Free Advice for Freelancers in 2009

Reflection on our Industry in 2008
As 2009 approaches, reflection on the VFX/Animation industry in 2008 causes one to pause for a moment. Just about every animator I know has money owed to them from past due invoices for this past year. Including myself.

The economy, no doubt, is to blame...among other things. Budgets in film, TV and commercials are lower than ever. Studios are not being paid by the client and are asking for 75% up front before even starting a show. Colleagues have confided that they are being forced to accept smaller bids than ten years ago. Bids for a shot that would have taken 4-5 days are now being pushed for only 1 day. The bigger studios are focusing on the younger animators to get the lower pay rates and meet the smaller budgets. Smaller studios are outbidding the bigger studios, but need to hire experienced artists and TD's because they do not have the talent pool in house and on staff. And, of course, if that all wasn't enough??? we have overseas production putting the squeeze on everybody.

art by hugh

The new pay policy for freelancers at the little studio
Due to the smaller studios employing more seasoned people to get the job done, there seems to be a disconnect as to how freelancers are paid. The average workforce at a smaller studio is a few staff employees and a regular flow of less seasoned freelancers who will take any job they can to get the experience and skills they need to move up. However, the VFX/Anim veterans have expectations for hours and pay that they are accustomed to and assume will be respected.

I thought about offering a list studios who owe artists money from 2008 here on the blog. I really did. But, I don't think that would be constructive and I try to give people the benefit of the doubt. Instead, I though it better to offer advice in establishing freelancer wages and pay schedule. The advice below should help the freelancer navigate the the new tactics by studios to keep more cash on the books... and less in your bank account.

The Norm
Before I state the NEW strategy for freelancers accepting employment... I should point out MOST animation and VFX studios like DD, Sony, R & H, Dreamworks, Disney, Pixar, Jim Henson Studios, Luma Pictures, Colorado FX, Duck Studios, Super78, CafeFX/Syndicate, Engine Room Design, Zoic, Artifact Design, Amalgamated Pixels, Sea Level, Giant Steps, Asylum FX, and more!!!! follow the standard and legal policies at a workplace. I can confirm that these studios follow the California State Work Policy defined below.

art by hugh

California State Work Policy
It is a requirement for all employment to not only be paid on a bi-weekly schedule starting the first day of employment, but also be paid the balance owed on the last day of employment. This is not only the law for any personal services, freelance or not, but it is the standard work policy. This is why so many freelancers are confused by 30 day net policies and refusal to pay invoices, even after 90 days. These artists are required to be at the studio by a certain time, are using the studio's equipment and report to a specific individual. These artists are not laying tile in your bathroom or selling you oranges in bulk. Therefore, a 30-day net policy doesn't legally apply.

a real contractor; using his own tools, working his own hours, reporting to no one

What is a 30 day net policy?
A 30-day net policy states that you will be paid 30-days after submitting an invoice, including weekends and holidays. All invoices are due and payable 30 days after the invoice date. This means the first paycheck for one week of work will be paid 5 weeks after you have started employment. Sometimes the invoices are "lost" or "not received until a much later date than originally sent" and a new one has to be submitted again and the cycle starts all over again. Some studios try to say weekends or holidays do not count, but this is not the legal definition of a 30 day net.

The first 30-day net policy I encountered was because I wasn't told and didn't know to ask. After that, I ask every prospective employer what their pay policies and schedules are. The more we hold 30-day net policies as unacceptable, the less they will be imposed. The bigger studios wouldn't play these games with freelancers because they know the law and take pride in their reputation in the industry. 15-day net policies apply to the same strategies as the 30-day and are subject to when the 15 days begin. Invoices can be lost, interpretations of when a 15 day net begins can be skewed.

The larger studios that follow California work policies understand it's less expensive to hire a proper bookkeeper and payroll company to handle wages. It's less work for the controller if people are on direct deposit and regular pay schedules. They also understand they are more likely to have good artists return, if they have a good payroll system.

The Advice
Here is my advice to freelancers interviewing with any studio that is not listed above as a studio that follows CA State Work Policy or a studio you have not already established a working relationship with in the past. This might all seem like common sense, but if points are assumed once they are discussed in email and not followed up in writing, there is room for people to waver on the agreement.

1. BEGIN/END DATE: Establish how long the project is and if there will be any holds placed beyond the term of the project. (Continue to communicate if you take the job about the dates of the hold as you get closer to the end date, so there are no surprises and you are let go earlier than you imagined.)
2. HOURS: Ask about the hours and set your rate for a 40 hour week. Make it clear that hour beyond the first 40 worked fall under Over Time rates of time and a half. You must make this clear or suffer later when it is open to interpretation.
3. PAY SCHEDULE: Ask when the next pay period is and what the pay schedule is at the studio. The more artist do not agree to a 30 day net policy, the less studios will try to implement it.
4. END DATE WAGES: State that you expect to be paid in full on your last day of employment the balance of what is owed for wages worked.
5. HOLIDAY PAY SCHEDULE: Ask how wages are handled during holidays, if any fall during you time working there. Just because people are not in the office doesn't mean you do not get paid.
6. TO TAX OR NOT TO TAX: Establish if you will be on payroll or invoicing the studio.
7. MANAGEMENT: Ask who you will be reporting to directly. This will help you if there is a problem because you know exactly who in the chain to go to first.

GET IT IN WRITING!!!! Once all of this has been agreed upon, ask for a deal memo to be typed up stating these points and emailed or faxed to you.

Again, much of this seems common sense and we all take it for granted because it falls under CA Work Policy. Most studios respect bi-weekly pay schedules and Over Time pay as their everyday business systems and policies. But!!! not all do anymore. There is no real animation union fighting for the rights of TD's or artists today and no one to turn to if you are not paid, other than the Labor Board. If you do not spell out every single point regarding your employment and pay, you have no recourse. The smaller studios employ an irreverent regard for the people who work for them. Not all, but the majority of the small studios do not value the people who come in and get the job done and then leave the studio with a happy client.

If you ask the right questions and put the answers in writing, there is less likely to be any disagreements or misunderstandings as to what the terms of your employment are. It's unfortunate that things need to be spelled out like this, but it's my experience that this will limit the disputes as to when you will be paid and how much, along with other expectations. Most studios will ultimately respect your attention to the details.

In keeping the tone here on the positive side...
Please post in the comments area if you work at a studio that follows the California State work policies. We should give props to the studios who are doing the right thing by their employees, even in this this bad economy. I hope this helps other freelancers, because myself and many of my colleagues have learned the hard way in 2008.