Payroll

The gig economy offers benefits to workers and companies alike. While those benefits do include flexibility for workers and lower costs to employers, they don’t cover things we’ve grown used to such as built-in 401K plans, health insurance options, and worker’s compensation. For many independent contractors, that’s a problem. And as the gig economy’s slice of the economic pie grows, so does the problem. Currently, there is no roadmap telling you how to pay contractors fairly while keeping costs down. The good news is that we at PayReel have been on this road long enough to learn how to pay contractors legally and ethically.

Start with worker classification

First things first: classify workers correctly from the outset. A worker’s classification (whether they’re an employee or an independent contractor) guides what freelance benefits they’re entitled to by law. The rise of the gig economy has brought with it the rise of confusion over who is an employee and who is a contractor. Wherever gray areas and money meet, you will find lawsuits. True to form, legal disputes over worker classification have plagued everyone from Uber to FedEx. Following the rules and classifying correctly from the beginning saves time and potential legal troubles.

Stay aware of potential legal changes

From workers to legislators, people are thinking about how to manage the evolving landscape. Some envision an entirely new system with changing guidelines that suit changing times. Such a system might include “portable benefits” that travel with workers from company to company.

According to this article from the Pew Charitable Trusts, one bill proposes to:

“require people or companies that find work for and transfer payments to independent contractors — Uber, say, or a middleman who works with farm laborers — to contribute to a pool of money managed by an independent nonprofit. The broker might do that by charging consumers extra or by taking the money out of workers’ pay.

Contributions would be made at least monthly and would have to amount to either $6 per hour worked or 25 percent of the sum charged to the consumer, whichever is smaller. The money could be spent on paid time off, health insurance or other qualified benefits.”

We can only guess how things will change, but we do expect them to change. It behooves company leaders to stay in tune with these kinds of conversations and legal considerations.

Consider more than the bottom line

Some companies aren’t waiting for a legal mandate to make changes. Instead, they are voluntarily providing freelance benefits beyond their legal requirements. Care.com, for example, adds a small fee to each transaction, which converts to “benefits bucks” that service providers may use for expenses such as transportation. This kind of perk goes beyond the money in a worker’s pocket. Workers who feel valued are more loyal and do better work.  

Protect yourself

If you can’t (or just don’t want to) keep up with the rules and developments surrounding the on-demand economy, PayReel can keep up for you. Check out this handy guide to see if you might benefit from hiring a payroll services company. Not only does our team manage worker classification, payroll, and payroll taxes; as the employer of record we even take on all risks associated with a variable workforce. Going above and beyond in the ethics department isn’t just a warm and fuzzy notion. It’s a sound business decision, too.

About PayReel

When it comes to payroll taxes and so much more, PayReel makes your life easier. Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want, when they want and that everyone is paid properly. Leave all payroll services and details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

Heads up: The way the production industry has traditionally approached contractor payroll just isn’t going to cut it anymore. Though currently stalled, new overtime regulations are questioning outdated payment practices—including day rates in the production industry.

Wherever you find new guidelines radically changing previously-accepted practices, you will also find someone trying to get around them. But it behooves companies to be ahead of the guidelines instead of trying to work around them. Just ask Volkswagen.

For its shady dealings (which the BBC broke down here), Volkswagen is paying the price to the tune of $20 billion—one of the most expensive corporate payouts in the United States’ history. But it’s not all about the money. While the circumstances differ, the production industry can learn a few lessons from Volkswagen’s scandal about how to walk above board and avoid ending up in court.

Culture is everything, and it’s about to shift for the production industry

Martin Winterkorn, Volkswagen’s then CEO, implicated “the terrible mistakes of a few” in his apology. But a scandal so deep doesn’t happen without a company culture (hello, Supervisor B!), and a broader auto industry culture, that tolerates or encourages finding a way around the rules.

A New York Times article points to the cultural element in industries that traditionally require long hours—like video production—that has always made room for fudging paperwork. Companies negotiate a flat rate and contractors work as long as it takes, even up to 12 or more hours, to get the job done. Since it’s standard practice, submitting timesheets that read “9-5” when everyone knows it was actually 9-9 hasn’t necessarily seemed unethical or unfair to either party. That’s just the way it is. Or at least the way it has been.

The new proposed regulations make it clear that even when workers claim to be okay with not getting paid accurately, it’s not actually okay. Employers must be prepared for the culture to shift and for workers to start questioning their overtime eligibility.

When the press talks, the people talk…

There’s nothing that shifts culture more than attention. As laws change at the state level and contractors and workers start thinking “this relates to me,” there will be pushback against industry norms. And it’s not just the workers. The media love to find and expose wrongdoings. Nobody wants to be the center of the biggest scandal of the year. Once again, just ask Volkswagen.

A mutual expectation of a flat rate for an undetermined number of work hours doesn’t count as compliance. Duties and levels of pay dictate whether or not someone is eligible for overtime, not tradition. The more the press highlights these points, the more the people talk. And the more the people talk, the more the wink and nod approach in the video production industry will come under scrutiny.

…and money always talks

The air is dirtier, the ozone is thinner, and consumer trust is shattered. Unfortunately, Volkswagen isn’t the only company bending the rules or blatantly cheating in order to make a buck. Theirs is a tale as old as time. They just got caught.

And it’s coming to our industry too—the same New York Times article states that Fox is in litigation with a former worker who alleges he was paid unfairly. Once a studio gets shut down with a class action lawsuit, everyone will suddenly tighten up their practices and fall in line. But why risk finding yourself at the defense table in a courtroom? It’s not the amount of money that makes it relevant to our industry, it’s the fact that people are paying attention to it.

Don’t be the Volkswagen of the media production industry. It’s going to happen to someone. Why gamble your business instead of just starting to recognize eventual changes to overtime regulations now?

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

The Department of Labor’s Fair Labor Standards Act (FSLA) will make about 4 million more workers eligible for overtime on December 1st, 2016. With 21 states suing to end the act altogether, some businesses may be hoping it all just goes away before they have to make changes. But waiting is risky. Getting ready for upcoming changes now ensures companies stay in good standing with employees and the government, too.

Four ways to prepare for payrolling contract employees in light of new rules

1. Provide a daily guarantee for a pre-negotiated flat rate for contractors. Budget for overtime if applicable.

2. Start tracking time accurately. Businesses and contractors using obligatory, inaccurate timecards need time to adjust to new processes.

3. Classify workers correctly upfront. This is a big one because it sets you up for success. In fact, you can read a whole slew of advice on the topic by clicking here.

4. Read our previous posts on what the Volkswagon scandal teaches us about the FSLA and payrolling and four ways to prepare for changes to contractor payroll.

The production industry must adapt to remain competitive. And it may wreak havoc on some budgets in the short term. But this whole thing goes beyond the numbers. Companies that treat people fairly attract high-quality workers. And when people feel valued, they go above and beyond. Proactive compliance is good business.

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

Time is money. And when you have a tendency to get buried under onboarding, vendor payment, classifying temporary employees, and other hiring details, time is priceless. Here’s a brief quiz to determine if hiring someone to handle your payroll services might be worth the investment.

Do you regularly hire independent contractors and/or temporary employees?

Is said hiring and onboarding one of the most time-consuming parts of your role?

Do old-school payment processes or corporate legal concerns cause frustrating bottlenecks?

Is your desk/desktop cluttered with binders, folders, and paperwork?

Have you ever made a contracting bad hire because of a time crunch?

Do you get pulled into fighting payrolling fires at least once a month?

Would a high level of service free you up to focus on other aspects of the business?

Do concerns about compliance, worker classification, IRS audits, and workforce headcount keep you up at night?

Have you ever lost favor with one of your best contractors by paying late?

Do you have a reputation among contractors for paying late?

Not everyone needs a service like PayReel (especially startups and small businesses), but if your blood pressure went up as you read the list above, you might need PayReel. For those who need quick/frequent access to qualified contractors or who want to take all the risk out of dealing with the independent workforce, PayReel is a headache-free solution. PayReel’s independent workforce engagement solutions make classifying, onboarding, and paying your freelancers painless, paperless, and personalized. It’s about time.

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail perfectly while making sure their clients think nothing of it. Relax. We got it.

Like it or not, upcoming overtime exemption rules will change the way the production industry engages with contractors and freelancers. In the past, we talked about where things have been. Here, we’ll talk about where they’re going and what you can do to stay ahead of the curve.

Be aware.

If you hire contractors, you need to be aware of the following in order to maintain trust and stay out of trouble:

1. Industry standards such as hiring contract employees on a day rate aren’t always in compliance with the laws. Educate yourself so you can learn to bridge the gap between the two.
2. Be up to date on the specific requirements where your project is located (California has different rules than Colorado, for example).
3. Find an expert who can classify workers correctly and identify who is legally exempt from overtime.

Be proactive.

Productions are hectic enough. Do your homework ahead of time to squelch possible legal problems and avoid the pressure of trying to implement last-minute changes.

To start, determine who needs to be paid a flat rate and who is exempt. If you aren’t sure, engage someone with production-specific expertise in this area.

Be transparent.

In a previous post, we talked about Volkswagen’s trouble with shady, dishonest practices. In his post-scandal apology, Martin Winterkorn (Volkswagen’s since-resigned CEO) gave his word that they’d “proceed with the highest possible openness and transparency.” This shows he understands that people care about transparency, but can a company that size turn on a dime to become fully transparent? It’s a lot easier to trust a company that is proactively committed to transparency and has it’s employees’ and freelancers’ best interests at heart.

To demonstrate your commitment to transparency and earn trust:

1. Make announcements about all your changes to both internal employees and all relevant external parties with as much advance notice as possible.
2. Make your intentions and changes as clear as possible.
3. If you make mistakes (which you likely will), share about that, too.

Be above board.

Just like so much in life, there are ways around the rules. But if you operate in the gray area, you’re gonna get caught—or at least earn a negative reputation.

To stay above board:

1. Do the right thing upfront. In this industry, most contractors probably make above the $47,476 yearly threshold if you annualize their day rate pay, but that’s not the point. At the heart of the law is President Obama’s goal of providing “a fair day’s pay for a fair day’s work.” Paying for overtime is the right thing to do and will make you a preferred client (which, by the way, means you’ll get better workers who do better work).
2. Avoid backing-in to artificial hourly rates or employing the split-day plan to find ways around the rules.

Laws are ever-evolving at the state and local level and keeping up with them is a full-time job. It takes a lot of time and expertise to stay on top of these many details, but it’s a worthwhile investment. If you don’t have the time, resources, or desire to pay attention to all the details, hire a team like PayReel. Our PayReel OnLine software is fully equipped to help you sort out the rules and execute processes while also balancing contractor expectations, legalities, and company budgets.

If you have any questions about how your company’s keeping up, call us at 303-526-4900, shoot us an email, or contact us here—any time, day or night.

About PayReel:

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail—down to insurance for temporary employees—perfectly while making sure their clients think nothing of it, so they can get back to doing what they do best.