L.A. Actors Are Losing Unemployment Benefits Based On Work They Did Years Ago

The following article was originally published May 7, 2020, and republished through a collaboration with KPCC and LAist.

Story by David Wagner

The coronavirus pandemic has been devastating for L.A.'s entertainment industry. Movie theaters are closed. Film and TV shoots are shut down. Actors are out of work.

And some actors are now losing their unemployment benefits because of work they did years ago.

That's because California's unemployment system counts residual income from past work against current benefits. Actors earn residuals whenever their work is reused. For instance, when a sitcom gets syndicated or when an old movie gets rented online.

Actors say normally, residuals are a nice (if small) supplement to their normal income. But now, earning even a small amount of residuals can mean actors will lose hundreds of dollars per week in benefits.

"It feels like we're being singled out for the way we get paid," said Hope Shapiro, a part-time professional actor in Van Nuys.

'MAILBOX MONEY' IS WIPING OUT UNEMPLOYMENT BENEFITS

Shapiro has played small roles on TV shows such as "Will & Grace," "House" and "2 Broke Girls." The residuals she earns from those appearances can be worth anywhere from a few cents to a couple hundred dollars, depending on what shows are in syndication.

Shapiro said finding those checks in her mailbox used to bring her joy — even when that "mailbox money" was miniscule. Now she's petrified to open her mail.

"My pride in having done these jobs is now, 'Oh God, please don't give me any money for having done them, because I still need to feed my family,'" Shapiro said.

California requires unemployment recipients to report their residual income. That income can subtract from their weekly benefit amount.

When she applied for unemployment, Shapiro was awarded $83 in weekly benefits. Her award turned out to be fairly low because the system based it on her acting income rather than her main job just before the pandemic hit: working as a freelance catering chef.

Many other L.A. workers with a mix of income from self-employment and traditional W-2 wages are in the same boat.

Despite the lower benefits, Shapiro was initially happy to at least get $83 per week. Because any amount entitled her to an extra $600 per week under the federal CARES Act.

But then Shapiro received $111 in residuals in the span of one week.

That reduced her benefits for the week to $0, which meant she also lost the extra $600. "I got wiped out," she said.

Shapiro feels helpless about fixing the problem because her residuals are beyond her control.

"It's for past work. I don't have a choice. It just shows up," she said.

ACTORS UNION LOBBIES CALIFORNIA TO CHANGE ITS RULES

Residuals don't count against weekly unemployment benefits in other states such as New York. The union representing professional actors, SAG-AFTRA, is now lobbying the state of California to change its rules.

"The result of accounting for a performer's residuals in their weekly income reporting can be extremely detrimental to a family," SAG-AFTRA's national director of government affairs and public policy Kerri Wood Einertson wrote in a recent letter to California Labor Secretary Julie Su.

Residuals are likely not an issue for highly paid A-list actors. But Einertson said the union is getting calls from many performers who are now struggling to get help at a time when their income has dried up and their industry is dormant.

"It's affecting a lot of working actors who have been in successful shows in the past," Einertson said. "I would say it probably affects a large number of our members."

LAist emailed and called California's unemployment office about the state's policy on counting residuals against weekly benefits, but did not receive a response in time for publication.

FOR SOME, RESIDUALS CANCEL OUT ALL OTHER INCOME

Residuals are even coming back to haunt actors who've largely shifted into other careers.

Valley Glen resident Ben Hermes last worked as a professional actor in 2017. But he continues to get residuals from earlier roles, such as his 2011 appearance on "CSI: Miami."

Lately, Hermes has been earning his living as a creative director for a digital marketing company. But, because he earns that income as an independent contractor, California's unemployment system discounted it and instead awarded him benefits based solely on his W-2 residual checks.

"That qualified me for a whopping $112 in weekly benefits," Hermes said. (Like all unemployment recipients, he's also now getting the federal boost of $600 per week.)

Hermes thinks California's unemployment system should do a better job of accounting for how actors get paid, given that the state is home to so many entertainment workers.

"Many of us have to do so many jobs," he said. "We can't just do the thing we love, which is perform or be behind the camera. I think they are not taking that into account."

Officials with California's unemployment office have said that under federal law, they are required to process an applicant's W-2 income first when calculating benefits. If applicants have enough W-2 income to qualify them for traditional unemployment insurance, they will be disqualified from the state's new unemployment program for self-employed workers who've been affected by the coronavirus.

FULL DISCLOSURE: As a union employee at KPCC/LAist, the reporter is a member of SAG-AFTRA.