California Has Bad Copyright Laws Regulating Work For Hire Agreements
In California state law prohibits transferring copyrights from the author/creator to a client under "Work for Hire" agreements unless the creator is also treated as an employee.
In other words, anyone you hire independently to do your SEO work (which is considered copyrighted material) not only gets to keep full copyrights to their creations, but cannot legally transfer their rights to you unless certain conditions are met.
California Law Requires You to Carry Workers Comp Insurance to Obtain Copyrights
If you make an agreement where the creator will give you copyrights to their creation (in this case, meta data and SEO work), they are seen by California law as any other employee.
This means, to get copyrights to your SEO data you will need to carry workers compensation insurance and unemployment insurance for the creator, and you may even have to withhold federal and state taxes from any payments made to them.
California law (Labor Code 3351.5 (c))also requires that insurance be purchased and in place before you sign a Work for Hire agreement, before any work is done, and before any payment is made.
If you do not comply with this law and enter into an agreement without this insurance, the employer is committing a crime under California law.
Caution from the California Department of Insurance
Specifically, according to the California Department of Insurance:
"Employers who fail to purchase Workers Compensation insurance are in violation of the California Labor Code. The Director of the Department of Industrial Relations has the authority to issue a stop order against any company who is discovered to be unlawfully uninsured for Workers Compensation. A stop order closes down business operations until Workers Compensation insurance is secured ... Failure to comply with a stop order can result in a $10,000 fine, while the fine for failure to carry Workers Compensation insurance is $1,000 per employee.Employers can be prosecuted for insurance fraud for willful failure to secure Workers Compensation insurance as prescribed by law. Also, if Workers Compensation is not purchased, an employer opens himself/herself up to liability lawsuits from injured employees [this includes certain persons under Work for Hire agreements]. Exclusive remedy protection does not apply if Workers Compensation insurance is not in force at the time of employee injury."
Work For Hire Agreements With Creators Outside of California
The California Department of Insurance states:
"Out-of-state employers may need workers' compensation coverage if an employee is regularly employed in California or a contract of employment is entered into here.
In other words, even if you hire someone you found on Elance who lives in California (and you do not), if you want SEO copyrights, you may still need to treat them as an employee subject to California employment laws.
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