SUMMARY OF LOW BUDGET SIDELETTER TO THE 2020 DGA BASIC AGREEMENT
The DGA's Low Budget Sideletter covers films intended for theatrical or home video/DVD release with budgets up to $11 million, and is effective from July 1, 2020 until June 30, 2023.
The Sideletter has several levels:
- Level 1a: Films with budgets from $0 but equal to or less than $500,000.
- Level 1b: Films with budgets greater than $500,000 but equal to or less than $1,100,000.
- Level 2: Films with budgets greater than $1,100,000 but equal to or less than $2,600,000.
- Level 3: Films with budgets greater than $2,600,000 but equal to or less than $3,750,000.
- Level 4a: Films with budgets greater than $3,750,000 but equal to or less than $5,500.000.
- Level 4b: Films with budgets greater than $5,500.000 but equal to or less than $8,500.000.
- Level 4c: Films with budgets greater than $8,500.000 but equal to or less than $11,000.000.
The Sideletter clearly defines how a film will be categorized for residual payment purposes before production even starts. This is important because it has become increasingly difficult for an independent producer to determine what the primary release platform—theatrical, home video/DVD, etc.—will be for a particular film until it is completed and screened for potential distributors.
The key terms of the Low Budget Sideletter include:
MINIMUM SALARIES:
Directors:
- Levels 1 and 2: Compensation shall be subject to negotiation between individual employee and employer for films with budgets less than $2,600,000.
- Level 3: $75,000 for films budgeted between $2,600,000 and $3,750,000.
- Levels 4a and 4b: 75% of scale for films budgeted between $3,750,000 and $8.5 million dollars.
- Level 4c: 90% of scale for films budgeted between $8.5 million and $11 million dollars.
- At levels 3 and 4, the DGA will consider a request to reduce minimum initial compensation, in some circumstances, for Directors who are directing their first theatrical motion picture.
AD/UPMs:
- Level 1a: Compensation is subject to negotiation between the Employer and individual employee for films budgeted under $500,000, but in no circumstance can pay rates be less than the prevailing minimum wage.
- Level 1b: 33% of the Studio Rate and no production fee for films budgeted between $500,000 and $1,100,000. The weekly rate for 2nd 2ADs and Additional 2ADs is $803, but in no circumstance can pay rates be less than the prevailing minimum wage.
- Level 2: 50% of the Studio Rate and a production fee of $25/week for films budgeted between $1,100,000 and $2,600,000; the daily production fee is $6 if employed on a daily basis. The pay rate for 2nd 2ADs and Additional 2ADs is the Additional 2AD rate.
- Level 3: 60% of the Studio Rate, a production fee of $200/week for UPMs and 1ADs, and a production fee of $150/week for Key 2ADs for films budgeted between $2,600,000 and $3,750,000. The pay rate for 2nd 2ADs and Additional 2ADs is the Additional 2AD rate.
- Level 4a: 70% of the relevant pay scale and production fees for films budgeted between $3,750,000 and $5,500,000.
- Level 4b: 80% of the relevant pay scale and production fees for films budgeted between $5,500,000 and $8.5 million.
- Level 4c: 90% of the relevant pay scale and production fees for films between $8.5 million and $11 million.
Additionally:
- AD/UPMs are not required to receive Vacation, Unworked Holiday Pay, Wrap Supervision Allowances or Distant Location Allowances at Levels 1 - 4b.
- AD/UPMs are not required to receive Completion of Assignment pay at Levels 1 and 2; Completion of Assignment pay is per the DGA Basic Agreement at Levels 3 and 4, with a corresponding Health Plan contribution of 14.5%.
- At all Levels: DGA Trainees may be employed at the same discounted rates as are applicable to ADs and UPMs at each Level (e.g. at Level 4a, 70% of the Trainee rates listed in BA Paragraph 14-103), provided that the salary for any hour of work must be no less than the prevailing minimum wage.
PENSION, HEALTH AND RESIDUAL PAYMENTS:
- At all levels: Pension and health contributions to all directorial team members at the same rate as films made under the DGA's Basic Agreement.
- At all levels: Full residual payments to all directorial team members at the same rate as films made under the DGA's Basic Agreement.
- Levels 1 and 2: The 2020 Sideletter adds a provision for how pension and health contributions are paid for Employees who are also owners of the company.
QUALIFICATION LIST REQUIREMENTS:
- Level 1-2: Employers may hire two individuals on any of the applicable Qualification Lists to work in the next higher Qualification List category than the one on which they are placed. For example, a Qualified Second Assistant Director may be employed as a First Assistant Director.
- Levels 1-3: Employers may hire one directorial team member not on any Qualification List. All other DGA hires must be at least on the Third Area QL.
- Level 4: Employers must give preference of employment to Employees as provided in Article 14 of the BA. However, on productions based in the Southern California area or the New York area, Employer may employ one Assistant Director or one Unit Production Manager who is on the Third Area Qualification List if the Employer has made a reasonable effort to find someone on the appropriate Qualification List and can document such effort.
TRAVEL:
- Directors and their teams travel in business class for flights of 1,000 miles or more. They can be traveled in coach for flights that are less than 1,000 miles.
CUTTING TIME:
- Levels 1 and 2: Same number of days as shoot, with a minimum of 20 days.
- Level 3: 8 weeks.
- Level 4: 10 weeks (per BA).
SAFETY:
Prior to any employee commencing covered services, the Employer must confirm with the DGA in writing that it has established a written safety program to the extent required by applicable law.
BUDGET AND FINAL COST STATEMENT SUBMISSION:
- Before the start of principal photography, the Employer is required to submit the Budget (as defined in the agreement) to the DGA. No later than 60 days after completion of the answer print or digital equivalent, or 18 months after wrap of principal photography, whichever comes first, Employer must submit to the DGA a Final Cost Statement.
