California Governor Gavin Newsom signed a union-backed bill to protect entertainment workers’ access to rental companies after an audit earlier this year raised concerns about their future. did.
The governor’s office announced Monday that Newsom officially gave the green light to state Sen. Anthony Portantino’s SB 422. The bill was supported by the Entertainment Union Coalition, which includes the California IATSE Council, the Directors Guild of America, SAG-AFTRA, Teamsters Local 399, and LiUNA. Local 724 — Codifies that rental companies are employers of the entertainment workers who establish and work under their auspices and are responsible for paying employer taxes.
The law also prohibits recreational payroll companies from being considered rental companies or employers of their employees. Under the bill’s provisions, recreational payroll companies would be required to submit quarterly reports to the California Department of Employment Development disclosing payments made to lending companies.
According to one industry union, the bill effectively affirms the long-term use of S corporations, C corporations, or LLCs, in which entertainment employees “loan” their services to various other companies. “In practice, this means lending companies will continue to function as they have for decades,” the Writers Guild of America West said in an Aug. 31 message to members explaining the bill. I wrote it. The bill was passing the state legislature at the time. . “This legislation also upholds an important court ruling that established the right of seconded employees to receive UI benefits on the same basis as other unemployed workers.”
Employees from many different industries use loan companies, including writers and reality TV producers. Financing companies can provide some degree of business protection and provide tax benefits. DGA Western Executive Director Rebecca Lyne, whose union played a leading role in helping write the bill, explained in an interview: various projects. Therefore, this is a structure that helps people in the industry manage their respective work lives. ”
Several parties began working on the bill after news broke in May that the California Employment Development Department was auditing leading payroll company Cast & Crew. That same month, Cast & Crew sent out a warning message to industry workers, noting that the State Department was objecting to the practice of channeling compensation through lending companies rather than paying them directly to owners and shareholders of the lending companies. Employees of payroll providers. Cast & Crew said at the time that it was “actively contesting” EDD’s decision and was working with unions and entertainment companies on the issue, predicting that the issue would soon become an “industry-wide issue.” He said that
In a response at the time, EDD said it was working with industry representatives and clarified that it had no intention of banning the use of loan-outs in California.
Rein said the entertainment union began working with the governor’s office on the issue after news of the audit came out, and ultimately worked with Portantino to resolve the issue through legislation. WGA West, EDD and cast and crew also played a role in this effort, according to an August message from WGA West to members. “Most importantly, this law provides clarity to our members, the state and the industry about the role of lenders in our world,” Rein added of the new law.