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Employer of Record Payroll: Benefits and Services

Original publish date: February 16, 2023

As we discussed in part 1 of our breakdown, an employer of record can help independent filmmakers and producers minimize the many unnecessary burdens on their productions by streamlining the process of getting your crew paid. But how does this middleman get the job done? What factors should be considered? There’s certainly a lot to think about when vetting vendors, so let’s look at some of the common questions that arise when debating the addition of an employer of record (EOR). 

What about governmental requirements? 

When it comes to getting crews started, their time recorded, and their money paid on time, EORs provide the support productions need to free up a heavy workload. During the onboarding process, an employer of record ensures that new hires stay compliant with state and federal regulations and that their information is accurate before submitting it to the Department of Homeland Security.

This includes the important I-9 form, which verifies a person’s legal ability to work in the United States. If submitted incorrectly, a production or producer could face significant fines. EORs remove that concern. They also handle W-4 distribution, collection, and compliance, ensuring that they know how to pay employees and how much tax should be withheld.

It is critical to have this information squared away before payroll commences, so an employer of record will ensure that all necessary forms are properly filled out. (We suggest checking out TiM for all your payroll needs. It’s simple, easy to use, and legally compliant.) 

Can an employer of record help with tax administration?

There is obviously a tremendous amount of work involved in keeping production companies and their projects compliant with up-to-date tax laws, and no one wants to be on the wrong side of a tax administration dispute.

Just giving an employer of record a zip code allows them to calculate local, state, and federal obligations for everyone working on a project. It also allows them to do withholdings and pay the IRS for things like taxes, Social Security, Medicare, and unemployment insurance, saving a ton of headaches in the process.

When it comes to FICA (Social Security and Medicare), the cost is split between the employer and employee. By providing accurate calculations, EORs ensure that payments are always accurate. They file tax returns, wage reports, and records of remitted payments to the IRS, Social Security Administration, state Franchise Tax Boards, and state Unemployment Insurance Departments.

EORs ensure that the hiring and paying of employees remains compliant, helping to avoid fines and fees. And when it’s tax time, they issue W-2s and 1099s to employees.   

How can EORs help with SUTA / FICA?

In the area of state and federal unemployment insurance (SUTA / FUTA), an employer of record provides a host of benefits, many of which you can read about in our previous article. They can mitigate the headache of dealing with multiple agencies by withholding the appropriate unemployment liabilities and remitting payments to the necessary entities.

Additionally, they process unemployment claims whenever an employee chooses to file for relevant benefits. As a bonus, they also handle verifications for employees, should they need one (like when they’re buying a home).  

How about wage garnishments and workers’ compensation? 

EORs even handle wage garnishments and withholding orders from governmental bodies. If a garnishment is received—usually for something like child support, spousal support, or tax liability—EORs can do the calculations and remit the accurate payments to the proper authorities. These withholdings are extremely time-sensitive, and they can be complicated when multiple orders target the same employee.

And on the occasion where a workers’ compensation claim enters the equation, an employer of record can administer insurance on a production employee’s behalf, remitting the proper payments as needed. Apart from Texas, every state in the country requires a production to have workers’ compensation insurance. Depending on the region, compliant insurance may be purchased from the state itself (likely a monopolistic fund) or from a variety of private insurers (competitive funds). As many productions can film in different states and locales, this issue can become a complicated pain point. An employer of record can administer workers’ compensation on behalf of a production’s employees and remit the appropriate payments. 

Can an employer of record help me navigate guild requirements?

As with any other aspect of the entertainment industry, EORs have learned to work with all relevant unions and guilds, who each have their own sets of rules and regulations to follow. EORs handle the fringes, making sure that employees are paying into their pension and health benefits plans (calculating the cost split between employee and employer). They work with union talent to ensure the minimum wages laid out in union contracts, avoiding unnecessary fines for things like meal penalties, forced calls and turnaround penalties, and overtime. By hiring a production-ready employer of record, SAG projects need simply fill out an Exhibit G form. 

What should I look for when hiring an employer of record?

It is imperative that you find the right employer of record to fit your project; one that can help mitigate painful financial burdens while earning your production an experienced administrative ally and superior products and services.

Media Services provides a wealth of institutional knowledge and understanding (not to mention a robust selection of ancillary services) to that end. By combining robust incentives financing and production insurance program benefits with the power of the complementary Showbiz software, your production can ensure its compliance while relieving considerable time constraints and eliminating the burden of overseeing its own complex payroll structure. 

Still have questions? Reach out to our team here and we’ll help you get the ball rolling so you can start enjoying the benefits of having extra time and peace of mind. 


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