By Payroll and Entitlements Editorial Staff
On September 5, California Governor Gavin Newsom signed legislation clarifying that motion picture production workers working in other states may still have access to California unemployment insurance, state disability insurance benefits, and paid family leave benefits, when they reside in California.
Under S.B. 271, service provided by a motion picture production worker is localized within a state when the worker is a resident of that state, the worker is hired and dispatched from that state, and the worker intends to return to that state upon conclusion of the assignment.
Introduced by Scott Weiner (D-Dist. 11) in February, the legislation garnered final approval on August 22. “SB271 will not only make compliance uniform for motion picture production employers, it will also make it easier for motion picture production employees to access unemployment insurance (UI), State Disability Insurance (SDI), and Paid Family Leave (PFL) benefits; benefits they often need in a time of stress,” according to a legislative analysis citing the bill’s author. “PFL/SDI benefits are based on wages from which SDI contributions are taken for work in California. When entertainment industry workers work in multiple states, but their employment is mistakenly attributed to a state other than California, the worker’s benefit could be as little as zero.”
Determining benefits. California offers both UI and SDI to workers considered to be working in the state. These programs are funded by employer payroll taxes and contributions taken out of a worker’s wages, which are recorded and used determine the level of benefits to which that worker has access.
Under S.B. 271, for those who work in multiple states, a legal test is applied to determine where the taxes and wage contributions should be paid. The test first looks to the state in which the services take place. If the work takes place in multiple states, the test considers where the entity in charge of directing the employee (“base of operations”) is located. If this base of operations is not in any state where the service is being performed, then the test looks to the state in which the worker resides.
The problem. Motion picture production companies can have a hard time establishing what entity constitutes a “base of operations”; that gives direction, the bill analysis explains. For example, there is the payroll services company that pays the worker’s wages, the production company for which the worker is providing the service, and numerous other potential affiliates that could be designated by a regulator as the base of operations. When there is a mistaken designation, unemployment taxes and SDI contributions can be sent to the wrong state.
The legislation addresses what can happen when only small portions of workers’ wages have been counted towards unemployment taxes and SDI contributions due to their work being located out of state. When this happens, workers may not be able to access the unemployment benefits, disability insurance, or paid family leave that has been paid for by the workers and their employers. Unfortunately, it is hard to detect the mistake until access to benefits is denied or the worker receives far less in benefits than he or she is owed.
The solution. To resolve these issues, S.B. 271 clarifies that in the event that a base of operations cannot be established or is not in any state where the contracted service is being provided, unemployment taxes paid on a motion picture production worker’s wages and SDI contributions from that worker’s wages should be paid to the state where the worker resides. It also clarifies that the contributions should reflect the motion picture production worker’s entire service, even if that service was performed in another state (A.B. 271, signed 9/5/2019).
Interested in submitting an article?
Submit your information to us today!Learn More