Q: Is it legally permissible for a California LLC to use unpaid labor to produce a short film? If not, is it possible to use a deferred salary approach to defer cast and crew compensation until after the short earns a financial profit, if it ever does?
I’m sympathetic to the needs of indie filmmakers. Your budget is stretched past its breaking point, and keeping expenses down is crucial to getting the film done. You might rely on crew to donate their time and skills to make the budget work, a common practice in the independent film world. Common as it may be, however, state and federal laws prohibit the use of unpaid labor for for-profit entities like LLCs and other corporations. Which means, in short: No, you can’t use volunteer labor to make your film.
There are only two scenarios in which hiring unpaid laborers is legal. First, you can hire volunteers if you’re a nonprofit entity (like Greenpeace), a public agency (like your local police department), a religious institute (like the Catholic Church), or a humanitarian organization (like Americorps). The work should be part-time and cannot displace any of the organization’s paid employees. This automatically rules out 99 percent of production companies.
Or you can hire unpaid interns. But don’t treat this as a panacea. Hiring unpaid interns can be treacherous if you don’t know what you’re doing, and large corporations are starting to shut down their internship programs because of lawsuits stemming from intern abuse. Unpaid internships are only acceptable if all of the following six Department of Labor criteria are met…
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