BILL ANALYSIS �
AB 533
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Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hern�ndez, Chair
AB 533 (Ian Calderon) - As Amended: April 18, 2013
SUBJECT : Artistic Employment Contracts: minors.
SUMMARY : Excludes background performers from the requirement
of establishing a Coogan Trust Account (Account), as specified.
Specifically, this bill :
1)Provides that the court shall not require the employer of a
minor for services as an extra, background performer, or in a
similar capacity, as specified, to set aside 15% of the
minor's gross earnings.
2)Exempts an employer of a minor for services as an extra,
background performer, or in a similar capacity, as specified,
from depositing or disbursing the 15% of the minor's gross
earnings pursuant to the contract within 15 business days
after receiving a true and accurate copy of the trustee's
statement, a certified copy of the minor's birth certificate,
and, in the case of a guardian, a certified copy of the court
document appointing the person as the minor's guardian.
3)Provides that notwithstanding any other statute, for any
minor's contract for services as an extra, background
performer, or similar capacity, as specified, that is not
being submitted for approval by the court pursuant to existing
law, or for which the court has issued a final order denying
approval, is exempt from having 15% of the minor's gross
earnings pursuant to the contract be set aside by the minor's
employer.
4)Stipulates that an employer of a minor for services as an
extra, background performer, or in a similar capacity, as
specified, is not required to deposit 15% of the minor's gross
earnings pursuant to the contract within 15 business days of
receiving the trustee's statement, or if the court denies
approval of the contract, within 15 business days of receiving
a final order denying approval of the contract.
EXISTING LAW :
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1)Requires the written consent of the Labor Commissioner (LC)
for the employment of a minor in the entertainment industry,
as specified.
2)Provides that once written consent is given by the LC, as
specified, that consent shall be void after the expiration of
ten business days from the date the written consent was
granted unless it is attached to a true and correct copy as
evidence that a "Coogan Trust Account" has been established on
behalf of the minor.
3)Requires that 15% of a minor's gross earnings be set aside by
the minor's employer in trust, in an account or other savings
plan, and preserved for the benefit of the minor.
4)Requires that the minor's employer deposit or disburse the 15%
of the minor's gross earnings within 15 business days, as
specified. Pending receipt of (among other things proof of
the establishment of a trust account), the minor's employer
shall hold, for the benefit of the minor, the 15% of the
minor's gross earnings pursuant to the contract.
5)States that if a parent, guardian, or trustee fails to provide
the minor's employer with a true and accurate photocopy of the
trustee's statement within 180 days after the commencement of
employment, the employer shall forward to The Actors' Fund of
America 15% of the minor's gross earnings to hold until the
minor reaches 18 years of age, as specified.
6)Provides that if a minor renders services as an extra,
background performer, or in a similar capacity through an
agency or service that provides one or more of those
performers for a fee, such as a casting agency, the agency or
service shall be considered the minor's employer.
FISCAL EFFECT : None
COMMENTS : According to the author, "Existing law requires that
all child actors must have 15% of their earnings set aside in a
Coogan Trust Account, which may not be accessed by anyone
including the child actor until after they become adults. For
child actors who earn large sums as principal performers, the
Coogan law provides needed and beneficial protection. However,
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for kids who only work once or twice a year as an extra or
background performer, this requirement is an unnecessary and
inefficient waste, and simply denies kids some summer fun money.
This bill corrects this situation and removes the requirement
that the parents of background kids have to create Accounts."
Central Casting, the largest casting agency in the world, states
that background kids work less than two times a year on average.
The author concludes, "The daily pay rate for the background
actors is $64/8 non-union and $145/8 for kids who are in
SAG/AFTRA. When you take out 20% for their agent; 7% for taxes;
15% a Coogan Trust Account, very little is left to deposit.
Given that some banks charge fees for the Account, and draw it
from the corpus of the trust, this pittance is exhausted
quickly. For those accounts which are in place waiting until a
child becomes an adult to release the funds is really
inefficient and does little further our goal with the Coogan Act
to protect kids."
According to The Actor's Fund of America (AFA), "the Unclaimed
Coogan Fund has over 38,000 individual deposits, and over 32,000
of them are for less than $99." Very few have aggregated sums
of substance, which leads AFA to conclude it's probably all
background players who are abandoning their money rather than
establish a Coogan Trust Account.
In a recent article discussing the ongoing class action lawsuit
against Bank of America (B of A), (alleging that their practice
of collecting fees from Coogan Account Trust Funds violates the
Coogan Act), it was noted that B of A requires a minimum deposit
amount of $300, and will charge service fees on accounts which
slip below that limit. Backstage, Did Bank of America Steal
From Child Actors? Sean J. Miller, Sept. 24, 2012 . Other banks
also charge fees for the establishment and maintenance of the
Accounts.
Background on The Coogan Trust Act
The Coogan Trust Act was enacted to preserve a portion of a
minor's earnings under an employment contract for creative or
artistic services, for the minor's use when he or she reaches
the age of majority. SB 1162 (Burton), Chapter 940, Statutes of
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1999, overhauled the Coogan Act. Applicable to both
court-approved and non-court-approved minors' contracts for
creative or artistic employment, SB 1162 required 15% of a
minor's earnings to be set aside and deposited into a "Coogan
Trust Account", invested in low-risk financial vehicles, and
blocked from use until the minor is emancipated or reaches age
18. To enforce the set-aside, SB 1162 imposed a duty on the
employer to make the deposit directly into the minor's Coogan
Trust Account, which a parent or guardian is required to open at
an insured financial institution and to invest in a manner
consistent with that of a trustee. Annual accounting is
required, and court supervision of trust accounts for minors
with court-approved contracts continues until the minor turns
18.
To further strengthen enforcement of the Coogan Act, the
Legislature adopted, and the Governor signed, SB 210 (Burton),
Chapter 667, Statutes of 2004, which added the requirement that
the LC's written consent for performances of a minor under Labor
Code Section 1308.5 be limited to 10 days, unless a Coogan Trust
Account has been established.
SB 210 also created a mechanism for payment of the Coogan
set-aside to AFA for those child performers whose parents failed
to establish a Coogan Trust Account. The AFA holds the money
for the benefit of the child until such time as the child claims
his or her funds. Periodically AFA will advertise the Unclaimed
Coogan Account, and makes best efforts to contact children whose
15% set aside is being held in trust for them.
REGISTERED SUPPORT / OPPOSITION :
Support
BizParentz
The Actors Fund of America
Opposition
None on file.
Analysis Prepared by : Lorie Alvarez/ L. & E. / (916) 319-2091
AB 533
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