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by Rotimi Agbabiaka

On August 26, SB 805, or the “Save The Performing Arts Act of 2021,” a California Senate bill that aims to help nonprofit performing arts companies, with annual revenues of $1.4 million or less, pay their workers minimum wage, passed unanimously through the Assembly Appropriations Committee. The bill is now on track to receive a vote on the Assembly floor and potentially be signed by the governor before the current legislative session ends in October.  

SB 805 was crafted in response to AB 5, a California law which went into effect in 2020 and requires companies to provide wages and benefits to a vast number of workers who were previously classified as independent contractors. Theatre companies have buckled under the weight of compliance, and smaller companies, which typically pay stipends to members of their production teams, have felt especially threatened with the prospect of having to close up shop.

The new bill calls for the creation of a paymaster system whereby small performing arts companies can secure the services of a common paymaster who will handle their payroll requirements, including unemployment insurance and worker’s comp claims. This aggregated paymaster service promises to significantly lower costs for participating companies, many of which have been struggling with the exponentially larger administrative burden imposed by AB 5.

a close-up of Martha Demson smiling showing her teeth. She is a white woman with blue eyes and short blonde hair. She is wearing a blue sweater.

Martha Demson

“By requiring that everyone pay every single person who comes in an hourly minimum wage, including someone who’s coming to hang lights for two hours, [AB 5] takes these small organizations, with very little administrative bandwidth, and all of a sudden they’re now employers of maybe 50, 100, 150 people in the year,” says Martha Demson, artistic director The Open Fist Theatre Company in Los Angeles.

For companies like Demson’s 99-seat theatre, the costs associated with such a drastic change have precipitated an existential crisis, especially when combined with the devastation that the Covid-19 pandemic has wreaked on the performing arts. Early in 2020, the Theatrical Producers League of Los Angeles, of which Demson is board president and which will soon be changing its name to the League of Southern California Theatres, called an emergency meeting to figure out how to respond to the challenge of AB 5. 

At first the group wanted to lobby the state legislature to secure exemptions from the law for smaller performing arts organizations but when it became clear that the unions representing performing artists did not want to see exemptions that would threaten artists’ wages, a pivot seemed necessary. 

The convening, some months later, of a Covid safety task force to draft common recommendations for theatre reopenings provided another opportunity to discuss AB 5. Members of the League decided to find a legislator to bring a fix, in the form of new legislation, to the state legislature, and State Senator Susan Rubio stepped up, citing her appreciation for small theatres and her awareness of the jeopardy placed upon them by the requirements of AB 5.

Rubio sponsored SB 805, which originally intended to establish, in addition to the paymaster system, an Equitable Payroll Fund, which would award grants to organizations, based on their size, to help them comply with the increased labor costs necessitated by AB 5.

“Essentially it would be government helping to subsidize the cost of the impact of this legislation on a sector that simply cannot afford it based on the economics of our industry,” says Demson. “Those who are least able to afford this would be given the most substantial matches to the dollars that they contributed.”

Since its introduction to the legislature this February, the bill has drawn support from artists and organizations all over the state, including Bay Area companies like Altarena Playhouse and Teatro Vision. 

There have been some obstacles along the way. This being the League’s first legislative effort, its members didn’t realize that they needed to do additional advocacy to make sure that funding for the payroll system would be included in the upcoming state budget. Failing to secure the funding for the payroll grants, proponents amended the bill to only include the paymaster system.

Thankfully, other legislative efforts on behalf of the arts have helped to fill the gap and secure more relief for the beleaguered field.

a light skinned woman with long blonde hair against a black background. She is wearing large hoop earrings and a light grey jacket.

Julie Baker

Advocacy by California Arts Advocates, the California chapter of the National Independent Venue Association, and the California Association of Museums led to a historic $616 million allocation to the arts, culture, and live event industries in the 2021-22 state budget signed by Governor Newsom on July 12. Those funds included $50 million in grants that will be made available to small arts organizations to help them meet employee expenses—essentially what the Equitable Payroll Fund would do, albeit on a smaller scale. Out of the $50 million, $25,000 grants will go to organizations with annual revenues under $100,000; $50,000 to organizations with revenues between $100,000 and $1 million; and $75,000 to organizations with revenues between one and two million dollars.

The allocation also includes $500,000 awarded to the California Arts Council to hire a third party to set up a paymaster system. 

“So there were two victories this year,” says Julie Baker, executive director of California Arts Advocates. “Fifty million dollars plus five hundred thousand to the CAC to administer a paymaster and then hopefully SB 805 will also pass.”

Demson says it’s important for SB 805 to pass in order to enshrine the legislative precedent for the paymaster system. The league plans to introduce a bill next legislative session to establish the Equitable Payroll Fund. And once the new budget allocation for the arts is released, Demson and Baker plan on doing extensive outreach to make sure that all eligible companies have access to the funds and that state lawmakers are made even more aware of the scope of need.

“We’re doing major outreach once the grants are available, because we’d like to demonstrate that, ‘Look, the $50 million was made available. It was gone in two months,’” says Demson. “Because we know that the need is dire. We’re hearing stories every day of organizations shutting down permanently, not just because of Covid.”

Rotimi Agbabiaka is the Features Curator for Theatre Bay Area. Rotimi is an actor, writer, director, and teaching artist. Learn more at RotimiOnline.com