This article is part of a series monitoring developments with regard to California Assembly Bill 5 and its impact on the entertainment industry. See our first post here.
The Talking Heads repeat the words, “same as it ever was” in their famous song, “Once in a Lifetime.” Echoing that sentiment, we have learned that all the major studios (and some of the streaming platforms) have agreed to continue to respect the use of loan-out companies after January 1, 2020, the effective date of new California Assembly Bill 5 (AB5). Consensus in the legal community is one of relief that the status quo will remain in place and loan-out viability will continue in accordance with past custom and practice. This outcome is consistent with the position of the various guilds, which issued a rare joint pronouncement in September solidifying their stance that loan-outs will not be affected by AB5.
As a reminder, AB5 is the newly signed law that redefines the distinction between an employee and an independent contractor. With the leadership of the major studios and streamers, we are expecting that other studios and production companies will follow the same policy, and business will continue as usual. Or will be the “same as it ever was.”