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Contractor payroll is changing. Here are four ways to be prepared.

8.13.16

Like it or not, upcoming overtime exemption rules will change the way the production industry engages with contractors and freelancers. In the past, we talked about where things have been. Here, we’ll talk about where they’re going and what you can do to stay ahead of the curve.

Be aware.

If you hire contractors, you need to be aware of the following in order to maintain trust and stay out of trouble:

  1. Industry standards such as hiring contract employees on a day rate aren’t always in compliance with the laws. Educate yourself so you can learn to bridge the gap between the two.
  2. Be up to date on the specific requirements where your project is located (California has different rules than Colorado, for example).
  3. Find an expert who can classify workers correctly and identify who is legally exempt from overtime.

Be proactive.

Productions are hectic enough. Do your homework ahead of time to squelch possible legal problems and avoid the pressure of trying to implement last-minute changes.

To start, determine who needs to be paid a flat rate and who is exempt. If you aren’t sure, engage someone with production-specific expertise in this area.

Be transparent.

In a previous post, we talked about Volkswagen’s trouble with shady, dishonest practices. In his post-scandal apology, Martin Winterkorn (Volkswagen’s since-resigned CEO) gave his word that they’d “proceed with the highest possible openness and transparency.” This shows he understands that people care about transparency, but can a company that size turn on a dime to become fully transparent? It’s a lot easier to trust a company that is proactively committed to transparency and has it’s employees’ and freelancers’ best interests at heart.

To demonstrate your commitment to transparency and earn trust:

  1. Make announcements about all your changes to both internal employees and all relevant external parties with as much advance notice as possible.
  2. Make your intentions and changes as clear as possible.
  3. If you make mistakes (which you likely will), share about that, too.

Be above board.

Just like so much in life, there are ways around the rules. But if you operate in the gray area, you’re gonna get caught—or at least earn a negative reputation.

To stay above board:

  1. Do the right thing up front. In this industry, most contractors probably make above the $47,476 yearly threshold if you annualize their day rate pay, but that’s not the point. At the heart of the law is President Obama’s goal of providing “a fair day’s pay for a fair day’s work.” Paying for overtime is the right thing to do and will make you a preferred client (which, by the way, means you’ll get better workers who do better work).
  2. Avoid backing-in to artificial hourly rates or employing the split-day plan to find ways around the rules.

Laws are ever-evolving at the state and local level and keeping up with them is a full time job. It takes a lot of time and expertise to stay on top of this many details, but it’s a worthwhile investment. If you don’t have the time, resources, or desire to pay attention to all the details, hire a team like PayReel. Our PayReel OnLine software is fully equipped to help you sort out the rules and execute processes while also balancing contractor expectations, legalities, and company budgets.

If you have any questions about how your company’s keeping up, call us at 303-526-4900, shoot us an email, or contact us here—any time, day or night.

About PayReel:

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail—down to insurance for temporary employees—perfectly while making sure their clients think nothing of it, so they can get back to doing what they do best.

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