[Dixielandjazz] Workers Compensation

Wed Aug 29 11:46:22 PDT 2007

I was involved with all of that for a bunch of years up until about 1985. 
Things may have changed since then.

If you are an employer and pay Social Security and Medicare on your 
employees AND have more than three employees for more than 3 months

(actually I don't remember the time and it may have changed.  It was written 
like this to exempt companies that hired large numbers of workers for 
harvest etc.)

You are charged a percentage and that can go up a lot if there are claims. 
This is why employers try to get many claims shot down.

It's just more paperwork and a real pain.  It's hard to have any size band 
at all under the laws and not pay.

Trouble is once you start into this system of payments it's hard to get out. 
The best way is to not start.

We have a city earnings tax (1%) for the city of St. Louis and if you work 
in the city you are supposed to pay (not!).  I don't live in the city, my 
business is not located in the city and I prefer to not work in the city.  I 
hadn't paid city tax for years and they actually issued a warrant for my 
arrest.  I was able to convince them that I didn't live or work there and 
they dropped it but it's just another way government gets their hooks into 
you.

For those of you who don't know the City of St. Louis is not a part of St. 
Louis County and it's 150 or so separate cities.  It's the only city in the 
US that isn't a part of it's county or in some states parish.

If you go that way you:
1. have to get an employer number - your ss number doesn't work any more.
2. a special account has to be set up to deposit tax money with both the 
federal and also the state if your state has income taxes as mine does.  You 
have a limited time to make the payment to that account. (about 2 weeks as I 
recall)  Bad things happen if you don't.
3. Payments have to be made for Medicare, Social Security (you pay 7.5% the 
employee pays 7.5%), possible city taxes, State taxes, Workman's comp.
4. Then if you are a union member they want work dues and by the way the 
Unions want you to do all this stuff because they want you to be an EMPLOYER 
not a contractor.  This is kind of strange because if you are a leader you 
wear two hats: the employer and also the employee.  This works well if all 
the members of the band or more often, symphony orchestra, where everyone 
including the leader, are employees of a corporation or some entity and all 
get their checks from that corporation.  The leader doesn't get a 
contractors cut but accepts a wage and Social Security is taken out of his 
check.

I'm not trying to put down unions and I am a member but they are all about 
setting wages and prices for X amount of work.   That's how I got involved 
with all this mess, while trying to follow the rules, as a band leader.   A 
few years back I had a conversation with them about it.  My point was they 
could have my resignation right then and there but I wasn't about to be an 
Employer.  They told me how I kept my books was my business.  Case Closed. 
One of the guys that I work for who is very much a stickler for detail quit 
and took his whole band out of the local over that issue.  I told him that 
he didn't have to drop out because they really didn't care but because 
that's on the books and those were the rules he wouldn't do it.

After all that you might consider becoming a hobby musician who takes cash 
or simply send out 1099's and have your people sign a subcontractors 
agreement.  I will send you a copy of mine off list.
Larry
St.L
----- Original Message ----- 
From: "tduncan" <tduncan at bellatlantic.net>
To: "Larry Walton" <larrys.bands at charter.net>
Cc: "Dixieland Jazz Mailing List" <dixielandjazz at ml.islandnet.com>
Sent: Wednesday, August 29, 2007 9:56 AM
Subject: [Dixielandjazz] Workers Compensation

>I recall numerous postings on the financial management of bands regarding
> pay of musicians and reporting of that pay; keeping records; status of
> musicians as independent contractors; liability insurance; etc.; but, I
> don't recall anything on payment of workers compensation insurance by the
> leader as contractor.
>
> I'd like to hear any comments, opinions or experiences regarding this. I 
> do
> not now maintain workers comp insurance. I pay all hires as independent
> contractors and report their incomes in my records and by 1099 to them.
>
> Thanks,
>
> Tom Duncan
> Doctor Dubious and the Agnostics
> PO Box 2118      Teaneck, NJ 07666
> P   (201)836-6076     FAX   (201)833-4143
> www.doctordubious.com <http://www.doctordubious.com/>
>
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