Hollywood's Loan-Out Companies Get a New Lease on Life

Governor Gavin Newsom just signed a new law that's a big deal for Hollywood. It's all about those loan-out companies that actors, writers, and crew members use to get paid. These companies have been around for ages, letting creatives deduct some expenses from their taxes. But earlier this year, the state's Employment Development Department (EDD) started questioning this setup. They wanted to make sure these companies were paying their fair share of taxes, especially after a bunch of unemployment claims rolled in during the COVID-19 pandemic.One of the big payroll services companies, Cast & Crew, was audited. The EDD thought Cast & Crew should be paying the taxes, not the loan-out companies. This caused a stir, and the unions got involved. They warned their members that the EDD might change how the industry works. But the governor's office and industry folks worked together behind the scenes to find a solution. They created a new law that makes it clear loan-out companies are responsible for paying taxes. It also makes payroll companies like Cast & Crew file reports with the EDD. This way, everyone knows what's happening. The unions are happy because this new law protects their members' jobs. And the industry can keep doing business as usual. The law won't take effect until 2026, so there's time to get everything in order.