IRS Announces That It Will No Longer Refund FICA Taxes on Severance Payments

The IRS recently announced that severance payments are taxable wages under FICA, and thus employers who seek tax refunds on those payments will be denied.  The IRS’s position reflects the United States Supreme Court’s ruling in United States v. Quality Stores, Inc., issued in March of last year.

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Prognosis Negative: You’re Not Immune to Company Policy Under California Leave Law

In Richey v. Autonation, Inc., issued January 29, 2015, the California Supreme Court reinstated an arbitration award against the plaintiff and confirmed that employers retain the right to terminate employees who violate company policy even while they are on a leave of absence under the California Family Rights Act (CFRA).

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Chicken Soup for CA Employers: How to Stay Healthy When Implementing Your Sick Leave Plan

The new California paid sick leave law is now “in effect” (as we reported here and here) and you are ramping up your HR and payroll team to get ready for July 1 when employees can start accruing sick leave under the law.  But now that you’re digging into the details, you’re realizing that this isn’t as easy as you thought.  Don’t worry, you’re not alone.  There are a few subtleties to the sick leave law that are catching more than a few employers off guard.  But fear not, here are some tips to help you implement your sick leave plan:

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Employees Snooze, Employers Lose: California Supreme Court Delivers Wake Up Call to Employers of On-Call Security Workers

In Mendiola v. CPS Security Solutions, Inc., issued on January 8, 2015, the California Supreme Court ruled that security guards are entitled to compensation for all on-call hours spent at their assigned worksites, even when they are engaged in certain personal activities or sleep.

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Employers Finally Get a Break—Court Reverses $90 Million Verdict and Holds That Employers Are Not Required to Relieve Employees of All Duty During Rest Periods

On December 31, 2014, the Court of Appeal for the Second District of California held in an unpublished opinion that employers are not required to relieve employees of all duty during rest periods mandated by California state law.  In so holding, the court in Augustus v. ABM Sec. Servs., Inc., No. B243788, 2014 WL 7463154 (Cal. Ct. App. Dec. 31, 2014), reversed the trial court’s award of approximately $90 million dollars in statutory damages, interest, penalties, and attorneys’ fees to the employees.

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Medical Marijuana Cards: A New Scarlet Letter? First-of-its-Kind Lawsuit in Rhode Island Claims that Employer Discriminated on Basis of Medical Marijuana Cardholder Status

A Rhode Island graduate student has filed a lawsuit against a textile company, alleging that it discriminated against her because she used medical marijuana.  The complaint, filed by the local ACLU chapter on behalf of University of Rhode Island student Christine Callaghan, alleges that Darlington Fabrics Corporation rescinded a paid internship offer because Callaghan was a registered medical marijuana cardholder.  According to the complaint, it appeared that Callaghan was going to be given the internship until, during a meeting with a Darlington HR representative, Callaghan disclosed that she suffered from migraines and used medical marijuana to treat her condition—but that she would not bring marijuana with her onto the premises or show up for work after having taken marijuana.  A few days after the meeting, the representative contacted Callaghan and told her that Darlington would not be offering her the internship because of her status as a medical marijuana patient.  The suit is believed to be the first to invoke the anti-discrimination provisions of Rhode Island’s medical marijuana law.  Under the law, schools, employers, and landlords may not “refuse to enroll, employ, or lease to, or otherwise penalize, a person solely for his or her status as a cardholder.” G.L. § 21-28.6-4(c).

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In the Nick of Time: Governor Cuomo Approves Repeal of Annual Wage Notices

As employers in New York were gearing up for distribution of the annual wage notices in January 2015, Governor Andrew Cuomo finally signed the amendment to New York’s Wage Theft Prevention Act that was passed by the legislature back in June and repeals the annual wage notification provision.  While the other amendments to the Act will not take effect for 60 days, the Governor’s December 29, 2014 signing statement and the New York Department of Labor make clear that employers are not required to distribute wage notices to their employees this January.  The amendment, however, does not relieve employers of their obligation to provide all newly hired employees with wage notices at the time of hiring.  In addition, although not specifically addressed in the amendment to the Act, it would be prudent for employers to distribute a revised wage notice when an employee receives a new position with a different compensation structure during his or her tenure with the employer.

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Franchisors Beware: NLRB Seeking to Super-Size Joint Employer Liability

The National Labor Relations Board’s (“NLRB”) General Counsel’s Office has again signaled its commitment to expanding the scope of the current test for joint employment. In a move that could have implications for a broad array of franchise relationships, on December 19, 2014, the General Counsel of the NLRB announced that it has issued complaints against both McDonald’s franchisees and McDonald’s USA, the franchisor, as a joint employer. The decision to name McDonald’s as a respondent is consistent with the General Counsel’s recent advocacy that the current joint employment standard is too narrow.

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Don’t Forget the Veterans: Unique Provisions, High Stakes, and Liberal Judicial Interpretation Make USERRA Compliance a Battle

Because of the way the statute is drafted and how courts have interpreted it, employers of current members of the Armed Forces and veterans can sometimes find themselves with unexpected legal exposure under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”).  The statute imposes various obligations on employers with respect to members of the U.S. military returning to work and also prohibits discrimination against employees and potential employees based on their military service.  As 2014 comes to a close, a couple of USERRA cases from this year remind employers of the intricacies of USERRA compliance.

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San Francisco Enacts Broad Protections for Employees of “Formula Retail” Establishments

On December 5, 2014, San Francisco enacted two ordinances, dubbed the “San Francisco Retail Workers’ Bill of Rights,” that will extend benefits to part-time retail and food service employees and require certain employers to make schedules more predictable for all employees.  The ordinances are believed to affect approximately 35,000 employees in San Francisco (approximately 5 to 6% of the City’s total wage and salary employment) and are also believed to provide the broadest protections in the country in terms of rights for part-time workers and scheduling requirements.

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