Help: Do Actors need worker compensation?

[Koikaka]

Hi all
I'm preparing my first feature with a sub-zero budget (well yes, meaning that there is not one dollar left after buying and renting gears). I'm new in America and a bit a lost with the rules in NYC. I need your help!

I tried hard to do things right so I created a LLC and got nice contracts with deferred pay agreement drafted by and entertainment layer for my cast and crew. I have all my crew and cast ready (we're presumed to shoot in 2 weeks) and I was about to send them their contracts when I read that as a production company I should give to each 'worker's compensation' and get them on payroll (only the word scare me ). Presumably I have to do that also with the crew. Is that true???

If I really need to go as far as payroll and co I might have to cancel the whole project.

I've read that some of you are just shooting no matter what without LLC, contracts or else is that legal?

My actors and crew are ready to be in the prod for free so the deferred pay is not a lie or a carrot (as I saw it written in some post) it's a plan saying what will happen IF the money comes one day.

So should I go with the contracts and without he worker compensation or burn the whole thing and go full guerilla way?

PLEASE PLEASE HELP ME.

 

[Zensteve]

is that legal?

For legal advice you should consult a qualified attorney. All you'll get here are opinions.

...and in my opinion, you should be fine if you have agreements with all the cast & crew spelling out what they are being paid... ie: the deferred pay.

Why did your entertainment attorney not take care of this?

 

[directorik]

I'll repeat what zensteve said, you need a lawyer to answer this legal question.
In my opinion, you don't need to put cast an crew on payroll. However, since
you have contracts with a deferred pay agreement drafted by and entertainment
lawyer then that lawyer would be the person to ask.

For clarity: "deferred" pay is a legal term meaning the cast and crew will be paid;
just paid later. This is different than working on a points basis which means cast
and crew will only see a percentage of the movies profits - if any.

Since this project is a legal "deferred pay" production there are different rules from
a "percentage" agreement. To do things completely legal your company is required
to have some insurance and in many states Workers Comp is something you need
to carry. Many producers don't carry it at all. You are not going to get sued or your
production shut down but you will be held legally liable if anyone is hurt. Location
owners will be liable if anyone is hurt.

PLEASE PLEASE HELP ME.

Please contact a lawyer in New York before you shoot.

 

[slapshot]

You don't need a payroll service because you are not paying anyone at this time. I imagine you have production insurance because you can't get a shooting permit in NYC without that. Standard production insurance in NYC covers injuries and such, should they occur, at whatever location.

Regarding the contracts, talk to your lawyer, and ask him to rewrite them if necessary. The important thing to tell your lawyer is that you don't want ANY of the people working on the film to be considered "EMPLOYEES" in the eyes of New York State. If someone has to show up at a certain time and at a certain place for pay that is promised in the future, then that person MIGHT actually qualify as an employee. New York State is brutal in that regard. Again, that is one for your lawyer. Please delay your production if need be to get this straight.

 

[Blade_Jones]

As a corporation it may be that you are expected to do things the right way and add workers comp to the insurance policy for shoots as part of "corporate formalities". Do it the wrong way and it may expose yourself to being sued personally (if you have money to sue for). Ask this one in a legal forum and you'll probably get the answer. Personally I would have skipped shelling out money to be incorporated and just added workers comp to the shoot insurance.

 

[Koikaka]

Some precisions

First of all thank you! I feel a bit less lonely here. You have to understand that coming from France where one watch tons of Americans flicks where everybody is getting sued you become paranoid.

I want to answer everybody and I have some pieces of information that could help some.

To answer Guru: Thanks a lot, I realized that I made a mistake and in fact what I propose to actors is not a deferred pay but working on a points basis. Now you say that a lot of production company don't use worker compensation but when I looked closely at the child actor release (yes there is a child there, I guess I'm going to learn a lot with this prod) they do ask for worker comp to be attached. And when I read NYC law about who can be qualified as an employee it's pretty much everybody who do something for someone else.
Hence my questions: If an actor or a crew member agree to work for free is it legal?
Again pardon me being candid but it's seem to me that doing something for free is pretty much impossible in this country.

to answer Slapshot: you said " I imagine you have production insurance because you can't get a shooting permit in NYC without that". This is not true in NYC city. Since the last Bloomberg law you don't need an insurance to shoot as long as you use portable gear (tripod is ok) and don't block more than half of a sidewalk. There are some exception like Battery Park or Governor Island that are considered as Private properties.
But you are very right about the definition of 'employee' and the state (comp worker) being brutal about that. So I'm back to my first question how to have someone not being considered an employee. I've read in the past posts that someone was thinking about giving each actors and crew member a share of its LLC, basically make them partners instead of employee but I'm not sure if that works. Anybody doing that?

to answer Blade Jones: You write 'as a corporation' but don't you think it's much worse as an individual if you get sued? Or are you telling me that I could do this movie without legal worries as an individual. Basically gather a bunch of friends who are ok to do actors and crew for free, the way students do? It's what I want to do so why is that not possible when you're not student?

For those who want to create an LLC in NYC it's less expensive than what people tell you if you do it yourself (and it's really easy as it's all on the net). So basically it's $200 to register online with the state and then you can use the service of a registered agent in Albany (I paid mine $125) which locate your LLC there which makes you pay only $80 for the publication fee. You get an LLC for $405 which is ok.

Last but not least: Could anybody give me the contact info of 1) the cheapest possible insurance company 2) the cheapest possible worker comp?

Thank you! Thank you! Thank you! AND Merci!

 

[Koikaka]

What worker compensation?

I keep reading complex things in law text.
- Did any producer got a worker compensation for its cast?
- How much does it cost?
- Who did you use?

- Do you need it also for the crew? (someone wrote that the Crew is NOT considered as contractor under NYC labor laws)
- If you were an LLC did you had to ask for a FEIN?

Still at lost...

 

[directorik]

Again pardon me being candid but it's seem to me that doing something for free is pretty much impossible in this country.

Be as candid as you want here. We’re all candid.

This is both true and not true. People are very willing to work
for free in this country. However, not everyone is willing. Finding
good, qualified, enthusiastic people willing to work for free is
very, very difficult. But they are out there. Usually the people
willing to work for free are people with beginning skills - they
need the experience. But even people with skills will work for free.
You say you have already found people, right?

I'm back to my first question how to have someone not being considered an employee. I've read in the past posts that someone was thinking about giving each actors and crew member a share of its LLC, basically make them partners instead of employee but I'm not sure if that works. Anybody doing that?

This can be done. But you will need a lawyer to draw up the
partnership agreement with each person. And that means more
than just offering a share in the LLC - each person must be a
partner, not just a share holder. Another method used is to use
independent contractors. This, too, can create legal issues because
the legal use of independent contractors isn't very clear.

If an actor or a crew member agree to work for free is it legal?

What most of us do is simply ask people to volunteer. No pay, no
shares, just volunteers willing to help out for a few days. Yes, it's legal.

Could anybody give me the contact info of 1) the cheapest possible insurance company 2) the cheapest possible worker comp?

Insurance is essential. I use Film Emporium. Workers comp isn’t
cheap and I often required even for volunteers. I have produced
projects without it and with it.

 

[moonshieldmedia]

My advice would be to keep legal out of it as much as possible. If you are good to your actors and crew, and you keep a safe enjoyable work environment on set, and the film you make is good and not a complete waste of everybody's time, you'll find that people will do their jobs because it's what they want to do, and they won't be looking to sue for money.

Just make sure you get everyone to sign the appropriate release form so you can actually use the footage you shot with them. If you want to be extra careful, get release forms for all borrowed or paid for locations, as well as any artwork that appears in your film.

Other than that, if there is an issue with any crew members, feed them lunch and then replace them, no hard feelings.

In NY you'll be able to get away with stealing lots of public locations if you keep your crew small enough, so go guerrilla if it works for the style of your film.

Once you've been in America for several years, you'll be able to see what kind of laws you can and can't get away with breaking when it comes to filmmaking. Almost every indie film breaks laws in one way or another. Basically, all you need to know is this:

It is completely legal for you to film actors for free on private property with permission from that property owner. You can even film one or 2 actors on public streets (for example, nobody is going to hassle a dad filming his family on vacation as they sight see). Where you're going to start getting into trouble is adding crew members where it becomes a full on production. At this point, you can still get away with a lot of public locations, but sooner or later a police officer will show up and ask to see your permit, and since you don't have one, you'll be asked to leave. You won't go to jail, you won't get sued.

When it comes down to it, the amount of permits, insurance, contracts, legal stuff you need involved in your film depends on the scale of the film, which is up to you to decide.

My opinion is: Keep your film small and save the lawyers and LLCs until later when you're looking for distribution.

 

[slapshot]

Moonshieldmedia gives good advice. Best to keep as much "legal" out as possible at this point.

In theory every BUSINESS in NYS that is for-profit must cover employees and volunteers with Workers Comp:

http://voices.yahoo.com/when-business-required-workers-compensation-9225281.html

But do you need to be a business? I assumed you formed an LLC to get permits and insurance. But I did not know that insurance/permits are no longer necessary if you have portable gear. So why even bother with contracts and associating the LLC with the film?

Why can't it just be a bunch of people getting together to make a zero-budget film? If you have already lined-up crew to the project for deferred pay, they must believe in you and/or be looking for experience rather than big bucks.

The way indie filmmakers usually get attacked by NY Workers Comp is that they pay crew as if they are independent contractors, rather than pay them via payroll service. Then, a crewmember who knows how to take advantage of the "system" files for Unemployment Benefits...and that starts a whole chain of events, because crewmembers qualify as employees in the eyes of NYS. Most indie filmmakers in NYC don't know that.

Since you are not paying anyone, no one in your crew can file for Unemployment Benefits. The worst that can happen is that someone gets injured on your shoot and let's hope that doesn't happen.

Just to answer your other questions, Workers Comp in NYS can only be obtained through the New York State Insurance Fund. It will cost around $600.00 per person that you have to cover. The insurance I used on last feature was D.R Reiff & Associates. If you don't have stunts/guns it can be in the $500.00 range if you do have stunts/guns it starts at like 5K.

 

[Koikaka]

Then how to deal with Child performer permit?

Thank you Slapshot,

what you said totally make sens and I will follow your advice (even though it will be hard now that I told everybody that they will have contracts but we'll see).

In fact it all start because I need a child performer permit. The form for that looks simple (you just have to pay -again !- $350) but then they ask your FEIN (the LLC number as an employer) or if you don't have one they ask why. And they ask for the worker comp form and the insurance form.

So you see they immediately associate you as an employer. I would follow your advice 100% but I'm not sure what to do for the child permit.

Any advises?

I ask a lot I know but you're so helpful I have to take advantage of your knowledge

 

[slapshot]

Who is asking you for a child performer permit? As far as I know, the only agency that could do that is SAG, but you are not signed with SAG are you? If you did sign up with SAG for Experimental contract it doesn't mean you have to use a SAG child actor. If you need a kid just put a casting notice in Backstage asking for a non-SAG kid. You will be bombarded with replies. If you are not signed with SAG who is asking you for a permit?

 

[Koikaka]

Who is asking you for a child performer permit? As far as I know, the only agency that could do that is SAG, but you are not signed with SAG are you? If you did sign up with SAG for Experimental contract it doesn't mean you have to use a SAG child actor. If you need a kid just put a casting notice in Backstage asking for a non-SAG kid. You will be bombarded with replies. If you are not signed with SAG who is asking you for a permit?

Slapshot are you serious?

I wrote to the child labor department and told them I'm a mother doing a film with my own child in my garage and there is no money involved, they answered: you do need a child permit ($350) + worker comp + you have to create a company.

Ok I'm not doing a film with my own kid in my garage and the child performer cast is non-union.
BUT I don't think it's question of union or non-union, I think it's question of child labor laws in NYC.

Any other clues or advices?

 

[Zensteve]

told them I'm a mother doing a film with my own child in my garage
(...)
Ok I'm not doing a film with my own kid in my garage

Well, you're obviously trying to find answers that you find satisfactory to your situation, as opposed to answers that are "by the book"... but how does it help if you set up situations which aren't even true when enquiring with gov agencies?

 

[Koikaka]

Well, you're obviously trying to find answers that you find satisfactory to your situation, as opposed to answers that are "by the book"... but how does it help if you set up situations which aren't even true when enquiring with gov agencies?

I said the truth to the gov agency. I was just wondering if anybody in this forum already made a movie without going through the whole thing of setting up an LLC and becoming an employer just so you can get a child performer authorization.
I don't try to find satisfactory answers (and I got none in this forum, maybe I should become premier member for that). It's just that it seems all or nothing: either you become an employer or you do things illegally, it's a bit harsh as a choice. I'm not willing to do either so I guess that means no movie at all which is also a pity as I have a great cast and crew and everything to do it but the paper work. I guess I should just find a producer and let him deal with that.

Zensteve I apologize if I'm taking to much space in the forum or ask too candid questions or anything like that, again I'm discovering both America and your laws and it's not easy for me to understand what one can or can't do here. Imagine one minute doing a movie in Germany or Spain, you'll certainly be happy to ask questions on forums.

Thank you to all who answered.

 

[directorik]

I guess I should just find a producer and let him deal with that.

An excellent idea.

When I make a movie out of the state (or out of the country) I always
find a local person to handle all the paperwork.

When you said...

I wrote to the child labor department and told them I'm a mother doing a film with my own child in my garage and there is no money involved, they answered: you do need a child permit ($350) + worker comp + you have to create a company.

...that wasn't true. I believe that's what zensteve was talking about. Seems
to me that writing to the child labor department with a story that isn't true
isn't the best thing to do. Or really help you with answers.

I have made four films with child actors - non union, unpaid. Never had to get
a child permit or workers comp. I simply made an agreement (in writing) with
the parents and had one of them on set when the child was there.

 

[Morris]

While certain general rules apply, every state has the ability to write its own laws on items like workers compensation as long as the laws do not conflict with federal guidelines.

 

[Blade_Jones]

to answer Blade Jones: You write 'as a corporation' but don't you think it's much worse as an individual if you get sued? Or are you telling me that I could do this movie without legal worries as an individual. Basically gather a bunch of friends who are ok to do actors and crew for free, the way students do? It's what I want to do so why is that not possible when you're not student?

I know of people who have been sued as individuals, but since they are broke they haven't paid a dime. Just look at OJ. He's a prime example.

By the same token, you could incorporate, fail to follow proper corporate formalities, which might include pulling worker's comp insurance, and then get sued individually. I don't know how the law works for this specific situation, but I know there's certain things that a corporation is required to do.