Archive for January, 2020

AB5 WORK LOSS – Comments

Saturday, January 18th, 2020

AB5 WORK LOSS – COMMENTS

…Absolutely guaranteed anonymity – Former Musician’s Union officer


…The one voice of reason in a sea of insanity – Nashville ‘first call’
scoring musician

…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician

…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician


Dear Editor, 

Just received a call from an enraged fellow musician…an opera that was scheduled for all next week has been cancelled due to AB5!  Here is a musician that relies on this type of community gig to pay the bills!  How will this musician cover this loss? So sad and will not be the only one….so many other persons in other fields are already feeling the pain of jobs lost and a mad scramble to get anything to keep money coming in.  As one person wrote re: Repeal AB5 ….in answer to Assembly Member Lorena Gonzalez’s (who introduced the bill) comment, “People shouldn’t need to have two or three jobs…” “Thanks, now I have no jobs!”

Dark Dates will go Black Market and musicians will be relegated to the same status as the day laborers at Home Depot…illegal and working for cash! Sickening!

47 Member

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It is pathetic that the musician union that suppose to defend the interest of musician is doing nothing to oppose this law that the only thing it will do is damage the entire music business.

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Many musicians woke up on January 1, 2020 without a clue that their way of life was going to be in jeopardy. AB5 is a drastic game changer for people who are used to owning their own lives and livelihoods. This bill is a power grab by big labor and a money grab by an out of control legislature. Don’t whine…get busy and exercise your civic rights! Our government works best when it fears its voters!

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This law is extremely harmful to the entire music community and will cause harmful consequences to the people working in this industry as well as for the general population who will be deprived of music because there just won’t ba any way to produce it any more. Venues will close, people will go broke with all the challenges that insures on the health of a human being.

I urge you to reconsider and amend this law to take our specific industry into consideration and leaving it out of this legislation.

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We’ve also received word from another member who writes text for a publishing company on the side. Turns out the company has decided to leave California, eliminating whatever work was done by folks here.

Nice going AB5 supporters. (You listening John?…. Ray?)

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There was a recent interview with one of the legislators who had to hear complaints from constituents whose work has disappeared directly because of AB5.

Her Response? “They’re lying.”

With friends like these….

Till next time.

THE COMMITTEE

UPDATE ON AB5

Wednesday, January 15th, 2020

Freelancers Angry Over Assemblywoman Gonzalez’ False Claims About Benefits

“The terms of AB 5 are so murky that many companies are choosing to not work with anyone living in California.”

Newsom Budgets Millions to Hunt Down AB-5 Violators

By Michelle Mears, January 14, 2020 6:51 am

“Like the old Soviet Union you will be allowed to work only if government allows it—under their conditions, not yours.” ~Stephen Frank

Part ll of those hurt by AB 5.

Part l is here: Democrat Assemblywoman Gonzalez Says There Is No Data Proving Thousands of Freelancers Are Losing Work Due to AB-5

Assemblywoman Lorena Gonzalez (D-San Diego) and Governor Gavin Newsom (D)  are digging in as freelancers fight back against AB 5. On Friday, Jan. 10 Gonzalez appeared on KUSI in San Diego and made numerous false claims about workers in the gig economy not paying taxes or having benefits. The same day,  Gov. Gavin Newsom allocated $20-million to target and investigate contractors, not in compliance with the law that took effect New Year’s Day.

California is estimated to have nearly two million residents who choose to work as an independent contractor, according to the  2018 U.S. Bureau of Labor Statistics Economic Release. Two million however is a conservative estimate because the report did not include the number of individuals who supplement their income with online platforms.

Gonzalez has angered not just thousands but possibly millions of voters. Self-proclaimed hard core Democrats have said this is the straw that broke the camels back.

A group of contractors met with Assemblyman David Chui (D) in San Francisco on Monday. Chui told contractor Emily Price and others that a repeal of AB-5 is unlikely but he is keeping a binder of people’s stories on how the bill is affecting them.

Meanwhile, rally’s are being planned up and down the state, freelancers and independent contractors are writing letters, and making phone calls to state representatives. Gonzalez however remains firm AB 5 and says the new law is best for the state.

AB 5 stems from the  The Dynamex Operations West, Inc. v. Superior Court decision by the California Supreme Court in April 2018 that overturned three decades of California employment law that allowed individuals to work as independent contractors.

According to Imindependent.com, “This decision could upend how millions of Californians earn a living and nearly every industry due to its new restrictive ABC test. The ABC test is the first time in U.S. history that such a test has been imposed by a court, without legislative approval, with three independently disqualifying factors.“

Newsom who is pro-union like Gonzalez, said he will use part of the $20 million for training staff to allocate the ABC test and to allocate funding to investigate and hold hearings on compliance. A reporter from California Political Review compared Newsom’s tactics to the those of a communist regime.

“Like the old Soviet Union you will be allowed to work only if government allows it—under their conditions, not yours,” wrote Stephen Frank.

The terms of AB 5 are so murky that many companies are choosing to not work with anyone living in California.

AB5 / REDUCED BENEFITS / STREAMING / COMMENT

Wednesday, January 8th, 2020
  1. AB5 UPDATE, LOCAL 47
  2. MUSICIANS’ UNION TO TREASURY: LET US REDUCE BENEFITS IN 2021.
  3. UNION FAILS TO WIN STREAMING RESIDUALS
  4. MEMBER COMMENT

…Absolutely guaranteed anonymity – Former Musician’s Union officer


…The one voice of reason in a sea of insanity – Nashville ‘first call’
scoring musician

…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician

…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician


Editor’s Comment: As anyone who’s followed the AB5 story knows by now, The AFM and Local 47 made no request to exempt freelance musicians from AB5. In fact, they support it. Word is they support it because they think it’ll force those who’ve gone Fi-Core or are non-union to re-join or join the AFM. That’s not going to happen, and as you will read below, the AFM and Local’s conduct is coming home to roost in a big way, affecting us all.

READ ON…….

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  1. AB5 Update LOCAL 47

Originally posted December 31, 2019 by AFM Local 47 President John Acosta [johncoz2022]:

Many of you may now have heard of California legislation AB5 which was created to ensure that most workers in California are classified as employees, not independent contractors. Introduced by California Assemblymember Lorena Gonzalez, AB5 was created to incorporate the Dynamex ruling, which was a California Supreme Court decision from last year, into state law. That decision limited an employer’s ability to classify certain types of workers as independent contractors. Some members have asked if this new law will negatively impact the practice of using loan out companies as a way of ensuring fair tax treatment for our members. It is our view that AB5 will have no impact on the use of loan outs. AFM Local 47 along with DGA, WGA, IATSE and SAG-AFTRA have done exhaustive due diligence with counsel to come to this conclusion.

Another hot topic with AB5 is the so-called “end of the music business as we know it” tagline that some organizations are touting. Nothing could be farther from the truth! While AFM agreements clearly establish that musicians are employees and not independent contractors, there were many instances where employers attempted to misclassify musicians. Leading up to the bill’s adoption we worked closely with SAG-AFTRA to ensure that musicians and singers were properly covered under this new legislation. With the backing of the California Labor Federation, our Secretary/Treasurer Gary Lasley along with AFM reps all over California reached out to elected officials to seek continued support for this important legislation.  

There are current talks underway with the California legislature and employer partners to clarify AB 5’s impact where necessary, but AFM Local 47 will always do what is in the best interest of its members first and foremost.

Whether it is a community orchestra, small theater, or a live performance, California law requires employers who hire musicians for performances, which meet the AB5 threshold, to pay the appropriate taxes and make the necessary withholdings. This way, musicians can apply for disability, unemployment, Social Security or workers’ comp when necessary and applicable.

This entry was posted in All News, Legislative News (Deadline.com) and tagged AB 5, AB5 on January 2, 2020.

  1. Comment on the site for this story:

January 4, 2020 at 10:12 am

Horrible stupid bill and shame on the “union” for backing it!!!! The union represents less than 5% of the music industry but they don’t give a crap about anyone else. I’m going to-core

  • Additional Local 47 member comment:

Really?  Someone who has been a desk jockey for nearly two decades has the balls to tell the rank-and-file the Union is working for us?!!

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2. Musicians Union’s Pension Plan Asks Treasury Department For Permission To Reduce Benefits In 2021

By David Robb (Deadline.com)

VIEW ALL

January 7, 2020 9:00am

Trustees of the American Federation of Musicians’ troubled Pension Plan have asked the U.S. Treasury Department for permission to reduce thousands of musicians’ monthly pension benefits in order to keep the “critical and declining” Fund from becoming insolvent within the next 20 years.

The Plan is in trouble because as of March, its $3 billion in liabilities exceeded its $1.8 billion in assets, meaning that the Plan is underfunded by about $1.2 billion. Ironically, many musicians facing pension cuts were once employed on films executive produced by Treasury Secretary Steven Mnuchin, who was a prolific movie producer and investor before joining President Donald Trump’s Cabinet in February 2017.

See the trustees’ FAQ here.

U.S. Department of the Treasury

The trusties, who determined that the Plan had entered “critical and declining status” last April, told their participants today that “This means that the Plan is projected to run out of money to pay benefits – or become ‘insolvent’ – within 20 years under the Multiemployer Pension Reform Act (MPRA), a law enacted in December 2014. Under MPRA, if a fund enters critical and declining status, the trustees can apply to the U.S. Department of the Treasury for approval to reduce participants’ benefits by an amount sufficient to avoid insolvency.

“Although reducing earned benefits will be painful, the trustees have submitted an application to do so because the alternative of running out of money would leave participants with a much greater benefit reduction in the future. The trustees have no other viable way to save the Plan for the long term – that is to say, realistic investment returns and contribution increases will not avoid insolvency.”

According to the trustees, nearly half the Plan’s 50,782 participants are expected to see some reduction of benefits beginning early next year, and some will be harder hit than others. Pensioners who are 80 years old and older, for instance, won’t see their pensions reduced at all, nor will those who receive disability pensions. Those who receive relatively small pensions won’t be affected either, or will be affected the least. The reductions will fall mostly on younger retirees – current and future – and on those who receive the largest pensions.

The trustees estimate that 22,753 participants (44.8%) are expected to see reductions of 20% or less, with 930 (1.8%) seeing reductions of 20-40%. They estimate that 27,099 participants (53.4%) won’t see any reductions at all.

If approved by Treasury and by the participants, the benefit reductions, which will kick on Jan. 1, 2021, will affect a broad mix of musicians who work or have worked in the film and television industry under the union’s contract with management’s AMPTP; on sound recordings; at symphonies and operas; on Broadway, and in regional and traveling musical productions.

20,000 Musicians To Receive “Painful” Pension Cuts To Keep Benefit Fund Solvent

The decision to apply to the Treasury Dept. for benefit reductions “was painful, but it is essential that we do everything possible to put the Plan on stronger financial footing,” the trustees told participants today in personalized statements telling each participant how much, if any, their benefits will need to be reduced to keep the Plan solvent.

“Doing nothing also results in benefit reductions,” they said. “This isn’t a choice between reducing benefits and not reducing benefits. It is a choice between reducing benefits now, or reducing benefits later, but to a greater extent. No one wants to reduce benefits. But, if we don’t reduce benefits now, at some point in the future, the Plan won’t have enough money to pay benefits.”

The Pension Benefit Guaranty Corporation (PBGC), which was created by an act of Congress in 1974, is supposed to protect multiemployer pension funds like the AFM’s, but facing a record-breaking deficit of more than $65 billion itself, has said that it could run out of money by 2025.

“The PBGC’s multiemployer program is projected to become insolvent by 2025,” the trustees noted. “If that happens, then there will be little to no PBGC guarantee to fall back on. In this scenario, if the Plan became insolvent, then participants’ benefits would be reduced dramatically. That’s why it’s so important for us to ensure that the Plan avoids insolvency. While there is no doubt that benefit reductions for participants will be difficult, they cannot be worse than the catastrophic reductions that would take place for participants if the Plan and the PBGC both ran out of money.”

And even though the PBGC’s own financial problems make it an unreliable guarantor – with more than 100 multiemployer pension plans across the country currently facing insolvency – they’re required to pay into it, regardless of their funding status. For 2020, multiemployer plan have to pay $30 to the PBGC per plan participant – nearly quadrupling from $8 per plan participant in 2007. For the AFM Plan, that means that its required PBGC premiums increased from approximately $400,000 a year in 2007 to $1,450,000 last year “due to the enormous increases in the per-participant annual premium,” the trustees said.

Musicians Union Failed To Win Streaming Residuals – Its Main Goal In Film & TV Contract Negotiations

“Some legislative proposals in Congress have included significant increases to PBGC premiums, including a November 2019 proposal by Senators Charles Grassley and Lamar Alexander,” the trustees said. “If passed, such increases would drain the assets of troubled plans like the AFM Plan even faster, thereby hastening possible insolvency. The trustees oppose these increases.”

“We have a real opportunity to save the Plan,” the trustees said. “There are a number of other financially troubled plans that are too far gone to even apply” to the Treasury Dept. for benefit reductions. “We believe that our proposed reduction will reposition the Plan to be around to pay benefits to current and future retirees for decades to come.”

But that will require the Plan’s participants to approve the reductions if Treasury gives the okay. And if everything goes according to plan, Treasury will post the AFM’s application on its website on Jan. 29, and will have completed its review of the application by Aug. 11, approving or denying it. If the application is approved, the Treasury Dept. will mail ballots to all participants and beneficiaries of deceased participants within 30 days of approval. Voters will then have at least three weeks to cast ballots, with those who don’t vote being counted as “yes” votes to reduce benefits. Treasury must then announce the outcome of the vote within seven days of the voting deadline, and for a plan of benefit reductions to be voted down, a majority of eligible voters must vote against it, meaning that a low-voter turnout will guarantee approval.

It’s also possible that Treasury will identify changes that need to be made in the application before it can be approved. In that case, the Plan may withdraw the application and resubmit it, which would restart the timeline. This has occurred for many other pension funds that ultimately have had their applications approved. “To reduce the likelihood of this scenario,” the trustees said, “we have had numerous communications with Treasury about its expectations.”

“Nobody wants to see benefits reduced,” the trustees stressed. “But unless Congress steps in with a legislative solution, something it has so far refused to do, the options boil down to reduced benefits now or running out of money and having a much higher reduction in benefits later. We understand that participants don’t want to hear that we need to take away a portion of the pension they have been relying on, but that’s the awful choice we face.”

COMMENT ATTACHED TO THE ARTICLE

“Good morning, thanks for calling the AF of M”

Yeah hi, this is runaway scoring calling. I’m here in Seattle, tomorrow I’ll be in London at Abbey Road with all your musicians. We’re scoring all your films non union now. I think you might have a long term problem coming on your hands and I want to give you the heads up”

“I’m sorry, we’re busy at the moment right now with pressing matters”…click.

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3.Musicians Union Failed To Win Streaming Residuals – Its Main Goal In Film & TV Contract Negotiations

The American Federation of Musicians failed to achieve its main goal in its recently concluded negotiations for a new film and TV contract – winning residuals for musicians’ work on episodic TV shows made for streaming services. Even so, the 80,000-member union says it will keep fighting for those payments when the contract comes up for renewal in two years.

The negotiations with management’s AMPTP concluded with a tentative agreement on Friday, but terms of the deal weren’t released until today.

The new two-year contract, which still must be ratified by the union’s members, “includes many substantive improvements and no significant concessions,” the AFM said, “yet still does not include residuals for work on films and episodic TV shows made for streaming.”

The union added: “For the first time in history, musicians will receive screen credits when they perform on theatrical and streamed film scores. Also for the first time, the proposed deal establishes fair wages and conditions for high-budget shows made for streaming platforms.”

Other economic improvements include an increase in musician residual payments for shows rented and purchased online, as well as 3%-a-year wage increases. According to the union, “Musicians successfully resisted attempts by the studios to impose unjustified concessions, including those that would allow studios to score more TV shows and films abroad.”

The AFM added: “While these unprecedented achievements are significant wins for musicians, their biggest demand — residuals for work in new media — was not included in the final offer by the Alliance of Motion Picture and Television Producers. While the studios continue to refuse industry-standard residuals for new media projects, musicians have made it clear that this is still a priority and that they will continue to fight for this basic standard.”

AFM president Ray Hair called the deal a temporary “truce” in its ongoing battle for streaming residuals:

“The campaign for fairness in our contract with the studios, particularly on the issue of compensation and residuals for content made for streaming, has energized not only our film and television musicians in Los Angeles, New York and Nashville, but musicians throughout the country. The tentative agreement, if ratified, will be viewed as a short-term truce. While we’ve made meaningful progress on how we are recognized and treated when we perform scoring sessions for theatrical and long form new media productions, our musicians’ concerted activity will continue as the backdrop to our ongoing efforts to obtain fair residual terms whenever we are engaged to score content made for streaming.”

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4. MEMBER COMMENT

Great blog! I agree with and support both articles by Ari and the one with the letter. However, I think the most compelling article is the one written by the current AFM member. I’ve spoken with many union members about AB5 and learned that many of them did NOT support this bill. Very little information was shared prior to September 18, 2019 when the bill was signed by Governor Newsom. Even after the law was signed, the majority of music professionals I spoke to knew nothing about the law. If the AFM was truly “representing” the voice of their members and the music community, they should have done a much better job at educating everyone about the impending bill BEFORE it was signed into law. Now we must spend our precious time and resources complying with the law while also fighting for an exemption. Great job AFM!

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Until Next Time,

The Committee