Entertainment Payroll 101

In addition to acting as payroll provider, an entertainment payroll company focuses on concerns specific to the film, television and commercial production industries. This includes following all wage and hour laws particular to the entertainment business. The California Wage Order for the Motion Picture Industry differs in significant ways from the state’s wage orders for the transportation and agricultural industries, for example. Overtime rules, meal periods and penalties are defined specifically for entertainment workers. For union productions, it is essential that the entertainment payroll company be well versed in the contracts of the many union locals and guilds that serve the production employee community. Collective bargaining agreements lay out minimum wage scales and working conditions for each member of a production’s crew and talent staff. The rules can vary widely from one entertainment local to the next.

Of even greater importance to production crew workers and their unions is that the entertainment payroll company understands the contribution rates for pension, health and welfare funds, and that it has a system in place to make those contributions in a timely and accurate way. Often, independent productions will negotiate “one-off” deals with unions; these individual agreements may allow better terms than the collective studio agreement, but the unions will want to be assured that a capable entity is going to take responsibility for making benefit contributions. In many cases, that means working with an entertainment payroll service with a solid history of union contributions reporting.

The Fair Labor Standards Act (FLSA) was enacted in 1938 with the aim of protecting workers particularly vulnerable to being taken advantage of, such as children and low-wage employees. The federal statute established stringent rules for the employment of minors, and created the basis for our current wage-and-hour laws. Minimum wage, the 40-hour workweek and mandatory payment of overtime all have their roots in the original tenets of the FLSA. Over the years, the statute has evolved, but it still remains the basis of federal employment law throughout the United States.

The FLSA applies to the entertainment industry as to any other. Production companies and even crew members have at times sought to avoid the strictures of the statute by classifying entertainment workers as independent contractors rather than employees (more on this as it relates to entertainment payroll below).

Exempt and Non-Exempt Production Employees
Non-Exempt Employees – Employees who are covered by the FLSA’s minimum wage and overtime laws are called non-exempt employees. The federal government and most states have set a minimum wage for non-exempt workers. If the employer is covered by both state and federal law and the two rates are not the same, the employer is required to pay the higher minimum wage based on the state in which the employee works.

Exempt Employees – Those not covered by the FLSA minimum wage and overtime laws are called exempt employees. Exemptions to the FLSA requirements are not based on job title but on the employee’s actual duties, responsibilities, and level of authority. In almost all cases an exempt employee must make minimum dollar amounts per year to qualify as exempt.

Certain specialized jobs on your entertainment payroll are traditionally recognized as potentially exempt, though there is no across-the-board exception. There are some clear restrictions for entertainment payroll, however; for example, a production assistant (PA) or intern can never be classified as exempt.

What Is Governed by the FLSA
The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments. Covered, nonexempt workers are entitled to a minimum wage, which varies by state. Nonexempt workers must be paid overtime pay at a rate of not less than one and one-half times their regular rate of pay after 40 hours (Federal), after 8 hours daily (California) up to 12 hours, double time after 12 hours.

What Is Not Governed by the FLSA
Vacation, holiday, severance, or sick pay
Meal or rest periods, holidays off
Premium pay for weekend or holiday work
Pay raises or fringe benefit
A discharge notice, reason for discharge, or immediate payment of final wages to terminated employees. These are determined at the state level.

Over time, both the federal and state governments have become increasingly vigilant about the misclassification of entertainment production employees as independent contractors (see our guide to California's AB 5 law as an example. These government agencies are concerned about two things here: the potential loss of income tax from misclassified production crew workers and the loss of payroll taxes from production companies when crew members are misclassified.

Those entertainment payroll taxes go toward funds that are drawn on by U.S. workers in entertainment and other industries alike; those funds include Social Security and Medicare. Much has been written about independent contractor vs employee status in entertainment payroll. Let's start with some basic definitions.

Definition of Employee in Entertainment Payroll
An employee is required to comply with directions as to when, where and how the production company employer wants them to work – clearly the case for most crew members in the entertainment industry. An employee is hired by the production company employer, works exclusively for the production and is subject to dismissal or can quit at will.

While many production companies have paid crew members off of payroll as independent contractors in the past, the law has become clearer that crew members in the entertainment industry should be properly classified as employees for payroll purposes.

Common Law Test
One test used to determine if an entertainment industry worker is an independent contractor or employee is the “Common Law Test,” which says that if a business tells, or has the right to tell, a production worker, how, when, and where to work, then the worker is an employee.

The top three factors the IRS looks at are:

Instructions to workers. A crew member is probably an employee, and belongs on payroll, if they are required to follow instructions as to when, where and how the work is to be done.
Job Training. Training indicates that the production work must be performed in a particular manner. Any form of employer-provided training suggests the worker is an employee.
Realization of profit or loss by an entertainment worker. A true independent contractor might lose money on a job, or overall in the course of their business in a given year. A crew member in the entertainment industry, in contrast, normally gets paid whether the piece of entertainment succeeds or fails to make money.

Recently, states have turned more and more to the “ABC Test” of the Supreme Court’s Dynamex ruling for a decision on whether a crew member is a valid independent contractor or not. Most prominently, California codified this into law in 2020 with CA AB 5, which reinforced a State Supreme Court ruling that workers should be considered employees unless they meet all three requirements of the ABC test.

The ABC Test as it applies to Entertainment Payroll
Keep in mind that a film crew worker has to meet all three of these criteria to be properly classified as an independent contractor; otherwise, they are employees of the production company and should be part of your entertainment payroll.
(A) the worker is free from the control and direction of the hirer in connection with the performance of the work…
(B) the worker performs work that is outside the usual course of the hiring entity’s business; and
(C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.”
Misclassification Problems in Entertainment Payroll
Production companies misclassifying an entertainment industry employee as an independent contractor face significant scrutiny of their entertainment payroll practices. Misclassifications represent a large potential loss of revenue for all levels of government. Because of the loss to Social Security, Medicare, disability and unemployment insurance, states and the federal government take a particular interest in the misclassification of employees as independent contractors. Fines and back payroll taxes are significant.

If an entertainment industry “contractor” faces tax problems, needs unemployment or disability benefits, the crew member has an incentive to go back and claim employee status… and then it is up to the production company to prove they were properly classified as an independent contractor for the production. If the production company is unable to prove that the crew worker is an independent contractor, it can cost the company a substantial amount of money in federal and state payroll taxes, penalties, and employment benefits.

The basic laws covering entertainment payroll are similar to those that govern payroll for other businesses. But some wage-and-hour rules are made specific to the entertainment business in the California Wage Order for the Motion Picture Industry. Other provisions are made for specific crew member classifications, or for entire areas of entertainment industry production, in collective bargaining agreements negotiated by film and TV union locals. In this section, we examine some of the basic legal requirements for processing entertainment payroll, particularly in the state of California. We also define and explain some common terms in entertainment labor law, e.g. workweek, hours worked, regular rate of pay, the difference between a discretionary and nondiscretionary bonus, and the distinction between net pay and disposable pay. Many of these rules and terms will be most useful in non-union payroll situations, but some will apply to union cast and crew as well.

Minimum Wage and Overtime Laws
The Fair Labor Standards Act (Federal) requires that all non-exempt employees be paid 1 ½ times their regular rate of pay for all hours actually worked over 40 hours in one week. According to the California Labor code, section 500-510, all non-exempt employees must be paid 1 ½ times their regular rate of pay for all hours actually worked after 8 hours per day, 2X after 12 hours. For the 6th day worked, 1 ½ for the first 12 hours, 2X after 12. For the 7th day worked, 1 ½ for the first 8 hours worked, 2X after 8 hours.

Regular Rate of Pay
The regular rate of pay is an hourly pay rate determined by dividing the total regular pay actually earned for the workweek by the total number of hours worked.

“Hours Worked” Defined
“Hours Worked” includes the time during which an employee is subject to the control of an employer, and includes all the time the employee is permitted to work, whether or not required to do so.

“Workweek” Defined
A workweek is defined by the FLSA is a fixed, recurring period of 168 consecutive hours (7 days X 24 hours).

A workweek defined by the California Labor Code and the IWC is any seven consecutive 24 hour periods, starting with the same calendar day each week, beginning at any hour on any day, so long as it is fixed and regularly recurring.

What’s Included in Regular Rate of Pay
Base pay for all hours worked. Nondiscretionary bonuses – also known as “bumps,” “adjustments” or any payment made related to production, efficiency, quality or performance. Fair market value of noncash items. Shift premiums. Retroactive pay – it must be prorated over the period covered.

Multiple Hourly Rate Calculations in Entertainment Payroll
The following example is how to calculate multiple rates worked in one production workweek:

Mon – $10.00 X 8 hours = $80.00
Tues – $10.00 X 9 hours = $90.00
Wed – $12.50 X 8 hours = $100.00
Thur – $13.50 X 10 hours = $135.00
Fri – $10.00 X 8 hours = $80.00
Total – $485.00

$485.00 divided by 43 hours = $11.30
$11.30 X .5 = $5.65 (overtime premium rate)
$5.65 X 3 hours = $16.95 (premium for overtime)
$485.00 + $16.95 = $501.95 = Total weekly pay

Bonuses (Discretionary vs. Nondiscretionary)
The answer to whether a bonus, adjustment or bump must be included in the regular rate of pay for overtime depends on the reason for the extra pay. A nondiscretionary bonus, or one that is promised or announced to the employee in advance to being paid or that is dependent on hours worked, or productivity must be included in the regular rate of pay for overtime purposes. For example, an hourly employee who earns $8.00 per hour in a 40 hour workweek has a regular rate of pay of $8.00 per hour and an overtime rate of $12.00 ($8.00 X 1.5). If that same employee received a $50.00 production adjustment for that week, the employee’s regular rate of pay would change to $9.25 per hour ($50.00 plus the regular weekly rate of $320.00, divided by 40 hours) and the overtime rate becomes $13.88 per hour for that week ($9.25 X 1.5). A discretionary bonus which is paid solely at the discretion of the employer, such as a Christmas bonus, does not have to be included in the regular rate of pay. The bonus should not be measured by or dependent on hours worked, productivity, or efficiency, and it may not be part of any employment agreement.

Retroactive Pay
Retroactive pay is a delayed payment for work which has already been completed. The most common reason is ongoing labor negotiations between entertainment studios and labor union leadership. While negotiations are being reached, the production company employer continues to pay the employees at their established rate. When the negotiations are over, and there is a clause that entitles the employees to a wage increase on a set date, the employer is required to make up the difference with a retroactive pay check. Media Services calculates all retroactive payments for its clients, based on union agreements.

Vacation Pay
For non-union film and TV crew, there is no legal requirement in California that an employer provide its employees with paid or unpaid vacation time. However, if an employer has an established policy to provide paid vacation, then certain restrictions are placed on the employer as to how it fulfills its obligation. Under California law, earned vacation time is considered wages, and vacation time is earned, or “vests,” as labor is performed. Vacation pay accrues as it is earned, and cannot be forfeited, even upon termination of employment, regardless of the reason for the termination. All earned and unused vacation must be paid to the employee upon termination at his or her final rate of pay. In California because vacation pay is considered wages, an employer cannot have a “use it or lose it” policy, it is illegal and will not be recognized by the Labor Commissioner. An employer can put a “cap” or “ceiling” on vacation time that can be accrued. Once a certain level or amount of accrued vacation is earned and not taken, no further vacation pay accrues until the balance falls below the cap.

Minimum Wage and Overtime Laws
The Fair Labor Standards Act (Federal) requires that all non-exempt employees be paid 1½ times their regular rate of pay for all hours actually worked over 40 hours in one week. According to the California Labor code, section 500-510, all non-exempt employees must be paid 1½ times their regular rate of pay for all hours actually worked after 8 hours per day or 40 straight time hours per week, 2X after 12 hours per day. After working 40 hours in the first 5 days, the 6th day worked all non-exempt employees must be paid 1½ for the first 12 hours, 2X after 12. For the 7th day worked, 1 ½ for the first 8 hours worked, 2X after 8 hours. For union employees, their vacation pay is determined by a Collective Bargaining Agreement. Most agreements pay 4% of straight time earnings directly on the employee’s check.

Holiday Pay
There is nothing in California state law that mandates an employer to pay an employee a special premium for work on a holiday, Saturdays, or Sundays, other than the overtime premium required for work over 8 hours in a day and 40 hours in a workweek. For union employees subject to a collective bargaining agreement, such as the Hollywood Basic, holiday is generally accrued at 3.719% of straight time earnings and paid out at the end of the show.

Waiting Time
To ensure that employers comply with the law governing the payment of wages when an employment relationship ends, the Legislature enacted Labor Code 203, which provides for a penalty against the employer when there is a willful failure to pay wages due the employee at the end of the employment relationship. If an employee is fired, all wages including any unused vacation must be paid at termination. The same applies if the employee has given 72 hours notice of quitting. If the employee does not give notice, the employer has 72 hours to make payment or waiting time penalties will apply. The penalty is the employee’s daily rate for each day the employee was not paid, up to a maximum of 30 days. The waiting time penalty is not wages, so no deductions are taken from the payment. The penalty includes all days including weekends, non-workdays and holidays.

Rest Periods
In the state of California, employers must give employees a 10 minute paid rest period for every 4 hours worked. The rest break must be given as close to the middle of the 4 hour period as practical. A rest period is not required for employees who total daily work time is less than 3 ½ hours. If an employer fails to give an employee a rest period, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of pay for each workday that the rest period is not provided. Working through rest periods does not entitle an employee to leave early or come to work late.

Reporting Time Pay
Reporting time pay is an important concept for production payroll. Each workday an employee is required to report to work, but is not put to work or is furnished with less than half of his or her usual or scheduled day’s work, the employee must be paid for half the usual or scheduled day’s work, for no less than 2 hours and no more than 4 hours. No reporting time pay is due when the following conditions exist: 1. When the employer’s operations cannot begin or continue due to threats to employees or property. 2. When public utilities fail to supply electricity, water or gas. 3. When the interruption of work is caused by an “Act of God,” such as an earthquake. 4. When the employee leaves work on his or her own accord. Reporting time pay is not considered wages, and therefore not used in determining if overtime is due.

Meal Periods
In California, an entertainment industry employer may not have an employee work for a period of more than 6 hours (5 hours for other industries) per day without providing a meal period of at least 30 minutes. The exception to this rule is when the total work per day is 6 hours or less. Unless the crew member is relieved of all duty during his or her 30 minute meal period, it is considered a “on duty” meal period that is counted as hours worked and paid at the employee’s regular rate of pay. If the production fails to provide an employee a meal period, the company must pay one additional hour of pay at the employee’s regular rate of pay for each workday that a meal period is not provided.

Layoffs
Many states and unions have regulations regarding final payments to employees who are laid-off. In many cases a check must be issued within 24 hours after the lay-off, excluding Saturdays and Sundays. California law states that if an employee is fired, the final check must be given immediately. If the employee quits, the check must be available within 72 hours, or immediately if 72 hours notice was given. On the final timecard for an employee the production should write “Finished” or “COA” (completion of assignment) and get it to the payroll company as soon as possible. If an employee is fired for cause and the production wishes to fight unemployment for the fired employee, they should write “fired” on the timecard and attach a full explanation.

Disposable Pay vs. Net Pay
Under the CCPA (Consumer Credit Protection Act) earnings, for the purpose of defining disposable pay include salaries, commissions, bonuses or other compensation. They also include payments to a retirement and pension program. Disposable pay is not net pay. Net pay is the result of subtracting all deductions from gross pay. Disposable pay is derived by deducting from gross pay all deductions required by law, including federal and state taxes. Not included is deductions for health insurance, retirement plans, credit unions, bonds, other wage attachments and voluntary deductions. The computation for disposable pay varies from state to state. Where state and federal differ, employees are protected by whichever law is the most protective of the employee.

Non-Taxed Income
This includes any income that is voluntarily withheld to pay for an employee’s medical or dental premiums, or any contributions to a “cafeteria” type medical plan. It can also include contributions to a retirement plan such as a 401(k). Media Services offers health plan options to clients who process their in-house staff payroll with us. We will also withhold contributions for a retirement plan, if the production company or studio provides one.

Deductions from Pay: Voluntary vs. Involuntary
There are two kinds of employee payroll deductions: voluntary and involuntary. Voluntary deductions include those mentioned above, such as health plan premiums and 401(k) deductions. Involuntary deductions include all garnishments, such as tax levies, marital and child support, attachments and creditor collections. While income tax may be an involuntary deduction, the employee to some extent determines the rate at which taxes are deducted each paycheck, via withholdings on his or her W-4.

Form I-9 for Entertainment Companies
Form I-9 helps production company employers to verify individuals who are authorized to work in the United States. Every employee hired after November 6, 1986 must fill out an I-9. On March 1, 2003 the former Immigration and Naturalization Services (INS) were transferred to three new agencies in the U.S. Department of Homeland Security (DHS): U.S. Citizenship and Immigration Services (USCIS), U.S. Customs and Border Protection (CBP), and U.S. Immigration and Customs Enforcement (ICE). Every Form I-9 must be fully completed within 3 business days of the first day of work.

Section 1 – Every employee needs to complete section 1 when he or she begins to work by filling in the correct information and signing and dating the form.
Section 2 – The entertainment industry employee must present to the production company employer an original document or documents that establish identity and employment authorization within 3 business days of the date employment starts. List A documents establish both identity and employment authorization. List B documents establish identity only. List C documents establish employment authorization only. The employee can choose which documents he or she wants to present from the Lists of Acceptable Documents.

After documents have been presented and examined by the employer, the date employment begins is entered and then signed and dated. Many of Media Services' entertainment payroll clients utilize the TiM (Time is Money) digital onboarding service to streamline the process of crew start paperwork. TiM has a definitive explanation of the I-9 for production crews here.

Form W-4
The Form W-4 is designed to tell the employer how many withholding allowances the production employee is claiming, this number will determine the amount to withhold from the employee’s wages for federal and state income tax. The form may also indicate that the employee wants an additional dollar amount withheld beyond the amount based on the withholding allowances claimed.

Employees cannot indicate on their W-4 that they wish to have a flat dollar amount of tax or a percentage of earnings withheld rather than an amount based on the number of withholdings allowances that can be claimed.

Employers must keep all employees’ W-4 forms for at least four years after the last return was filed using the information on the W-4.

Verifying Social Security Numbers
The request to see an employee’s Social Security card is only for tax withholding and reporting purposes, not to substantiate the employee’s right to work in the United States.

E-Verify is an Internet-based system that compares information from an employee’s Form I-9, to data from the U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility. You will be notified if the name and Social Security Number do not match.

The following are some examples of invalid social security numbers:

- SSNs having 000 or 666 as the first 3 digits
- SSNs greater than 773 as the first 3 digits
- SSNs having 00 as the fourth and fifth digits
- SSNs having 0000 as the sixth through ninth digits

Start Card
A start card must be filled out for every new employee per show. For longer-form entertainment, the start card is show-specific rather than production company-specific. One of the reasons entertainment payroll companies like Media Services require the form is that we are obligated to inform various state governments of any new hires within two weeks. A new start card should be filled out for any changes during the production: address change, rate change, department change, account code, union change, job classification or work state.

Foreign Documentation
All documents must be valid and not expired. The following verify employment authorization and identity:

- U.S. Passport or passport card.
- Permanent Resident Card or Alien Registration Receipt Card (Form I-551).
-Foreign passport that contains a temporary I-551 stamp or temporary I-551 printed notation on a machine-readable immigrant visa (MRIV).
- Employment Authorization Document Card that contains a photograph (Form I-766).
- In the case of a nonimmigrant alien authorized to work for a specific employer, a foreign passport with Form I-94 or Form I-94A bearing the same name as the passport, and the period of endorsement has not expired and has no restrictions or limitations identified on the form.
- Passport from the Federated States of Micronesia (FSM) or the Republic of the Marshall Islands (RMI) with Form I-94 or Form I-94A indicating nonimmigrant admission under the Compact of Free Association between the United States and the FSM or RMI.

Employment Verification Letters for Entertainment
These letters are usually prepared for someone who is trying to get into the union. These employees usually worked on a non-union production. This type of letter is addressed to one employee, gives the name of the production, the number of days worked during a specific time period, and the classification/occupation worked.

Contract Services Letters
These letters are issued for two reasons: The entertainment employee is working on a permit and needs 30 days to become rostered, OR the employee is already rostered and has completed the required number of days and or hours to be upgraded to another classification within their local.

Right-to-Work Laws for Union and Non-Union Film Crews
Generally a “Right to Work “ law does not allow a union to require membership as a condition of employment, but there are exceptions. Because of this, there are no rules that can be consistently applied to all productions. When a production company is shooting in a “Right to Work” state we suggest that you speak to our Business Affairs Department to ensure that you are aware of all the rules that apply to that jurisdiction. It is important to be aware that when a production company signs a union agreement, even in a “Right to Work” state, they are bound by the terms and conditions of that agreement for all crew or cast employees covered by that agreement, even if they are not members of the union.

The following is a list of “Right to Work” states productions should be aware of: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia.

State Tax Reciprocal Agreements
Almost all states that have an income tax require that the tax be paid on all income earned in that state, including income earned by non-resident film crews. Resident film crew workers can usually take a credit on their return for their state of residence for taxes paid to other states. Many states have entered into reciprocal agreements. If two states have a reciprocal agreement and a crew member lives in one of those states and works in the other, the individual will only be subject to the tax in the state they live. Almost all states that have reciprocal agreements have a form that an employee can complete that would make his or hers income exempt from withholding of the income tax for the state where the employee works.

Work State/ Resident State
Most states demand that a State Income Tax be withheld whenever a person is performing work in that state, even if the film crew member's permanent residence is in another state. If this happens, the crew member will be paying the higher of the two state taxes. For example, if a production crew employee lives in California but works in North Carolina, and the California state tax is higher than the North Carolina state tax, North Carolina taxes are withheld in full and California taxes are withheld for the difference between the North Carolina tax and what would have been the total California tax.

Employer Taxes
FICA
Under the Federal Insurance Contributions Act (FICA), workers are required to contribute to the cost of Social Security/Disability (OASDI) and Medicare hospital insurance (HI). FICA refers to the combined cost of coverage for old age and survivors insurance, disability insurance and Medicare hospital insurance. United States employers are required to make contributions for FICA equal to the amount withheld from the employee. The rates are standard for all employers set each year by the Social Security Administration. Generally it is the production company employer's responsibility to pay the crew member's portion of FICA if it fails to collect the employee’s share of tax. Old age, survivor & Disability – 6.2%, with a ceiling that changes each year - $137,700 for 2020. Medicare Hospital Insurance – 1.45%, no ceiling. FUTA Federal Unemployment Tax Act (FUTA) the production company, not the crew employee, is liable for this tax. Provides for payments of unemployment compensation to film crew workers who have lost their jobs. The FUTA tax has a ceiling: it is only charged on the first $7,000 of a crew employee's wages in a given year. SUTA State Unemployment Tax Act (SUTA) rates are set by each state on an annual basis, each with its own wage base ceiling. It is based on actual unemployment claim experience in each state. SUTA is paid by the production employer and is added to a fund that can be used by a worker in the event he or she is becomes unemployed.

Recordkeeping
The basic Federal payroll recordkeeping requirements are contained in regulations issued by the Wage and Hour Division of the Department of Labor under the FLSA. Records that must be kept for each employee for at least three years after their last date of entry include:

- Name, as it appears on the employee’s social security card;
- Home address, including ZIP code;
- Date of birth;
- Sex and occupation (for use in determining Equal Pay Act compliance);
- Regular rate of pay for overtime weeks, the basis for determining the rate, and any payments excluded from the regular rate;
- Hours worked each workday and workweek;
- Straight-time earnings;
- Overtime premium earnings;
- Additions to and deductions from wages for each pay period (e.g. bonuses, withheld taxes, benefits contributions, garnishments);
- Total wages paid for each pay period;
- Date of payment and the pay period covered;
- Collective bargaining agreements;
- Certificates authorizing the employment of minors.

Unclaimed Checks – What You Need To Know
Wages not claimed by crew and cast employees (uncashed paychecks) must eventually be turned over to state treasuries under each state’s abandoned property (escheat) laws. In California, the time period determining when such unclaimed wages are considered abandoned is one year. When wages are abandoned, production employers must make a report to the state and remit the abandoned amounts. Employers also generally keep a record of the employee’s name and last known address for a specific period of time after the wages become reportable. In California, the time period is seven years.

Minors
Under the California Labor Code, “minor” means any person under the age of 18 years who is required to attend school under the provisions of the Education Code, and includes minors under the age of six. All minors under 18 years of age employed in the state of California must have a permit to work. The federal Fair Labor Standards Act (FLSA) also requires a certificate of age for working minors. The state Permit to Employ and Work is accepted as the federal certificate of age. The minor’s school issues Permits to Employ and Work. All employers must have a Permit to Employ and Work on file and available for inspection by school and labor officials at all times.

Coogan Law
The Coogan Law went into effect on January 1, 2000. It was designed to protect the earnings of child actors, musicians, and sport figures. It covers 100% of all minor contracts. It makes the earnings the separate property of the child, rather than community property of the parents. It establishes the rate of 15% of gross earnings to be set aside for the minor. The 15% is the minimum amount, the trustee may elect to contribute more. Within 7 business days after the child’s contract has been signed by the minor and production company employer, the trustees are required to establish a trust account at a bank, savings and loan, credit union or other company registered under the Investment Company Act of 1940, unless a similar trust has been previously established. Within 10 days after the minor has signed the contract, the trustee needs to prepare a written statement that includes the name and number of the account, the name of the minor beneficiary, the name of the trustees of the account and other information needed by the minor’s employer to make the required deposit.

Considering entertainment payroll services for your crew and cast members, with no deposits or setup fees? Get pricing here.