EDD Says It Is “Not Taking Action To Ban” Loan Out Corporations In California After Hollywood Guilds Sound Alarm

deadline.com:

The California Employment Development Department has insisted that loan out corporations will not be prohibited in the state, after entertainment payroll agencies raised alarm over the weekend.

As Deadline previously reported, IATSE and several of the other Hollywood guilds issued memos to their members warning that the use of loan out corporations may no longer be permitted within the entertainment sector, following an audit from payroll agency Cast & Crew. “We understand the great importance of California’s film and television industry and are proud of our work to support California’s employers and industries.

We have received various inquiries highlighting questions about loan-out corporations’ ability to operate in California. As we have previously stated, EDD is not taking action to ban these companies in California,” the statement read.

The EDD added that, as one of the nation’s largest tax collection agencies, “our commitment is to ensure these taxes are collected according to state law.” “We will continue our communication with industry representatives to ensure their concerns are heard and understood,” the statement continued. “We are optimistic that this dialog will help bring further clarity and information for the benefit of everyone who works in one of California’s most iconic industries.” The statement did not clarify why Cast & Crew, as well as other payroll agencies that service the entertainment industry, had received directive that the EDD would no longer be accepting loan out corporations, if that is not the case.