INTRODUCTION
On any given morning in midtown Manhattan around the hours of five to seven in the morning, a passerby may see an unusually long line of twenty to thirty something year olds waiting outside a building with oversized bags in tow and curlers in their hair. The passerby may wonder if they are waiting in line to see a celebrity. Or maybe they are waiting for the huge promotional giveaway of the newest iPhone. Perhaps they are waiting in line to buy tickets for the new hit Broadway show. It is likely that the passerby does not consider that what these young hopefuls are actually waiting in line for is a chance to “be seen” at an audition for an acting role at any variety of theaters across the country, many of which offer them little to no pay.
Actors in this line are on their phones, intently checking the actor’s audition reference called “Audition Update.” “Audition Update” is a website “by actors, for actors.”1 It provides audition hopefuls with live updates regarding regional auditions, callbacks, and castings.2 It also has sections titled “B****ing Post” and “Gig&Tell,” where actors can provide support and advice about past theater contracts.3 A frequent uproar on the “Gig&Tell” blog is about lack of wages.4
While stage theater jobs come in all shapes and sizes, in most employment contexts, both federal and state minimum wage regulations entitle these actors to at least the minimum wage.5 Typically, stage actors are contracted to perform in productions at a variety of theaters throughout the year, the performances lasting anywhere from one day to several months.6 Work hours are “extensive but irregular,”7 and schedules often require all day rehearsals8 and late-night performances.9 The disparity in the type of stage theater job is mirrored by a vast disparity in pay rates.10 While Broadway performers make a union-mandated minimum of $1,900 a week11—and principal roles often receive a salary bump12—actors performing at smaller theaters may only make anywhere from zero to two hundred fifty dollars a week.13 Actors auditioning for these smaller theaters are warned of the reality of underpayment, yet the majority agree to work for little or no pay, advancing excuses like they are doing the job for exposure or to build their resumes.14 This phenomenon of actors not enforcing their right to minimum wage under the guise that working for free will eventually further their careers is what this Note refers to as the “Actor’s Sacrifice.”
Part I of this Note will provide a background of the stage theater industry and the current federal and state labor laws and regulations. Section I.A will introduce the basic structure of the acting world, the differences between union and non-union actors, and the conflict surrounding the recent repealing of the Los Angeles 99-seat Theatre Waiver. Section I.B will discuss current minimum wage laws, focusing on the provisions of the Fair Labor Standards Act (FLSA).15 Part II of this Note will analogize the actor’s situation in the line with the relevant statutes, regulations, and case law to determine whether theaters are actually breaking minimum wage laws. Part II will also analyze the economic and moral ramifications of fair wage regulations and why it is necessary for the federal and state governments to protect and enforce these standards, regardless of the individual workers’ desires.
Part III of this Note will propose a dual action process to work towards solving the issue of the actor’s sacrifice and its perpetuation of illegal labor practices and economic stagnation. On a legislative level, the government must take steps to amend current legislation in a way that clarifies the statutory ambiguities for actors in the labor force and provides incentives for theaters to pay actors a fair wage. A second layer of action requires establishing enforcement mechanisms both legislatively and through social bargaining organizations in order to educate actors, strengthen their bargaining power, and provide them with a support vehicle through which they can advocate for their rights. While this labor force is unique in both form and substance, its uniqueness in no way suggests that actors should be left unprotected.
I. BACKGROUND
A. The Perfect Storm for the Actor’s Sacrifice
1. The Actors’ Equity Association
To grasp the extent of the unfair and potentially illegal compensation practices prevalent in theaters across the country and how and why these practices are able to perpetuate, it is first necessary to understand the acting pool and the various “types” of actors auditioning to perform at these theaters. In the theater world, working stage actors fall into two categories: union and non-union.16 Union actors are members of the Actor’s Equity Association (AEA).17 AEA, the sole union representing actors and stage managers in live theater productions,18 was founded in 1913 to combat the long history of actor exploitation.19 Today, AEA negotiates Equity contracts with theaters across the country to establish fair wage agreements, reasonable audition requirements and working conditions, and benefits such as health care and pension plans.20 Each Equity contract sets forth the responsibilities of the actors and theaters21—the least lucrative Equity contract representing the minimum professional standard22—and varies depending on the type of role (chorus or principal) and the size of the theater.23 In consideration for the theater’s promise to abide by union regulations, the union promises to provide high caliber, professional performers who have experience in the field and have established themselves as hardworking and talented performers.24
2. The Plight of the Non-Union Actor
Becoming a union member is the goal of many young actors entering the theater business. Union membership not only provides valuable wage benefits,25 but it is also viewed as achieving the peak of professionalism.26 One of the most important benefits of union membership is the ability to audition (in actor’s lingo, “be seen”) for high-end productions whose auditions are only open to AEA members.27
However, joining the union is easier said than done. The “simplest way” to join is to book a job at an Equity theater.28 Following the show’s run, the theater will provide the actor with her Equity card.29 An actor can also join the union by participating in the Equity Membership Candidate Program (EMC), which operates on a points system,30 or by joining a sister union.31 However, union auditions are for the most part only open to current union members.32 For union hopefuls, this union membership requirement presents a “catch-22”: to be cast in productions that offer points towards EMC or a full Equity contract, you have to be able to “be seen” at Equity auditions—but to be seen at these auditions, you need to be an Equity member.33 Booking Equity or EMC contracts require some level of talent, but more often a lot of luck.34 Those who are not as talented, or maybe just not as lucky, are grouped into the subclass of non-union actors known as the “noneqs.”35 Noneqs are unprotected by union regulations; therefore, non-union theaters are able to avoid the minimum payments mandated by the union and only pay actors a small stipend (or sometimes no stipend at all), regardless of the hours they rehearse or perform (which are often comparable to the hours worked by Equity actors at union-member theaters).36
3. Unemployment: The Chicken or the Egg?
The union’s closed shop37 audition eligibility policy is likely fueled by two main interests: (1) maintaining the guise of the union elite and (2) combating unemployment. First, the union itself is solely sustained by the dues and membership fees of its actors,38 which are paid both as an annual fee and as a percentage of the gross earnings of the actor’s contract.39 The union uses the strict eligibility requirement to guarantee theaters that they will have access to elite artists, which then empowers the union to negotiate higher salaries and receive a larger fee from each actor’s earning.40 Audition eligibility also provides a major incentive for actors to join the union, which again increases the union’s funds: if non-union actors had access to every audition, they may be less likely to join to avoid having to pay a portion of their earnings.41 Second, proponents of unionism and its strict eligibility system believe the union set up is necessary to combat the rampant unemployment in the industry.42 Mass unemployment in the acting industry is the reality both non-union and union actors face,43 and employment statistics reveal that their concerns are often valid.44
A major contributing factor to the high unemployment rate among theater actors is that far too many actors are entering the labor force each year but there are not enough productions in which to cast them.45 As a result, the union uses strict audition eligibility requirements to narrow the pool of artists auditioning for top productions.46 By disallowing non-union actors from auditioning, the union hopes that when faced with the choice to work non-union jobs with no pay or not work in the industry at all, non-union actors will choose the latter.47 However, with the continued growth of the non-union acting pool, the question persists whether unemployment can be solved by the strict eligibility plan, or whether the strict eligibility plan actually increases unemployment. The union seems to underestimate non-union actors who are highly dedicated to their art and creative growth,48 and—perhaps naively (based on the data)—believe that perseverance in low-paying acting jobs will eventually land them a job on Broadway.49 Instead of leaving the acting world, they continually choose to accept the low-paying non-union jobs or lower tiered equity jobs to beef up their resumes.50 Thus, the “Actors’ sacrifice” is born: many actors would rather sacrifice their well-being and livelihoods, and perform for little to no pay than not perform at all.51 This sacrifice is highlighted perfectly in the recent debate surrounding the new 99-seat Theater Agreement in Los Angeles.
4. The “Los[t]” Angeles 99-Seat Theater Agreement
The Los Angeles theater community is known for its large percentage of small, intimate theaters that provide actors with the ability to perform before live audiences, hone their artistic talents, and contribute to the experimental environment of the Los Angeles theater scene.52 In 1972, an Equity waiver was implemented by AEA specific to Los Angeles’s small theaters.53 The waiver allowed union actors to perform in these theaters by designating them as “volunteers” instead of “employees.”54 This designation also allowed producers to pay them only a small stipend for performances (seven to fifteen dollars) and no wages.55 AEA hoped that eventually these wage cuts would allow smaller theaters to grow and transition beyond the 99-seat capacity to the umbrella of midsize theaters (who have to pay their actors wages).56 This no-wage feature remained intact for twenty-five years,57 until 2014, when AEA conducted surveys that revealed that the majority of members believed the waiver plan benefitted producers over actors and needed changes.58
In 2015, changes were proposed to “synthesize and balance member’s concerns . . . to more fairly value actors’ contributions.”59 At the same time, AEA wanted to ensure that actors would still have the opportunity to perform.60 The final proposal balanced these concerns through four significant provisions: (1) equity member wages in 99-seat theaters would be increased to at least the minimum hourly wage, including payment for rehearsals and performances; (2) equity members would be permitted to work without wages in productions of fifty seats or fewer for a maximum of sixteen performances per production; (3) equity members would be permitted to work without an equity contract in member-produced productions or membership companies; and (4) a transitional code would be in place to maintain the status quo for more than one year.61 In AEA’s opinion, these provisions were the best possible compromise between the actor’s desire to perform and the actor’s desire to make at least a partial living through performing.62
Despite AEA’s attempts at compromise, many actors and producers were extremely unhappy.63 In April of 2015, 66% of Equity members in Los Angeles who returned ballots in a nonbinding referendum voted against a mandatory minimum wage for small theaters.64 Many actors argued that they weren’t performing at these theaters to make a living, but to continue their education and “feed[] their souls.”65 Producers felt that there would be no way to make up potentially more than $40,000 in budget for actors’ wages through increased ticket prices because ticket buyers were accustomed to the heavily discounted tickets and wouldn’t purchase otherwise.66 Actors feared that if unable to come up with the money, theaters would close or hire non-union actors, so they would end up without pay and without experience—even worse off than their situation under the waiver.67 Many members did support the new rules,68 and AEA stood by its decision.69 It believed that the previous waiver plan only led to stagnation in the Los Angeles small theater scene.70 Equity also relied on its core principal to support its decision: all actors deserve fair pay.71 Acting is a professional occupation, and its workers should be dignified with a minimum wage.72 This change was meant to empower actors to stand up for themselves.73
The actors’ campaign against their own financial sustainability is undoubtedly “an unusual twist” in the continuing debate across the nation regarding wage fairness.74 To fully understand the sacrifice and whether theaters are actually legally responsible for paying their actors a minimum wage, it is necessary to analyze both state and federal minimum wage regulations in the United States.
B. Minimum Wage Regulations
The Fair Labor Standards Act (FLSA) is a federal law that was enacted by Congress in 1938.75 The Act’s main accomplishments included setting minimum wage standards and overtime pay requirements.76 These provisions were meant to serve three purposes: (1) prevent exploitation of vulnerable workers, (2) promote fair competition in interstate commerce, and (3) generate more jobs by spreading work around more employees.77 The FLSA’s efforts to reignite and empower the working class following one of the most socially and economically turbulent times was coined one of “the most far-reaching, far-sighted program for the benefit of workers” ever seen in the United States.78
In the current iteration of the FLSA, to be covered by the minimum wage regulations, a person must be (1) an employee,79 a seemingly obvious but nonetheless contentious requirement;80 and (2), individually engaged in commerce or in the production of commerce, or employed in an enterprise engaged in commerce or production of goods.81 The term “employee” is interpreted broadly in the context of the FLSA,82 but there are certain classes of workers—such as independent contractors, trainees, and volunteers—who are not covered by the FLSA.83 Designations as independent contractors tend to be the most hotly debated in the arts world.84 Typically, independent contractors are separate business entities that control their own work and are evaluated on overall project completion; in essence, they are in business for themselves and not for the employer “contracting” the work.85 However, it is often unclear exactly how the performance or business relationship should be categorized. Therefore, different governing bodies have established fact-specific tests that analyze various factors of the working relationship. Under the traditional legal test called the “economic reality test,”86 federal courts focus on (1) the alleged employer’s degree of control exerted over the worker; (2) the worker’s potential for generating profit or loss; (3) the extent of the worker’s investment in the business; (4) the permanence of the business relationship; and (5) the expertise required to perform the work.87 The U.S. Department of Labor (DOL) has also followed a similar economic test, adopting many of the above factors and stating that there is no single test that courts must apply and that no single set of factors is exclusive.88 Both the courts and the DOL look to the totality of the circumstances to determine the type of employment relationship.89 Some state labor codes take a different approach. For example, California’s Labor Code section 2750.5 creates a rebuttable presumption that certain workers are employees rather than independent contractors.90 The code also provides factors that one must satisfactorily prove to successfully rebut the employee presumption.91 New York, in contrast, includes professional performers in the definitional section of “employee” in its Workers Compensation Law and Unemployment Insurance Law.92 However, the statutory definition is not included in the New York Wage Law.93
Section 206 of the FLSA also requires that the employee is engaged in commerce94 or is employed in an enterprise engaged in commerce or in the production of goods.95 Broken down, section 206 creates two different types of coverage: “enterprise coverage” and “individual coverage.”96 Enterprise coverage includes establishments whose annual gross volume of sales made or business done is not less than $500,000, and that employ two or more workers engaged in commerce or in the production of goods for commerce or that handle, sell, or in some way work with goods or materials that are moved through the chain of commerce.97 Nonprofit organizations are considered enterprises if their gross sales of $500,000 are a result of typical competitive business activity.98 If an employer meets these requirements, then all of the employees are subject to the FLSA.99 If the businesses do not meet these requirements, an individual can still be covered under individual coverage if he regularly devotes hours to work involving interstate commerce.100 Individual coverage requires the business to follow the FLSA for that specific employee’s wages, even if the businesses would not meet the requirements of enterprise coverage.101
If an employee is not covered under federal law, she will most likely be covered under state law.102 Every state has enacted its own minimum wage requirements that afford the individual equal, if not greater, minimum wage protections than an employee covered under the FLSA.103 Generally, states either add on to the FLSA regulations and enact even higher minimum requirements, or adopt “safety net” laws that apply only to workers not already covered by FLSA.104 States also enact their own exemptions to their minimum wage and overtime laws.105 Certain states set blanket minimum wage amounts, regardless of community type (suburban, urban, or rural) or the number of employees in the business.106 Others distinguish amounts based on number of employees and specific county or city within the state.107 When the state or city has a higher minimum wage rate than the federal rate, employer’s must pay the higher amount.108
1. Exemptions
There are exemptions from the FLSA’s minimum wage and overtime requirements for certain employees.109 Section 213(a)(1) of the FLSA creates a general exemption for employees acting in executive, administrative, or professional capacities.110 This exemption is broken down further by the DOL into a “creative professional” exemption.111 To be exempt as a creative professional, the employee must (1) be paid on a “salary basis”112 at an amount no less than $455 a week113 and (2) the employee’s “primary duty”114 must be the performance of work that requires “invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.”115
The legislative history of section 213 is not extensive, but it suggests that these exemptions were meant to target specific employment situations where employees already earned salaries well above the minimum wage and where the type of work being performed was difficult to quantify in terms of hours.116 In these situations, requiring overtime payment based on a forty hour work week seemed impossible and unnecessary.117 These types of highly advanced and particularized positions could not realistically be divided up and spread amongst multiple employees in order to avoid working over forty hours a week (frustrating one of the original intentions of the FLSA of creating more jobs).118
II. THE ISSUE OF AMBIGUITY: ANALYZING THE STAGE ACTOR’S WORK WITHIN THE CONTEXT OF THE FLSA
This Section will address two issues: (1) whether theaters are actually breaking the law when they fail to pay their actors a minimum wage and (2) even if they are breaking the law, if actors do not care and are willing to make the sacrifice, whether the government and the rest of the country should interfere.
To correctly answer the first question, it is important to remember the type of actor that is making the sacrifice. It is not the Brad Pitts and Angelina Jolies of the Hollywood world; nor is it the Idina Menzels and Taye Diggss of the Broadway scene, nor even lesser known Broadway success stories like Lindsay Mendez and Derek Klena119—although it is likely that they all made the sacrifice when they began their careers. It is also not the person who performs in community theaters after work as a hobby. The types of actors making the perpetual “sacrifice” consider themselves professionals. They are often not part of the union, so they book jobs at smaller regional or experimental theaters120 and commit anywhere from twenty to forty hours per week to rehearsals and performances.121 Actors working at some of these theaters—often located in small towns away from their home base—are unable to supplement their income from the show by working part-time jobs during their contract. After their show contracts terminate, they return to the city, work two to three part-time jobs, and continue to audition for other regional theaters or perform in small theaters at night.122 One example of this type of actor is highlighted in the L.A. theater controversy, and it is helpful to keep this actor in mind when analyzing the minimum wage requirements of these employment relationships.123
A. Are Theaters Even Breaking the Law?
The first step in considering whether an actor will be protected by minimum wage laws, either on a state or federal level, is to analyze the actor’s unique situation in accordance with the statutes, regulations, and case law.124 For actors, it can be challenging to conduct a general analysis because there is a widespread variety of work across the field.125 As a general matter, it is important to note that neither case law nor the DOL, nor various state labor departments have ever given an explicit answer to whether actors are within the class of employees protected. Instead, they continue to analyze the situation on a case-by-case basis.126
Per the text of the FLSA, an actor must first be considered an employee to be covered;127 however, actors are commonly misclassified as independent contractors so that employers can avoid paying the minimum wage.128 Employee misclassification is a widespread issue,129 and currently proposed federal legislation amending the FLSA—the Payroll Fraud Prevention Act—highlights the need to legislatively address the recurring imbalance in employee-employer relations.130 Currently, courts retroactively determine whether a classification was valid by considering factors such as: (1) the ability of the theaters to intervene in the actor’s work, (2) the ability of employees to set their own rates and schedules, (3) the relationship between compensation/salary and the actor’s performance, (4) the type and length of the contract, and (5) the employer’s furnishing of lodging and accommodations.131
In federal courts, two cases established the precedent for performers’ classification as employees or independent contractors. In Radio City Music Hall Corp. v. United States, the Second Circuit held that certain actors employed in stage shows were independent contractors, because it found that the producer’s actions in organizing the vaudeville type acts only amounted to a limited level of control and intervention.132 Several years later, the Second Circuit again addressed the issue of employees in the performance context in Ringling Bros.-Barnum & Bailey Combined Shows v. Higgins, holding that clowns, featured artists, and specialty actors were employees of the circus corporation.133 In Ringling Bros., the performers were contracted for entire seasons and maintained a permanent relationship with the employer throughout the contract.134 Even though each individual act required a great deal of individuality and artistry, the Second Circuit found that ultimate power of direction and control was in the circus producer’s hands, and therefore the actors and performers were employees of the circus.135
In subsequent cases, courts continued to balance the worker’s individual artistry with the employer’s level of control to determine whether the worker was an employee or independent contractor.136 In Club Hubba Hubba v. U.S., the District Court of Hawaii held that club dancers who were given room and board to perform in a special dance group under six month contracts were employees of the nightclub.137 In Harrell v. Diamond A Entertainment, Inc., the District Court for the Middle District of Florida considered the relative degree of control by the employer and also applied a full “economic reality” analysis, finding that an exotic dancer was in fact an employee and not an independent contractor.138 In Harrell, the court noted that the dancer did not have any “meaningful part of the business [such] that she st[ood] as a separate economic entity.”139 Other factors considered were the relative investments made by the dancer and employer, the skill and initiative taken by the dancer, the opportunity for profit and loss,140 the permanency of the relationship,141 and to what extent the dancer’s performance was an integral part of the business.142 Each of the factors cut in favor of economic dependence, leading the court to find that the dancer was an employee.143
The debate surrounding the independent contractor misclassification remains highly relevant today and has gained recent media attention due to litigation surrounding the National Football League (NFL) cheerleaders.144 In May 2017, a New York State court in Erie County granted the Buffalo Jills, cheerleaders for the NFL team the Buffalo Bills, partial summary judgment in their lawsuit against Citadel Broadcasting, the contractor that hired them, finding that the cheerleaders were employees and not independent contractors.145 The cheerleaders succeeded by alleging that the team exercised basic aspects of employer control over them by requiring them to attend all games, participate in practices and rehearsals, attend meetings, follow a strict handbook, and attend community service events.146
Given the prior broad rulings147 and the heightened skepticism surrounding the independent contractor classification, it is likely that the majority of theater actors performing in theater productions would be considered employees.148 While many actors travel to theaters for only short time periods and frequently move from job to job, the itinerant nature of the acting job should not be the main factor in considering employment status.149 Actors performing in stage theater are largely subject to the control and intervention of the theaters and producers.150 Theater management is in charge of advertising and ticket sales, and the producers and directors dictate performance and rehearsal schedules and decide the repertoire of the theaters.151 Directors also control their actors’ individual performances by articulating exactly how they want lines delivered and choreographing and staging the entire production, often leaving only a small amount of room for creativity or collaboration on the part of the actor.152 From an “economic reality” perspective, theaters are almost completely responsible for the profits of the theater and bear the financial risk that their shows will not be successful.153 If actors are paid at all, they are usually paid a set stipend or salary, regardless of the amount of people in the audience or the success of the show.154 Additionally, the actor’s performance is often the “main attraction” of the theater and an integral part of the theater’s business. Given the likelihood that many actors are in fact employees, their frequent misclassification as independent contractors reflects the need for a more concrete, consistent, and widespread solution to the employment debate within the theater community.155
B. Why Do We Care?
It is essential to acknowledge the elephant in the room: if many theaters are illegally failing to pay minimum wage, and actors know this and are willing to work for free, is there any reason for the government to take any action on behalf of the actors? To answer this question, it is important to look beyond the desires and career aspirations of individual actors and towards a general policy perspective.
The enactment of the FLSA in 1938 finally acknowledged the main flaw of allowing a fully deregulated, free market system to control the labor market: this system forced the individual to bargain for his own rights, which strengthened employer power in a highly competitive system and disempowered the working class.156 Human labor is unlike other commodities: decreasing the price of human labor does not lead to a curtailment of people in the labor force and an increase in demand for labor as it would in the normal supply and demand chain of products.157 On the contrary, the large labor force remains in existence in the form of unemployment, and as wage rates decline, the demand for labor also declines.158 The FLSA addresses these issues by affording the workers greater protection and granting them even a small increase in bargaining power with the employer.159
The passing of the FLSA also recognized that the federal government has an important role in promoting prosperity, opportunity, and equality amongst its citizens, and minimum wage standards help accomplish this goal.160 It is no mystery that with increased wages and bargaining power comes higher employee morale, health, and living conditions.161 With higher morale comes greater self-respect.162 Minimum wage regulations also provide workers with the legal entitlements to advocate for their rights.163 Both the self-respect and legal empowerment gained through minimum wage regulations are essential for economic growth and for a highly functioning society.164
Since its enactment, the biggest critique of minimum wage regulation is that it will actually lead to unemployment and that the positive social and moral implications are not enough to outweigh the potential for unemployment.165 But many argue that this neo-classical theory has not necessarily proven true,166 and even if the immediate effect of minimum wage is temporary unemployment, it would not be the worst price to pay in the long term.167 A minimum wage is not only meant to protect disempowered workers, it is also used for directing economic and national goals.168 To this extent, certain businesses whose productivity is low and are only able to exist under illegal working conditions will be forced to restructure and become more economically efficient, otherwise, they will be forced out of the market.169 Employers, not employees, therefore must bear the financial risks of economic prosperity.170 If certain businesses are unable to bear the burden, their market production will be shifted to other more efficient businesses.171 On the whole, more efficient enterprises that are able to pay their workers the minimum wage will only contribute to economic growth, not diminish it.172
The actor argues that she is not contributing to unemployment because she is employed; she is merely choosing to work a variety of part-time jobs so that she can work for free in the theater industry. While she may not technically be unemployed, she is often underemployed.173 This means that there is a “mismatch” between the jobs the actor holds and her human capital, ability, and desire.174 Underemployment, like unemployment, is repugnant to economic growth and morale,175 and it is even more repugnant in the actor’s case because this underemployment persists for years and years as the actor works her way through dead-end performance job after dead-end performance job.176 These low-paying, dead-end jobs do little to help improve an individual’s economic self-sufficiency and essentially keep the individual tied down at the poverty level.177 And even though the actor may be choosing to remain in this situation, perhaps an involuntary choice due to the lack of employment in the acting industry, this does not mean she is exempt from the feelings of hopelessness and desperation that many other unemployed and underemployed workers feel.178
III. PROPOSAL
One big hurdle that actors must face if they wish to be paid a fair minimum wage is themselves.179 Many actors are willing to sacrifice their wages for a chance to work for their art. In this way, they are inherently different from the typical group of workers who protest minimum wage violations.180 This artistic and philosophical difference between actors and other minimum wage employees should not be furthered as an excuse for why actors choosing to work for free should not be protected by minimum wage laws.181 Instead, the federal and state governments must recognize the actor’s unique situation and take action specifically geared towards improving the theater industry and the Actor’s sacrifice.182
First, the federal government must address the recurring confusion regarding the classification of actors as employees or independent contractors.183 Currently, the burden is on actors to prove that they are employees; this forces the weaker party to the bargain to litigate to enforce the right to minimum wage.184 Rather than rely on case-by-case analyses that use the “right to control” or “economic realities” tests, the best way to combat the interpretive ambiguities and to equalize bargaining power would be to amend the statutory definition of employee under 29 U.S.C. § 203 of the FLSA to add an explicit inclusion of persons engaged in the performing arts.185 The ideal textual language would closely mirror the definition of an employee in the New York Worker’s Compensation Law:
“Employee” shall also mean . . . a professional musician or a person otherwise engaged in the performing arts who performs services as such for a television or radio station or network, a film production, a theatre, hotel, restaurant, night club or similar establishment . . . “Engaged in the performing arts” shall mean performing service in connection with the production of or performance in any artistic endeavor which requires artistic or technical skill or expertise.186
Although this statutory definition would undoubtedly provide heightened protections for actors against misclassification, one critique of the statutory definition is that it may be over-inclusive—given the wide variety of performing arts employment, there may be situations where an actor truly would fit the definition of an independent contractor.187 To account for this possibility, the federal and state legislators could therefore take a route similar to California’s Labor Code188 by providing a rebuttable presumption that performing artists are employees rather than independent contractors. Rebuttable presumptions are frequently used in the context of employment law to “tilt the scales” at least slightly in favor of employees.189 The rebuttable presumption would remove the initial obstacle for artists of having to prove their status,190 but would also give employers the opportunity to make good faith classifications for artists who really are independent contractors.191 Once the ambiguities in classification are remedied, the passage of the Payroll Fraud Prevention Act, which mandates obligatory reporting of worker classification and imposes penalties for misclassification,192 will heighten the actor’s awareness of her rights and will disincentivize theaters from misclassifying their actors.193
This amendment alone significantly improves actor’s protections, but given the constant minimum wage enforcement issues, the government should go a step further to create a compromise that takes into account the theater industry’s unique economic situation. This step would involve amending the “creative professional” exemption.194 The reasoning behind the creative professional exemption aligns with the stage acting profession: it is meant to apply to individuals working in a creative endeavor who work a wide range of hours and perform duties that cannot be divided among several workers.195 The exemption also recognizes that hourly wage calculations are not always the most efficient methods for calculating actors’ wages, and it gives the DOL the flexibility to take into account industry-specific factors when setting a minimum salary.196 However, the current exemption only applies to employees making a minimum salary of $455 per week;197 therefore, many actors are not exempt because they are making lower wages.
Currently, the test the DOL uses to set the minimum salary applies one standard formula for all executive, administrative, and professional employees.198 This standard test relies on data from actual employee earnings across all the various industries—accountants, nurses, engineers, singers, graphic designers, managers, chief executive officers, and directors199—and sets the salary level near the lower end of the range of those earnings to accommodate businesses where salaries are generally lower due to geographic or industry-specific reasons.200 For stage actors, this type of widespread calculation is problematic because it overlooks the unique problems of the acting industry, underemployment, misclassification of actors, and the failure of theaters to pay minimum wage at all.201 In the past, the DOL used the “long duties” test, which set separate salary levels for executive, administrative, and professional industries, and gave the DOL more flexibility to take into account industry- and geographic-specific factors.202 Although the DOL abandoned this test due to its “rigorous” nature, a rigorous, fact-based test is necessary for creative professionals specifically, given the artistic and economic differences between them and the other occupations included in exemption.203 The DOL should use an updated salary calculation to amend the creative professional exemption by lowering the salary level to one that more accurately reflects the average wages across the entire creative industry.204
This amendment of the creative professional exemption will help balance the actor’s entitlement to fair wages and the theater’s ability to operate and produce shows—and abide by the law. For example, if the salary threshold is lowered to a minimum level of around $250 per week, the theaters can conduct a cost-benefit analysis to determine whether it is more effective to pay their artists the flat salary rate in line with the exemption, or pay hourly and abide by the minimum wage requirements. If the theater sees that certain actors will not accrue $250 worth of hourly work, they can instead pay them on an hourly basis in line with the minimum wage requirements, bearing the risk that they would be required to compensate their overtime hours if actors did end up working more than forty hours. If the theater chooses to pay the flat salary basis, the theater will not need to be concerned about overtime pay during weeks where an actor is in fifty hours of rehearsal. During weeks where the actor is performing perhaps only twenty-five hours per week, she will not need to be concerned that her weekly rate will drastically decrease.
The DOL, on the other hand, proposes consistent increases in the standard salary level for the exemption. It argues that as the minimum wage continues to increase, increases in the salary basis are necessary to accurately reflect the salaries in the economy and maintain the demarcation between overtime-protected employees and exempt workers.205 However, this argument relies on the assumption that employers are abiding by minimum wage regulations and increasing salaries as the minimum wage increases, which is not the case for many stage actors. Therefore, the proposed decrease in the salary level only for creative professionals would not offend the goal of the exemption.
These amendments will unambiguously define stage actors as employees but will also give theaters the flexibility to choose how to pay them.206 Regardless of the compromise, the persistent countervailing argument advanced by the theater industry is that any effort to force theaters to pay wages will cause theaters to close. However, many theaters already make it a priority to pay their actor’s minimum wage and are able to do so and remain in business.207 Even if some theaters are forced to close and actors become temporarily unemployed or have less opportunities to perform, in the long-term, this may not be the worst thing for the theater industry.208 For one, theaters who are able to readjust to minimum salary requirements will flourish due to the diminishing competition.209 Actors who were previously working at small theaters for free may eventually be forced to move on and get full-time jobs, but they will finally maximize their other skills and contribute to the economy.210 As the pool of arguably less talented actors and theaters that employ them decreases, AEA, with less concern over small theaters employing free labor, will be able to loosen its eligibility requirements and allow for more actors to be protected by the union.211
Of course, this proposal would be incomplete without addressing the recurrent issue that theaters may continue to break the law and actors may continue to work for free. The enforcement issue will undoubtedly continue if additional action is not taken on both the side of the government and of the actors. First, the federal and state governments must help actors enforce their rights by policing unfair labor practices and suing theaters for back wages.212 The government should also enact legislation that will allow them to proactively impose fines and penalties on theaters that chose not to comply with labor standards.
Actors must also come together to enforce their right to fair labor. They must unify through an organized social support group that will advocate for actor’s rights by simultaneously pressuring the theaters to abide by the law and the DOL to enforce the law. While the AEA partially assumes this role for union actors, non-union actors, who are generally much more worse off, need protection as well.213 A social bargaining association—supported but not managed by the union—would be the ideal mechanism.214
A relevant example of a successful social bargaining group can be found in the “Fight for 15” campaign.215 In 2015 in New York, after surmounting pressure from fast-food workers to increase their wages, Governor Andrew Cuomo exercised his power216 to impanel a Wage Board to recommend and investigate what adequate wages would be for the industry. The Board—which included members from labor, business, and the general public—held hearings with the active participation of fast-food workers and eventually announced its decision to increase the minimum wage to $15 per hour.217 A similar social bargaining group for stage theater would ideally be composed of representatives from the actor’s union, employer representatives (theater board members), and union and non-union actors.218 The representatives would have the authority to evaluate compensation issues and propose amendments and regulations directly to the state and local governments.219 This type of organization will give actors an active voice in their community and a forum through which they can communicate in conjunction with private theaters and their local governments.220 Actors have already shown initiative to come together and fight for better pay in movements like “#FairWageOnstage.”221 They must continue to unite and support each other to sustain their art.
CONCLUSION
Minimum wage laws were enacted to increase worker bargaining power and equalize the playing field between employee and employer.222 Many actors are legally entitled to these protections, yet they sacrifice their rights because they believe the sacrifice is necessary in order to perform.223 Regardless of the actor’s individual desires, this is not a sacrifice the government can allow these workers to make.224 The actor’s situation is unique and requires small but significant modifications to the current labor laws. These legislative modifications will be able to take into account the economic realities of the theater industry and provide a clearer and more reasonable structure of payment. By combating unfair labor practices of theaters that are only able to sustain themselves by not paying their actors, the federal and state governments will also be able to take a big step to combat unemployment in the theater industry.225 Hand-in-hand with social organizing and government enforcement, the modifications will incentivize actors to know their rights, fight for these rights, and improve their industry and their art.