If you work in entertainment production in California, chances are you're familiar with loan-out companies. A loan-out company is a corporation (or LLC taxed as a corporation) that a performer, writer, director, or other crew member sets up to "loan out" their personal services to a production company. Rather than being hired directly as an individual, the worker's entity contracts with the production, and the production pays the entity. Loan-out structures have been standard practice in the entertainment industry for decades.

What Did California's New Loan-Out Law Change?

While loan-outs have long been part of how the industry operates, California had never formally recognized them in statute. In 2024, Governor Gavin Newsom signed SB 422 into law, which does two significant things: 

1. It protects entertainment workers' continued use of loan-out companies, and
2. It creates new reporting requirements for motion picture payroll services companies like GreenSlate. 

The law took effect January 1, 2026, and compliance obligations are now active.

As we highlighted in our ‘California Codifies Loan-Out Companies, Adds Payroll Companies Reporting Requirements’ blog in 2024, SB 422 amends Section 679 of the California Unemployment Insurance Code and adds Section 1088.9, formally codifying the loan-out structure and clarifying the employer relationship for unemployment insurance purposes. 

The law makes clear that the loan-out company (not the payroll services company and not the production company) is the UI employer of the individual providing services. That distinction matters for tax filings, unemployment insurance, and how everyone in the chain handles their reporting obligations.

This post breaks down what production employers, individual workers, and GreenSlate each need to do to stay compliant.

For Production Employers: How to Support Your Loan-Out Workers

If your production engages workers through loan-out companies for California-based work, you have a direct role in making sure the process runs smoothly. Here's what production should do:

Verify that each loan-out meets the new legal definition. 

California now formally defines a "loan-out employer" as a corporation (or LLC classified as a corporation for federal income tax purposes) whose principal activity is the performance of personal services for a motion picture production company or allied motion picture services company, provided that those services are substantially performed by an employee of the corporation who owns more than 10% of the outstanding stock on any day during the taxable year.

In practical terms, this means a loan-out must be a properly formed corporation or LLC taxed as a corporation, and the person doing the work must be a significant owner. If a worker hands you a loan-out that is structured as a sole proprietorship, a partnership, or an LLC taxed as a pass-through, it does not qualify under SB 422. Catch these issues early, before onboarding is complete, to avoid delays in payroll processing.

Collect and confirm required documentation upfront. 

For every loan-out engaged in California-based work or based in California, make sure you have the following on file before submitting to GreenSlate for payment:

• The loan-out company's business name, address, and phone number

• The company's Federal Employer Identification Number (FEIN)

• The company's California Employer Account Number (CA EAN), which is the primary identifier the EDD requires for quarterly reporting

The CA EAN is a new field that many workers may not have readily available. If a worker doesn't have one yet, direct them to the California EDD's e-Services for Business portal to register. They can also find their existing EAN on prior California tax documents such as the DE-9 or DE-9C.

Get ahead of it before payroll is due. 

The most common pitfall we're seeing is production teams submitting loan-out workers for payment without complete documentation, particularly the CA EAN. Because GreenSlate is now required to include this information in quarterly EDD reports, incomplete submissions can delay payroll processing. 

Build loan-out verification into your onboarding workflow so it happens alongside start paperwork, not as an afterthought.

Communicate proactively with your crew. 

Many workers who have operated loan-outs for years may not realize anything has changed, or they may not know what a CA EAN is. A brief note at the start of production letting loan-out workers know they'll need their CA EAN (and where to get one) can prevent a lot of last-minute scrambling.

For Workers Using Loan-Out Companies: Your Compliance Checklist

If you provide your services through a loan-out company on California productions, here is what SB 422 means for you and what you need to do.

Step 1: Confirm your entity qualifies. 

Under the new law, your loan-out must be a corporation or an LLC that is classified as a corporation for federal income tax purposes. You must own more than 10% of the outstanding stock, and the principal activity of the entity must be the performance of your personal services to production companies. If your entity doesn't meet this definition, consult with your tax advisor or business attorney about restructuring before your next California engagement.

Step 2: Get your California Employer Account Number (CA EAN). 

This is the single most important action item for loan-out workers right now. The CA EAN is a number assigned by the California Employment Development Department, and it is now required for payroll companies to report payments to your loan-out under SB 422.

• If you already have one, you can find it on your DE-9 or DE-9C tax forms.

• If you don't have one, register through the EDD e-Services for Business website.

• If you are unable to obtain a CA EAN, the EDD may accept other identifying numbers, but the CA EAN is the primary requested identifier.

Don't wait until you're onboarding for a new production to deal with this. Register now so you have the number ready when you need it.

Step 3: Keep your formation and tax documents current. 

You should have the following readily accessible for any production or entertainment payroll company that requests them:

• Articles of Incorporation (or Articles of Organization for an LLC)

• Current W-9 reflecting your entity's correct legal name and FEIN

• Proof of your CA EAN

• Documentation showing your entity's federal tax classification as a corporation

Step 4: Understand your UI employer status. 

Under SB 422, your loan-out company is your UI employer. You are not considered an employee of the payroll services company. This means any UI claims filed through a production payroll company like GreenSlate for loan-out employees will be denied. Your loan-out entity is responsible for its own unemployment insurance obligations in California.

Step 5: Set up your loan-out in GreenSlate. 

For a detailed walkthrough of how to enter your company information, upload your Articles of Incorporation, add qualified states, and save a W-9 preview, visit our Help Center guide on setting up a loan-out company.

GreenSlate's Requirements as Your Payroll Services Provider

As of January 1, 2026, motion picture payroll services companies are required to file quarterly reports to the California EDD for each loan-out company processed. GreenSlate takes this obligation seriously, and we need accurate, complete information from both production employers and loan-out workers to meet it.

What we report each quarter. 

For every loan-out processed on a California production, GreenSlate must report the following to the EDD:

• Total payments made to the loan-out company

• Business name, address, and phone number of the loan-out company

• The loan-out's FEIN, CA Employer Account Number, or other identifying number as required by the EDD in consultation with the Franchise Tax Board

• Full name, address, and Social Security number of each individual whose services were provided through the loan-out

• GreenSlate's own name, address, and identifying numbers

• Any additional information the EDD may require

How we collect this information. 

We collect all necessary loan-out information during onboarding through our platform and, when applicable, via paper start work. Whether your crew is onboarding digitally or on paper, the loan-out fields (including the CA EAN) are part of the standard process.

What we need from Production. 

To process payroll and file accurate quarterly reports:

• Production employers: Submit complete loan-out documentation at onboarding. Do not submit a loan-out worker for payment until the CA EAN and all other required fields are filled in. Incomplete submissions will hold up processing.

• Loan-out workers: Provide your CA EAN, FEIN, Articles of Incorporation, and a current W-9 during onboarding. If you're unsure how to enter this information in the platform, follow our Help Center guide.

What happens if requirements aren't met. 

If a loan-out submission is missing required information (particularly the CA EAN), GreenSlate may not be able to process payment until the information is provided. We cannot file incomplete quarterly reports with the EDD, so gaps in documentation will need to be resolved before payroll can proceed for that worker.

Last Take

SB 422 formalizes what the entertainment industry has been doing for decades, but it adds real reporting obligations that affect everyone in the chain. Production employers should build loan-out verification into their onboarding process. Workers should register for a CA EAN now if they don't already have one. And everyone should make sure their documentation is complete and current in GreenSlate's system.

If you have questions about how SB 422 affects your production's loan-out submissions or payroll reporting, contact GreenSlate Support.