Loan Out Corporations Could End, IASTE Tells Members
deadline.comEXCLUSIVE: The California Employment Development Department may soon stop recognizing loan out corporations.
Several IATSE locals informed their members Friday night that they’d received notice from payroll service Cast & Crew that, following an audit of the company, the EDD will instead require employers to pay for services directly to contracted employees. “This would fundamentally change the way that… workers conduct business in the entertainment industry,” a memo sent to some IATSE locals read.
So far, there does not appear to be any regulation change or modification of the law. According to the memo, the EDD will send notice to all impacted loan out corporation owners to audit the unemployment insurance and other taxes on the compensation that Cast & Crew paid to the loan out entities.
Loan out corporations will have the opportunity to appeal any proposed fines or additional amounts the EDD requests. In a statement to Deadline, an IATSE spokesperson said: “We are aware of an EDD audit at Cast & Crew and are looking into it.” It’s unclear how widespread the EDD’s edict will be and whether it would also apply to Entertainment Partners, which provides a majority of payroll services for productions in California nowadays.
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