Paying Talent on Time: What Talent, Producers and Agents Need to Know

One of the most confusing situations that confronts both talent and producers is when should talent be paid. Some producers are almost religious when it comes to “same day pay” while others place talent on payroll and may not pay for up to a month. Often, talent will contact my office with complaints of either not being paid timely and in rare occasions, when producer’s checks actually do not clear and “bounce.” This article will cover what talent, producers and agents have to be aware of in regards to when is payment due to talent. In California, there are serious penalties for failure to timely pay talent for work performed

Special attention must be paid to the California Labor Code when discussing work related payments. According to the Labor Code section 207, employers must establish regular paydays and post notices of when such days are. For example, if your production company has office staff and or production staff that are paid on the 15th and 30th of each month, these days will be presumed to be your regular pay schedule. Even though performers may not be part of your usual payroll schedule the 15th and 30th may be deemed to be your required days for paying talent, if you do not pay talent the same day and instead pay talent through a payroll service. For example, if talent works for your production company on August 28th and your usual pay date is the 30th you may be required to pay talent on the same day as you pay the rest of your employees.

If you are a small producer and do not have a regular payroll schedule to pay other employees then you must look to California Labor Code section 204 as to when talent must be paid. For wages earned between the 1st and the 15th of the month you must pay talent for their work no later then the 26th day of the same month. If the wages are earned between the 16th and the 31st of the month, wages must be paid no later then 10th day of the following month. For instance if talent works for you on August 8, 2012 that talent must be paid no later then August 26, 2012. If the shoot occurred on August 30, 2012 then talent must be paid no later then September 10, 2012. However, “payroll” does not mean that a producer get two weeks to pay talent. It actually means that a producer utilizes a real payroll service and other employees are being paid on the same date and that the producer is paying payroll taxes on the talent’s earnings. Simply stated, a producer cannot pay talent two weeks late and simply write a check for the full amount of the scene without deducting and paying taxes.

This information may come as a surprise to some of those that are reading this article. What will be more shocking is what are the penalties imposed by not following these payment schedules or in case your check bounces even if you pay the same day.

Failure to timely pay wages is not a situation you want to find yourself in as a producer. The penalty for such is that the talent’s right to payment at their rate continues for up to 30 days. Allow me to rephrase that, a producer will be required to pay the talent everyday for up 30 days as a penalty. For example, if talent performed for you on August 30, 2012, wages would have to be paid by September 10, 2012. If you did not pay talent by that date, that talent would be entitled to a penalty of whatever their rate was for the shoot (for example $1000) for each day payment was made late. Under Labor Code section 203 and 203.1 (in case of a check that does not clear) if you did not pay talent until September 30th you can be hit with a $20,000.00 penalty by the California Labor Commissioner for paying 20 days late. The penalty is $1000.00 per day (or whatever the talent rate is for that shoot) for up to and including the 30th day. Obviously, this is an extreme and severe penalty but one is that is often imposed and maintained by the Labor Commissioner. Even if you agree to settle with talent for less then the full penalty you will have to agree to send all payments to the Labor Commissioner’s Office who in turn will send it to the performer. Meaning there is no getting out of the this situation.

Further, it should be noted that nothing in the Labor Code has anything to do with whether a model release was signed nor can the Labor Code be contravened through a written agreement with talent. Simply put a producer cannot add a clause to a model release agreement indicating that they have up to six months to pay wages. Lastly, in addition to what is awarded to talent by the Labor Commissioner for unpaid wages, penalties and interest, the attorney representing talent will also be entitled to attorney’s fees.

Special attention should be paid by agents to this situation as well. It is often practice and custom within the adult industry for the agents to ask producers to pay them directly and then in turn the agent pays the talent. By doing this, the agent may unwittingly make themselves the employer in this matter and be subject to the same penalties for failure to pay talent timely. In California, there is a general legal conclusion that employment follows wages, which means if you pay the wages you may deemed to be the employer. Or in the alternative, if you are a producer and you pay the agent instead of the talent directly you may be in violation of the Labor Code if the Labor Commissioner determines you should have paid talent directly and did not and the agent failed to pay talent timely.

In conclusion, the payment of wages to talent is still a relatively untested area of law in the adult industry that is rife with potential pitfalls for the unwary and uninformed producer and agent. It is strongly recommended that you review your wage payment policies with a lawyer that is well versed in employment law and the Labor Code.

UPDATE:

I wanted to also add in some relevant case law and a brief synopsis of such so anyone reading this can realize how it applies directly to the adult industry.

In Smith v. L’Oreal USA, Inc. (2006) 39 Cal. 4th 77, the California Supreme Court ruled directly on this issue. Ms. Amanda Smith worked for L’Oreal as a “hair model” at an upcoming L’Oreal hair show. L’Oreal agreed to pay her $500 for one day’s work at the show. Ms. Smith worked at the show, where her hair was colored and styled, and she then walked a runway a few times. Ms. Smith stayed at the show until she was told she could leave. L’Oreal did not immediately pay her the $ 500 in wages it owed her, but waited over two months to do so.

Ms. Smith filed a law suit against L’Oreal, alleging that she worked for one day, that her employment was terminated at the end of the day, that L’Oreal violated its obligation to pay earned wages promptly upon separation, and that it should pay her “waiting time” penalties under Labor Code Section 203.

The California Supreme Court agreed. The Court held that the discharge element of Section 201 can be satisfied either when an employee is involuntarily terminated from an ongoing employment relationship or when an employee is released after completing the specific job assignment or time duration for which the employee was hired. An employee who works on a job assignment of short duration is not excluded from the protective scope of Sections 201 and 203.

If a production company does not pay your talent at the end of the shoot this could result in huge penalties being assessed against that employer. This would also apply to any temporary employees, including but not limited to directors, camera people, lighting or production assistants.