1A situation or system in which the options are either to participate or to pay a financial or other penalty; (now) especially (US) any of various (proposed) schemes in which employers are legally obliged either to provide health care insurance, pension contributions, etc., for their employees, or to pay into a government fund for this purpose. Chiefly attributive.
2In the entertainment industry: (a clause in) a contract guaranteeing a performer work or (more often) payment. Now (especially in the film industry) a clause or contract guaranteeing an actor or director a fee even if his or her services are ultimately not required. Chiefly attributive.
Mid 19th century (in an earlier sense). From pay + or + play.