The L.A. Times gets around to looking at the expansion of freelance work:
Freelancing beats the alternative for many
Many formerly full-time workers must now move from contract job to contract job, without benefits. But at least it's a paycheck.
... In 2005, the federal government estimated there were more than 10 million independent contract workers, or 7.4% of the workforce. That number has almost certainly risen during the economic downturn, experts say, as companies shifted some work from employees to contractors to cut benefits costs and make it easier to jettison staff when business slowed.
... Labor advocates are concerned that the trend, if unchecked, will lead to a widespread retreat in the benefits American workers have come to expect, including paid vacations, employer-paid health insurance and money for retirement. ...
In Animationland, this trend has gone on for decades, starting in the late sixties and early seventies with outsourcing work to Korea, Japan, and other lower-cost parts of the globe.
In more recent times, the sub-contracting has happened on two fronts. There is still the overseas outsourcing, but added to the mix is sub-contracting work that occurs locally, and often inside the studio. (One favorite trick is to offer the "sub-contractor" the use of a company desk, a real "win-win" all the way around: the sub-contractor gets to use the company's equipment and pay all the Social Security and Medicare taxes, and the employer can look over sub's shoulder and give helpful instructions, just as though the sub was an actual employee! What could be finer?)
As the Times points out, the Feds are starting to come down on some of these practices, but companies like MBO have offered employers a way to side-step employment requirements. My take on the freelancer issue is, sub-contract work won't be going away. Conglomerates are keen on cutting costs in the lower ranks, and outsourcing to the lowest bidder is a fine way to do it. (Less cash for the work force means more for the Chairman of the Board and Chief Executive Officer, don't you know.)
There will be sub-contractors who do fine with this set-up, but many others who get shafted. Sadly, in the brave new world through which we now travel, the shaftings won't be ending anytime soon.
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I know lots of people who say they prefer freelance, because they make more money than when they're on staff. However, my observation is that freelance rates are steadily decreasing, so that they often tend to match what one would make as an employee, but without any benefits whatsoever.
If the studios keep this up, they will progressively destroy the local workforce.
Yet another reason American's are glad to have Health Care reform! Now they can pay a reasonable price for insurance while moving from job to job without fear of it being cancelled. Single Payer would have been better, but the new health care bill is FAR better than what we had, with anonymous insurance company beuracrats making deciscions on my health care instead of my docter, and the insurance company death panels and all.
The Health Care Bill is a mess that will cause more job losses and put a heavy tax burden on the next generation. BUT health care does need an overhaul. John McCain proposed allowing people to buy insurance that they can take with them from job to job. And others have proposed changes that don't involve government taking over from insurance companies - yeah THAT'S a reassuring idea. Hopefully after the midterm elections changes WILL be made. Repeal and reform sounds good to me.
Let's be clear: McCain's (and every other Health Ins owned Reublican)big proposal was keep the status quo. The only time they proposed something other than that was for the purpose of delaying reform.
Is the current reform perfect? God no. BUT it does allow the door to be cracked open and for the continued fixing of healthcare without going through all the contortions that it took to get to thsi point.
Now as far as freelance goes the true beneficiary of freelance is the studio. Besides the savings they make on no employee payouts they also are able to control the prices of the work by paying for piecework. Instead of hiring a storyboard artist for 4 weeks to work on a sequence which they may or maynot be able to finish in the given time (sometimes it runs into 5 weeks or more) they can set a per script page price and freelance it and know hat even if the work comes in late it will still cost the same no matte rwhat.
Interesting post about the cancerous growth of 'freelance' employees. Let's hope people can get over the health-care debate long enough to pay attention to something as important as this.
Actually the GOP stands for bondage bars in West Hollywood and a National playbook on scaring Americans to vote for them. The Dems on the other hand are still spineless and conceded to many of the demands of the Republicans on this latest health care bill only to have none of the elephant boys vote for it. Business as usual, both parties are in it for their own pockets and selling all of us short.
Question on this topic is, how can the Guild curtail the eminent growth of freelancers that will inevitably be the majority of the creative workforce some day soon?
If they are working at the company's place using their equipment and the supervisor is standing there offering comments, then the company is in violation of state and federal labor laws.
I've deleted various comments up above that got too far from the topic at hand.
Let's not refight the the '08 elections, okay?
And sometime in October, I can launch a thread about the upcoming Fall elections. But in the meantime, the topic is "Freelance workers."
Here's part of one of the deleted posts (cleaned up a little.)
...here's how the people really feel about the health care bill, from various polling organizatons: "So, what do the latest polls say about Michael, Matt and Elrod’s confidence? At the very, very least, the message is “Hold on just a second.” Whereas the first Gallup poll showed a 49-40 margin in favor of the bill’s passage, Gallup’s next poll showed the public disapproving of the bill by a margin of 50-47 (or -3). A new survey from ABC and the Washington Post put the margin at 50-46 (-4), with CBS reporting the same differential, 46-42 (-4), while Quinnipiac registered the strongest disapproval, at 49-40 (-9).:" Here's the link ...: http://themoderatevoice.com/67988/public-still-against-healthcare-bill/. And Real Clear Politics.com has figures that are even more damning - 52-41 against: http://www.realclearpolitics.com/epolls/other/obama_and_democrats_health_care_plan-1130.html Read it and weep ...- although I'd save a few tears for the midterm elections...
Like I say, we'll get to the mid-term elections in due course. And life will go on.
... If they are working at the company's place using their equipment and the supervisor is standing there offering comments, then the company is in violation of state and federal labor laws.
Yeah, but many still get labelled "indpendent contractors." Saves the company money.
I still have to ask because I dont know a answer...If you work at a studio that is illegally mis-clasifying you as a independent contractor...who do you report it to?
Can you report it to to anyone when you dont take the job. I interviewed at a place where I was told I would not get paid OT and would be still classified as a w-2 (which makes no legal sense) and other places outright say you'll be w-9 independent contractor.
Who would/could I call or write to get the company to stop?
And please, no "well dont take the job comments" There has got to be an official mechanism to report these companies no?
It's clearly time for more dynamic remedies. First, the government has to close the tax vacation companies get for sending work overseas. If the other countries want to compete with lower salaries, that's one thing, but salaries AND taxes breaks? No way. That's something we can do something about.
The next thing we have to do is reclaim our right to strike from the IA, which they had no right, morally if not legally, to take away. Then we strike every signatory studio laundering their labor through boutique studios or hiring in-house full time freelancers, even if they are nominally classified as "independent contractors."
If there are no actual hard consequences for those dishonest and destructive practices, they will never stop.
I'm dealing with this issue right now as I'm doing my taxes for 2009. I worked for a month at a company that doesn't have any artists on staff. I got a 1099-misc from them. I worked in their office, on their equipment, overseen by a manager, on their daily schedule. So the only benefit to me in being classified as a contractor is being able to write off my expenses. But what can I write off in this situation? I've learned my lesson. I won't work for a company like this again. Oh, and as far as the industry going towards freelancers,,,, aside from DW's contracts, almost every place is run of picture (even if it's not spelled out). Show's over, thanks for your time. We'll call you when we need you. And with ever decreasing production timelines (aka: crunch time) has become the standard work environment. So we end up going from studio to studio, show to show, walking in the door almost immediately to "we're in a push. We've only got 4-5-6 months left. We're on 10s (or 12s) and we'll be starting Saturdays soon." Quite frankly, it sucks.
To the 1099 person:
You can report the company to the IRS and you will not be responsible for the extra tax burden.
It takes a few hours of your time and you can save thousands of dollars of tax liability.
Here is the IRS link with the 20 Factor Test. If you fail one or more of these tests, you may be misclassified as an independent contractor. http://www.irs.gov/publications/p15a/ar02.html
I forgot the best part of the last post: the company you worked for then becomes responsible for the extra taxes, not you. They are stuck with penalties and interest. AND they are also audited to see which other employees have been misclassified.
The more animators that flex their tax rights, the clearer the message is to companies: if you cheat and try to pass on costs of employment taxes to your "Independent Contractors", then you will pay the IRS penalty price later.
btw, this works with EDD too.
More and more artists are doing the 1099 thing. Either because that is the only option for some projects or that is the way they want it. it really depends on the individual, some would rather not have their taxes taken out by the company so they can do it through their own entity due to several reasons. Others I have heard have actually made far more money as an independent and wish to keep it that way. Then of course the other side is to be full time. The problem with the latter is that projects don't seem to last as long as they use to and you have to hit the reset button at the end of every show. So I think it goes back to the individual and whats best for them.
Others I have heard have actually made far more money as an independent
Like I said before, independent contractors working short term used to be paid much better than salaried employees, to make up for the lack of benefits and the short-term nature of the work. Now companies are trying to make everyone 1099, and pay the lower pay rate at the same time. It is destroying the work force, and is accelerating.
There are definitely a small group of true independent contractors who come in, do very high level work, get paid a premium, and move on. Enforcing labor law won't affect them in the slightest. But in 2010, most people being forced to work on 1099's don't fit that 'high-pay, true independent contractor' profile.
Hydraulx visual effects in Santa Monica brings a lot of workers in at 1099. I worked there a while ago and it was the first time I heard of 1099. I had no idea it was illegal. They also paid ot only after 50 hours of work and only paid you after 30 days upon invoice. I eventually got paid after I left... 2 months later. But what can we do? Most people in the industry hate unions on purely ideological grounds and if we speak up and make these vfx houses even more unprofittable we will only be forced to work at a vfx sweatshop in Europe, Canada, and new Zealand.
But what can we do? Most people in the industry hate unions on purely ideological grounds and if we speak up and make these vfx houses even more unprofittable we will only be forced to work at a vfx sweatshop in Europe, Canada, and new Zealand.
If it's so easy to set up shop overseas, these scumbag companies would already be doing it.
Ever notice how many of these small vfx studios insist on staffing with young, bright, eager just-graduated-from-college kids? That isn't an accident. It's easier to exploit the young'uns because they want to make a good impression and build their portfolio, nevermind the shitty pay, the lack of health insurance, and the stupidly long hours that they don't get paid for. They usually don't realize until they hit their 30's that they've done no one any favors by working for free, especially themselves.
You want things to change? It goes back to artists having enough self-respect and support for themselves and each other to say, "Wait a minute, you want me to work here but be paid as a freelancer? ISN'T THAT ILLEGAL?" Same thing with falsifying timecards when one is actually an employee.
Open communication amongst artists will help, as well as follow-through. The studios will take advantage of artists every way possible unless the artists themselves finally say that they've had enough.
"Most people in the industry hate unions on purely ideological grounds..."
That's quite a statement. You have this on what authority? Citations, please.
To the post above,
Read this thread at cgtalk:
http://forums.cgsociety.org/showthread.php?f=2&t=863912
The mere discussion of a proposal to unionize vfx workers brings reactions of "unions are like communism".
The VES had a townhall meeting about the problems in the vfx industry and one of the proposals was unionization.
Time and time again I've heard artists complain about the amount they pay in union dues but when I point out they get double to triple the return in their IAP retirement account they ignore that. Why? It's because of pure ideology.
to Anonymous @10:16:00 AM, thank you for the IRS link. I checked it out and aside from the fact that I was hired to work on a particular show, there seems no reason to me why I would be classified as an independent contractor. Interesting. I'll have to look into it. Thanks again!
With regard to people not wanting to go union, I think the biggest problem with how the union system works now is that people are no longer at a facility long enough for their cards to count.
With regard to people not wanting to go union, I think the biggest problem with how the union system works now is that people are no longer at a facility long enough for their cards to count.
I understand that gigs are getting shorter but the union does a better job accommodating workers for that than the facilities. The condition is worse for short term artists who are not in the union and let me show you why personally:
I worked 2 years at a big vfx house and was let go. I lost my health insurance after one month and lost 75% of the 401k match the company gave me.
I then worked 2 years for a big company with the animation guild. For unrelated reasons I recently quit my job. I get to continue having the union health insurance for another 17 months! I'm also fully vested in the Individual Account Plan which is at $12,000.
The crazy thing is most of these benefits kick in after 450 hours of work which was 9 weeks for me.
to anonymous@6:09:00 PM: You responded to my post and I totally agree with you. I read this blog because I worked at a union shop for about 6 months. After that, I got a job at a place that didn't offer insurance but I was covered for quite awhile because of the coverage I earned while at the union shop. I'm now back at the big vfx shop so I have coverage now but with all the money I'm putting into the plan, as soon as I leave, I lose it (unless I continue to pay for COBRA). I would be a big fan of both health and retirement packages following me from job to job. My comment was merely a practical concern. Steve reported awhile ago the number of cards he'd gotten from a facility and there were hundreds that didn't count anymore because the people had been laid off from that facility.
Unionizing is not difficult. In theory. Under the NLRB (National Labor Relations Board.)
In real-time, real life, it can be difficult. But when a tipping point is reached (i.e., employees are pushed to the edge), it can be remarkably simple. And speedy.
Employers usually run an anti-union campaign that includes group meetings, veiled threats of closing if workers vote to "go union," one-on-ones with key employees, layoffs of perceived "trouble makers." (This can mostly be avoided if the "trouble maker" puts the company on notice that he/she is actively working to unionize the place, because this deprives the company of plausible deniability that it knew the person was participating in a "protected activity" (unionizing.)
Labor attorneys with their salt will tell the company to leave the person in place to avoid a labor board charge and/or lawsuit.
Doesn't mean the trouble maker won't be let go at some future date when lots of others are laid off, but it protects people short-term.
To blogger 4:46 PM,
<>
I followed your link to the VFX blog and saw the Red-baiting you referred to.
My impression: These blogs are basically coming from a single individual pretending to be several people, hardly "most" of them. Obviously, this deception worked on you. Actually most of the bloggers seemed to agree on the urgency of organizing.
No sane, intelligent person has seriously equated unionism with Communism since the 1930s. That's what indicates to me that this blogger is a ringer. He is either a corporate shill or a small studio owner tossing a "red herring" (pun intended), trying to throw a monkey wrench into the discussion. Either that, or he's just a general troll provoking just for the fun of it.
Don't be discouraged-sign the cards!
How does someone go about joining a union or guild, is it dependent on your location?
http://www.animationguild.org/answers.htm
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