BILL ANALYSIS Ó
AB 55
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Date of Hearing: March 30, 2011
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
AB 55 (Gatto) - As Introduced: December 6, 2010
SUBJECT : Unemployment insurance: motion picture industry
SUMMARY : Extends the law that allows a motion picture payroll
services company to serve as the employer of motion picture
production workers for purposes of tax reporting and benefits.
Specifically, this bill removes the January 1, 2012, sunset date
on the law that allows a motion picture payroll services company
to serve as the employer of motion picture production workers
for purposes of payroll tax reporting and employee benefits
pursuant to the unemployment insurance (UI) and state disability
insurance (SDI) programs.
EXISTING LAW :
1)Requires each employing unit that meets the requirements of a
motion picture payroll services company and pays the wages of
a motion picture production worker to file a statement with
the Employment Development Department (EDD) that declares its
intent to be the "employer" of these workers.
2)Defines "employer" as any employing unit that is a motion
picture payroll services company that pays and controls the
payment of wages of a motion picture production worker for
services either to a motion picture production company or to
an allied motion picture services company.
3)Establishes EDD as the payroll tax collection agency and the
state agency that administers the UI Program and the SDI
Program. The UI Program makes available benefits to eligible
people unemployed through no fault of their own, and the SDI
Program makes available benefits to eligible people who lose
work as a result of non-occupational injury or illness.
4)Sunsets on January 1, 2012, the law that allows a motion
picture payroll services company to serve as the employer of
motion picture production workers for purposes of tax
reporting and UI and SDI benefit purposes.
FISCAL EFFECT : Undetermined.
AB 55
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COMMENTS :
1)Background. The present law on this topic was enacted by SB
1428 (Scott), Chapter 811, Statutes of 2006, and amended by SB
1173 (Scott), Chapter 391, Statutes of 2008. When SB 1428 was
being considered in 2006, the source of the bill,
Entertainment Partners, stated that the movie industry employs
a unique business model where a company can be formed to
produce a single film and shut down as soon as it is
completed. By using a statutory payroll company (SPC), many
of the duties of employers are centralized in a limited number
of entities rather than thousands of individual production
companies. This approach reduces the administrative work that
would otherwise be required of the film production employers,
the employees, and the relevant state agency (EDD).
2)Arguments in support. According to Entertainment Partners,
the source of this bill, AB 55 would continue the option for
motion picture payroll services companies to be the statutory
employer of the many production workers involved with the
making of movies, television shows, music videos and
commercials in California. That model has proven beneficial
to the unions and guilds and the workers they represent, the
entertainment industry, and to the state. Entertainment
Partners also states that the stability that would be created
by this bill would ensure that the more than 150,000 motion
picture production workers which they served during 2010 would
continue to work in a vibrant and expanding California
production environment.
REGISTERED SUPPORT / OPPOSITION :
Support
Entertainment Partners
Screen Actors Guild
Opposition
None received.
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086
AB 55
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