CA SB422

Establishes that loan-out companies are employers of their employee-owners or members who provide services to motion picture production companies for purposes of remitting employment taxes and related obligations under the Unemployment Insurance Code.

Prohibits loan-out companies and individuals whose services are provided through loan-out companies from being considered employees of motion picture payroll services companies.

Requires motion picture payroll services companies to file quarterly reports with the Employment Development Department beginning in the first calendar quarter of 2026, including payment amounts, company identification information, and individual worker details related to loan-out company payments.

Establishes penalties for non-compliance with reporting requirements, ranging from $24 for failures not due to willfulness or fraud to $490 for willful or fraudulent failures, with an exception when loan-out companies fail to provide requested information.

Specifies that a loan-out company is a corporation or LLC classified as a corporation for federal tax purposes whose principal activity is providing personal services to motion picture companies, with services substantially performed by an employee owning more than 10 percent of the company's stock.