SAG Influencer Agreement: Pros and Cons

Our ninth minisode of the fourth season of “The Creative Influencer” podcast is available today for download on iTunes, Spotify, and premier platforms everywhere. In this minisode, Jon looks more closely at some of the pros and cons of the new agreement from the Screen Actors’ Guild of America covering content created by influencers.

______________________________________________________________________________

A transcript of the episode follows:

In our last minisode we provided an overview of the SAG-AFTRA’s new influencer agreement. Today we are going to talk about the pros and cons of the new agreement.

One of the major reasons to join SAG-AFTRA is to gain access to Pension and Health benefits. All SAG members have to meet a threshold of earnings in a year to qualify for these benefits. Currently, this is a minimum of $29,950 of earnings or so-called “covered services” in a year to qualify for the health plan, and $20,000 in a year to earn one pension credit. With the default 20% fee paid to SAG under the influencer agreement, this essentially means you need to have contributed a minimum of $5,990 to the union in order to qualify for these benefits in a given year.

To keep your benefits, you have to meet the minimum earnings threshold each year. If you don’t make that much in a given year, then you have the option of paying for the health plan out of pocket, through COBRA, which is the same system as when you lose your job and pay a monthly premium to keep your health insurance from your former employer.

For pension benefits, the general rule is you have to earn a minimum of 10 credits over a ten-year period to be eligible (but there are exceptions and other ways to calculate this for periods of being out of work, having children, etc., but I’m not going to go into the weeds).

Contributions to SAG also max out. You don’t pay a percentage on your “covered earnings” after you make more than $232,000 in a year.

Under the terms of the new agreement, influencers will qualify for Pension and Health benefits in exactly the same way that other SAG members qualify: based on contributions made on covered earnings. What this means is that the Influencer makes Pension and Health contributions on the portion of their compensation that represents the value of their “covered services.” This is their work as a performer as opposed to their work as a writer, producer or editor. I’ll come back to that difference in a moment, but let’s break this down a little more first.

Normally, actors are paid by the producer, and the SAG contribution, which is about 20%, is taken out of the paycheck and paid directly to the union. For Influencers, the calculation is similar. The influencer pays Pension & Health contributions on a minimum of 20% of their compensation and can qualify for benefits based on the compensation actually subject to contributions. For example: if an influencer is paid total compensation of $100,000, and makes Pension & Health contributions on $20,000, only $20,000 will be considered SAG-AFTRA earnings that can help them qualify for health insurance or a pension. In essence, this means that five percent of gross earnings are paid to SAG (20% of 20% is five percent). Put this on top of the other percentages paid to managers, agents and lawyers, and all of a sudden your take-home pay as an influencer is going to be 60 to 65 percent of the total contract value for the brand deal.

What this means is that some influencers may want to specify in their contract the breakdown for their work as a performer versus the other editing and producing work that goes into a successful sponsored post. So instead of taking the default calculation of 20% as “covered earnings” they may want to specify in the contract the exact percentages for work as a performer versus work as a writer and editor.

There are two major cons that stick out to me.

First, SAG retains full control to deny, revoke or investigate any project. It is unclear exactly what this means, and I don’t want to read into it too much. But imagine striking a brand deal just to have the project rejected by SAG?

Another potential con is once you join the union, you must follow what SAG calls “Global Rule One.” To quote the rule: “No member shall render any services or make an agreement to perform services for any employer who has not executed a basic minimum agreement with the union.” What this means is once you become a SAG member, you have to keep all of your brand work under the SAG agreement.

Whether or not is makes sense to join SAG if you are currently a non-member will vary with each influencer’s individual situation. If you may be doing other acting work that would otherwise be covered by the union, then it could make a lot of sense to include your influencer work, in order to help qualify for the Pension and Health benefits. But if you have no such inclination and are only doing your own self-produced work for social media, then it may not make sense. Yes, the Pension and Health benefits are great, but from a strictly economic point of view, contributing five percent of your earnings toward this is probably more costly than buying your own health insurance and investing for retirement.

We’ve reached out to SAG for an interview but, so far, they have not gotten back to us. We’ll let you know.