HR Best Practices in a Post-Strike Entertainment Industry

The recent SAG-AFTRA strike sent shockwaves through the entertainment industry, highlighting the need for robust HR best practices that address the evolving needs of actors and writers. While the strike focused on securing better compensation and working conditions, it also sparked important conversations about talent acquisition, diversity, and the impact of technology on the workforce.

This blog explores how the SAG-AFTRA agreement impacts key HR services like payroll, accounting, benefits administration, and tax incentives.

The SAG-AFTRA Strike: A Catalyst for Change in the Entertainment Industry

The SAG-AFTRA strike, which unfolded from July 14th to November 9th, 2023, was more than just a labor dispute. It served as a pivotal moment for the entire entertainment industry, highlighting long-standing concerns about unfair working conditions and demanding greater equity for actors and writers. At the center of this strike were three key objectives:

Fair Compensation for a Streaming Age: The explosive growth of streaming platforms has revolutionized entertainment consumption, but actors and writers felt their compensation was not keeping pace. Residual payments, which provide ongoing income based on a project’s performance, were deemed inadequate, particularly for streaming content. The strike aimed to secure a fairer share of the streaming revenue pie, ensuring actors and writers receive appropriate compensation for their work’s long-term impact.
Protecting Artists’ Well-Being: Beyond financial concerns, the strike addressed the issue of short to non-rest periods. Actors and writers often face grueling schedules, leading to fatigue, burnout, and potential health risks. The strike demanded guaranteed meal breaks, reasonable working hours, and proper rest periods to prioritize the physical and mental well-being of the talent.
Transparency and Accountability: A lack of transparency in financial reporting was another major concern. Actors and writers often lacked access to information about the financial performance of their work, making it difficult to assess their fair share of compensation. The strike sought to establish greater transparency and accountability from studios, ensuring accurate financial reporting and fair treatment for all parties involved.

“This is not just about actors and writers. This is about all of us. We are fighting for a better future for all working people.”
– Gabrielle Carter, the 2nd National President of the SAG-AFTRA and actress.

The strike affects the entertainment industry’s HR practices.

The SAG-AFTRA strike acted as a catalyst for positive change in the entertainment industry. By prioritizing fair compensation, artist well-being, and transparency, the agreement has established a new landscape for HR practices.

Moving forward, HR professionals play a crucial role in implementing these changes and ensuring a more equitable and sustainable work environment for everyone involved in bringing stories to life. Now, the work ethic of companies like Entertainment Managed Services has become the norm, so we want to talk about the changes that have been achieved in the industry.

Impact on Payroll:

The new SAG-AFTRA agreement introduced significant changes to payroll processes, necessitating meticulous attention to detail and accurate calculations. This entails updating payroll software, revising pay schedules, and reviewing payroll calculations to ensure compliance with the new requirements.

Additionally, HR departments must establish clear communication channels to inform cast and crew members about the changes and ensure timely and accurate payment distribution. For payroll functions, the ideal would be to have a specialized and expert team to take charge of these functions and administer them.

Accounting Considerations:

In the wake of the SAG-AFTRA agreement, accounting teams face the task of navigating a transformed financial landscape. The agreement’s stipulations, including increased residuals, per diem rates, and enhanced health benefits, directly impact production budgets, needing meticulous planning and strategic financial management. To effectively manage these changes, HR professionals must collaborate with accounting teams to achieve:

Accurate Budget Projections: Projections must incorporate the new compensation and benefits structures to ensure that productions have sufficient financial resources to meet their obligations under the agreement.
Rigorous Expense Tracking: Establishing a comprehensive expense tracking system is crucial for maintaining financial transparency and accountability. This system should accurately capture all production expenses, including residuals, per diem payments, and health benefit contributions.
Compliance with Financial Reporting Requirements: The agreement introduces new financial reporting requirements that must be adhered to. HR and accounting teams must ensure that all financial reports are accurate, timely, and compliant with the new regulations.

Following the new regulations, productions can effectively manage the financial implications of the SAG-AFTRA agreement. HR professionals should ensure that financial decisions align with the agreement’s provisions, safeguarding the economic well-being of all parties involved.

Benefits Administration:

The SAG-AFTRA agreement’s enhancements to health insurance plans and the introduction of new pension and retirement contributions mandate a comprehensive overhaul of benefits administration processes. HR professionals must communicate these changes to all eligible employees, ensuring they are well-informed about their expanded benefits options.

Additionally, HR departments must update enrollment procedures to accommodate the new plans and contributions, streamlining the process for employees to enroll and receive their benefits. Moreover, HR professionals should establish clear and transparent procedures for administering the benefit programs, ensuring that employees have seamless access to their benefits and that all claims and contributions are processed accurately.

Tax Incentives:

The entertainment industry heavily relies on tax incentives to attract productions and stimulate economic activity. These incentives, often structured as deductions or credits, provide financial relief to studios and production companies, encouraging them to invest in projects and create jobs within a particular region. However, the SAG-AFTRA agreement introduces new requirements for studios to qualify for these incentives, potentially impacting the financial viability of productions.

To navigate this complex landscape, the best option is to get you a trusted partner who stays abreast of the latest tax regulations and ensures that studios comply with all eligibility requirements. This includes maintaining accurate records of production expenses, adhering to labor laws, and collaborating with production accountants to ensure all tax-related documentation is complete and accurate.

Navigating the Changes:

HR professionals and PEOs working for the entertainment industry can navigate these changes by implementing the following best practices:

Develop a comprehensive understanding of the SAG-AFTRA agreement: Closely analyze the agreement and its implications for all HR services.
Stay updated on industry trends: Stay abreast of ongoing developments in the entertainment industry and adapt HR practices accordingly.
Invest in technology: Utilize software and automation tools to streamline payroll, accounting, and benefits administration processes.
Emphasize transparency and communication: Communicate changes to the SAG-AFTRA agreement clearly and transparently to all employees.
Foster collaboration: Cultivate a collaborative environment between HR, production teams, and union representatives.
Promote diversity and inclusion: Implement strategies to attract and retain diverse talent and create a more inclusive work environment.
Prepare for the impact of technology: Develop proactive strategies to address the potential impact of AI and automation on the workforce and the industry.

“This is a major step forward for diversity and inclusion in the entertainment industry,”
– Alfonso Cuarón, screenwriter, film director, and SAG-AFTRA member.

Implementing these changes will lead to a more sustainable and equitable work environment for all stakeholders in the industry.

New Work Conditions for Actors and Writers in the Entertainment Industry

The SAG-AFTRA strike serves as a reminder that human resources professionals play a crucial role in shaping the future of the entertainment industry. Maintaining good practices favors the work in the red of series or movies and favors consumers who can have quality products and enjoy their favorite stories.

By staying informed, adapting to change, and prioritizing talent needs, HR can help create a thriving environment for innovation and creativity.

Now that you know the HR best practices you should consider when making your production, free yourself from the responsibility of doing everything yourself and trust a trusted partner in the Entertainment Industry. In Entertainment Managed Services, we are leaders in payroll processing for feature films, television, and commercial productions.

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