How to read your Deal Memo

No one likes paperwork, especially the fine prints. But when working as a freelancer, it’s worth reading in a contract you sign. Sometimes a deal memo can be very minimal, so you might not see all the details outlined below, but you can always ask questions, and, if you judge that it’s too important to not be in ink, ask for additional terms of services to be included in the paperwork you sign.

Rate and Guarantee

Getting paid for a 12 hour day isn’t the same as getting paid for a day. A deal memo will usually state if your rate is a flat (meaning you will get the same amount no matter how long the day goes), or if your rate is based on a set number of hours. In the later case, it becomes possible to establish what your hourly rate will be (see this article on How to Calculate your Hourly rate).

Overtime

What happens when you go beyond your hourly guarantee? When you are paid through a payroll company, there isn’t any room for discussion and the state laws will apply, but if you are working as an independent contractor and planning on invoicing your employer, it is important to have in writing what overtime rules apply. In the end, most employers will play by the rules and give you double time after hitting 12 hours (in California at least), but there’s nothing forcing them to do so if it isn’t stated in the deal memo.

Overtime is also sometimes only awarded if it has been pre-approved by someone on set. Find out if you need to talk to a producer or production manager before talking an action that would put you into overtime.

Payment Terms & Approvals

Every deal memo will outline how quickly you will be paid. Some companies pay within a week, and some are on what we call “Net 30”. This means that the employer has 30 days to pay you, usually starting upon reception of all the documents they require for payment. This is why it’s important to turn in all your paperwork as quickly as possible! If you send an invoice the day after you wrap, but don’t send your W9 form until a week later, the 30 days start when the W9 was received. Of course, if you have provided all the documents, and the employer is requesting additional forms down the road, the date used should be when the production company previously acknowledged the reception of all documents needed.

If you are getting paid on a project basis, rather than on a daily or hourly basis, it is important to know if you will be paid entirely upon delivery of the approved project, or if you are entitled to part of the payment earlier than this. On long projects, it becomes quite important to make sure that you will be paid at various milestones of the project. Otherwise, you will have to wait until your employer has approved the final delivery to submit an invoice, which means that you could have to wait another 30 days from there.

Talking about approvals, your employer should state how long it will have to review your work and approve or make notes on it. This will avoid going for days or weeks without any information, which again, will delay the day that you finally get compensated.

Insurance & Equipment

What happens if you get injured, if you get into a car accident etc…This is almost always outlined in a deal memo. When working as a contractor, your will often have to use your own insurance for everything that happens. When working as an employee, your employer has to provide “worker’s comp insurance”, which will cover you in case of injury. Your personal car might still be out of coverage though. When your bring your own equipment (which could include your personal vehicle in some specific situations), you can ask for a certificate of insurance that would cover damages on the job.

Travel & Meals

Very often, travel rates are different from your regular day rate. Make sure to know what the job entitles you to. Also, if you use your personal vehicle, will you be compensated for the mileage? At what rate, and in which situations?

When you are traveling, will you be compensated for breakfast, lunch and dinner? Will you have to provide receipts, or will you be given a daily “Per Diem” amount? Will that Per Diem be paid before you travel, or after the job is done?

Confidentiality

Some deal memos explicitly restrict you from talking about what you are working on. Generally speaking, it’s always good practice to not divulge any information about what is going on on set of in the office, but it becomes easy to forget when something amazing happens and you just want to take a picture of it…So always be on a safe side and don’t say anything!

Ownership

Finally, if you are working in a creative position, it is important to know what you are allowed to use for yourself once the project is over. Does the production company own every single piece of content you have created? Or are you allowed to re-use assets for other projects or for your personal reel?

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