Including a WMFH (“Work Made for Hire”) clause in your agreements with independent contractors essentially puts an independent under “statutory employee” status. That’s based on California’s workers’ compensation guidelines. That can be invaluable for many reasons, but the most important one protects your intellectual property rights.
Under the state’s workers’ comp rules, a statutory employee is eligible for unemployment insurance and disability. The idea is to balance the employers’ need to protect their assets while giving contractors benefits for signing an agreement and clarifying ownership.
Ownership of work
Absent a statutory employment relationship or a written contract stating that the independent contractor assigns all copyright to the employer, independents not under contract can take resources produced at one employer to another. They create specialized work, usually work outside the scope of the business.
Written agreements are critical. When you do not have one, ownership does not automatically transfer to the employer. The employer can use the solution but cannot stop the contractor from taking the resource elsewhere.
A WMFH Clause is an incentive for contractors to give you their work free and clear in exchange for benefits that are usually not part of the deal.