Insights

Giving Employees Gifts May Require Giving to the Tax Collector Too

Traditional year end employer gifts to employees are generally treated as supplemental wages and subject to income and payroll taxes. This Insight provides employers guidance on giving taxable and nontaxable gifts to employees this year end.

And You Thought the Bailout Was Bad: Employment Law Risks in the Current Financial Crisis

International Legal Trends for Encouraging Employee Whistleblowing

With fraud still an issue for many businesses worldwide, several new legal trends are emerging to encourage employees to report wrongdoing to their employers including expanded protections for whistleblowers and new retaliation claims.

An Employer's Guide to Social Security Administration Notices Regarding Employee "No-Match" Situations

While the current litigation over "no-match" letters drags on, employers should also be aware that the Social Security Administration may send other categories of letters when it determines a mismatch in information relating to an employee's reported wages. This Insight addresses the three most common SSA letters and provides guidance on how employers should respond to them.

Tuberculosis In The Workplace

Tuberculosis was once the leading cause of death in the United States but with advancements in medicine and public education efforts, TB rates in the U.S. steadily decreased from the 1950s to the 1970s. However, between 1970 and 1992, the country let its guard down, and the number of TB cases increased. Since 1992 with increased funding and attention to the TB problem, there has again been a steady decline in the number of new TB cases. However, TB is still a problem, more than 14,000 cases were reported in 2005, and employers have specific obligations when it comes to handling employees with TB in the workplace.

Antiviral Drug Stockpiling for Pandemic Planning

CDC issues "Proposed Considerations for Antiviral Drug Stockpiling by Employers in Preparation for an Influenza Pandemic." Employers who decide to buy antiviral drugs must: (1) decide whether to stockpile for outbreak prophylaxis, exposure prophylaxis, or treatment; (2) develop an appropriate level of stockpiling, (3) select the mechanics for maintaining and distributing the stockpile, and (4) develop procedures in light of the employment law issues surrounding the allocation and distribution of limited resources.

An Employer's Guide to Employee Leave-Sharing Programs

An employer-sponsored leave-sharing program allows an employee to donate accrued hours of paid vacation, or personal and potentially sick leave for the benefit of other employees who are in need of taking more paid leave than is available. This Insight provides a brief employer's guide to establishing and running a leave-sharing program, including establishing and maintaining such a plan in conformity with IRS requirements and various financial and administrative considerations for the employer, the donor and the donee employees.

Employers Face New Compliance Challenges As Massachusetts Becomes the 39th State to Enact a Security Breach Notice Law

New notice-of-security-breach laws can transform misdirected e-mail, stolen laptops, and other potential security incidents into a major legal compliance challenge for employers.

Section 409A Broadly Impacts Employment Agreements, Severance Arrangements and Settlement Agreements

Section 409A of the Internal Revenue Code imposes wide-ranging restrictions in connection with many pay arrangements that in one form or another, defer compensation. These include many types of payments under employment agreements, severance arrangements and agreements to settle litigation. A great number of existing arrangements will need to be amended in 2007 in order to remain compliant with the law.

Across the Board: Changes Are In the Works for Noncompete Agreements

From coast to coast, changes are in progress in state laws governing the enforcement of noncompete agreements and the provisions therein. Meanwhile, courts are not sitting idly by and employers would be wise to take heed of these changes, evaluate their current use of noncompete provisions.

Recent Court Decisions Identify Concerns in Drafting Releases

Recent court decisions provide guidance regarding issues that employers must consider when drafting releases for current or former employers. This Insight article addresses claims that cannot be released by agreement of the parties, required "carve-outs" from releases, and the content of informational disclosures under the OWBPA. Failure to comply with legal obligations, some of which are discussed in this Insight, can invalidate the release and allow employees who signed the release to nevertheless sue their employers.

Preliminary Opinions By European Court of Justice Top Advisors Tilt Slightly In Favor of Trade Union Rights

Does the right of trade unions to defend their members' pay and working conditions trump the free movement of labor in the European economy? Does European Community law allow trade unions to block a company from relocating to another member state in order to take advantage of a lower cost base? How can the freedom of companies to set up business and provide services anywhere in the European Union – principles that underpin the concept of a single European market – be reconciled with the fundamental right of trade unions to take collective action that can effectively block the exercise of those freedoms? Can collective action, such as a strike or boycott, be justified as an overriding "fundamental right" even if it has a directly discriminatory effect? Top legal advisors at the European Court of Justice grappled with these and other thorny questions implicating core European legal principles late last month. In two recently issued advisory opinions, the Advocates General responsible for two critical labor law cases offered clues as to how the European Court of Justice may rule on these weighty questions in the coming months.

USERRA and the Five-Year Rule

Employers should take special care before terminating the employment of military reservist employees who have been on active duty for more than five years of cumulative service.

Missed Meal & Rest Periods Will Cost Employers More Following California Supreme Court Decision

In a unanimous decision, the California Supreme Court in Murphy v. Kenneth Cole Productions has found that Labor Code section 226.7's "additional hour of pay" for missed meal and rest periods is a wage and not a penalty.

401(k) Plan Fees Litigation: Is The Dam Breaking? A Slew of Class Action Lawsuits Alleging Shady Fee Practices Roils 401(k) Sponsors

In a new wave of federal court class action lawsuits, plaintiffs claim that 401(k) fiduciaries (employers and service providers) are draining off revenues from trust accounts in exorbitant "revenue sharing" arrangements. This Insight discusses the claims being made in these lawsuits and what employers and plan fiduciaries should do now.

The President's New Employment Tax Proposals Create Potential Challenges for Employers

All of these legislative proposals have significant and far-reaching consequences for employers from the perspectives of systems, compliance, withholding and others. Continued monitoring of these proposals is recommended.

Proposed Legislation Would Require California Employers to Verify Employee's Social Security Numbers And Penalize Those Who Don't

Proposed legislation in California would require employers to verify employee's social security numbers through the Social Security Administration and file a report each year with the California Franchise Tax Board. The bill also offers a tax credit for correctly reported social security numbers and a penalty for not reporting false or fraudulent social security numbers.

The Employee Free Choice Act: It's More than Just a Misleading Name

The House of Representatives passed the Employee Free Choice Act on March 1, 2007 by a vote of 241-185. The Act soon will be introduced in the Senate, where considerable debate is expected.

. . . .with Liberty and Health Care for All

State and local governments are regulating health care, incrementally adopting elements of President Clinton's failed plan along with other reform proposals to expand access to health insurance. This Insight focuses on what these governments are doing and how their laws affect employer-provided medical benefits.

Department of Labor Issues Opinion Letter Recognizing Mortgage Loan Officers as Exempt Administrative Employees

In an opinion letter with broad implications in the financial services industry, the Department of Labor held that the subject mortgage loan officers were exempt administrative employees.

Dealing With Employees' Tip Income In Large Food and Beverage Establishments: New IRS Agreement ("ATIP") Available January 1, 2007

Large food and beverage employers must understand how to deal with employees' tipped income. The IRS recently announced a new program to assist with employers' and employees' compliance obligations. This Insight reviews tip reporting obligations and IRS programs to assist with those obligations.

RICO/IMMIGRATION or ANTITRUST/IMMIGRATION Lawsuits?

Developments over the last year may invigorate the recent wave of RICO/IMMIGRATION test lawsuits blaming employers for attracting large numbers of illegal workers into an area: a January $1.3 million settlement in Washington, a new Supreme Court decision on the "direct harm" requirement of RICO, and an expansion of the attack beyond RICO to antitrust accusations. Employee class actions and competitor attacks are also looking to creatively craft predicate RICO acts and antitrust restraints out of not only criminal immigration acts, but also alleged wage and hour violations in the payment of illegal workers by employers and their labor suppliers.

Agreements to Submit Disputes to a Judicial Referee May Allow Employers to Avoid the Pitfalls of Jury Trials and Arbitration

A California Appellate Court holds that the parties to a contract can agree that any future dispute they may have will be decided by a judicial referee, even though such an agreement serves as a predispute waiver of the right to a jury trial.

Union "Funeral Procession" Violates Secondary Boycott Law - Are Rats and Banners Next?

Having ruled mock funeral processions are unlawful secondary boycotts, the NLRB is poised to decide whether two other union tactics - displaying giant inflatable rats and large banners - violate the secondary boycott law.

An Employer's Guide for Dealing with "Unusual" Tax Withholding Requests

Employers must know how to address both regular and "unusual" changes and requests concerning exemptions and personal allowances reflected on employees' W-4 forms. This Insight provides background on the issues and guidance to employers dealing with "unusual" tax withholding requests.

An Employer's Guide for Responding to an IRS Wage Levy

For employers who receive IRS wage levies, compliance may seem daunting. This Insight provides practical information to employers for dealing with IRS wage levies, including how a levy gets issued, an employer's obligations for compliance, the proper method to calculate amounts exempt from the levy, and how to respond to employees that insist that the levy be ignored.

North Country: An All-Too Familiar Territory for America's Employers

With the release of the movie North Country, America's attention is once again focused on sexual harassment issues in the workplace but this is nothing new for employers and many are prepared for the extra scrutiny.

It's Baaack: The Reemergence of Withdrawal Liability and Its Impact on Employers Participating in Multiemployer Pension Plans

Recently, many funds have experienced ballooning withdrawal liability and some have come dangerously close to funding deficiencies. This Benefits Insight reviews what withdrawal liability is, how it affects employers, and how employers may avoid triggering an assessment of withdrawal liability.

New Wave or Flash Flood: 11th Circuit Allows RICO/Immigration Lawsuit to Proceed

In a slew of new class actions, plaintiffs are trying to prove that an illegal criminal enterprise composed of employers, recruiters, and staffing companies are together benefiting from the increased population of illegal workers brought to the area.

HR's Role in HIPAA Security Compliance

Suffering "HIPAA Privacy Rule fatigue," many Human Resources (HR) professionals have passed compliance responsibilities on to Information Technology (IT) Departments. Littler outlines the need for HR staff involvement and ways to prevent costly and embarrassing security incidents.

Class Action Fairness Act of 2005: Law Allows Some Class Action Cases to Be Removed from State to Federal Court

In a remarkable, speedy bipartisan effort, lawmakers passed this Act, which targets class actions filed in "magic" or "magnet" jurisdictions much more likely to certify proposed classes. Littler offers an in-depth analysis of the Act and its favorable, but limited, impact on employers.