Los Angeles Acting blog by David August: More Employees Fewer Contractors

Monday, May 14, 2018

More Employees Fewer Contractors

A lot of people have been considered contractors instead of employees on sets and stages (and shops and offices too), and now that is changing, maybe. This could impact non-union acting, many crew positions in production and post, live promo work and even rideshare driving. The line between employee and contractor has moved:

In order to make the line clearer, the California Supreme Court just adopted a very expansive definition of employee in a recent case, Dynamex Operations West, Inc. v. Superior Court. Under this new test, a worker is considered to be an independent contractor only if all three of the following factors are present:

(A) The worker must be free from the control and direction of the payor in connection with the performance of the work, both under the contract and in fact;

(B) The worker must perform work that is outside the usual course of the payor's business; and

(C) The worker must be customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed by the worker for the payor.

Applying this test, the court held that truck drivers were employees of the company they worked for. This new test casts a wide net that will result in many "independent contractors" in the entertainment industry being reclassified as employees. In particular, the second factor listed above could be used to argue that almost everyone in the entertainment industry is an employee.

(from Dynamex: A New Test for Employee Status, emphasis in original; thanks to James McMann for putting me onto the article). The fallout remains to be seen fully, but may be transforming how employment is across the industry. It could mean more workers compensation coverage (good in case someone gets hurt), and the rights of an employee to get paid in full and on time (the law tends to make it harder not to pay an employee than it does to not pay a contractor).

If you're an actor-producer, it has always made sense to use a payroll company to handle paying your cast and crew. Now it may make more sense than ever. I can get into why in another post perhaps.

I am optimistic this could be a good thing, for everyone, even for employers. Employers sometimes forget that treating people well is the easiest way to significantly, immediately and fundamentally improve the work itself, while it also avoids expensive things like fines, back taxes and jail time too. Yes, misclassifying employees as independent contractors can actually land an employer in jail.