Category: business

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One Year

Yesterday, July 1, was the first anniversary of Burns the Attorney.
Ive been incredibly lucky. Its been a really good first year.

I have wonderful clients, both new and old, who honor me with their trust. I take very seriously their reliance on me to do my best for them because, in very important ways, it means I help them focus on being creative professionals. Think about it: which would an artist rather do, make new art or chase down people who have used existing art without permission or payment?

That is most of what I do, helping artists with copyright infringement matters. But I do other legal work as well, of course. In the past year, Ive helped clients with contracts and releases, discussed business formations and the effects of community property on clients copyrights, and, well, lots of other things too.

Not everyone gets the opportunity to do what she really loves. I do, and I am so grateful for it.

I want to thank all of my clients and, in advance, all of those who will call on me to help in the future. I intend to be here for some time, serving artists of all sorts.

If you ever need me, you know where to find me.

And thanks.

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WMFH Affects More Than Copyrights

Creative pros have been understandably angry at the words work made for hire (WMFH) for some time. I mean, clients try to sneak that into contracts all the time and it means you, creative pro, have to carefully watch out for it, lest you sign that bad boy and end up making the client the author and owner of what should be your copyrights. So sure, those words tend to raise a creative pros hackles.

But this post isn’t about how your copyrights are affected with a WMFH contract; it’s about other effects of such an agreement.

Now, before I go any further, I’m only talking about California law here. If you are in another state, the rules (probably) aren’t the same. That being said, if you ever work in California or for a company in California, you might want to pay attention.

There is another side to WMFH agreements in the Golden State. If you are a sole proprietor business (that is, not an entity of some kind, like a corporation or an LLC), and someone hires you as an independent contractor, and the signed contract includes a WMFH clause, then you are statutorily an employee and the employer has to follow the laws regarding unemployment, disability, and workers compensation insurance as if you were a regular employee. According to the California Labor Code[1], if a person is hired to create a commissioned work and the parties agree in a signed writing that the work shall be considered a work made for hire, as defined in Section 101 of Title 17 of the United States Code, then, boom, the hired person is a statutory employee. Moreover, the California Unemployment Insurance Code[2] says almost exactly the same thing. Basically, every code that deals with unemployment, disability (including paid family leave) and workers comp has something about WMFH like this.

Anyway, failure by the employer to follow the rules means the employer can be hit with substantial fines and even jail time! Yikes!

“So what?” you may be thinking, “only the state cares but it doesn’t really affect me,” but you’d be wrong. Those are rights to which you are entitled under California law. If you get injured on the project, for example, Workers Comp should pay your medical bills (roughly speaking). Also, the law is unclear[3] about other benefits that employers in California must supply to such employees, so it may be that you, as the employee, are entitled to other things beyond being paid as an employee (including having the employer pay its half of FICA) rather than an independent contractor, like having limits on time/overtime, etc.

If you live and generally work in some other state but come to California for a WMFH project, then you too would likely be considered a statutory employee under California law as well[4], and maybe if the company is here but you aren’t. Also, if you work physically here, your pay would probably be subject to California personal income tax withholding[5].

Most importantly, if you are in California (resident/business) and you hire assistants or other independent contractor workers and you have a WMFH clause in the contract you have these people sign, you also need to know this info. You have to follow these same rules! There are ways to avoid some of these issues (for example, maybe an assignment clause instead of a WMFH), but there are downsides to the other options as well. Talk to an attorney to get the best advice for your particular situation.

Oh, and don’t forget, if you are in California, you really, really must pay your people on time.
[**UPDATE** There is more time to pay now, but it’s still faster than you might think]

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[1] California Labor Code Section 3351.5(c).

[2] California Unemployment Insurance Code Section 686.

[3] The statutes don’t seem to say explicitly one way or the other; a court could possibly make the analogy and apply the same rules to pay, time off, etc.

[4]See http://www.edd.ca.gov/pdf_pub_ctr/de231d.pdf.

[5] Id. (That means, same source as I just cited, for the non-nerdy readers).

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Forming an Entity: Watch for Issues

Most creative professionals start their businesses without doing anything more than accepting the first freelance project offered. That is, they don’t bother to do anything about forming a legal entity like a corporation. That’s fine; if you don’t do anything and you work solo, you are a sole proprietor. After that first project, if you continue doing business, getting projects, cashing checks, you probably won’t think about your business structure any further.

At least for a while.

One day, you, the now-successful creative pro hires an accountant to do your taxes and that CPA tells you you should incorporate or form an LLC. The accountant is concerned about the relative tax burdens and, often, it does make immediate financial sense to form an entity; that is, you can save a bundle on your taxes. But, the accountant doesn’t (probably) know about the copyright ramifications, and (usually) neither does the average creative pro.

Yes, there are copyright ramifications.

Overall, there are a whole host of legal issues to consider when it comes to potentially forming an entity. Most people focus on the tax issues, and that makes sense, but there are other legal issues and I highly encourage anyone considering forming an entity to talk to a lawyer before taking that step. Anyway, for this post, I’m only going to focus on the copyright one as it is most often totally ignored, and it shouldn’t be.

So, let’s imagine you have formed a single-member LLC and, as per your CPA, you’ve made yourself an employee of that LLC. Your tax bill thanks you. Now, however, when you make your art (whatever kind of art you make–doesnt matter), who owns its copyright?

If you said you do, you’d be wrong. Even though you are the only member of your entity (the LLC), it’s that entity that owns the copyright in the art you make as an employee of that entity. It’s an automatic work-made-for-hire. No writing required.

Well, I hear you saying, but I am the entity so it’s the same thing. Nice try; but, under the law, no, you aren’t and no, it isn’t at all.

First, since the entity is now the author of the work, the length of the copyright is no longer life of the author plus 70 years. A copyright authored by an entity lasts either 95 years after its first publication or 120 years after its creation, whichever is shorter[1]. By the way, there is an exception to this to get back to the authors death +70 years length, but it requires more paperwork and I know how much y’all love paperwork.

Second, when you register that copyright, you need to do it correctly. You have to name the entity as the author and the claimant because you, as an individual, by law did not create and do not own the copyright. While screwing this up doesnt necessarily totally void a registration, it certainly will be an issue if you ever get infringed. You (and your lawyer) don’t want to have to fight about the validity of your registration. I’ve seen it in cases and it could result in a great case becoming a loser. Remember, if you sue for infringement and lose, you might end up being required to pay the other side’s attorneys’ fees and costs; you don’t want something like this to scuttle your otherwise watertight ship.

Third, let’s say you get hit by a bus and shuffle off the mortal coil, who gets the copyrights your entity owns? And what about existing licenses and royalties based off those copyrights–who gets the money? It’s not so easy, if you havent planned ahead. Do you have a succession plan in place for your entity?

None of these issues are insurmountable at all. For example, you can have a writing that keeps the copyrights created after the entity is formed as your own (if you want to do that and there are reasons to do that, or not). Overall, the issues beyond the tax ones that come up when you form an entity, including copyright ones, do require some thought and there are decisions that need to be made and new processes need to be learned if you decide to go ahead and incorporate.

Don’t go it alone and hope it all works out–thats a lousy business strategy. Talk to your own attorney and get good, personalized advice.

[1] 17 USC 302(c).

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Safe Harbors, Piracy, and Your Value

I could write on this issue, but I’ll save the time and point you toDavid Newhoff over at Illusion of More. In this post, Mr. Newhoff discusses the differences and, importantly, the similarities facing artists in the USA as compared to the Canadians when it comes to the (false) promises made by tech to improve the lives of artists. Miranda Mullholland made a wonderful and passionate speech to the Economic Clubof Canada about her (and others’) life as a musician–one who works her ass off but who barely makes a living. Watch her video and read Newhoff’s comments. I won’t reiterate it all here.

I will say this, though:

  • You make the art, be it music, photographs, design, illustrations, and it is art–the platforms can’t be successful without you.
  • Stop calling the art you createcontent and stop letting people rip you off both directly and by devaluing what you do (like, by calling it content).
  • Don’t rip off anyone else and support all other artists, yes, even (especially) when it costs you more.
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The No-Pin Tag (who knew?)

I dont like Pinterest.

Anyone who knows me knows Ive complained about it since I first learned of it. In my opinion, its business model is based on exploitation of creative works, mostly without the authorization of the creators/copyright owners of the works. All its money has been generated on the back of creatives, few of whom ever get any real benefit from it.

One of the things I do not like about Pinterest is how it not only exploits the safe harbor of the DMCA (takedown process) to protect itself, but also it flips the entire idea of how copyright is supposed to work on its head. In short, rather than making its platform opt-in, it forces creators to opt-out.

Normally, to use (copy, publish, display, etc.) a creative work, first you have to ask permission. If Pinterest wanted to do things in a creator-friendly way, it would have set up its system so that creators could opt-in to have their works (that appear on their websites) eligible to be included on Pinterest. Instead, Pinterest will permit any work to be posted from any creators site onto its site unless the creator blocks her/his/its work or site. Essentially, that is an opt-out requirement. That is dirty pool, in my opinion; its flipping the burden.

Regardless of my personal feelings, that is how it works. According to Pinterest itself, if youd like to block your work, you can do so by virtue of including a bit of code into your websites code. That code is called the no-pin tag. See https://help.pinterest.com/en/articles/prevent-people-saving-things-pinterest-your-site, which says:

If you don’t want people to save things to Pinterest from your website, just paste this code into the <head> section of any page on your site:

<meta name=”pinterest” content=”nopin” />

When someone tries to save things to Pinterest from your site, they’ll see thismessage:This site doesn’t allow saving to Pinterest. Please contact the owner with any questions. Thanks for visiting!

You can also prevent any individual image from being used by (as the page cited above notes):

add this tag to [the single image]:

<img src = “foo.jpg” nopin = “nopin” />

Now, I had no idea until today that there was such a thing as a “no-pin tag.” I’m a copyright attorney and I’ve pursued infringers on Pinterest before, and yet even I didn’t know about this. Crazy. But now I do and that’s why I’m telling you about it, as soon as I could.

I honestly dont know any creative pro who is making money from her/his/their work being taken from her/his/their own site and used on Pinterest. At best, I know of a few who have shot for corporate or advertising clients who then used the work on Pinterest, but they got paid by their client(s) for the license. Pinterest is, I think, a trojan horse of a site that scares people into thinking “I have to let people pin my work so that they see it and I get hired!” but, really, it doesn’t work that way. Housewives in Podunk, USAare unlikely to hire you.

Putting on my marketing consultant hat for a minute, I would never recommend a creative permit work to be used on Pinterest without a paid license. Instead, keep your work on your own site, preferably with a watermark on each work and a proper copyright notice on or next to each work, too. Register the copyright in your works asap after creation. Embed the no-pin tag on your site. Then, if your work gets used, including pinned, without your permission, go after the infringer and protect your rights.

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Pursuing Infringers: Good For You & Your Clients, Too

I just read this interview with photographer Andrew Buchanan, on the Copyright Alliance site (by the way, if you aren’t a member of the Copyright Alliance, you should be, in my opinion). In it, he says that he pursues infringers not only because he deserves to get paid for his work, but also because his clients pay him for his original work and if infringers use the work, then his clients are getting hurt.

I love that attitude and smart business thinking. By pursuing infringers, you are serving your clients as well as protecting yourself. You can even use that in your marketing! Let your clients know that while you can’t get every infringer, you do make efforts to make sure that infringers don’t use the work you are licensing. That is an added service value.

Mr. Buchanan is right in that registration is still a pain in the ass in some ways (like the whole published/unpublished thing, to start), but it’s part of what you need to do to ensure the viability of your cases, especially the more minor value infringements. I read a case recently, Gonzales v. Transfer Technologies, Inc., 301 F. 3d 608, 609 (7th Cir. 2002), that noted:

No one can prosecute a copyright suit for $3,000. The effect of the district court’s decision if universalized would be to allow minor infringements, though willful, to be committed with impunity, to be in effect privileged, immune from legal redress. The smaller the damages, provided there is a real, and especially a willful, infringement, the stronger the case for an award of attorneys’ fees.

That’s great, and it also shows what I keep saying: you can (and should) go after small infringements and they don’t all cost $100K to do (not even close). But, and this is a big BUT, you can only possibly get attorneys’ fees if you have registered the copyright in your work before the infringement in question starts (or within a 3-month window of first publication for published work only).

So, register your work asap after creation, go after infringers, and tell your clients you are protecting them as well as yourself by doing so. You might even consider raising your rates to reflect your added value to your clients.
Just a thought. 🙂

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2017 Planning Ideas

The end of the year brings out the compulsion to make lists and I am no exception to that. It is a good time, now, in the days before the new year, to make some plans and changes to your business. Hopefully, the list below will give you some ideas of things you can do in 2017 to have a happier, more productive and lucrative, and more legally prepped (think, preventive) creative business.

  1. Register your copyrights regularly and often. If you are a photographer, register your copyrights in newly (first) published work every month; you can do this as a group published registration for one fee ($55). For all artists (not just photographers), here are some helpful links to the USCO about how you can register your works: https://www.copyright.gov/eco/help-registration-steps.html, https://www.copyright.gov/eco/help-type.html, https://www.copyright.gov/eco/eco-tutorial-standard.pdf, https://www.copyright.gov/eco/eco-tutorial-single.pdf.
    This is the cheapest insurance you can get–remember that a the minimum statutory damages for an already registered work is $750, more than the cost of your registrations.
  2. Stay aware of changes in copyright law and registration procedures. Things change and keeping up will make your life easier (like there will probably be a new way to register group unpublished photographs, soon). To stay informed, read this blog and others like my mentors (photoattorney.com) and copyrightalliance.org.
  3. If you havent yet (and dont feel bad–many of you havent), get separate business banking accounts, credit card(s), insurance, and software to track it all (like Quickbooks, Xero, etc.).
  4. Run your business like a business, including: get things in writing, including (especially!) your licenses and contracts (and invoices, etc.); have strict policies about payment schedules (like 50% up-front) and stick to them; and, pursue infringements so that you protect your rights and dont let people rip you off.
  5. If you do work for free or on a discount, from now on, do it right. First, only do it because you want to (like you get total creative freedom or its a charity you want to help). Second, invoice the client, even if the total due is $0. How? Like this:
    Creative Fee: $2000
    License Fee: $8000
    Total Fees: $10,000
    One-time Discount: -$10,000
    Total Due: $0
    This shows the value of your work and for the license; if anything goes wrong later, the invoice can be used as evidence for those values (this will make your lawyer happy; note also that the license fee is greater than the creative fee which will make your lawyer extra happy, see here for more).
  6. Plan time off. Im just as bad as most small businesspeople on this one so dont beat yourself up over it, just make it a priority this year. If you lose one project for a vacation, it is totally worth it as all the science shows you will be more creative and productive after the vacation.
  7. Work a reasonable schedule. Especially if you work from home, its vital that you have work time and not work time. Schedule a reasonable number of hours per week (like 40) and if you need to work more sometimes, then work less another. Relatedly, when you are working, you are working, so no kid interruptions or the like. If at all possible, have a separate space (room) for your work (the IRS will like you better for that, too).
  8. Pay others on time. This is just good to do, even when your clients string you on. Others behaving badly does not excuse you doing the same, so knock off that excuse. Also, in California, you must pay your crew and talent in full on the final day of any project. No exceptions (except for motion pictures, sort of). See https://burnstheattorney.com/2016/08/pay-your-people-now/
  9. Plan for the future: marriage, divorce, and death. As a creative professional, these life events have an extra impact because the copyrights you create are very seriously affected. See https://burnstheattorney.com/2016/08/i-do-what-did-i-do/ and https://burnstheattorney.com/2016/09/thinking-long/
  10. Make archival prints of your best work (at least) and back up everything connected with your business in multiple ways. This is really imprtant for many reasons. First, I think having tangible work is great. There is a big difference between opening a file on your Mac and opening a file in a drawer and finding the work there. See (from my old blog) http://www.burnsautoparts.com/blog/2014/01/09/tangible-matters/. But more importantly, if you keep your job files in print, you wont lose the contract due to some digital hiccup. Think about it–how many of you have a zip drive now? At least, do the 3-2-1 system. This guy has it right.

 

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Lift & Separate

(updated 12/2020)

Long before I became a lawyer, I advocated for two things when it came to photographers fees: raise them (particularly the license fee) and separate the creative fee from the license fee. The big push-back was often that buyers don’t like it. Well, the buyer has its self-interests but you must respect your own.

I bring this up because I’ve seen it repeatedly in my practice: a photographer comes to me with a possible infringement and, not having timely registered the copyright in the work (grrr!), leaves me no option but to see if there are sufficient actual damages in the form of lost licensing fees to make the case worth my efforts. When asked what her/his usual and customary license rate is for a similar use, the photographer will respond with something like, “Well, I would have asked $2000.”

My next question is, “Do you have invoices to back up this rate?” And the responses are either “No, but that is what I would have charged,” (ugh) or I am presented with an invoice for the creation of the work with a combined creative/license fee of $2000 (ick), or, worst of all, I get the invoice for the creation and licensing of the work where the photographer only charged $500 on some sort of mega-discount but it only shows as a $500 total fee (hurl!).

Obviously, none of these are good answers to a lawyer’s ears.

In the first case, no history of licenses, it could be worse. I can at least argue for the fair market value of a license and then, using common metrics like Fotoquote and online calculators for stock license rates, get a number. Sadly, as we all know, those numbers are likely to be low, particularly since there are more and more cheap stock sites out there. But still, at least I’ve got nothing the other side can use against my client.

In the last case, you’ve just set you price, forever. You are never going to get anyone to believe that a license similar to the original one is worth anything more than a few dollars because you have told the word that you’ll make and license it for so little! Now, if you are going to offer a super-mega-discount (and that’s totally cool, sometimes), make sure that you spell it out on the invoice like:

Creative fee: $2500
One-time Discount: -$2300
License Fee: $4500
One-time Discount: -$4200
Total Fees: $500

That way you are saying “my usual price for this license is $4500” and that can be used as evidence later of your actual fees. That’s great! But, if you just list the discounted price, you’ve only got your word that you normally would have charged more. That won’t hold up.

In case #2 above, all bets are off. The other side can argue that $500 was the license fee and $1500 was the creative fee, or worse. It is almost impossible to argue successfully that the majority of a combined fee is for the license and not the creation of the work, unless it is spelled out in the paperwork. I’m good, but I can’t make butter with a toothpick and there are plenty of good attorneys on the other side who can present evidence that the fair market value of the license is only $200. If you’ve got nothing in your records to show otherwise, then it’s quite possible that all you can get for actual damages will be that $200. At the very least, in court, it would cost a hell of a lot more in expert testimony to try and prove up your damages, and the other side knows it, so they can stonewall in pre-suit negotiations. You got no bat, as they say. Go home.

The best business practice, both for now and to protect your values in the future, is to separate out your fees on your paperwork and, very importantly, to make your license fee the higher portion of those fees. Later on, you can use those higher numbers to support getting higher actual damages. Also, if you do timely register your work, the courts will often look to the actual damages in setting statutory ones (like maybe doing a multiple of actual damages). If you can prove up substantial actual damages (a high license fee), you are more likely to get higher statutory ones. Proof of higher fees will make it easier for your attorney to argue for higher pre-suit settlements as well.

As for the argument that your clients want combined fees, well duh–and you’d like a million bucks for the shoot. They don’t get to tell you how to run your business–they are not doing you a favor by hiring you. They’re hiring you because you are good at your job; moreover, you have to run your business your way, not how they want it. Besides, they can’t complain if you do as in the example above: that is, you can give a final number that is combined, just make sure that the line items are separate. If they argue for a higher creative fee and lower licensing one, you know they are thinking of the future when they want to re-license; so should you and a higher license fee now means higher re-license fee later.

Run your business like a business. That includes thinking about future value and long term effects.

It’s not hard, it just takes some guts. You can do this.

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How to Work With Your Lawyer: Trust

Creative professionals are usuallyvery smart people. Whether formally educated or not, your brains tend to fire pretty well (even if some people think they fire, um, differently). This is generally a good thing (especially the differently bit) and can definitely make for better art, no matter what your medium. The downside is that sometimes some of you think you know more than you really do*, especially abouta very technically precise field like the law. That attitude can bite you in the ass.

When I was in law school, I wrotea post on my Burns Auto Parts Super Premium Blog about how, before law school, I thought I knew copyright law pretty welland how wrong I was. See, I learned that while I knew more than the average person, what I knew was actually very, very little, especially compared to, say, a copyright lawyer. There is so much more to copyrightlaw (and law in general) than I ever could have imagined without having gone through all of law school. There is the interplay between the statutory scheme and constitutional issues, and how it works in day-to-day business, and how the courts interpret all of it, and more.Unless you immerse yourself for three years in intensive, undistractedstudy (hello,law school) and then get out there in the trenches, you just can’t know. I sure didn’t. Even after all that, you still have to do what I do: spend a ridiculous amount of time reading cases and highly technical academic articles to learn more, every day, just to keep up.

But I was one of you before law schoolone of those who even debated the woman who would become my mentor, Carolyn Wright, on legal questions that appeared in places like the old APA Forums. I look back on those debates with more than a little embarrassment. I thought I knew the law well enough to challenge her opinions when, really, I knew just enough to probably frustrate the hell out of her when she was trying to help by teaching the community the (actual) best practices (I will always appreciate her grace–not once did she later say “Do you remember…?”).

Now, after practicing for years, I know what itfeels like to be challenged by people who think they know more than they do. I have the headdesk-induced scars to prove it.

The most frustrating thing that happens in my practice isnt when the opposition pulls some chicanery or even when I get called names by defendants. Nope, the worst is when someone comes to me with a question which I answer based on my expertise (and often I do additional research to make sure my info on that particular issueis current), and then s/he doesnt like the answer, saying, Well, I feel that youre wrong.

First, you dontfeelthat Im wrong, youthinkI am (language matters!); and second, if you arent going to trust my opinion, then you shouldnt ask for it. Thats not me being petty, thats me knowing that I cant do the bestfor you unless you trust me when it comes to legal issues. My job is to fight for you and to have your back, but I cant do any of that if you dont trust that what I am telling you is the best, most accurate answer and advice based inthe law that I can give you. I’m not making stuff up or telling you what I think you want to hear–I’m being 100% straight with you. Im happy to talk to you and explain what I can, but in the end, you just have to trust me.

There are ethics rules that say we have to do what is best for you, sure, but I think most lawyers actively want to do what is best for our clients; that means telling you the truth, even the hard truth. None of us lawyers likes having to tell a (potential) client bad news. We know its unfair that a screwed-up copyright registration can scuttle an otherwise beautiful case and that the Copyright Office makes it damn easy to screw up (especially the published/unpublished thing). It sucksthat if we cant get you statutory damages (register, please) or documentthe value of yourlicenseis $10K we cant get $10K for you. It’s frustrating as hell that while any normal human can see your work has been knocked off, stylistically, proving its actually an infringement isn’t so clear and itwould cost gods own wallet to litigate and we could still lose, so we cant take the case on a contingency fee basis. And it’s not easy to tell you that you cant not do X now (without repercussions) because you agreed in your contract to do X.

Lawyerswant to be able to help people; thats why Ido what Ido (honestly, I think all good lawyers still hold that as their first principle). We look for ways to sayyesto whatever it is that you want, to enable you to achieve your goal, to fix the wrongs, promote the good, and to defend your rights, but sometimes we have to saynoornot like that you cantorwell, you can try it, but heres what youre risking, orit just isnt worth that much, or even,it sucks, but justwrite the check and move on. Your job, then, is to trust your lawyer; s/he is offering you the best advice possible.

I (and others) have describedlaw school like military bootcamp for the brain: a law student is stripped of her old way of thinking and taught a new way in her first year, then trained to use that new way to alevel of competence in the next two years. Then, we go out and apply it all in the real world, honing our knowledge and skills as we go. Maybe the Vulcan Science Academy is a better analogy, actually, because we learn toprocess a ton of data with dispassionate logic. But the best of us also reintroduce humanity to the practice and become weird hybrids of logic and compassion. That’s what I shoot for (and I know others that do the same).

The result of this training is that lawyers think strategically as well as tactically about each of your issues and formulate a plan to achieve yourobjectives, if at all possible; or to minimizethe bad stuff, if not. There is balance and judgment involved. Its tough work that requires more time and energy than you know. And that’s not me being egocentric–it’s just like howyour work is much more complicated and subtle than any outsider ever understands. Your work is pretty miraculous to me, even whenI don’t care for it aesthetically.

So, to have the best relationship with your lawyer, you dont have to like what you hear, but you do have to trust that it isseriously considered, bestadvice, with your best interests in first position.

Oh, and if you don’t think it really is, then don’t hesitate to get a second opinion from another lawyer.
But don’t be surprised ifthe answer is pretty much the same.

_______________

*This is true for all of us–we all have those areaswhere we think we know more than we really do.

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Pay Your People, NOW

If you are working in California and use crew (including models/cast) of any kind, you need to pay your crew before they leave on the last day of the project. UPDATE: As of September 5, 2019, you have up to the next REGULAR payday after the end of the project. Still, don’t screw it up. 

No, I am not kidding.

California’s labor laws are some of the most complex in the USA, but you probably already knew that. Maybe you’ve heard that some of those laws state that when you dismiss an employee, that employee must be paid in full on the day of the dismissal (that includes things like accrued vacation time, by the way). What you likely did not know is that when you hire a model or a stylist or an assistant (etc.) for a project, be that for 2 hours or 2 weeks, or 6 months, when that project ends, you are “dismissing” the person for the purposes of the applicable laws; that means that you must pay the person everything s/he is owed, on that very day. There is a minor exemption for motion pictures (it gives a little leeway) but, trust me, you don’t qualify for it.

I already know what you’re thinking: I’ll just have in my agreement with any crew that they will be paid within Xdays. Bzzz! No.Thank you for playing. The laws specifically prohibit contracting around this requirement.

This is a sneaky requirement and one that can cost you a pile of buckos (considerably more than the Benjis above), especially because there are often layers of players. For example, maybe you are contracted by an ad agency for an end client… you could end up holding the bag. The penalties are very steep–including having to pay the person’s wages for every day you haven’t paid, for up to 30 days, plus the employee can get attorneys’ fees. So, for example, you hire a stylist for $1500 a day, for a one-day shoot; then, you don’t cut the check for two weeks. You now could be on the hook for (on top of the original $1500 you’ve already paid) $1500 x 14 = $21,000, plus attorneys’ fees!

Apparently, models in particular are catching onto this and they are suing or threatening to sue photographers and their clients for these claims. To be clear, you are not out of the woods if you go through a modeling agency whichyou pay later, or a producer, or any agency. Also, trying to claim that someone is an independent contractor will also likely not save you–in California, you should assume that any individual working for you on a creative project under your direction is an employee under these laws (and others, like the workers comp laws).

Now, even if you aren’t in California, your state may have similar laws. It’s something you should definitely check on.

So, what can you do? Your best action is to pay your cast and crew on the final day of anyproject. If you are using an agency or a producer who will be paying others, still pay on the final day and have that person/entity indemnify you against any claims related to these laws (talk to your lawyer about this). Have your payroll company on notice that you need to pay on that day. Maybe arrange to pay electronically, on that final day.

In short, pay now,because you sure don’t want to have to pay later.Besides, it’s just good to pay your people immediately; stringing people on (even if you get strung by your client) is, in my opinion, a petty, nasty practice. Don’t do it. If you pay immediately, sure, you may be a bit cash-poor until you get paid but, in the end, you’re doing the right thing.

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