Cast & Crew Payroll Service Explains Why It Raised Alarm on Loan Outs: ‘There’s Very Severe Stakes Here’
variety.comGene Maddaus Senior Media Writer It began as a routine audit at Cast & Crew, one of several payroll companies that service the entertainment industry.
But that audit — typically handled in secret — has now raised alarms across Hollywood. Last week, Cast & Crew put out a warning that the California Employment Development Department was attempting to “invalidate the use of loan-outs” — a common structure by which entertainment professionals get paid.
Without loan out companies, workers would be unable to deduct certain employment-related expenses — leading to higher income taxes.
Their earnings would also be subject to payroll taxes, which fund the state unemployment and disability insurance programs. “We knew that even just raising this information would cause some panic,” said John Berkley, the CEO of Cast & Crew, in an interview late on Tuesday. “We weren’t looking for that panic at all.
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