Tell Us Your Experience With Yurcor In NYC!

In late 2011, I became aware of unusual and unexplained deductions from the paychecks of visual effects artists working at The Mill in Santa Monica. Subsequently, I learned about Yurcor and its “Employer of Record” services for The Mill. The more I learned, the more I questioned whether the deductions were lawful. I wrote a few posts about the situation and perhaps you read them.

This spurred quite a few artists, who worked for VFX houses using Yurcor’s “Employer of Record” services, on both coasts to contact me. A few artists in California indicated they were willing to take action on behalf of their peers to recover the amounts deducted, and I helped them to get started doing so. Those individuals brought a class-action lawsuit against the Mill and Yurcor with respect to their California employees. That case has been tentatively settled subject to final court approval, which is currently scheduled for April.

The New York artists originally voiced many of the same complaints made in California, but added that the practice was much more prevalent in NYC. We are now ready, willing and able to help New York artists.

If you’re a New York artist who has worked through Yurcor and interested in attempting to recover questionable deductions made by Yurcor, please fill out the form linked below. Even if you have already done so, please fill it out again now so we can be sure our information is up to date. I will get back to you very soon.

Animation Guild NYC Yurcor Form

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Artists' Stand Paying Off

In November of 2012, we wrote about artists who had filed a class-action lawsuit in Los Angeles against The Mill and Yurcor. The issue: employee wages were being deducted to pay the employer's taxes. The artists have now reached a settlement with the companies, which has been preliminarily approved by a federal court judge. The hearing for final approval is scheduled for April 2014.

As soon as I took my position as the Guild’s organizer, I was asked about the legality of wage deductions artists were forced to accept with Yurcor when working at The Mill. After seeing the “payroll tax” that was levied on them and thinking something wasn’t right, I did some research. Shortly thereafter, I contacted the Guild’s attorney, and started to reach out to artists to see if there was any interest in legal action.

The Guild is extremely happy to hear that the artists have prevailed in this matter. We are glad to have been able to help and hope that visual effects artists can take note of the importance. However, we are also aware that the wage deduction practice has not been stopped, but has only taken on a new shape.

Those few artists who led the charge have helped over two hundred of their friends and colleagues benefit financially from the court’s decision. More importantly, this shows that artists have the ability, and therefore the POWER, to take actions to improve their working conditions.

The decision to act, individually or together, is always an option. If you are ready and interested in making a change in your workplace, let us know by signing a card, or feel free to email me.


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Artists Taking a Stand

A little over a year ago, we posted about our discovery of the hiring practices of The Mill in Santa Monica and were introduced to the EOR company, Yurcor. As mentioned in that post, we asked for artists who had experience working through Yurcor to contact us to explore the possibility of recovering wages we felt had been taken illegally.

We've recently received word that some of those artists have been able to file a lawsuit against The Mill and Yurcor:

Recently, three Los Angeles artists filed a lawsuit in state court against The Mill and Yurcor. The Mill, a visual effects production company, employed the three artists on a temporary basis. Yurcor, which processed the paychecks of artists at The Mill, told the artists that it was their “employer of record” while they worked at The Mill. In the case, which was filed in California state court as a class action on behalf of themselves and an estimated 500 other California artists, the artists allege that The Mill and Yurcor failed to pay them the compensation that they were promised.

The lawsuit alleges that The Mill and Yurcor schemed to treat California artists as independent contractors when in fact they were employees. Under California law, the artists were employees and not independent contractors because The Mill exercised total control over the manner in which they worked, and also set their wages, hours, and other working conditions.

In addition to taking standard employer payroll deductions from the artists’ paychecks for their work at The Mill, Yurcor also took illegal deductions from their wages for Yurcor’s “administrative overhead costs.” As alleged, The Mill and Yurcor sought to confuse and deceive the California artists about their employee status in order to enrich themselves, deliberately misclassifying the artists as independent contractors when they were in fact employees. This meant that the artists lost wages they were promised.

The artists allege, among other things, violations of various provisions in the California Labor Code. They seek relief including lost wages, interest and penalties, as well as an order prohibiting The Mill and Yurcor from engaging in this conduct in the future.

Congratulations to the artists who took a stand and did their part to make the visual effects industry a better place to work. We will continue to keep you up to date on developments in this case as they are presented to us.

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Have you been forced to deal with Yurcor? Let us know ..

Many thanks to all who have taken the time to write and keep us informed of their experiences working through the Employer of Record company, Yurcor. We have received many emails and phone calls from artists who have read our posts. Many are glad that some action is being taken against companies of this nature and are interested in retrieving the pay that was illegally withheld from them.

The Guild is interested in assisting all artists who have been effected by Yurcor's improper wage withholdings. We have created a form on our site that is meant to give us a better understanding of how many artists have been effected and which studios are utilizing Yurcor's services. If you have worked for a studio that has used Yurcor and would be interested in seeing your wages returned, please take the time to fill out the information on the form and submit it back to us:

Animation Guild Yurcor Form

Our goal is to help enforce labor laws and returning wages that were improperly withheld from visual effects artists. Once we receive your information, we will contact you to discuss our current progress and the next steps in retrieving your wages.

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Wage Theft: What Can You Do?

Many thanks to all those who have contacted me to discuss their experiences with Yurcor and other EOR companies. Through the documents that have been shared with us, as well as the correspondences with representatives of these companies, we're progressing with our plans to seek enforcement of the law and the return of wages to the affected artists. A special debt of gratitude needs to be paid to Justin Cone who exposed our efforts to the readers of his website Motionographer and brought us exposure we never would have been able to do on our own. While I am eager to update you on what has transpired so far, I can only say that we have significant progress and things are looking good.  I will continue to update our progress when I can.

I wanted to specifically address the frequent questions that have been raised about what artists can do if they wanted to act on their own to recover the wages that they lost to Yurcor. While its our intention of instigating a class action lawsuit which would cover the United States, some artists are eager to start the recovery process faster than we can initiate the claim. For them, I want to post some information that would be useful.

I've been in contact with the Labor Departments of California and New York. (I will contact the DOL of Washington tomorrow and post those results in comments.) Through those conversations, I was told what steps artists should take if they decide they are interested in pursuing action against Yurcor.

Before you proceed in any legal venture of this nature, you must have proper documentation of the transgression at your disposal. This would be copies of  Payroll Reports from the EOR that detail the employer tax withholdings for the entire claim you want to file. Meaning, if you worked for a studio for six months under Yurcor, and want to recover the wages withheld to pay the employer taxes, you will need records showing all six months worth of withholdings.

California

To file a claim with the EDD, follow the steps outlined under To Report Payroll Tax Fraud at https://askedd.edd.ca.gov/frmFraudStart.htm.

For the purposes of these reports, you should answer the questions on the Fraud Reporting Form as described:

To which EDD program does your report relate? with Payroll Tax Fraud

Does this report involve fraud by an EMPLOYER, EMPLOYEE, or BOTH? with Employer

In the subsequent form, list how Yurcor is withholding your earnings to pay the Employer Taxes for loaning you out to the visual effects studio. For name of person owning the business, list "Unknown" and leave the Full-Time and Part-Time employees.

New York

To file a claim with the Labor Standards Department of the New York Department of Labor, first have the LS 223 form completed.  The form is pretty self explanatory, however be sure to fill out the last few questions accordingly:

25. List the TOTAL amount of Employer Tax withholdings that were withheld from you by the EOR.  This is for the entire time you worked for them.  It is important that you have the documentation to back up this claim.

26. Mark the [Yes] box

27. Its best to list "See Documentation" and be prepared to show invoices for the period listed in the claim.

29. Mark the [Yes] box and write in the following column that the EOR withheld these monies to pay the employer-responsible payroll taxes.

With the form completed, call one of the three following numbers:

212-775-3680

212-775-3723

212-775-3880

According to the representative I spoke with, they make three numbers available in case one is busy.  All three are answered by the same office.  This will begin your claim and the Labor Standards Department will begin action against the EOR to recover your wages.

Under most state laws, employers are responsible to pay Unemployment Insurance, State Disability, State Income and Employment Training taxes for their employees. California's EDD explains this in their Employer's Guide (page 6). While Yurcor is most likely paying that on behalf of the artists they loan out to companies, doing so with artist wages is the illegal part.

As always, feel free to contact me with any questions, concerns or continued documentation.  We will continue our progress towards putting an end to this illegal and egregious practice that is so prevalent in the visual effects industry.

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The latest vfx scam: Artists paying all the taxes

Word from the westside of town is artists working at The Mill in Santa Monica are paying their share of taxes .. as well as the employers.

The Mill has engaged Yurcor to act as the Employer of Record for the artists they employ. Officially, artists work for Yurcor and are "loaned out" to The Mill. Yurcor is therefore responsible for the reimbursement to the artists for their work time at The Mill.

The Mill explains this has allowed them to:

"meet compliance requirements and improve administrative support to [their] valued freelancers.

By using Yurcor’s services you gain W-2 status and many of the benefits and services of a full time position while keeping all the career freedom and tax savings of a 1099 freelancer."

A full-time employee keeping the "freedom" of a freelance employee sound to good to be true? It should. Its also illegal.

To give that feeling of freedom, Yurcor not only withholds the traditional payroll taxes employees are responsible to pay (Fed Income, FICA, CA Income and SDI). They also withhold the employer portions of FICA, FUTA, California state unemployment insurance (UI), and the employer workers compensation insurance.

Documents we've received show Yurcor sells this as a benefit to the artist:

Employer of Record (EOR): “Employer of Record” is the best of both worlds; you establish your rates, you determine your work schedule, you can move from client to client, you can submit pre tax business expenses to offset your gross billings in arriving at your gross payroll, and you have access to health & retirement plans!

Similar to a 1099 scenario, you are responsible for both the employer and employee portions of the payroll taxes. Employer taxes are deducted pre tax as an administrative fee against your gross billings, employee taxes are deducted through payroll, and business expenses are reimbursed to you pre tax with your payroll direct deposit!

After contacting the Employment Development Department, the California Labor Commissioner, the IRS, and our attorney, we disagree with their assessment of the situation. Based on those conversations, we believe this is illegal and there are avenues available for the artists to recover the wages that were taken as a result of this practice.

If you have worked at or are currently working at The Mill in Santa Monica, we are interested in speaking with you. Contact Steve Kaplan at the Guild at (818) 845-7500 or skaplan@animationguild.org.

With your help, we can help stop this egregious infringement on labor and tax law while working to get your rightful wages returned to you.

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