Employees, Independent Contractors, and Interns

Often in the production of a film, the discussion turns to whether to hire crew members as employees or independent contractors. However, this is not really up to the producers, it is determined by government regulations.

Misclassification of a worker as an independent contractor can lead to significant penalties on both the federal and state levels, including fines and criminal prosecution. Regulatory agencies seem to focus on certain industries, and entertainment companies are among those most frequently examined.

This should not be surprising considering the manner in which entertainment companies typically hire their workers. All too often, production crew who are properly “employees” are called “independent contractors” because the producer thinks it’s easier to pay them that way. Unfortunately, this is not a legally determinative reason to do so.

Factors for Determining Status

There are number of factors that determine whether a worker is classified as an employee or an independent contractor, and different agencies have different criteria. What is most difficult, and frustrating, in this area is that the same worker may be considered an employee under the set of rules used by one agency and an independent contractor under another agency’s rules.

Different states may have different sets of rules, so you need to check your local government regulations. However, under most regulations, crew members on a film will never be considered independent contractors. They work at the producer’s location under instructions given to them by the producer, in furtherance of the producer’s objectives, all of which are characteristics of an employee within most guidelines.

In California the status of film crews may be likened to migrant farmworkers, in the sense that both groups come together for a short period of time on a particular project, complete the project, then move onto a new project for new employer. They may even work with minimal, or no, supervision. Case law in California says that migrant workers are employees. See S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, 48 Cal.3d 341 (1989).

Other Types of Workers

There may be categories of workers, however, who are independent contractors on a film production. In general, these would be outside service providers such as editing houses and special effects houses who do their work independent of the producer’s supervision. Where an employer specifies an end result and the worker is left to determine how to achieve it, uses his own equipment at his own location, and has advanced professional skills, that worker embodies typical characteristics of an independent contractor.

Please note that it does not matter whether there is a written agreement that specifies otherwise. Under the law, the contract is not controlling as to the definition of independent contractor or employee.

Interns

Another area to be wary of is the use of “interns” in the production of your film. Again, there are legal restrictions on the definition of intern. Many of the people considered interns by film producers don’t qualify under the law.

This year the United States Department of Labor warned that it intended to crack down on the use of unpaid workers misclassified as interns. It issued guidelines that set forth a six-factor test:

  • the internship must be similar to training that would be given in an educational environment;
  • the internship experience is for the benefit of the intern, not the employer;
  • the intern does not displace any regular employee, but works under close supervision of staff;
  • the employer that provides the training derives no immediate advantage from the activities of the intern and on occasion its operations may actually be impeded;
  • the intern is not necessarily entitled to a job at the end of the internship;
  • the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Only if the employer can show that all these factors are met will the intern be exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act. In most cases unpaid workers on a professional film crew would not meet all of these criteria.

There is much more information about labor and employment law in the context of film production in Volume One of What Every Filmmaker Needs to Know About the Law, which is available at a discount to my readers.

If you’d like my help with your production or your agreements, click the “Production Counsel Website” link above.

© Keith E. Cooper. All rights reserved. You may freely link to this post, but please do not copy (in whole or in part) without permission of the copyright owner.

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One Response to “Employees, Independent Contractors, and Interns”

  1. Beth says:

    Thank you for sharing this! It seems as though independent film producers are totally unaware of these issues. I’ve found it frustrating trying to convince several productions to operate properly. Keep it coming!