Hollywood in Turmoil: The Loan-Out Corporation Crisis Explained

An audit by the California Employment Development Department (EDD) into Cast & Crew, a payroll company servicing the entertainment industry, has raised concerns about the potential invalidation of loan-out companies, a common payment structure for entertainment professionals. This could lead to higher income taxes and payroll taxes for workers. Cast & Crew and industry unions are seeking clarity from the EDD, which has stated it is not banning loan-out companies but is ensuring proper tax collection. The issue may be linked to California's AB 5 law, and affected parties have been given the opportunity to challenge the EDD's assessment.