The Ultimate Guide to the SAG-AFTRA Commercials Contract
During pre-production, you have a decision to make: To hire SAG-AFTRA talent or non-union talent.
Unlike working with non-union workers, hiring union talent comes with a complicated list of contractual requirements from your production team.
SAG-AFTRA aims to protect talent rights in the industry with negotiated fair wages, proper working conditions, health benefits, and more. Therefore, to hire SAG talent, you are required by SAG-AFTRA to enter into a contract with each performer.
As simple as it may seem, these contracts are tricky, and if you are not well-versed in their terms and regulations, the price for talent will run high fast.
Thankfully, we’re here to help! With our years of experience, we are here to spill all that we know with the Ultimate Guide to SAG-AFTRA Commercials contracts. Below, we will dive into what SAG-AFTRA is and who they represent, how their commercial contracts work, and some essential tips producers should know when navigating the different types of contracts.
What is SAG-AFTRA?
SAG-AFTRA is an entertainment and media labor union that represents many talented performers including:
Actors
Broadcasters
Stunt doubles
Radio hosts
Voiceovers
Announcers
Dancers
Singers
Stunt Drivers
SAG-AFTRA negotiates and enforces collective bargaining agreements (CBAs) that establish minimum standards for wages, working conditions, and other benefits for its members who work in film, television, commercials, and other media.
For advertisers and producers, understanding and navigating SAG-AFTRA commercial contracts is essential for successfully hiring and working with unionized performers.
What is the SAG-AFTRA Commercial Contract?
To hire SAG-AFTRA talent, your production must be party to the SAG-AFTRA Commercial Contract which establishes the working conditions and compensation you must ensure the performer while shooting for your production. When signing this contract, your team subjects to:
Negotiated wages
Fair working conditions
Opportunity to effectively resolve disputes and make necessary adjustments
Health pension and benefits
SAG-AFTRA is strict on complying with the terms and regulations under the contract; failure to do so can lead to violations that are subject to additional penalty fees for the producer or advertiser.
What Makes SAG Commercial Contract Complicated?
The Commercial Contract can be complicated for even the most experienced advertisers and producers. This is because it covers a wide range of topics that require a wide variety of expertise including compensation, work hours, residual payments, and safety standards. The Commercials Contract also outlines specific requirements for advertisers and producers when casting and hiring performers, such as the need to provide adequate notice and audition time, and requirements for callbacks and wardrobe fittings.
Here are a few other reasons the Commercials Contract can be difficult to navigate:
They are legally binding agreements negotiated and revised regularly between SAG-AFTRA and the producers' representatives, making them complex.
The requirements of the Commercials Contract can vary depending on the specific project and the roles of the performers involved, which make it challenging to determine the exact terms and conditions that apply to each project.
Compliance with the Commercials Contract requires strict adherence to specific procedures and timelines, such as providing adequate notice and audition time for performers, ensuring safety standards are met, and making session and residual payments on time.
Failure to follow the requirements under the Commercials Contract can result in legal issues or labor disputes, which can be costly and time-consuming to resolve.
Tips for Navigating SAG-AFTRA Commercials Contracts
After two decades of helping advertisers and producers successfully negotiate SAG-AFTRA Commercials Contracts, we’ve learned a few tips along the way, so you don’t have to. If you’re thinking about hiring SAG talent for your next commercial, keep these in your back pocket as you start the process.
You need a signatory from the start
Before your team can start working with union talent, your team will first be required to have a SAG-AFTRA signatory on the project. A SAG-AFTRA signatory is an entity or individual who has signed the SAG-AFTRA Commercial contract and has agreed to comply with the terms and conditions of the contract when working with SAG-AFTRA performers.
Your team then has three options when engaging with SAG talent:
Become a direct signatory to SAG-AFTRA Commercials contracts
Hire a third-party SAG-AFTRA signatory company
Sign a One Production Only Agreement (OPO) directly with SAG-AFTRA
All of these options come with their pros and cons so it's important to identify the best option for your production.
If your agency or production company wants to continue hiring non-union talent for future projects, you will likely want to engage a third-party SAG-AFTRA signatory.Completing the paperwork
When hiring SAG-AFTRA talent, several forms of paperwork are crucial to submit to ensure your production avoids any added penalty fees or delays in the start of production.
Paperwork varies as you enter the respective production stage:
Pre-Production Stage:
→ Signatory Application: To become a SAG-AFTRA signatory producer, you need to fill out and submit a signatory application. This establishes your commitment to adhere to the union's terms and conditions. However, if you hire a third-party SAG-AFTRA union signatory, this step isn’t required.
→ Commercial Production Agreement: This is the agreement between the producer and SAG-AFTRA that outlines the terms and conditions under which the commercial will be produced. It will include information about the shoot dates, locations, and compensation for performers. This step is also not required if you use a third party signatory company.
→ Cast List: Provide a complete list of performers, including SAG-AFTRA members and non-members, with their roles and contact information.
→ Performer Contracts: Each SAG-AFTRA performer must sign a performer contract outlining their specific terms, such as compensation, working conditions, and other provisions.
→ Taft-Hartley Report: If you hire non-union performers, you may need to submit a Taft-Hartley report. This form explains the reasons for hiring non-union talent and justifies their employment under the union's jurisdiction.
Production Stage:
→ Principal Employment Contract (Exhibit A-1): This is a standard form contract used in SAG-AFTRA productions to formalize the terms and conditions of employment for principal performers. Principal performers are those actors who have speaking roles or are otherwise featured in a production, as opposed to background actors or extras.
→ Extra Employment Contract (Exhibit A-2): This is a standard form contract used in SAG-AFTRA productions to formalize the terms and conditions of employment for background actors or extras. These performers typically do not have speaking roles and are used to create the atmosphere or environment in a scene.
To learn more about SAG-AFTRA employee forms, check out How To Fill Out SAG-AFTRA Commercial Employee Forms.
→Production Time Reports (Exhibit G): These forms should be completed daily during production to track work hours, overtime, meal breaks, and other work-related details for each performer. This is essential for ensuring compliance with union rules regarding work hours, breaks, and compensation.
→ Meal Penalty Reports: If meal breaks are delayed or not provided according to SAG-AFTRA guidelines, you will need to fill out meal penalty reports to document these instances and calculate any additional compensation owed to the performers.
Post-Production Stage:
→ Pension, Health, and Retirement Contributions: Producers are required to make contributions to the SAG-AFTRA pension, health, and retirement funds on behalf of each performer in a timely manner. You will need to fill out and submit the appropriate paperwork to ensure these contributions are made accurately and timely.
When it comes down to processing payment for talent it is recommended to hire an entertainment payroll provider to help streamline the process and the added workload that comes along with it.
→ Final Cast List Report: At the end of the production, submit a final cast list report, including all performers and their contact information, to SAG-AFTRA.
→ Commercial Tracking Report: This report documents the use of the commercial, including air dates and media platforms. This information is necessary for calculating and paying residuals to performers.
If you lack bandwidth in-house to manage each of these stages, back-office production support services could help improve productivity and lower operational costs for future commercials.
Understand Residuals, Pension and Health
Paying wages is only a fraction of the total cost that comes with hiring SAG talent. Under the SAG-AFTRA Commercials Contract, you must also pay usage (residuals) and health, and pension contributions. It’s essential to become familiar with these terms as they will contribute to your overall production costs.
What are SAG-AFTRA Residuals?
Residuals are an additional fee to the performer for the use of commercials across different platforms beyond those used covered by the initial session fee. Some factors taken into account to determine residual costs include:
When and how often it airs
Where it airs
What platform it airs
Talent’s role in the production
What is SAG-AFTRA Pension & Health?
SAG-AFTRA requires producers to provide their performers with health insurance and retirement benefits. Under the Commercials Contract, SAG-AFTRA requires you to pay talent pension and health fee of 20.5% of the actor’s wage.
Celebrity or “Above Scale” Health contracts
Our team understands the ins and outs of the SAG-AFTRA commercials contract and knows how your team can cut costs when paying residuals, pension and health. Here are a few tips for getting the most cost savings under your SAG-AFTRA Commercials Contract:
Bundle Agreements: If you plan on using celebrity talent for services not covered by the Commercial Contract, think ahead and structure their contracts upfront. Services not covered under the SAG-AFTRA commercial contract will allow the contract to be considered “multi-service” and only 50% of the total compensation will be subject to the 20.5% P&H contribution rate.
Know the Cap on Celebrity P&H: There is a $1M per contract year cap on the amount of compensation subject to SAG P&H. The maximum amount your production will pay for pension and health is $205,000 for a celebrity SAG -AFTRA member.
Conclusion: Streamline Your SAG-AFTRA Productions
It’s important that producers and advertisers understand all there is to know about the SAG-AFTRA Commercials Contract. It will benefit your production’s budgeting process and make working with SAG talent a positive experience.
Unfortunately, this blog only covers the surface of the SAG-AFTRA commercial contracts and there’s still much to learn. Hiring a third-party SAG-AFTRA signatory company will save you this trouble and streamline the hiring process.
CMS is a third-party signatory to the SAG-AFTRA Commercials, Corporate Educational / Industrial & Interactive media contracts. We are here to help you hire the best talent in business for your next project. Contact us to receive a consultation.
FAQs
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Residuals are additional payments that performers receive when their work is used beyond the initial session fee payments, which happens in every case unless the commercial is not used. For commercials, residuals are typically paid for each time the commercial airs, or a flat fee paid for each 13-week cycle.
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SAG-AFTRA requires advertisers and producers to provide adequate notice and audition time for performers. The notice period can vary depending on the type of audition and the role being cast but is typically at least 24 hours. Performers must also be provided with a copy of the script or sides in advance of the audition.
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Noncompliance with the SAG-AFTRA Contract can result in legal issues and labor disputes, as well as fines and penalties from the union. In some cases, noncompliance can also result in inability to work with SAG-AFTRA performers in the future.
