Question of the Day – Initiation Fees

We asked Steve Kaplan:

So what’s the deal with initiation fees? They are waived for new members present when a vote takes place, right?

If someone is employed at a later date, do they have to pay the fee?

Isn’t it true most companies will pay the fee if asked for as a signing bonus?

Can you pay in a payment plan? If so, over how many months?;

What are the dollar costs to people?;

Would the severance pay from a union contract basically balance out this cost?

Thanks

Steve says:

Initiation fees, like dues, are meant to pay for the operational costs for the local representing the member. Bills, salaries, organization costs, etc. are all paid by the dues and fees the locals collect. Each local pays “dues” to the international which go towards paying their costs. Unions disclose their financial statements to the Department of Labor each year in forms called the LM-2. This form lists all assets and liabilities for the local/union disclosing how much money is taken in and where its spent. TAG’s 2011 LM-2 statement can be found here.

Its a common practice to ask the IATSE to waive initiation fees at the time a studio signs their first contract. This helps remove the cost barrier from the artists who have/would be helping to organize the studio. The initiation fee waiver would be made for all parties included in the bargaining unit at the time the contract is signed. Any new hires to the studio after the contract is signed would be assessed the initiation fee. Dues will not be waived. I have heard of artists who have gotten studios to agree to pay their union initiation fee during their salary negotiations before being hired. I can’t say this is a common practice, but certainly one with a strong precedent.

I can only give hard number figures for Local 839, as dues and fees vary for each local. The Animation Guild initiation fees are equal to two weeks of the contracted scale wage per job category. An artist can negotiate a higher wage at the time they’re hired, but still only pay the initiation fee based on the scale wage for their job category. Per the LM-2 statement, the highest initiation fee 839 charges is approximately $3,200.00. When an new member is initiated into the Guild, our office manager sends a letter with a default payment plan which is always negotiable. That plan asks for an initial payment of $635.00 and regular, two-week payments of $210.00. As I mentioned, this plan is very negotiable as Lyn is always adjusting the plan to fit the needs of individual members.

Dismissal pay is another of the items that is heavily discussed at the negotiation table. Some studios have it in their contract and some do not. Some have adjusted it slightly based on their typical staffing requirements. The language in the body of the contract is summarized this way:

Employees laid off for more than 110 days are to be paid dismissal pay accordingly:

* Employed between three and six months – one and one quarter day’s pay
* Employed between six and 12 months – one week’s pay
* Employed more than 12 months – two weeks pay

So, a dismissal payment can cover the initiation fee for an artist who has worked over a year according to that language. However, that artist will have to wait over 110 days after leaving the studio before they can request and receive that payment. Its important to remember that these numbers can always be adjusted during negotiations.

Best,

Steve K

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