefully, avoid broad work-for-hire clauses, and consider licensing or copyright assignments instead of full ownership transfers.

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