Wednesday, August 17, 2011

When Does This Become an Employment Relationship?

I've seen several articles relating to the phenomena of "sugar daddies"; older and well-off gentlemen who agree to provide the necessities of life (in the upscale version, these amenities are typically college tuition and living expenses) to young women in exchange for, uh, "companionship". The initial lawyer reaction to these types of arrangements (after envy, that is) runs along the lines of, "Isn't this a form of prostitution?"
According to the CEO of an online site that caters to arranging these types of relationships, the answer is a firm "no", because there's "chemistry" involved and the quid pro quo takes place over an extended period. But if it's not a criminal exchange of sex for financial support, is it some other type of commercial exchange? Perhaps one more closely akin to hiring a full-time escort? Are these payments income to the young lady? Should there be some type of withholding? Certainly there is a tax implication in there somewhere.  It's clear that this particular Brave New World is just itching for attorney intervention. Whether it's in the form of an IRS opinion/audit, or some type of quasi-civil union claim, I suspect it won't be too long before these relationships start getting formalized and legalized.  I can hear some of my family law practitioner friends limbering up their word processors already.

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