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  • Employment Law
  • October25th

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    The Internal Revenue Service today launched a new program that will enable many employers to resolve past worker classification issues and achieve certainty under the tax law at a low cost by voluntarily reclassifying their workers.

    This new program will allow employers the opportunity to get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit.

    This is part of a larger “Fresh Start” initiative at the IRS to help taxpayers and businesses address their tax responsibilities.

    “This settlement program provides certainty and relief to employers in an important area,” said IRS Commissioner Doug Shulman. “This is part of a wider effort to help taxpayers and businesses to help give them a fresh start with their tax obligations.”

    The new Voluntary Classification Settlement Program (VCSP) is designed to increase tax compliance and reduce burden for employers by providing greater certainty for employers, workers and the government. Under the program, eligible employers can obtain substantial relief from federal payroll taxes they may have owed for the past, if they prospectively treat workers as employees. The VCSP is available to many businesses, tax-exempt organizations and government entities that currently erroneously treat their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees.

    To be eligible, an applicant must:

    • Consistently have treated the workers in the past as nonemployees,
    • Have filed all required Forms 1099 for the workers for the previous three years
    • Not currently be under audit by the IRS
    • Not currently be under audit by the Department of Labor or a state agency concerning the classification of these workers

    Interested employers can apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before they want to begin treating the workers as employees.

    Employers accepted into the program will pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years. Participating employers will, for the first three years under the program, be subject to a special six-year statute of limitations, rather than the usual three years that generally applies to payroll taxes.

  • October20th

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    Employers who do not employ “union employees” are sometimes caught unaware that their employees are protected under certain provisions of the National Labor Relations Act (the “NLRA”). In particular, Section 7 of the NLRA provides that “employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection” (emphasis added). Section 8(a) of the NLRA makes it an unfair labor practice to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7.

    Based on these provisions of the NLRA, the National Labor Relations Board (the “Board”) recently decided its first case ever regarding an employer basing its employment decisions on the use of social networks by employees. The Board, in Hispanics United of Buffalo vs. Carlos Ortiz, found against a New York non-profit organization for terminating five employees due to the employees’ Facebook discussion about a co-worker. In the case, the employer claimed that a Facebook discussion by and between the five employees regarding another co-worker’s criticism of their job performance amounted to bullying and terminated the employees under the employer’s anti-harassment policy in the employee handbook. The employees brought suit against the employer stating that the Facebook discussion was protected under the NLRA because it was a concerted discussion for the purpose of protection.

    The NLRB Administrative Law Judge ruled the employees’ Facebook postings, discussing issues regarding the workplace and work productivity, was protected speech under Section 8 of the NLRA. The judge ruled that the “employees were taking a first step towards taking group action to defend themselves against the accusations they could reasonably believe [their colleague] was going to make to management. By discharging the employees, the employer prevented them from taking any further group action vis-a-vis [their colleague’s] criticisms.”
    The judge then analyzed the speech against some of the limited exceptions to NLRA Section 7 protection. The factors for determining whether an exception to Section 7 applies are found in the NLRB’s decision in Atlantic Steel Co. including: (a) the place of the discussion, (b) the subject matter of the discussion, (c) the nature of the employee’s outburst, and (d) if the outburst was provoked by the employer. The judge found that none of the factors applied to this particular case. Even more importantly, the judge stated that it was basically irrelevant that the discussion took place in a public forum, like Facebook, where non-employees were able to see the posts.

    Finally, the judge took into consideration the harassment policies posted by Hispanics United of Buffalo and found that no type of harassment (sex, religion, race, etc.) as stated in the employee handbook applied. Therefore, as the employees did not violate the employer’s harassment policy or engage in activity disqualifying them from protection under the Act, the employees’ Facebook discussion was protected, and the employees were terminated unlawfully. The judge ordered the employer to reinstate each employee to their former position as well as provide them with backpay.

    In light of this ruling, employers should be mindful of making employment decisions based on employees using social media to air their employment related issues and problems. In addition, employers should ensure that their social media policies conform in regards to dealing with situations inside and out of the workplace.

  • August6th

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    The Employer Information Report EEO-1 is required to be filed with the U.S. Equal Employment Opportunity Commission’s EEO-1 Joint Reporting Committee. The filing deadline for the 2010 EEO-1 Survey is September 30, 2010.  All companies with more than 100 employees and who are subject to Title VII are required to file the Form.  Certain companies with under 100 employees are also required to file the EEO-1.

    All single-establishment employers (i.e., employers doing business at only one establishment in one location) must complete a single Standard Form 100, or use one of the alternate filing methods.  All multi-establishment employers (i.e. employers doing business at more than one establishment) must file either (1) a report covering the principal or headquarters office; (2) a separate report for each establishment employing 50 or more persons; (3) a consolidated report that MUST include ALL employees by race, sex and job category in establishments with 50 or more employees as well as establishments with fewer than 50 employees; and (4)
    a list, showing the name, address, total employment and major activity for each establishment employing fewer than 50 persons, must accompany the consolidated report.

    The total number of employees indicated on the headquarters report, PLUS the establishment reports, PLUS the list of establishments with fewer than 50 employees, MUST equal the total number of employees shown on the consolidated report.  All forms for a multi-establishment company must be collected by the headquarters office for its establishments or by the parent corporation for its subsidiary holdings and submitted in one package.

    The preferred method for completing the EEO-1 reports is the web-based filing system, which can be found here:  http://www.eeoc.gov/employers/eeo1survey/index.cfm

  • June23rd

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    The DOL has recently clarified and expanded the definition of “son” or daughter” under the Family Medical Leave Act due to the uncertainty that many employers and employees have when there is no legal or biological parent-child relationship.  As you know, among other things, the FMLA allows an employee to take protected leave for the birth or placement of a child, to care for a newborn or newly placed child, or to care for a child with a serious health condition.  The definition of child for these purposes includes not only a biological or adopted child, but also a foster child, a stepchild, a legal ward or a child of a person standing in loco parentis.
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    In loco parentis refers to a person who has put himself in the situation of a lawful parent by assuming the obligations incident to the parental relation without going through the formalities necessary to legal adoption.  Whether an employee stands in loco parentis to a child is a fact issue dependent on multiple factors. Courts have enumerated factors to be considered in determining in loco parentis status; these factors include the age of the child; the degree to which the child is dependent on the person claiming to be standing in loco parentis; the amount of support, if any, provided; and the extent to which duties commonly associated with parenthood are exercised.  The FMLA regulations define in loco parentis as including those with day-to-day responsibilities to care for and financially support a child.

    The DOL’s interpretation of the regulations is that an employee who intends to assume the responsibilities of a parent  must only establish that he or she provides day-to-day care OR financial support in order to be found to stand in loco parentis and not have to prove both factors.

    Examples provided by the DOL:  (1)  an employee who will share equally in the raising of an adopted child with a same-sex partner, but who does not have a legal relationship with the child, would be entitled to FMLA leave in the applicable circumstances, because the employee stands in loco parentis to the child, (2)  a grandparent who takes in a grandchild, or an aunt who takes in a niece or nephew because the child’s parents are incapable of giving care or have passed away, even if such circumstances do not lead to a legal relationship with the child; and (3) an employee who cares for a child when the child’s parents are on vacation would not be considered in loco parentis to the child.

  • June19th

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    In City of Ontario v. Quon, U.S. Supreme Court No.08-1332 (6/17/10), the Supreme Court ruled that an employer’s search of an employee’s text messages on an employer-provided device was reasonable and not in violation of the employee’s Fourth Amendment rights.

    In the case, the City of Ontario had a “computer usage, internet and email policy which the employee, Quon, had signed.  There was no explicit policy on text messages, but there was an informal policy that text messages would not be audited provided that the employee paid for any monthly overage charges.  Quon went over four times and paid the overage charges at least three times.  At some point, Quon’s supervisor complained that his job was not to collect bills for the wireless company as well as express concern that officers might be wasting official time and resources in sending personal messages while on duty.  The supervisor requested that the wireless company send transcripts of the text messages of those officers who went over the monthly allowance, including Quon.  An audit of Quon’s  text messages revealed many personal and sexually explicit text messages.

    Quon sued for invasion of privacy under the Fourth Amendment and the federal Stored Communications Act. The city said the purpose of the audit was to determine if the character limit was too low and should be increased for employees’ business needs. The 9th Circuit Court of Appeals ruled that the city and the police department were liable for violating his rights.
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    The Supreme Court overturned the 9th Circuit holding that the search was reasonable, not overly intrusive and that Quon did not have any expectation of privacy.  The Supremes noted, importantly, that “employer policies concerning communications will of course shape the reasonable expectations of their employees, especially to the extent that such policies are clearly communicated.”


    Therefore, it is important for employers to carefully craft their computer, internet and email usage policies in order to provide exactly what is expected of its employees.  In addition, this policy should clearly address social media, such as the use of LinkedIn, Facebook and Twitter.  The policy needs to be clearly defined in the employee handbook and acknowledged by the employees.