Questions Asked More Than Once: Guilds + Unions
Questions Asked More Than Once is a sub-section of the E/S Collab. Blog. There are the generic FAQs and then there are those very specific questions that are often asked too late into the game. In an attempt to unriddle the important business stuff, we’re publishing those questions asked more than once and the answers we’ve given more than once. To be clear, posts in this series won’t be diving too deep and will be limited to a simple Q&A style.
1. What are residuals?
Residuals generally refer to a royalty which is paid to a performer, writer or director for the use of their work in a different medium (e.g., for repeat plays on television). Minimum residuals are generally governed by the applicable industry-wide agreements which are negotiated with the unions and guilds, which are applicable to a particular project.
2. When are residuals paid? Am I [the producer] responsible?
It varies, but generally after use of the applicable creative’s work in that other medium. Unless the sales agent/distributor expressly assumes those residual payments, the producing/rights holding entity will be the one responsible for them. In any event, the recoupment waterfall should always have a separate item for residual payments above financiers and profit participants, otherwise the producer might be surprised to see a large bill years later for residuals owed. As always, highly advisable that you consult a lawyer before entering into financing, distribution and sales agreements and raise this issue with your representatives.
3. What’s a SAG-AFTRA Bond?
If your production is a SAG-AFTRA production, you’ll need to set funds aside for the SAG-AFTRA bond. This a refundable security deposit paid to SAG-AFTRA before the start of principal photography. Until you’re all paid up, your cameras can’t start rolling. The bond is usually an amount equal to your performers’ first two weeks of payroll, and the applicable pension, health and welfare contributions. The exact amount will be calculated by SAG-AFTRA and provided to you directly by your SAG-AFTRA business representative once the signatory process is underway.
4. I’ve just paid my SAG-AFTRA bond, when will I get it back?
Usually upon completion. The bond is held by SAG-AFTRA through to the end of production and only returned to you once you provide satisfactory evidence that performers have been paid, all contributions have been made and all requirements met.
5. I’m a SAG-AFTRA signatory producing entity, can I run payroll myself to performers?
No, you’ll likely need to have an independent third party payroll company handle it and this will be specifically set out in your signatory paperwork.
6. I’m super low budget, and the creatives I’m working with are guild/union members. Do I still need to be a [insert guild/union] signatory?
Yes, definitely. Every guild and union will have different rules applying to different budget tiers so if you’re extremely low budget, there may be some flexibility. E.g., SAG-AFTRA recently introduced a new Micro-Budget Agreement for projects of USD$20,000 or less.
7. The budget is super tight. I’m not going to pay my [insert creative], but they are a [insert guild or union] member so I need to find a work around.
Unless you can get an express waiver from the applicable guild or union, this is not a good idea.
8. When does overtime kick in for SAG-AFTRA performers?
For day players, after 8 hours
For weekly players, after 10 hours
Note: Because the Ultra Low Budget Agreement on allows for day players/day rates, even if your performers are working a full week or more, over time kicks in after 8 hours.
Questions? Drop us a line.
Last updated: March 13, 2022
Disclaimer: This post should not be construed as legal or commercial advice and we recommend that you obtain independent advice with respect to guild and union related maters for your specific project and especially before entering into any applicable agreements. E/S Collab. makes no warranty or representation that this information is exhaustive, complete or accurate.