Loan Outs in Limbo

The California EDD, the state agency that administers unemployment, has informed multiple entertainment payroll companies that cast and crew working on productions under the common “loan out” method have been misclassified. The EDD contends that many of those working under a loan out agreement should have been classified as employees, with productions paying them directly and withholding taxes from payment.

Loan outs are prevalent in the entertainment industry, with many department heads, actors, and other using them. Loan outs allow workers to own their own company, pay themselves through it, and “loan out” their services to productions. While this can benefit the productions, the primary purpose is allowing the worker to write-off their business expenses, including owned equipment, advertising, and agency fees.

The scope of the EDD’s objections are not yet clear, and the payroll houses, as well as the major guilds, are asking for clarification. It’s unclear whether the EDD is targeting specific instances of loan outs, or if this is the harbinger of a larger ruling. The Franchise Tax Board and other relevant agencies have not yet weighed in either.

This is a story that is likely to change quickly, but the Law Firm of Dillon McCarthy is monitoring the situation and what it will mean for clients.

WGA Reaches Tentative Deal with Studios

After almost 150 days on strike, the Writers Guild of America has reached a tentative agreement witht he AMPTP, the organization that represents the major studios. We still don’t know what’s the terms are as the parties work out the language, and it will need to be ratified by the WGA’s members. But this likely means the end of the strike is coming.

SAG remains on strike for the time being, and just authorized expanding it to video game voice actors.

Writers Guild Goes on Strike

As of midnight today, the Writers Guild of America has voted to go on strike. WGA members demands range many issues, but primarily focus on pay and residulas. The median pay for a film and TV writer has declined 4% over the last few years in the midst of rising inflation. Writers are also working fewer hours on each production. The WGA hopes to turn these trends around. Of primary concern is the payment of residuals in a streaming world; the last major negotiations took place before streaming became the way most people watch television. The Guild also seeks limits on the use of AI in generating writing material, something that comes with a number of legal hurdles we’ve discussed on this blog, but will becoming an increasing concern in the coming years.

The last time the WGA went on strike in 2007 it changed the industry. It remains to be seen what changes arise from this new strike. If you are a writer with legal concerns, contact the Law Firm of Dillon McCarthy.