How To Have the Payroll Conversation With Your Clients
As a photographer/producer, you’re probably hearing about changes in the industry that make payrolling assistants and crew a desirable necessity. But how do you talk to your clients about the unavoidable increase to their budgets? The shift to payrolling some employees is an inescapable evolution of the industry, but if you educate your clients with clear explanations and solid cost estimates, you can get them on your side and keep everyone compliant with California labor laws. It’s a tough conversation, but OOTB is here to help you through it.
Why is this happening?
The California bill, known as AB 5, expands a groundbreaking California Supreme Court decision last year known as Dynamex. The ruling and the bill instruct businesses to use the so-called ABC test to figure out whether a worker is an employee. To hire an independent contractor, businesses must prove that the worker a) is free from the company’s control, b) is doing work that isn’t central to the company’s business, and c) has an independent business in that industry. If they don’t meet all three of those conditions, then they have to be classified as employees.
To avoid legal liability under these shifting laws, it is extremely important to understand which crew roles need to be payrolled and which can be classified as independent contractors. Even one employee misclassification lawsuit can be financially devastating and irreversibly damage a photographer’s career.
Some clients are passing this liability on by asking photographers/producers to be responsible for hiring and paying assistants and crew. However, payrolling employees is a complex process that requires time, resources, and specialized knowledge. A payroll company can help you navigate these complexities and many California industries are starting to utilize a payroll partner. OOTB specializes in the commercial photography industry, so having our payroll solutions already in place can be a huge relief to clients and producers who don’t have the time, capacity, or knowledge to administer payroll themselves.
Having the conversation.
Educate your client.
Have a conversation about why this shift is happening. Remind your client about the recent changes in California labor law and the legal necessity of becoming compliant.
Emphasize the benefits, for both employers and employees, of being protected on set by the elements of properly implemented payroll, including worker’s compensation insurance and federal- and state-mandated benefits.
Clients know that payrolling is required, but it is often too large of a project for them to take on. By offering the solution in hand, clients will be open to talking about how to properly implement payroll not only to protect themselves, but their workers.
Discuss the new costs (and benefits) of payroll.
Be prepared to offer a clear estimate of the new costs to your client. OOTB is happy to build an estimate for you.
Remind your client that, while they will need to pay more with payrolled crew, the extra cost includes the following elements (and administrative peace of mind):
OOTB’s expert payroll administration and guidance regarding wage/hour laws and regulations and compliance with federal, state, and city (including San Francisco) mandates.
Easy-to-use timekeeping app for crew members
Workers’ compensation insurance
Tax withholdings as per state and federal requirements (including Social Security and Medicare)
Paid sick leave ordinance
State and federal unemployment insurance and unemployment claims processing
Remember: You’re Not Alone
OOTB is here to be your partner in payroll and take the headaches and confusion of HR off your plate so that you can get back to doing what you do best.focus on creating beautiful images for your clients. We provide assistance with all onboarding, payroll compliance, claims management, and timekeeping and payments to workers. You will have a dedicated account manager who knows both the technicalities of payroll AND the idiosyncrasies of labor in the commercial photography industry (1-day hiring, day rates, etc.) to help you along the way.
Talking about an increase in costs can be challenging, especially when it’s a relatively new shift for an (our) industry. But by providing your clients with clear information and a solution that is both ready to implement and tailored to your needs, you can make it easy for them to navigate the necessary change.