Why Do Productions Hire a Background (Extras) Payroll Company? August 15, 2021

Background, “Extras”, Payroll

Extras or Background Payroll companies are specialty payroll entities whose expertise is paying background talent. They are usually separate businesses from the crew payroll company; Background Payroll emerged as a niche external to production accounting in response to the volume of background performers, evolving municipal, state, and federal tax code, and collective bargaining.

Paper Vouchers for Extras

The paper payment voucher had been the production standard for nearly a century. The voucher combined the elements of a time card and a contract; over the decades, studios increased the amount of “startwork” required for extras to work on set. What originally was a voucher, and if the extras were lucky, a meal ticket, turned into federal and state withholding documents, citizenship verifications, production policies and procedure and of course – COVID Safety Compliance documentations. All of these documents, along with the union’s regulations, became labor intensive for production accountants – and so outsourcing became a wise spend.

i-9 Compliance

Among the background startwork is a tricky document called the form I-9. It’s a document created by the USCIS for verification of citizenship status. The I-9 requires: technical compliance, which means it has to be filled out correctly. Substantive compliance: which means the personal identifiable information used to complete the I-9 has to be sound. And it requires physical verification of identification of the performer by the employer. Failure to comply in any three areas could expose a production to risk. So productions mitigated the risk by hiring Background Payroll. Background Payroll Companies act as the “Employer of Record” for background performers, in turn, insulating productions from potential I-9 technical, substantive, or physical verification liabilities.

Keep in mind – extras and background don’t just work one day on set and they don’t fill out their startwork once. On some shows there may be hundreds of new background performers every day, which generate thousands of startwork packets.

Workers Comp

Injuries on set are a liability, especially when a production introduces tens or hundreds of background performers onto a scene. Purchasing workers compensation insurance for a variable amount of performers led to inconsistent rates for studios. Today, some studios self insure their crew but have stayed away from self insuring for background.

Conversely, a Background Payroll Company can spread the liability across multiple shows and studio projects. If there’s an injury on the set on a production of a studio, while it would impact the overall background worker’s comp rates – the liability would (indirectly) be spread among all the studios and wouldn’t cause a spike in the rate.

Digital Vouchers for Extras

The RABS App & Digital Background Voucher has replaced a few of these processes. We’ve decided to work with Background Payroll Companies instead of against them; it’s been a benefit to our production and studio clients and the background performers as the studios can retain the benefits of Background Payroll while enjoying RABS.