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The Hobbit Law


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#1 Richard Boddington

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Posted 30 October 2010 - 04:08 PM

I wonder if this idea will now spread around the globe?

"And on Friday, it amended labour laws in which film industry workers are deemed independent contractors rather than employees."

http://www.cbc.ca/ar...-nz-labour.html

Will more films head to NZ as a result of this, or will other jurisdictions follow suit?

R,
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#2 David Mullen ASC

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Posted 30 October 2010 - 07:07 PM

I wonder if this idea will now spread around the globe?

"And on Friday, it amended labour laws in which film industry workers are deemed independent contractors rather than employees."

http://www.cbc.ca/ar...-nz-labour.html

Will more films head to NZ as a result of this, or will other jurisdictions follow suit?

R,


It's odd because there was a move several years ago to move film workers away from independent contractor status to employee status here in the U.S., mainly for tax reasons - I think the IRS felt that too many people were finding ways around paying their full share of taxes through their independent contractor status. The studios here are also loathe to allow people to claim independent contractor status as well, prefer the simplicity of the employee status for payroll reasons, so it seems odd that it would be preferable in New Zealand.
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#3 Brian Dzyak

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Posted 30 October 2010 - 07:24 PM

The vast majority of my own work is done under the "independent contractor" category (invoices and 1099s). Only if I am asked to work under a contract* am I placed on payroll for a production company and only then am I considered an "employee."


*currently, IATSE has an EPK contract that specifically is only for Eastern and Central regions while excluding the Western Region. Why? I have no idea. No one will answer that question.
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#4 Stuart Brereton

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Posted 30 October 2010 - 07:35 PM

It's odd because there was a move several years ago to move film workers away from independent contractor status to employee status here in the U.S., mainly for tax reasons - I think the IRS felt that too many people were finding ways around paying their full share of taxes through their independent contractor status. The studios here are also loathe to allow people to claim independent contractor status as well, prefer the simplicity of the employee status for payroll reasons, so it seems odd that it would be preferable in New Zealand.


Perhaps the long-term nature of this shoot would have left the studio open to having to pay things like holiday & maternity pay, or pension contributions. In the UK, there are some long running shows that will not allow freelance staff to work more than 9 months out of 12, because they acquire employee rights after that time.
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#5 Richard Boddington

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Posted 30 October 2010 - 08:13 PM

That was my question as well David, I had to make all of the crew on The Dogfather, "employees." Which meant paying the payroll tax and workman's comp for each worker and deducting tax for each crew member. We even had to send everyone a formal notice of layoff two weeks before the shoot ended.

You used to be able to hire a crew here and call them all "independent contractors" but that practice has really been clamped down on by the gov't.

It's not so bad in Canada when you can use a payroll company. However, in the US if a producer hires a crew as "employees" does the producer need to supply healthcare for those workers for the duration of the shoot?

This of course isn't an issue in places like Canada and NZ.

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#6 David Mullen ASC

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Posted 30 October 2010 - 08:56 PM

Well, I tend to only shoot long-form content (features and TV series) where I'm on payroll for a couple of months, so I don't know what's more common for music videos, commercials, corporate work, etc. when you are only working for a day or two.

Since I've only been shooting union stuff since 2004, I've been covered under my union's healthcare plan, but generally there is no requirement that a production (or any company) provide healthcare to employees in the U.S.; when I was a non-union DP, I either had to buy it for myself or be covered under my wife's policy, or go without.

Workers' Comp is a requirement though.
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#7 Chris Millar

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Posted 31 October 2010 - 04:54 PM

There's a niggling feeling amongst some that certain less illuminated yet vocal individuals were manipulated behind the scenes here -

Taking a look at the end result of the whole palaver and you might start to wonder...

Not me though, too ignorant for that kind of carry on


:ph34r:
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#8 Saul Rodgar

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Posted 01 November 2010 - 01:32 AM

As much as they would otherwise desire to do so, the biggest reason why studios and producers in the US would never consider giving legally recognized independent contractor status to film workers is, quite simply, because then these workers could attempt to claim some sort of ownership under US copyright law.

"Although U.S. Copyright law generally recognizes the creator of a work as being the copyright owner, an exception is created by the “work made for hire” doctrine. The definition of a “work made for hire,” which is found in 17 U.S.C. § 101, is defined as “a work prepared by an employee within the scope of his or her employment.” This may include works in the form of visual, audio, film, or printed works. Employees who typically fall into these categories are computer programmers, sound engineers, video editors, graphic artists, and staff journalists."

http://www.mcafeetaf...tive-Works.aspx

Not only movie studios, but employers of all kinds, like universities, laboratories, and any enterprise where new works or advancements of any kind (patents, technological and / or scientific research, artistic works, etc) are created, produced, designed, researched or developed follow similar guidelines.

This is why deal memos are required to be read and signed the first day a crew member officially starts to work on a movie production. Anyone -particularly from the below-the-line ranks, but anyone really- who has taken the time to read a few of these deal memos has found that they go to great lengths to make absolutely clear that under no circumstance and in no way, form or shape they have any rights to the material they help produce.

Edited by Saul Rodgar, 01 November 2010 - 01:36 AM.

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#9 Hendrikus De Vaan

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Posted 02 November 2010 - 03:43 AM

As a young independant contractor here in New Zealand I have always been aware that Independant contractor means exactlly that. The problem was, from my understanding, that someone found a loop hole and abused it.

Anyway, I think the law change is a positive one.

Cheers,
H.
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#10 Ed Conley

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Posted 02 November 2010 - 09:24 PM

It's odd because there was a move several years ago to move film workers away from independent contractor status to employee status here in the U.S., mainly for tax reasons - I think the IRS felt that too many people were finding ways around paying their full share of taxes through their independent contractor status. The studios here are also loathe to allow people to claim independent contractor status as well, prefer the simplicity of the employee status for payroll reasons, so it seems odd that it would be preferable in New Zealand.



The NZ Actors were EMPLOYEES

"The union had demanded that local actors and other production workers be hired as full-fledged employees on union contracts."

but since Peter Jackson threatened to pull the Movie/Production out of NZ the Guv'ment changed Labor laws to appease the Studio and keep the Production in NZ.

Thus we have this quote
"And on Friday, it amended labour laws in which film industry workers are deemed independent contractors rather than employees."

Edited by Ed Conley, 02 November 2010 - 09:24 PM.

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#11 Richard Boddington

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Posted 03 November 2010 - 11:20 AM

The larger question is....why would any film worker want to be listed as an "employee." Your tax position is far worse as an employee than an independent contractor.

As an employee the gov't gets a hold of your pay cheque before you see a dime and you have no write offs to offset your tax bill.

As a contractor, you can write off the gas you buy to drive to and from set as a business expense. You can write off the portion of your car lease that you use for business. You can write off the portion of your house that you use as a home office.

Employees can do none of this.

A smart accountant can find you a dozen other good write offs. I have not been an employee for 10 years, and there is no bloody way in hell I will ever become one again!!

R,
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#12 Saul Rodgar

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Posted 03 November 2010 - 12:29 PM

The larger question is....why would any film worker want to be listed as an "employee." Your tax position is far worse as an employee than an independent contractor.

As an employee the gov't gets a hold of your pay cheque before you see a dime and you have no write offs to offset your tax bill.

As a contractor, you can write off the gas you buy to drive to and from set as a business expense. You can write off the portion of your car lease that you use for business. You can write off the portion of your house that you use as a home office.

Employees can do none of this.

A smart accountant can find you a dozen other good write offs. I have not been an employee for 10 years, and there is no bloody way in hell I will ever become one again!!

R,


This is not accurate with regard to US tax law. I am self-employed, and I have dealt with this issue extensively with my tax person. In my experience, if one is filing as self-employed (schedule C) with the IRS, everything that is applicable can be written off against any money paid to the IRS, on the tax return at the end of the fiscal year. As self employed, one is still responsible for paying SS, Medicare, etc taxes that would be deducted and forwarded to the IRS if one were employed by a company. These taxes are usually required to be paid quarterly to the IRS by all employers and / or self employers.


Whether one makes those payments as self employed or a company makes those payments to the IRS on one's behalf, it makes no difference because those amounts can still be adjusted by a smart tax person at the end of the year. The same can be said if a married couple is filing jointly and one person is employed and the other one is self employed. At the end of the year, all amounts collectively paid to the IRS by the spouses are subject to adjustment.

Edited by Saul Rodgar, 03 November 2010 - 12:33 PM.

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#13 Saul Rodgar

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Posted 03 November 2010 - 12:32 PM

double post

Edited by Saul Rodgar, 03 November 2010 - 12:33 PM.

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#14 Mark Dunn

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Posted 03 November 2010 - 12:42 PM

You've missed his point. He's agreeing with you.
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#15 Saul Rodgar

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Posted 03 November 2010 - 12:46 PM

You've missed his point. He's agreeing with you.


Who missed what point?
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#16 Richard Boddington

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Posted 03 November 2010 - 12:56 PM

I think in the US self employment is a bit more difficult because you have to pay both the self and employer shares of the Social Security tax. Plus you have no national healthcare system, and the rates I have seen my friends pay for family health coverage as self employed people is astronomical. $800.00/mos for a family is not un-heard of!! Incredible!

In Canada I don't have to pay the un-employment insurance premiums that employed people do, nor do I have to pay anything extra per month for healthcare.

Saul, I'm not entirely sure I understand what you're saying? You're saying that you can deduct your expenses? If so, how is that a disadvantage? That's a good thing isn't it?

R,

PS: When I was living in the USA I paid the Medicare tax but I could not access it of course because it was only for poor people. So Americans pay a tax for health insurance that very few qualify to use. Bizarre.
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#17 Saul Rodgar

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Posted 03 November 2010 - 01:17 PM

I think in the US self employment is a bit more difficult because you have to pay both the self and employer shares of the Social Security tax. Plus you have no national healthcare system, and the rates I have seen my friends pay for family health coverage as self employed people is astronomical. $800.00/mos for a family is not un-heard of!! Incredible!

In Canada I don't have to pay the un-employment insurance premiums that employed people do, nor do I have to pay anything extra per month for healthcare.

Saul, I'm not entirely sure I understand what you're saying? You're saying that you can deduct your expenses? If so, how is that a disadvantage? That's a good thing isn't it?

R,

PS: When I was living in the USA I paid the Medicare tax but I could not access it of course because it was only for poor people. So Americans pay a tax for health insurance that very few qualify to use. Bizarre.



I never meant it to say it was a disadvantage. All I am saying is that ultimately, whether one is self employed or married to someone who is employed, as a film worker one can claim all kinds of deductions. Which is obviously great. Whereas you seem to have meant that as a (self-employed) independent contractor it wasn't worth to become an employee for tax reasons, my whole point is that it doesn't matter, one can claim all sorts of deductions if one's tax person is worth their salt.
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#18 Saul Rodgar

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Posted 03 November 2010 - 01:23 PM

I think in the US self employment is a bit more difficult because you have to pay both the self and employer shares of the Social Security tax. Plus you have no national healthcare system, and the rates I have seen my friends pay for family health coverage as self employed people is astronomical. $800.00/mos for a family is not un-heard of!! Incredible!

In Canada I don't have to pay the un-employment insurance premiums that employed people do, nor do I have to pay anything extra per month for healthcare.




I think as self employed one does not pay unemployment tax here. But, certainly, having to pay for insurance sucks. That is not covered with SS or Medicare. Those benefits are usually only cover disability, retirement and old age medical entitlements.
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#19 Richard Boddington

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Posted 03 November 2010 - 03:29 PM

my whole point is that it doesn't matter, one can claim all sorts of deductions if one's tax person is worth their salt.


So you're saying that an employee of a company can claim the gas they buy to drive back-and-forth to work with as an expense?

R,
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#20 Saul Rodgar

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Posted 03 November 2010 - 04:19 PM

So you're saying that an employee of a company can claim the gas they buy to drive back-and-forth to work with as an expense?

R,


No. You are comparing apples and oranges. Check your PMs.
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