What is Production Payroll Services?
Production payroll services are distinct from other kinds of third-party payroll services. A production payroll firm is a full-service provider. The payroll provider processes accurate paychecks on time. They also pay all payroll taxes, unemployment, union fees, and workers' compensation insurance. The production payroll company works with the production accountants to submit payroll weekly.
The Role of the Entertainment Payroll Company
The entertainment payroll company is the employer-on-record for production companies. It caters to the payroll of the cast and crew in the film, television, and commercial productions. Entertainment payroll companies must also understand the industry's wage and hour laws. The California Wage Order for the Motion Picture Industry differs from other industries. The overtime rules, meal periods, and penalties are different for the crew in film. The payroll company must understand the regulations of the local unions and guilds. Collective bargaining agreements set the wage scales and benefits of the union employees. The rules vary significantly from one union to the next. It’s a hard road to walk alone.
Why Entertainment Payroll Companies Matter
The entertainment industry holds stumbling blocks that do not exist in other industries. Also, most payroll providers do not understand the needs of the production company. Entertainment payroll requires understanding the legalities. It also requires understanding the contribution rates to pension, health, and welfare funds. Every production needs a company that runs payroll with accuracy and timeliness. A good payroll company synchronizes all the data from the set to the production offices. A good payroll company keeps your production accountants happy.
At Topsheet, we remain obsessed with serving the entertainment industry. Topsheet provides payroll processing for features, commercials, music, and television (coming soon). We help keep your production compliant to union agreements and wage and hour laws.
No matter whether you make TV, feature film, web content, or commercials, we care about making it life easy for you and your production office. We understand that you didn’t get into the film industry to spend hours filling out paperwork. We know you don't want to carry the football around with you. We take care of all the payroll compliance for you so you can produce amazing content.
Here are some helpful resources for navigating union compliance:
Struggling with the EP Paymaster? Use our union rates search to find the film union minimums for your project.
Confused by SAG-AFTRA rates? Learn more with The Ultimate Guide to SAG-AFTRA Rates 2020
Does the Fair Labor Standards Act (FLSA) Impact Productions?
In short, yes. The Fair Labor Standards Act (FLSA), established in 1938, protect workers from predatory practices. The federal statute establishes rules for the employment of minors. It also set the bar for our labor laws today. The FLSA applies to the employees of film and television, like any other industry. Production companies long avoided the statues by classifying employees as contractors. But now, the government has cracked down on the misclassification of employees.
How AB5 Affects Small Production Companies on January 1st, 2020
AB5 is a California law that comes into effect on January 1st, 2020. Small production companies can no longer 1099 their cast and crew. The law benefits the employee with workman’s compensation and medical insurance. The Labor and Workforce Development Agency can fine companies $5,000 - $25,000 per misclassification. Even if you are working with a small crew of 10, that is a penalty of $50,000 to $250,000.
Here is a simple test to see if you can still pay someone as 1099 vs a W2 employee. Going ahead and answer the ABCs of AB5:
A. The hiring entity does not control or direct the worker in performing the working fact or under the terms of a contract.
B. The work performed is outside the “usual course” of the hiring entity’s business.
C. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Here are some helpful AB5 resources regarding productions:
Even if you can no longer classify workers as contractors, don’t worry. Topsheet is here to help. We understand that production companies are team companies. It's essential for team companies to do things the right way. We are here to keep your team compliant, while you focus on shooting your vision.