A recent decision in the Eleventh Circuit Court of Appeals may have tax implications for talent who conducts significant endorsement or brand ambassador activities. Generally, endorsement deals often have two components: (1) endorsement services (e.g., public appearances, social media) and (2) licensing the talent’s name and likeness (e.g., for use on print and digital advertisements). In other relevant tax contexts, income attributable to endorsement services has been treated as services income, while income attributable to licensing of one’s name and likeness has been treated as a royalty. See, e.g., Goosen v. Comm’r, 136 T.C. 547 (2011) (holding that income arising from licensing one’s name and likeness constitutes royalty income for purposes of determining U.S. source income). In the limited context of determining whether income is qualified business income for purposes of IRC 199A, however, income attributable to licensing one’s name and likeness is treated as disqualified service income. But is name and likeness income subject to self-employment tax?

Continue Reading Should Talent Pay Self-Employment Taxes on Income Associated with their “Brand”?

This summer, the United States Supreme Court held that Title VII of the Civil Rights Act protects workers from discrimination based on sexual orientation and gender identity. In a 6-3 opinion, Justice Neil Gorsuch found that “homosexuality and transgender status are inextricably bound up with sex,” and as a result, “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” Bostock v. Clayton Cnty., Ga., 590 U.S. __ (2020).

While this landmark decision ensures that sexual orientation and gender identity are protected categories under federal law, many individual states and localities provide varying degrees of protection for LGBTQ+ workers. For employers in the entertainment industry, it is important to be aware of these state and local laws when structuring and implementing employment policies, as those laws can significantly impact prospective liability.


Continue Reading Following a Landmark Decision for LGBTQ+ Workers, State and Local Laws Impacting the Entertainment Industry Are Still Vastly Different

One of the key elements in the White Paper from the Industry-wide Labor-Management Safety Committee Task Force is the agreement among producers and unions to have an “autonomous” COVID-19 Compliance Officer for each production. The Compliance Officer will not be above-the-line talent, but will nonetheless play a starring role.

The White Paper defines the role of the Compliance Officer as an autonomous designee whose principal responsibilities will include overseeing and monitoring physical distancing, symptom monitoring and testing, disinfecting protocols, and PPE education, protocols, and adherence on set. Officers will be accessible at all times during work hours and will undergo specialized training on health and safety precautions, policies and procedures related to infection prevention, surface disinfection, and the use of PPE. Given the volume of federal, state, local, and now industry-specific pandemic safety laws and guidelines, coupled with the unique demands of Hollywood productions, the training is expected to be rigorous and time-consuming. 
Continue Reading As the Entertainment Industry Gets Back to Business, COVID-19 Compliance Officers to Have a Starring Role

On June 5, the California Department of Public Health (CDPH) released statewide guidance for music, film, and television production to restart.  This guidance is the latest development in the reopening of the entertainment industry in California as the state continues to advance through its roadmap for reopening, following the submission to Governor Newsom on June 3 of a white paper with recommendations on this topic from representatives of producers and the unions of the motion picture and television industries (White Paper).

In this new guidance, the CDPH recommends that music, TV, and film production resume no sooner than June 12 and abide by safety protocols agreed upon by labor and management, which may be further enhanced by county public health officers.  The CDPH also recommends that back-office staff and management adhere to the office workspace guidelines published by the CDPH and the California Department of Industrial Relations.


Continue Reading California Allows Production to Resume June 12, Subject to County Rules

On June 1, the Industry-Wide Labor-Management Safety Committee Task Force (Task Force), composed of representatives of producers and the unions of the motion picture and television industries, submitted to the governors of California and New York a white paper proposing guidelines for the resumption of motion picture, television, and streaming production (White Paper). The White Paper presents the consensus of the Task Force regarding the circumstances under which content production can safely resume, with an emphasis on regular testing, sanitation, physical distancing, and education and training. The White Paper also addresses unique production-specific concerns, such as preventing infections from equipment that is commonly shared and not feasibly disinfected (e.g., lighting / electrical cables and certain props, costumes, accessories, wigs, and other specialty items), and special guidelines for casts that include minors or animals.
Continue Reading Industry Task Force Proposes Guidelines to Restart Production in California and New York

Recently, California Governor Gavin Newsom raised some eyebrows when he announced that state government officials anticipated publishing guidelines for the reopening of Hollywood production facilities by Memorial Day. The Governor’s announcement took many in the industry by surprise, given that producers and unions continue to wrestle with the legal obligations and operational complexities involved in safely reopening film and television productions with the ever-present threat of COVID-19. Faced with this monumental task and the fluid nature of the pandemic, most production houses do not anticipate any return to work before July 1. Regardless of the precise timing of Hollywood’s return to work, the various union collective bargaining agreements (Basic Agreements) are clear that producers and unions will share responsibility for ensuring a safe and healthy workplace for industry employees. Given the outsized roles that the Hollywood Guilds play in shaping industry employment policy, strategic labor relations will be key to the success or failure of producers’ reopening plans.
Continue Reading Back to Business: Hollywood Producers Navigate the Choppy Waters of Reopening Plans and Labor Relations

California employers beware. In Tilkey v. Allstate Insurance Co., No. D074459 (Cal. Ct. App. Apr. 21, 2020) (Order), California’s Fourth District Court of Appeal recently affirmed a judgment on a theory of self-published defamation. In doing so, it held that the plaintiff, a former life insurance salesman for Allstate, was justly awarded damages based on his compulsion to recite the allegedly false allegations Allstate made for terminating his employment to prospective employers.
Continue Reading California Court Affirms Self-published Defamation Judgment

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

This Article is part of a series monitoring developments with regard to California Assembly Bill 5 and its impact on the entertainment industry.

California Governor Gavin Newsom recently signed into law Assembly Bill 5 (“AB5” or the “Bill”), which redefines the distinction between an employee and an independent contractor. AB5 is primarily targeted at gig economy companies such as Uber and Grubhub, whose workers had been classified as independent contractors up to this point. Proponents of AB5 argued that many gig economy workers worked full time but received none of the benefits commonly associated with full time employment—including overtime, minimum wage, and workers’ compensation. Consequently, AB5 was touted as providing increased benefits and rights to a growing gig economy workforce. An additional impetus for AB5 was the legislature’s desire to stem financial losses to the state as a result of worker misclassification, including the loss of tax revenues.


Continue Reading Assembly Bill 5: Guilds Issue Joint Statement Advocating for Continued Use of Loan-Outs