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Entries in employer compliance (28)

Thursday
Jun272013

Post-DOMA for Employers

Lawyer for EmployerWage and Hour Defense

 

by Nicole Kamm
818.907.3235

 

 

 

 

With the dust just settling on Wednesday’s ruling on the Defense of Marriage Act, or DOMA, and Proposition 8 federal court opinions, now is the time for employers to consider the potential impact on their businesses.

Among the workplace-related issues raised in the cases are: continuation of benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA), eligibility for leave under the Family Medical Leave Act (FMLA), taxation of spousal health benefits, eligibility for spousal retirement benefits, and surviving spouse social security benefits.  And there are more.

In view of this, let's take a look at what the court opinions will mean for business.

 

Part of DOMA Definition of Marriage Unconstitutional

 

The U.S. Supreme Court ruled in a 5-4 decision in United States v. Windsor, that Section 3 of DOMA is unconstitutional. This is the section that defines marriage as the union of one man and one woman only, excluding same-sex marriages and polygamy.

Chief Justice John Roberts delivered the 5-4 opinion:

By seeking to injure the very class New York seeks to protect, DOMA violates basic due process and equal protection principles applicable to Federal Government…Its unusual deviation from the tradition of recognizing and accepting state definitions of marriage operates to deprive same-sex couples of the benefits and responsibilities that come with federal recognition of their marriages.

 

By applying the DOMA definition of marriage, over 1,000 federal benefits were denied to same-sex married couples. Many same-sex spouses were left without healthcare, pension and retirement benefits, tax benefits (see Kira S. Masteller's blog regarding Edith Schlain Windsor's claim, when her partner Thea Spyer passed) and leaves of absence privileges when a spouse serves in the military, has a child, or needs medical care – to cite just a few examples.

 

Proposition 8 & DOMA - Employer Checklist

 

Now that the U.S. Supreme Court has deemed the definition of marriage under DOMA void, you may need to:

  1. Review employee handbooks
  2. Review employee benefit packages
  3. Revisit retirement plans, since many define marriage by DOMA standards
  4. Prepare to garnish wages in the event of an employee's divorce or child support obligations, when s/he has been unable to meet those demands.
  5. Ensure employees know their spouses may qualify for benefits

If your company has staff outside of California, consider the possible implications of having employees who live and/or work in states that do not authorize gay marriage.

To the extent they already provide benefits to same-sex spouses or domestic partners, employers should consider whether further changes are required.  Finally, employers can expect to hear from workers wanting to add a spouse to a benefit plan.  Be ready to promptly handle such requests.

There are still many open questions.  In the meantime, make sure you take steps to comply with the law, including treating same-sex employees and their spouses the same way you would treat any other employee or spouse – without discrimination in pay, working conditions, or benefits.

Nicole Kamm is an Employment Defense Attorney at our Firm. If you have questions regarding compliance with state and federal employment law, contact her via email: nkamm@lewitthackman.com. 

Thursday
Mar142013

Employers: Use Updated I-9 for New Hires

Employer Lawyers Los Angeles

  

by Sue M. Bendavid & Nicole Kamm
March 14, 2013

 

Editor's Note: A new I-9 manual has been released, which provides information for employers regarding the more obscure procedures involved in completing the updated Employment Eligibility Verification form. Click: I-9 Manual for the pdf version, available on the U.S. Citizenship and Immigration Service website.

 

The U.S. Citizenship and Immigration Services (USCIS) published a revised Employment Eligibility Verification Form I-9 for use. All employers are required to complete a Form I-9 for each employee hired in the United States.

Improvements to Form I-9 include new fields, reformatting to reduce errors, and clearer instructions to both employees and employers.

Effective 03/08/13:

  • Employers should begin using the newly revised Form I-9 (Rev. 03/08/13)N for all new hires and reverifications. 

  • Employers may continue to use previously accepted revisions (Rev.02/02/09)N and (Rev. 08/07/09) Y until May 7, 2013. 

  • After May 7, 2013, employers must only use Form I-9 (Rev. 03/08/13)N.

 

English and Spanish versions of the new I-9 form are available on the USCIS website. However, the Spanish version is only for reference; Spanish-speaking employees must still complete the English version of the form.

As a reminder, employers generally must inspect original documents submitted by the employee within three days of hire. It is recommended that copies of the documents and the completed Form I-9 be filed together in a location separate from the employee's personnel file. The I-9 should be retained for three years after termination.

 

Sue M. Bendavid and Nicole Kamm of our Employment Practice Group represent employers in matters of compliance and employee claims. Contact them via email: sbendavid@lewitthackman.com, or nkamm@lewitthackman.com, for more information.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Tuesday
Mar052013

Employers: New Posting Requirement & Expanded FMLA Regs

Lawyer for EmployerWage and Hour Defense

 

by Nicole Kamm
818.907.3235

 

Marking the 20th anniversary of the federal Family and Medical Leave Act (FMLA), the US Department of Labor (DOL) issued new FMLA regulations on February 6, 2013. 

The regulations, which take effect Friday, March 8, 2013, expand FMLA protections for military family members and airline flight crews. The regulations also clarify intermittent leave calculations, and remind employers of their confidentiality obligations under the Genetic Information Nondiscrimination Act (GINA).

Highlights from the new FMLA regulations are summarized below:

 

Military Family Leave

 

Current FMLA regulations provide “qualifying exigency” leave for eligible family members of certain military personnel to address issues related to certain military deployments. The revised regulations clarify that qualifying exigency leave is intended for family members of persons serving in the regular Armed Forces, National Guard or Reserves who are on active duty or called to active duty in a foreign country.  

Additionally, a new category of qualifying exigency leave – parental leave -- has been added. Parental care exigency leave may be utilized to make arrangements for care of parents of military members.

 

Military Caregiver Leave

 

FMLA regulations currently provide leave to care for certain military members with serious injuries or illness. 

Military caregiver leave has been expanded to include leave to care for covered veterans who are undergoing medical treatment, recuperation, or therapy for a serious injury or illness. A covered veteran is an individual who was discharged or released under conditions other than dishonorable in the five-year period prior to the date the employee’s military caregiver leave begins.  

 

Intermittent Leave

 

Regarding intermittent leave, the new regulations clarify that employers must use the shortest increment of time the employer uses to account for other forms of leave, provided it is not greater than one hour. For example, if an employer allows an employee to take vacation in 15-minute increments, it must allow employees to take FMLA in 15-minute increments. 

 

Airline Flight Crew Eligibility

 

The new regulations state airline flight crew employees meet the FMLA hours-of-service eligibility requirement if they:

(1) have worked or been paid not less than 60 percent of the applicable total monthly guarantee (i.e., not less than 60 percent of the minimum number of hours an employer has agreed to schedule the employee), and

(2) have worked or been paid for not less then 504 hours during the previous 12 months. 

Airline employees who are not flight crew members continue to be covered under the general FMLA hours-of-service eligibility standard (1,250 hours in the preceding 12 months).

 

Genetic Information Nondiscrimination Act (GINA)

 

The regulations include a reminder to employers of their obligation to comply with the confidentiality requirements of GINA to the extent records and documents created for FMLA purposes contain family medical history or genetic information. 

Under both FMLA and GINA, employee information relating to medical certification or family medical history must be maintained as confidential medical records in separate files from the usual personnel files, and may only be disclosed under certain limited circumstances.

 

New FMLA Poster/Forms

 

In addition to the above, the DOL has published an updated FMLA poster for covered employers (i.e., employers with 50+ employees), as well as several updated (optional-use) forms. The new poster, which must be posted by March 8, 2013, is available on the DOL website. California employers should use caution when using the DOL’s forms, which may not be compliant with state law.

 

FMLA covered employers should review their policies and forms to ensure consistency with the new regulations. Employers should confirm they are properly accounting for intermittent leave (increments of one hour, or shorter if other forms of leave are permitted in shorter increments). Employers should be aware of and provide qualifying exigency and military caregiver leave when needed. 

Finally, covered employers should replace their current FMLA posters with the revised poster and review recordkeeping policy and practice to ensure compliance with FMLA and GINA.

 

Nicole Kamm is an Employment Attorney who helps employers minimize the risk of wage and hour, harassment, discrimination and FMLA claims. Contact her via email: nkamm@lewitthackman.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Wednesday
Dec052012

The Tax Increases Have Begun

by Lewitt Hackman's Trusts & Estate Planning Practice Group 
December 4, 2012

Tax Attorney EncinoMichael Hackman - Certified Tax Law Specialist Kira S. Masteller - Gift Tax, Trusts & Estate Planning

With the “fiscal cliff” discussions front and center, many people do not realize that certain tax increases are already being implemented, both at the federal and at the state level. 

 

Federal Taxes

 

Earlier this week, the IRS released 159 pages of new tax rules related to the implementation of the 2010 healthcare reform law, sometimes known as “Obamacare”. 

First, there is a 3.8 percent surtax on “investment income” for individuals earning more than $200,000 in modified adjusted gross income, and married couples filing jointly with more than $250,000 of such income (notwithstanding the 159 pages, there are still numerous uncertainties as to what constitutes “investment income”). 

This surtax will be applied to capital gains and dividend income and is the first of its kind applying to capital gains and dividend income.  The IRS offered the example of a single taxpayer who makes $180,000 in wages plus $90,000 in investment income (a modified adjusted gross income of $270,000).  The 3.8 percent tax would apply to $70,000, resulting in a $2,660 surtax. 

In addition, there is a 0.9 percent healthcare tax on wages (i.e., the employee portion of the payroll tax) for such “high-income” individuals.  These rules are effective for the tax year starting January 1, 2013, though the IRS will take public comments and hold hearings in April before making the rules final in the fall.  It is estimated that these tax increases will raise $317.7 billion over 10 years.  We believe that employers must start to withhold once an employee’s wages pass $200,000 each year. 

There are numerous other changes as part of the healthcare law, including several changes in the deductibility of medical expenses.

 

California State Taxes

 

California voters recently passed Proposition 30 by a margin of 55.3 percent to 44.7 percent.  This proposition increases California sales tax to 7.5 percent from 7.25 percent.   

In addition, it will result in increases in state income taxes for “high-income” tax brackets.  These California income tax increases will apply retroactively to January 1, 2012, as follows:

  • 10.3 percent tax rate on taxable income for individuals between $250,000 and $300,000, and for married couples filing jointly between $500,000 and $600,000 (formerly 9.3 percent);

  • 11.3 percent tax rate on taxable income for individuals between $300,000 and $500,000, and for married couples filing jointly between $600,000 and $1,000,000 (formerly 9.3 percent); and

  • 12.3 percent tax rate on taxable income for individuals over $500,000, and for married couples filing jointly over $1,000,000 (in addition, though not part of Proposition 30, there continues to be an additional 1 percent tax assessed for an individual’s taxable income in excess of $1,000,0000, pursuant to the Mental Health Services Act). 

The Proposition 30 tax increases are temporary – the increased sales tax applies for four years and the increased income taxes apply for seven years. It is estimated that these taxes will bring in additional revenues to the state of approximately $6 billion annually (less after 2016-17 as a result of the sunset of the four year sales tax increase period). 

On the bright side, certain proposed deep cuts to education and other government services should not occur as the result of the passage of Proposition 30.

 

Michael Hackman is the Chair of our Trusts and Estate Planning Practice Group, and is a Certified Specialist in Tax Law, designated by the State Bar of California Board of Legal Specialization. Kira S. Masteller is a Gift Tax, Trusts and Estate Planning Attorney. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Wednesday
Oct242012

Employers: Methods for Computing Commissions Must be Put in Writing

Employment Defense Attorney Los Angeles

 

by Sue M. Bendavid
818.907.3220

 

Beginning January 1st, all companies employing commissioned workers in California must provide written agreements describing the method by which commissions are computed and paid, per Assembly Bill 1396

The new requirement comes from recent legislation which amends the California Labor Code. Formerly, it applied only to out-of-state employers who employ California-based workers. 

Employee CommissionsThe Labor Code defines a commission as compensation paid to any person for services rendered in the sale of such employer's property or services and based proportionately upon the amount or value thereof. 

Since commissions are actually wages, it's important for you as an employer to make sure you pay them correctly and on time, to prevent wage and hour claims. 

 

Avoiding Employee Claims for Unpaid Wages 

 

It is not enough to merely outline how commissions are computed and earned.  As someone who hires commissioned employees, you must describe the calculation methods into a written contract, sign it, and then obtain a signed receipt for the contract from the commissioned employee. 

You should clearly define when a commission is “earned.”  Will your employee earn commission when a sales agreement is signed, when products are shipped, or when the company receives payment from the client for the products or services? 

Make sure you follow the terms of your agreement with your employee. 

 

AB 1396: Other Considerations 

 

The new law affects employers who routinely compensate employees through commissioned pay structures, as well as those who use this method on an occasional or even rare basis. 

Also per AB 1396: 

  • If your commission agreement expires, the terms of your signed agreement will remain in effect until you supersede it, or until the agreement is terminated in writing. 
  • You won't have to include short-term productivity bonuses (i.e. for retail clerks) or bonuses and profit sharing plans as commissions, unless you offer to pay a fixed percentage of sales or profits as compensation for work to be performed. 

This may seem like extra paperwork, but there is some good news for employers, as AB 1396 repeals a Labor Code provision making an employer who violates this section liable for “triple damages.”  Still…to prevent employee claims in the first place, get your agreements in order now, before the New Year. 

Sue M. Bendavid is the Chair of the Employment Practice Group, which defends employers from wage and hour and other employee claims. Email her for more information: sbendavid@lewitthackman.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
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