Payroll Service Forced to Raise Prices

Membership Alert

Volume CVI, No. 10October, 2006

Leo Ball

Since its inception in 1991, Legit 802 has grown to a point where we are realizing over $1 million a year in gross contracts processed. This prompted me to believe that we were drawing close to a break-even point. I even published an article in Allegro to that effect, not truly realizing to what extent Local 802’s costs have increased even though we’ve held the line on our fee of 19 percent of wages.

As most of you understand, the 19 percent includes the leader’s share of the responsibility for employees’ FICA, Medicare, unemployment, workers’ compensation and disability. At the beginning, this allowed Legit to realize a small profit on every contract, of about 3 percent.

Because of the increases over the years of the disability, workers’ compensation, and liability insurances, check cutting, and accountants’ fees, all of which Legit is responsible for, our profit margin has eroded to almost nothing.

Although this is a service that Local 802 is offering as a means to help musicians receive the benefits they deserve, the burden of subsidizing Legit has also doubled over the years and is placing more and more of a strain on our local’s finances.

I’m afraid the time has come to announce a raise in the total fee to 21 percent, effective Oct. 1. Of course, any contracts performed before that date will still be charged at the 19 percent amount. Hopefully, this will give Legit and the local a little breathing room and allow us to continue a service that has proved invaluable to many of our members.

I’d like to thank the employers, leaders, and contractors that have used the service over the years, and hope the 2 percent raise will not deter your use of the service for years to come.

Leo Ball is the administrator of Legit 802. He can be reached at or (212) 245-4802, ext. 175.