Legit 802 Passes Million-Dollar Mark

Volume CVI, No. 1January, 2006

Mikael Elsila

We’ve passed a huge benchmark at Local 802. For the first time, our payroll service has broken the $1 million barrier.

More and more employers are becoming aware that since 1991, Local 802 has run a payroll service called Legit 802, Inc. The service takes care of paying musicians’ wages, pension, health, benefits and taxes. All an employer has to do is write one check to Legit 802 and the union takes care of the rest.

“Over the years, the word has spread that we have this payroll system,” Leo Ball, the payroll service’s administrator, told Allegro. “Legit 802 takes the burden off the employer’s hands.”

As of Nov. 1, Legit 802 had processed over $1 million in gross contracts, which includes all the money that employers submit to the union. Ball guesses that by the end of 2005, the payroll service may approach the $1.5 million mark, which is a magic number for the union — that’s the number at which Legit 802 pays for itself.

The union has no problem subsidizing Legit 802 because it’s a valuable service for members. When an employer uses the service, it’s guaranteed that musicians are paid correct wages, benefits and — most importantly — taxes and unemployment contributions.

Far too many employers incorrectly think of musicians as independent contractors. Even if a gig is union, many employers just pay “gross” — without deducting and contributing taxes. This is money that the musicians themselves will have to pay come tax time. Paying musicians as independent contractors is against the law in New York, thanks to statutes that Local 802 helped pass.

“If employers are fooling around with 1099’s and cash dates, they’re taking a chance on a can of worms being opened up,” said Ball. “We’ve had a couple of cases of tremendous fines employers have had to pay. Musicians are not independent contractors.”

When an employer uses Legit 802, the union charges 19 percent of wages, of which approximately 16 percent is the employer’s legal responsibility to the various city, state and government agencies. The remaining 3 percent service fee is far below the hefty fees charged by major payroll companies offering similar tailor-made services.

“More and more freelance orchestras — including ballets, operas and symphonies — are using Legit 802,” said Ball. “Even the Queens Symphony has jumped aboard — they’re all using it. We’re expanding in the recording field, too. Our reputation is spreading by word of mouth.”

Any employer or bandleader can use Legit 802. Even if you are hiring your friends to play for a one-time gig, you can use the service. For more information, call Leo Ball at (212) 245-4802, ext. 175.