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Warning: I highly recommend consulting a lawyer for dealing with legal issues such as this one. The advice I provide should not take the place of proper legal counsel.

Unless you have permission from the copyright holder for the work that you are hosting on your website, yes - it most likely is illegal. There are a few possible ways one might deal with this problem and I'll briefly mention them:

Allow only verified users to upload content (this doesn't prevent verified users from abusing the system but it will add an extra roadblock for someone looking to dump a bunch of protected content)
Approve each item before publishing it (tedious and difficult to scale, but very effective)
Publish everything and wait for DMCA takedown requests (I mention this for completeness; I certainly don't recommend going this route)

If your userbase is small, approving each item (or even just the first submission by each user) is probably the way to go.


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