Film Accounting Glossary
Independent contractor
What is an independent contractor?
Also called 1099 contractor, or self-employed.
An independent contractor is a worker paid without employment withholding and reported on a 1099 rather than a W-2, appropriate only where the working relationship genuinely lacks the control that defines employment.
Most production crew are employees regardless of what a deal memo calls them, and misclassification exposes the production to back taxes, penalties, and union claims. Loan-out corporations are the accepted structure for treating an individual's services as a vendor relationship.
Example
A production pays a set dresser on a 1099 to save the fringe load. The dresser works production hours under a department head's direction using production equipment, so they are an employee in substance. The exposure is back taxes, penalties, and a union claim.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
A classification decision made at hire, not a label chosen at payment. Loan-out corporations are the accepted structure for genuine vendor treatment of an individual's services.
Common mistake
Choosing the classification to avoid fringes. Substance governs, so a crew member working production hours under direction is an employee whatever the paperwork says.
Related questions
- Can film crew be paid as independent contractors?
- Rarely. Most crew work under direction, on production schedules, with production equipment, which makes them employees regardless of what the deal memo calls them.
- What is the risk of misclassifying a crew member?
- Back taxes, penalties and interest, unpaid union fringe contributions, and potential wage and hour claims, usually surfacing after the production has wrapped.