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Employer of Record…should it be your entity, or your payroll provider's?

There’s a lot of talk in the production industry about how to find the best pricing model for your projects. The common options are either to have an Employer of Record (EOR) payroll service company, or choose to be the Employer of Record yourself with a company that provides you with those two options.  But how do you decide which pricing model will work in your favor?

To determine which model is best, consider...

What state are you filming in?

The cap and new employer rates vary by state, and costs associated with serving staff payrolls can range by production company as well. Is your payroll provider discussing the state-by-state variations in employee classification, as well as state labor regulations and insurance markets? 

How much can you save?

Carefully compare the fringe rates, including the payroll fee. In the traditional EOR model, payroll companies can all too easily inflate payroll fringe and workers' comp rates.  On the flip side, when the production company becomes the EOR, the producer has the potential to reap thousands of dollars in savings.

What are your responsibilities once a production has wrapped?

Many producers have been led to believe that being the EOR requires added administrative work. During production, your payroll company should handle the administrative duties required of production, regardless of EOR status. If a production chooses to become its own EOR, post-production requirements include just a few administrative steps involving forwarding documents to your payroll service provider for processing. Your payroll provider should work in lockstep with you to ensure this is easy and painless. 

Are you equally protected? Is there any liability you should know about?

Producers often shy away from EOR status due to the purported added liability and risk. Despite the myth, becoming your own EOR does not add risk, and producers are no more protected from liability if the payroll company is the EOR.  As long as insurance is in place, the producer is liable, and if negligence is involved, you can’t hide. The producer bears the ultimate responsibility.

No two production companies are alike. At GreenSlate, we believe in providing options. We can be the Employer of Record (EOR), or clients can choose to be the EOR and realize significant savings as a result.  More than a decade ago, we pioneered the model that lets clients choose to be the EOR (we call it the GreenSlate model), and we are the only provider that has perfected its service delivery.  

Flexibility and the best economics should drive this decision, not what is best for the payroll company. 

Many service providers try to replicate the GreenSlate model, but put in place too many caveats and restrictions. Ultimately, they fall short of their standard Employer of Record model service, leaving producers with extra responsibilities — something that will never happen with GreenSlate. No matter which option you choose, the service levels are identical and delivered to the highest standard.

 

SERVICE GREENSLATE MODEL EOR MODEL
Employer The Client is the sole employer. The Client and GreenSlate are
co-employers.
Tax Submission All tax deposits made under Client’s
Tax ID by GreenSlate.
All tax deposits made under GreenSlate’s Tax ID by GreenSlate.
State Unemployment GreenSlate reports SUI contributions
under Client’s SUI account and responds
to unemployment claims.
GreenSlate reports SUI contributions under GreenSlate’s SUI account and responds to unemployment claims.
Workers’ Compensation GreenSlate provides Workers’ Comp coverage and manages claims. GreenSlate provides Workers’ Comp coverage and manages claims.
Multi-State Employment GreenSlate registers Client in each state
in which it does business.
GreenSlate can make all statutory payments to all 50 states under GreenSlate’s reporting ID as the employer.
Liens and Garnishments Client sends notices to GreenSlate and GreenSlate complies. GreenSlate receives notices directly
and complies.
Records Retention Client responsible for maintaining all original records. GreenSlate retains
original records per records retention policy.
GreenSlate and Client responsible for maintaining all original records per records retention policy.
Tax Reporting GreenSlate submits all employment tax returns on Client’s behalf. Client should consult with tax professional regarding corporate tax reporting obligations. GreenSlate handles all payroll-related tax reporting.
Note: Whether or not a payroll company acts as the EOR, the production company is the common-law/special employer of production employees. We’re here to help ensure that you’re protected. 

 

Interested in learning more? We invite you to explore your options and request an analysis.

This information in this communication is general in nature, and is not intended, nor should it be construed, as legal, accounting, tax or other professional advice rendered by GreenSlate, LLC. The reader should contact his or her attorney, CPA, or tax professional prior to taking any action based upon this information.

GreenSlate
28 August 2019

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