Dear
ATPAM Member:
The purpose of this letter is to officially inform you
about steps the Union is taking to protect your salary and benefits by
updating and improving the Union’s bonding procedures.
As you know, two weeks salary, benefits and expenses are
currently bonded under the Union’s Broadway/ Road and Off-Broadway contracts.
This is a minimal bond compared to those held by unions and their benefits
funds in other industries. However, the cash bonds and irrevocable letters of
credit held by ATPAM are the only surety the Union has to guarantee your
wages, benefits and expenses should your employer ever default. Based on the
uncertainty of theatrical production, such defaults occur more often than you
might think.
ATPAM’s certified public accountants, Lutz and Carr, have
provided the Union with an opinion that directly impacts the current bonding
procedures. In short, when an employer defaults, the Union has an obligation
to pay out bonded wages as salary (not as an IRS Form 1099 fee) and also remit
the “employer” portion of the payroll taxes and report same on an IRS form
specifically intended for that purpose.
In the past, the Union has not required employers to post their
portion of the payroll taxes as part of the Bond. However, since the
obligation to make those payments on behalf of the employer when drawing down
the bond legally resides with the Union, ATPAM must now require that that
obligation be bonded as part of the salary portion of the bond. The bonding
provision of the collective bargaining agreements clearly permits ATPAM to
require this additional surety.
However, The League of American Theatres and Producers has not
agreed to this practice and has apparently informed its employer members not
to accommodate the Union. Dating back to last Spring, the Union contacted the
League and asked to sit down and discuss this matter and mutually identify an
appropriate percentage to use for payroll taxes. There was no response from
the League for nearly six months. As a result, ATPAM instituted a 20% payroll
tax bond requirement on new shows, which many employers have been complying
with voluntarily. That number was based on an analysis of the payroll tax
percentage charged by theatre owners on weekly settlements in several major
markets.
At that point, the League weighed in and accused the Union of
acting “unilaterally.” ATPAM is now in ongoing discussions with the League
regarding this matter. It is not clear what the resolution will be -- or if
there will be one prior to the expiration of the current League contract next
summer. The League has asked the Union to “justify” the new bonding
requirement and then they will take the matter “under advisement.”
If you, as an ATPAM member, are responsible for the posting of
bonds for any production please understand that the Union is acting in the
interest of you and your ATPAM colleagues. The Union is urging you to
consider voluntary compliance with the Union’s surety bonding requirements.
All amounts bonded are returnable at the close of the production if there are
no delinquencies in salaries, benefits or expenses.
In response to past complaints from individual employers and
the League, the Union has taken steps to improve the turn-around time on
return of bonds. Employer bonds are now returned promptly upon notice of
closing, provided there are no outstanding obligations or a pending employer
compliance audit by the League-ATPAM Pension and Welfare Funds. Assertions to
the contrary are old news and should not be linked to the current unrelated
issue.
We hope this communication has framed the issue clearly for you
and answered any questions you might have had about this dispute.
Fraternally,
The
Officers and Board of ATPAM
