Model Payment Question

Wow.

Thanks so much for providing this information.

Did you get any read on

-- A California entity (LLC/Corp) shooting content outside of California, such that the models never set foot in California... would those still be employees?

-- A California entity contracting with either a temp agency, a PEO, or a non-California (maybe Delaware or Nevada) corporation/entity that provides the models to the California entity, such that the California entity pays the Delaware corporation for the model's services

These would be my first thoughts on a legitimate strategy on how this issue could be resolved. Of course, I'm no attorney and all that, and I'm sure that you've explored every possible avenue... but never hurts to ask.

hdkbill - thanks for the link and the info. sure is bullshit, huh? but what if you go through an agency for your models? then they tell them when to appear. my daughter used to work through agencies for banks and had no control - she was basically an employee but was paid as a contractor with no benefits. they supplied her equipment, etc, and this is pretty standard in california for long-term and short-term temps.

just thinking... as far as cameras, they are not equipment the models use - they are equipment the photographer uses. the model brings his own warddrobe - that is his equipment. also he may bring a comb etc.

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Originally Posted by boyfunk

Wow.

Thanks so much for providing this information.

Did you get any read on

-- A California entity (LLC/Corp) shooting content outside of California, such that the models never set foot in California... would those still be employees?

-- A California entity contracting with either a temp agency, a PEO, or a non-California (maybe Delaware or Nevada) corporation/entity that provides the models to the California entity, such that the California entity pays the Delaware corporation for the model's services

These would be my first thoughts on a legitimate strategy on how this issue could be resolved. Of course, I'm no attorney and all that, and I'm sure that you've explored every possible avenue... but never hurts to ask.

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Hey Boyfunk,

I'm no attorney so take what I say with a grain of salt, but I have posed those same questions to our attorney.

A California company, regardless of LLC or Inc, would not have to worry about the California EDD if the filming takes place outside of California UNLESS, both the model is a resident of California and the Company is incorporated in California and the EDD could prove that the company is doing this on a regular basis JUST to avoid paying the taxes. Frankly, I would think this would be very difficult for California to prove.

If a California company contract with a modeling agency for the model, and then pays the modeling agency, the California company is home free and clear. It would then be the modeling agencies responsibility to pay all applicable taxes. The key here is that you pay only the modeling agency. That is no different than hiring a licensed plumber to come in and fix your crapper. You pay the plumbing company. The plumbing company is responsible to pay the plumber his wages and pay applicable taxes.

We are no longer a California company. We are now a Nevada corporation. Even so, if we shoot here in California then we would be responsible for pay taxes for the model if we paid him directly. If we were doing this on a regular basis, even though we didn't have a physical location in California, California could attempt to make the argument that we should have incorporated as a foreign corporation, paid those fees, and then hired the models as employees and pay all applicable taxes.

From what several labor attorneys have told me, California is the most aggresive state in going after companies they think are operating in such a way as to avoid paying California taxes.

Hope this answers your questions.

Bill

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Originally Posted by basschick

hdkbill - thanks for the link and the info. sure is bullshit, huh? but what if you go through an agency for your models? then they tell them when to appear. my daughter used to work through agencies for banks and had no control - she was basically an employee but was paid as a contractor with no benefits. they supplied her equipment, etc, and this is pretty standard in california for long-term and short-term temps.

just thinking... as far as cameras, they are not equipment the models use - they are equipment the photographer uses. the model brings his own warddrobe - that is his equipment. also he may bring a comb etc.

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Basschick,

Yep, it's bullshit for sure. California is doing this for two reasons. First, we become the tax collector and they are assured of collecting what they think they have due. Seems that most models, even though you provide them with a 1099 and report it appropriately, don't pay the taxes that are due.

I really believe that second reason is to try to make it much harder on adult companies to operate in California, and maybe even shut them down, without the hassles of trying to prove obscenity. Much easier for Cal-OSHA to just start levying fines for violation of the blood-borne pathogen part of of the OSHA regulations.

Hiring models through an agency is the best way to go. Pay the agency directly and then let them worry about the tax collection. The problem for us is that doing our type of films and photos, we really can't go through an agency.

Cheers,

Bill

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Originally Posted by basschick

are you shooting in california? if so, have you run into the problem hdkbill has run into?

and does anyone have a link to the regs about models having to be paid as employees? i searched around the california edd site but haven't found it yet.

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As producers, we do what we have been told to do by our accountants and the EDD and, we do what all companies we ever worked for (as models) do...with one exception, Titan.

When we were hired as models by Titan, they were the only company we ever worked for as models that withheld taxes. All other companies did not make withholdings and sent us 1099 forms.

If we are operating with misguided information as producers, then so are All Worlds, Bachus, Pleasure Productions, SX, Talos Entertainment, Pacific Sun, MSR, Chi Chi LaRue's Live and Raw (to name a few) and, every other web company and film company we have worked for as models over the past 6-7 years.

I do know from experience, that what the EDD, IRS or any other agency tells you "on the phone" will not hold up in court. It is always advisable to get important information, guidance, tips, etc. in writing when dealing with these agencies...

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Originally Posted by A_DeAngelo

As producers, we do what we have been told to do by our accountants and the EDD and, we do what all companies we ever worked for (as models) do...with one exception, Titan.

When we were hired as models by Titan, they were the only company we ever worked for as models that withheld taxes. All other companies did not make withholdings and sent us 1099 forms.

If we are operating with misguided information as producers, then so are All Worlds, Bachus, Pleasure Productions, SX, Talos Entertainment, Pacific Sun, MSR, Chi Chi LaRue's Live and Raw (to name a few) and, every other web company and film company we have worked for as models over the past 6-7 years.

I do know from experience, that what the EDD, IRS or any other agency tells you "on the phone" will not hold up in court. It is always advisable to get important information, guidance, tips, etc. in writing when dealing with these agencies...

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We were also doing exactly what our attorney and accountant told us to do. During the hearing we had with the EDD we were told that most attorneys and accountants, unless they specialize in labor law, do not understand these regulations.

Their is no doubt that many of the studios you mentioned are still hiring models as independent contractors. And, I hope I'm wrong, but if they get audited, that may change for them. I believe that Falcon was audited a few years back and they now pay their models as employees.

In my original post I only relayed the history of what has occured with us. Wasn't posted to create argument, just to let everyone know what is happening on this front.

The attorney we are using to fight this issue is a labor attorney who specializes in this type of thing and who does in fact represent a couple of the studios you mentioned. In fact, it was one of the companies you mentioned who referred us to him. He says we have very little hope of winning and he says that the other studios must decide for themselves what risks they are willing to take.

Bill