Employer Of Record Ripoffs

The Animation Guild’s organizer Steve Kaplan has a post on Employer Of Record companies like MBO and Yurcor:

Word from the westside of town is artists working at The Mill in Santa Monica are paying their share of taxes .. as well as the employers.

The Mill has engaged Yurcor to act as the Employer of Record for the artists they employ. Officially, artists work for Yurcor and are “loaned out” to The Mill. Yurcor is therefore responsible for the reimbursement to the artists for their work time at The Mill.

IATSE labor attorney and organizer Jim Goodman also has his analysis on the issue (and in my opinion knocks this one out of the park):

At the Mill, employees aren’t given the choice! They are required to go through an “Employer of Record”, which essentially says two contradictory things:
1. you are an independent contractor. and your own employer. so you have to pay “employer” share of payroll taxes. that’s an added cost to you. Around $10,000 per year.
2. and you are also an employee. Of who? or should I say, of what???

VFX artist Joe Harkins (who I welcome back to the vfx bloggin world) also has a post on the issue (with my emphasis in bold) :

What’s the solution?

There’s another tough question.  I think it’s partially the artists fault for being, well, somewhat gullible.  Then you top that off with the greediness of the VFX companies we work for surviving on thin margins, and there you have it.  The clients aren’t going to start paying more, there’s too much competition for that.  This is capitalism at work.  In my opinion, unless all the artists at these companies reject paying 15% to an EOR company and force their companies to ante up and start paying the difference, then likely nothing will change.

At the end of the day, we as VFX artists are losing this game.

We must be collectively intelligent in order to make good decisions about our financial futures.  Just going with the flow is too easy.  I realize most people can’t take a stand, after all, they want to work and get paid, but seriously…

Here’s my simple opinion on this. It’s pretty obvious some facilities are doing this to cut corners. If this was legal EVERY facility would have used these EOR services ages ago. Many of them avoid it because they run the risk of some big legal trouble.

Soldier On.

15 Responses to Employer Of Record Ripoffs

  1. rfk says:

    Either that, or the artists set up their own loan-out corporation and insist upon being paid through that.

    • skaplan839 says:

      Yurcor won’t let that happen. They badger artists into not using their S-Corps in this way.

      Everything I’ve found points to this being illegal. As Soldier mentioned, this is nothing more than another way a studio can keep costs down. From what I’ve been shown, this is exactly how Yurcor sells it to employers they approach.

      We’re gathering information to see how we can put a stop to this. If you’ve had a relationship with Yurcor, and want to help, contact me at 818-845-7500 or skaplan@animationguild.org.

      Steve Kaplan
      Labor Organizer
      The Animation Guild, Local 839 IATSE
      skaplan@animationguild.org

  2. gangstabougie says:

    RFK, The Mill currently will not work with loan-out corporations at all. If you are an S-Corp, you still have to deal with Yurcor and they will insist on you having bizarre types of insurance before they will pay an invoice. In addition, folks have reported 3 month turnarounds on invoice payment through Yurcor.

  3. daland4vfx says:

    This also allows these kind of facilities lowball jobs and drive the market price of our craft into the ground. On the commercial side, cost consultant companies keep a record of awards and use this lowball pricing to intimidate the facilities that are trying to stand firm. Everybody loses except the Wallmart-VFX execs.

  4. Paul says:

    Logan requires EOR (advises Yurcor) or your own LLC. What’s next bring your own system?!

  5. Bran says:

    I think the answer is to stop working freelance. Ask for an hourly staff job and get protected as an employee under FLSA.

    Are these companies paying their full-time employees through Yurcor, too? Or are they using 2 payroll services?

  6. vfx2cents says:

    Yurcorp is a rip off. don’t ever work for anyone who’s using Yurcorp to pay you.

  7. vfx2cents says:

    Also beware of the agency called VonChurch.

  8. gangstabougie says:

    Bran,

    More often then not, you don’t have a choice. You are presented with the option of working with the EoR or simply not taking the job. And yes, the staff employees are paid with a W2 as is legally required, so the company uses two different payroll services.

  9. […] a related note The Animation Guild is also helping artists go after Employer Of Record companies ripping off VFX artists. Check out litany of commenters forced to pay their employers’ payroll taxes on TAG Organizer […]

  10. […] portable retirement accounts, and enforcement of basic labor laws such as OT and the elimination of Employer of Record ripoffs. The best thing: All you have to do to unionize your facility is sign a rep […]

  11. Mike Irving says:

    Unfortunately, those who have been the industry long enough will understand this. Kids with “the dream” of seeing their name in the credits, that no one stays for, and working on that so cool movie wont give three sh*ts about this. Down the road they will learn and then the new crop will pop up. It’s a vicious cycle.

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