Each episode or project (i.e. long form television) you have written and are credited with has a ceiling, a specific cap or fixed amount of reportable earnings after which no additional contributions are due on that episode or project. Even if you continue to receive residual checks through the WGA for that episode or project, once the ceiling or cap is met, no additional contributions will be remitted to the PWGA on that episode or project. Also, not all types of residuals you receive are reportable. What this means in practice is that not all residuals will increase your pension benefit or help you qualify for health coverage.
Please also note that some residuals will never be reportable. These include theatrical residuals, clip payments, some New Media, supplemental markets, home video/DVD, Dubbed, In-Flight, Interest, Rental, and EST.
Article 17.B.1.e of the Writers Guild of America Theatrical and Television Minimum Basic Agreement (MBA) states that in connection with any television project, contributions will not be accepted on gross compensation in excess of the greater of the following: (i) the aggregate of two and one-half times the applicable minimum; or (ii) the initial compensation agreed upon in the individual employment contract. So, what does that mean in practical terms?
It all starts with your contract. The contract is required in order to calculate the ceiling and determine how much of reportable residuals are subject to contributions. Reportable amounts to the ceiling include your initial compensation, bonuses, as well as reportable residuals up to the project ceiling.
- The ceiling is the greater of 250% of the applicable non-network minimum for services provided or the initial compensation, whichever is greater.
For example: You are hired to write a one-hour network primetime episode. The standard services would be a story & teleplay. The ceiling is calculated by using the non-network rate for services provided.
- Current one-hour story & teleplay network minimum = $45,397 (this is your compensation)
- Ceiling = Non-network story & teleplay = $32,925 x 250% = $82,312.50
- From the ceiling, subtract initial compensation:
$82,312.50
– ($45,397.00)
$36,915.50
The $36,915.50 is the remainder of reportable residual compensation for this episode. Reportable residuals (Free TV, Free Foreign, Basic Cable and in the case of projects made for HBSVOD platform, HBSVOD residuals) would be reportable up to the ceiling, after which no additional contributions are due on this episode.
What Happens If You Are Part of a Writing Team
The example provided above is for a single writer. For a team of two splitting the covered work, for contracts under the 2020 MBA and prior agreements, the compensation would be split between the team members and the episodic/project residual ceiling would also be split between the team members.
Under the current 2023 MBA, for a team of two, the compensation would still be split between the team members. However, each team member now would receive a full episodic/project residual ceiling as they would if they were the only writer.
We hope this helps you better understand how residuals are paid, and how they might affect your pension payments and health coverage.
For more information, please contact Employer Compliance: [email protected]