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.

Los Angeles Resumes Film Production: What to Know for Your Set

Los Angeles is allowing film production to begin again. But coronavirus still threatens the health of the cast, crew, and other workers interacting with the set. The new rules for mitigating these risks are strict, and productions risk their future by ignoring them.

Most productions will not begin filming for some time, but these rules are not going away. In line with the governor’s orders, all members of the cast and crew must wear masks. While in front of the camera, if masks are not practical, actors are encouraged to remain at least 8 feet apart. The production itself must provide personal protective equipment and sanitation supplies for the crew to use.

A number of practices are being turned on their heads. Actors are asked to apply their own makeup. Traditional craft services buffets are banned. Everyone entering the set must be checked for signs of coronavirus before entering. Regular testing for the disease is required.

The County’s orders for film production are long and detailed, covering everything from who can be on set, what can be done there, and what procedures must be followed regarding testing and follow-up in the case of infection. Any production looking to resume filming should consult legal counsel for advice regarding the County’s Order on Reopening Protocol for Music, Television and Film Production before doing so. The Law Firm of Dillon McCarthy can help your production navigate these rules as you re-open while trying to keep your crew safe.