Agency Funny Money

[Richard Herd]

[Rich Rubasch] “I issue a W-9 up front “

That’s a good idea. https://www.irs.gov/pub/irs-pdf/fw9.pdf

[Ned Miller]

I have been freelance 30 years and run into this once or twice a year, usually from agencies. The first question I have is are you incorporated? If so, then just call their AP department and then there should be No Problem, but you will have to prove you are incorporated so therefore you can’t be an employee.

But what’s at play here are two things:

1) They don’t want to be what’s designated as the “Employer of Record” which means that if you are a sole proprietor and were injured on the job they aren’t responsible, the staffing service is.

2) States are desperate for tax revenue, they HATE the designation “Freelance” because they can’t collect the maximum amount of taxes. By using a payroll service your client isn’t designated the Employer of Record so by using the payroll service they protect themselves from the IRS and their state coming after them.

However, the BS about “we can’t pay you until we get paid”, well, they should have mentioned that upfront. I will usually give a small producer or struggling production company or agency slack if I don’t need the money. I like to be known as “flexible”. But if they go past 60 or 90 then I go up a DefCon level. If I see Lexuses or BMWs in the parking lot the gloves are off. Even though the end client is large, if your immediate client is small they will often have such tight cash flow they can’t pay you until they get paid, but they should have told you up front.

Ned Miller
Chicago Videographer
http://www.nedmiller.com
www,bizvideo.com