During a hearing conducted by the House Subcommittee on Workforce Protections, Littler Shareholder Kerry Notestine outlined the potential pitfalls in relying on recent Department of Labor (DOL) and Office of Management and Budget (OMB) guidances regarding an employer’s Worker Adjustment and Retraining Notification (WARN) Act responsibilities as the specter of massive budget cuts looms. Commonly referred to as “sequestration,” these cuts slated to begin on March 1, 2013 will have a significant impact on Defense and other federal contractors.Continue Reading...
In the week following President Obama’s inauguration, lawmakers reintroduced familiar legislation dealing with equal pay, whistleblower protections, immigration reform, and retirement security in bankruptcy protection.
On January 23, 2013, Sen. Barbara Mikulski (D-MD) and Rep. Rosa DeLauro (D-CT) reintroduced a bill that would amend the Fair Labor Standards Act (FLSA) to, among other things, provide for potentially unlimited compensatory and punitive damages in gender-based wage discrimination cases and weaken an employer’s affirmative defense against such claims. The latest version of the Paycheck Fairness Act (S. 84, H.R. 377) was introduced with 27 cosponsors in the Senate and 150 cosponsors in the House. Among other provisions, this bill would do the following:Continue Reading...
The eleventh hour agreement to avoid the precipitous tax hikes and spending cuts widely known as the “fiscal cliff” will still require employers to make some changes to their current practices, and leaves many questions unanswered. Notably, the deal delays – but does not resolve – the matter regarding the “sequestration” of federal funds, which could trigger mass layoffs or furloughs of federal contract employees. The final deal arrived at on January 1, 2013 – the American Taxpayer Relief Act of 2012 (H.R. 8) (pdf) – postpones this possibility an additional two months. The bill does, however, extend certain tax relief measures, while letting others expire. Highlights of the fiscal cliff deal are as follows:Continue Reading...
Federal service contracts and solicitations made on or after January 18, 2013 will need to comply with regulations implementing Executive Order (E.O.) 13495, Nondisplacement of Qualified Workers Under Service Contracts, signed by President Obama on January 30, 2009. This E.O. requires that any federal service contracts covered by the Service Contract Act (SCA) above the simplified acquisition threshold (currently $150,000) and solicitations for such contracts include a clause requiring contractors and their subcontractors to offer existing employees the right of first refusal to take positions for which they are qualified under the new contract. The right of first refusal clause does not apply to managerial or supervisory employees. Contractors found in violation of the E.O. and its implementing regulations could be barred from future federal contracts for up to three years.Continue Reading...
On July 30, 2012, the U.S. Department of Labor (DOL) issued Training and Employment Guidance Letter No. 3-12 (Guidance Letter), offering guidance on the applicability of the Worker Adjustment and Retraining Notification (WARN) Act, 29 U.S.C. § 2101-2109, to potential layoffs among federal contractors and the defense industry. The DOL has issued this guidance because there is a possibility of sequestration of funds under the Balanced Budget Emergency Deficit Control Act of 1985 (BBEDCA), as amended by the Budget Control Act of 2011, unless a solution is reached on certain federal budget issues by January 2, 2013. If a solution cannot be found by that date, the President is required to cut discretionary defense spending and discretionary non-defense spending by uniform percentages, estimated to be approximately 10% and 8%, respectively.Continue Reading...
On June 14, Sen. Sherrod Brown (D-OH) reintroduced the Forewarn Act (S. 3297) in the Senate. This legislation would amend the Worker Adjustment and Retraining Notification (WARN) Act by requiring more and smaller employers to notify workers of mass firings or plant closings and increasing employer penalties and enforcement mechanisms for noncompliance.
Generally, the Forewarn Act would apply to employers with at least 75 employees, reduced from the current 100-employee threshold required to initiate coverage. Additionally, the Act would reduce the number of laid off employees needed to constitute a plant closing from 50 to 25, and lower the mass layoff trigger. Moreover, the measure would require an employer to provide 90-day written notice (up from the current 60-day notice mandate) to employees and appropriate state and local governments before ordering a plant closing or mass layoff. The notification must include the reason for the plant closing or mass layoff, how many employees would be affected, whether the employer has jobs elsewhere, a statement of each employee’s right to wages and benefits, and a statement of available DOL employment and training services. Finally, the bill would authorize the DOL to enforce the terms of the Act, and increase employer penalties for violations to double back pay. Under current law, an employer is liable for regular back pay only.
This bill has been referred to the Senate committee on Health, Education, Labor and Pensions.
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Senator John Kerry (D-MA) has reintroduced the Fair Playing Field Act of 2012 (S. 2145), legislation that would limit the use of a federal “safe harbor” that allows businesses to treat workers as independent contractors for federal employment tax purposes, regardless of the employee’s actual status under the common law test.
The safe harbor provided under section 530 of the Revenue Act of 1978 protects an employer from liability for misclassifying workers as independent contractors if the employer had a “reasonable” basis for doing so and met other certain conditions. Generally, section 530 provides that an employer has a reasonable basis to classify an employee as an independent contractor if the employer relied on: (a) a past IRS audit with respect to the taxpayer; (b) published rulings or judicial precedent; or (c) long-standing recognized practice in the industry. Moreover, the employer must not have treated the individual as an employee for any period. For any time after 1978, all of the employer’s federal tax returns must reflect that the workers were classified as independent contractors. Similarly, in order to benefit from the safe harbor provision, the employer must not have classified workers performing substantially similar work as employees.Continue Reading...
Legislation introduced in the House of Representatives on Wednesday would require most publicly traded companies to report how many employees they have who work domestically by state and abroad. Introduced by Rep. Gary Peters (D-MI) and co-sponsored by Reps. Tim Bishop (D-NY) and Jerry McNerney (D-CA), the Outsourcing Accountability Act of 2012 (H.R. 3875) would amend the Securities Exchange Act to require employers to disclose:
- the total number of their employees and those of their subsidiaries who live and work in the U.S. by state;
- the total number of their employees who physically live and work abroad, broken down by country; and
- the percentage increase or decrease in the number of employees reported in the above categories from the previous year.
Rep. Lynn Woolsey (D-CA) has reintroduced legislation that would create new record-keeping requirements for employers that hire independent contractors, and impose stricter penalties for misclassification. Notably, the Employee Misclassification Prevention Act (H.R. 3178) would amend the Fair Labor Standards Act (FLSA) to require employers to keep records on and notify workers of their employment or independent contractor classification and their right to challenge that classification. In addition, the measure would do the following:Continue Reading...
IRS Offers Limited Amnesty Program for Employee Misclassifications; Agency Agreements and President's Deficit Reduction Plan also Focus on Issue
Employers that voluntarily reclassify their independent contractors as employees for federal tax purposes and pay a fee covering a portion of their past payroll obligations can escape certain tax liability for improper misclassification under the IRS’s new Voluntary Classification Settlement Program (VCSP). In a statement announcing the program, IRS Commissioner Doug Shulman said: “This settlement program provides certainty and relief to employers in an important area,” adding: “This is part of a wider effort to help taxpayers and businesses to help give them a fresh start with their tax obligations.”Continue Reading...
On Thursday, President Obama delivered his much-anticipated speech on job creation, urging Congress to pass the American Jobs Act, (pdf) a $447 billion plan to jump-start the economy. According to the President, “there should be nothing controversial about this legislation,” as all of the proposals set forth in the bill have allegedly been supported by both parties in the past. Beginning his remarks, Obama stated:
The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working. It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed. It will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and hire, there will be customers for their products and services. You should pass this jobs plan right away.Continue Reading...
Sen. Sheldon Whitehouse (D-RI) has introduced a measure that would provide businesses with tax incentives for hiring individuals in 2011 and 2012 who have been unemployed. The Job Creation Tax Credit Act of 2011 (S. 1271) would expand on certain provisions in the HIRE Act of 2010 by giving employers refundable tax credits of 15% of wages paid in 2011 and 10% of wages paid in 2012 for qualified new hires. Individuals deemed “qualified” would be those who (a) begin employment with the employer after the date of the bill’s enactment but before January 1, 2013; (b) have not been employed for more than 40 hours during the 60-day period before the date of hire; and (c) are not being hired to replace another employee unless that employee left work voluntarily or for cause. According to a press release on this bill, “the refundable nature of the credit means that struggling businesses can benefit from it even if they aren’t currently making profits.” This legislation has been referred to the Senate Committee on Finance.
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A bill introduced in the Senate last week takes aim at employers who mistakenly classify employees as independent contractors. The Payroll Fraud Prevention Act (S. 770) introduced by Senators Sherrod Brown (D-OH), Tom Harkin (D-IA), and Richard Blumenthal (D-CT), would impose new reporting requirements on employers, increase penalties for classification violations, and establish new protections for workers who believe they have been misclassified.
Among other things, the bill would:
- Require employers to keep records that reflect the accurate status of each worker as an employee or non-employee and clarify that employers violate the Fair Labor Standards Act (FLSA) when they misclassify workers.
- Require employers to notify workers of their classification as an employee or non-employee.
- Increase penalties imposed on employers who misclassify their employees as independent contractors and are found to have violated employees' overtime or minimum wage rights.
- Create a website to inform workers about their federal and state wage and hour rights.
- Provide protections to workers who are fired or otherwise discriminated against as a result of their efforts to be reclassified as employees.
- Direct the DOL’s Wage and Hour Division (WHD) to conduct targeted audits of certain industries with frequent incidences of misclassifying workers.
The Senate on Monday began its consideration of the Creating American Jobs and Ending Offshoring Act (S. 3816), a bill that would provide employers with tax incentives to maintain jobs in the United States, and eliminate tax advantages for outsourcing work. Introduced on September 21, 2010, this legislation would do the following:
Provide Tax Incentives to Create U.S. Jobs
The bill would create a payroll tax break for employers that replace foreign workers with American workers. Specifically, the measure provides for a two-year Social Security tax break on wages paid to U.S. employees who have replaced their foreign counterparts. The payroll tax holiday would be available for two years for employees hired during a three-year period beginning on September 22, 2010. To be eligible for this break, employers would be required to certify that the U.S. employee is replacing a foreign worker who had been performing the same or similar job.Continue Reading...
Senator John Kerry (D-MA) and Rep. Jim McDermott (D-WA) have introduced a bill that would curtail the use of a federal “safe harbor” that allows businesses to treat workers as independent contractors for federal employment tax purposes, regardless of the employee’s actual status under the common law test. The Fair Playing Field Act of 2010 (pdf) (H.R. 6128, S. 3786) would, among other things, require the Secretary of the Treasury to issue prospective guidance on worker classification for federal employment tax purposes. The safe harbor provided under section 530 of the Revenue Act of 1978 would continue to be available until the date an individual’s employment status is reclassified. The worker’s reclassification date would be the earlier of (a) the first day of the first calendar quarter beginning more than 180 days after the date of an employee classification determination by the Secretary of the Treasury; or (b) the effective date of the “first application final regulation” issued by the Secretary of the Treasury with respect to such individual (or if later, the first day of the first calendar quarter beginning more than 180 days after such regulation is issued).Continue Reading...
On Thursday, the Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing – Leveling the Playing Field: Protecting Workers and Businesses affected by Misclassification – to address issues relating to the misclassification of employees as independent contractors. During the hearing, HELP Committee Chairman Tom Harkin (D-IA) quoted a study indicating that nearly 10.3 million workers in this country are classified as independent contractors, and that as many as 30% of businesses have misclassified their workers as independent contractors. Consequently, both Congress and the Department of Labor (DOL) have shown a great deal of interest in this area in recent months.Continue Reading...
Senator Dick Durbin (D-IL) and Representative John Conyers (D-MI) have introduced legislation that would strengthen the ability of employees to recover wages and benefits and restrict the awarding of bonuses in the event of their employer’s bankruptcy. According to a press release, the Protecting Employees and Retirees in Business Bankruptcies Act (S. 3033, H.R. 4677) would, among other things, “ensure that back pay awarded through [the Worker Adjustment and Retraining Notification (WARN) Act] damages would be given priority in the bankruptcy claims process.” Specifically, as stated in the release, the bill would do the following:Continue Reading...
With the Obama administration’s renewed emphasis on job creation, a number of lawmakers have introduced bills that focus on employer incentives. On Wednesday, Senators Chuck Schumer (D-NY) and Orrin Hatch (R-Utah) released details about the Hire Now Tax Cut Act of 2010 (S. 2983), legislation that would exempt any employer that hires a worker who has been without full-time work for at least 60 days from paying the employer’s share of Social Security taxes on that worker for 2010. According to its sponsors, the advantage of structuring a tax incentive in this fashion is that it would provide businesses with an immediate benefit, instead of rewarding them with a tax credit in 2011. Additionally, the benefits to an employer would increase the longer it retains and the more it pays the employee, up to the maximum Social Security wage of $106,800.Continue Reading...
Today President Obama outlined his plan to promote the growth of small businesses as a way to stimulate the economy and reduce unemployment. During his State of the Union Address, Obama proposed using $30 billion repaid funds that financial institutions received through the Troubled Asset Relief Program (TARP) to increase the ability of small businesses to obtain loans. In addition, he called for tax incentives for businesses to invest in new plants and equipment, and the elimination of capital gains taxes on small business investment.Continue Reading...
The fiscal year 2011 federal budget (pdf) released on Monday contains provisions to combat misclassification of employees as independent contractors. Included in this $3.8 trillion spending measure is a proposal to be jointly administered by the Departments of Labor and the Treasury to eliminate legal incentives for employers to misclassify their employees. Funds are appropriated to enhance the ability of both agencies to penalize employers that misclassify employees as independent contractors, and restores protections to employees who have been denied them due to the misclassification. According to the budget, this proposal will increase Treasury receipts by more than $7 billion over 10 years. The budget allocates an additional $25 million to hire 100 new enforcement personnel to target worker misclassification and establish competitive grants to encourage states to address this issue.Continue Reading...
Sen. John Kerry (D-Mass.) has introduced legislation that would make it more difficult for employers to classify workers as independent contractors for employment tax purposes. The Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (S. 2882) would revise section 530 of the Revenue Act of 1978, known as the “safe harbor” provision, which currently allows employers to designate workers as independent contractors “regardless of the worker's actual status under the common law test, unless the employer has no reasonable basis for such treatment or fails to meet certain requirements,” according to a statement issued by Sen. Kerry’s office.Continue Reading...
Last week, Rep. Rosa Delauro introduced the Keep Americans Working Act (H.R. 4135) in the House of Representatives. An identical bill (S. 1646) was introduced in the Senate by Sen. Jack Reed (D-RI) in August. This bill would encourage employers to implement temporary work share programs as an alternative to layoffs, and entitle those employees working reduced hours to receive proportionate unemployment benefits.Continue Reading...
Senators Bernie Sanders (I-Vt.) and Charles Grassley (R-Iowa) have introduced legislation that would prevent large companies that conduct mass layoffs from hiring foreign labor through guest worker programs. The Employ America Act (S. 2804) (pdf) builds on similar prohibitions included in the American Recovery and Reinvestment Act (ARRA or “Economic Stimulus”), which prevents companies receiving funds through the Troubled Asset Relief Program (TARP) from replacing laid-off citizen workers with foreign labor. Under the terms of the Employ America Act, no guest worker visa petitions would be approved unless the employer provides written certification that it has not provided a notice of a mass layoff pursuant to the Worker Adjustment and Retraining Notification (WARN) Act in the past 12 months, and does not intend to do so. The provisions of the WARN Act apply to employers with more than 100 employees that lay off at least a third of their workforce and 50 or more workers. If such a large employer has instituted a mass layoff, any visa applications already approved would expire 60 days after the WARN notice is provided. An employer would be exempt from this requirement if it provides written certification that the total number of its citizen workers employed in the United States have not and would not be reduced as a result of the mass layoff.Continue Reading...
Legislation introduced in both chambers of Congress would extend for one year a tax incentive program that encourages small businesses to provide wage differentials to their employees called to active duty. The Small Business and Military Family Assistance Act of 2009 (H.R. 4042, S. 2748) would provide a tax credit for employers with fewer than 50 employees that chose to pay the difference between their employee reservists’ regular wages and their military pay while in active service. This bill would provide these small businesses with a credit equal to 20 % of the pay differential, up to $4,000.
In a press release Klein stated: “Many small businesses voluntarily choose to support our troops by making up the difference between military and civilian pay when one of their employees is called to active duty service. This is the right thing to do, and these businesses should be supported and rewarded with tax incentives.” If enacted, this tax credit would be extended to December 31, 2011.
The Senate version of this bill has been referred to the Senate Finance Committee. The House companion bill has been referred to the House Committee on Ways and Means.
On Monday, President Obama issued an executive order to promote the federal government’s hiring of veterans. The executive order, Employment of Veterans in the Federal Government, creates an interagency Council on Veterans Employment – chaired by the Secretary of Labor and the Secretary of Veterans Affairs – that will advise the President and the Director of the Office of Personnel Management on the veterans’ employment initiative (“Initiative”) created by the executive order, and serve as a national forum for promoting veterans’ employment opportunities in the executive branch. Under the Initiative, most federal agencies will be required to establish a Veterans Employment Program office that will be responsible for helping veterans find jobs within those agencies. In addition, these offices will be in charge of implementing veteran’s recruitment programs and training programs for veterans with disabilities, providing mandatory annual training to the agency’s human resources personnel and hiring managers, coordinating employment counseling to help match veterans’ career goals with the needs of the agency, and transitioning service members into the workforce, among other responsibilities.
According to a press release, the Initiative “underscores to federal agencies the importance of recruiting and training veterans, aims to increase the employment of veterans within the Executive Branch, and helps recently hired veterans adjust to service in a civilian capacity.”
Last week, lawmakers introduced legislation that would increase employer tax credits to encourage hiring. The Helping Invigorate and Revive our Economy Act of 2009 (HIRE America Act) (H.R. 3784) would expand the Work Opportunity Tax Credit (WOTC) and increase employer-provided child care credits, in addition to making the WOTC permanent. As it stands, the WOTC is set to expire on August 31, 2011.
In a press release, Rep. Tom Rooney (R-Fla.), who along with Rep. John Boccieri (D-Ohio) introduced the bill, explained that the legislation would increase the income tax credit for employers for each employee who is eligible under current WOTC criteria up to 50 percent. The bill would also create a new income tax credit for all other hires outside the current WOTC up to 30 percent. In addition, the bill would increase the maximum wage eligibility for veterans under the current WOTC from $12,000 to $16,000, and boost tax credits for employers who offer childcare services or benefits to employees up to 35 percent.
This bill has been referred to the House Committee on Ways and Means.
Last week Senator Jack Reed (D-RI) introduced legislation that would provide employers with an alternative to layoffs. The Keep Americans Working Act (S. 1646) would encourage employers to implement temporary work share programs, and entitle those employees working reduced hours to receive proportionate unemployment benefits. According to Sen. Reed, 17 states already have work share programs in place.
Under the terms of this bill, employer participation in short-time compensation programs would be voluntary. Those participating would need to certify that reducing employees’ hours was a measure taken in lieu of implementing temporary layoffs, and submit written work share plans for state agency approval. If unionized, the employer would also need to provide a written plan describing the short-time compensation program for union approval. In addition, employers would be required to certify that the reduced hours program would not impact the receipt of health or retirement benefits. Employees whose workweeks are reduced by at least 10 percent would be eligible for the pro rata portion of unemployment compensation they would have received if totally unemployed. For a period of two years, the bill would provide states with temporary federal financing for 100 percent of the work share benefits paid to employees for up to 26 weeks.
This bill would not authorize payments to be made for work share programs implemented by employers whose workforce had been reduced by more than 20 percent in the three months leading up to the date the employer submits its short-time compensation plan for approval. Moreover, employers that hire workers on a seasonal, temporary, or intermittent basis, or those currently engaged in labor disputes would be similarly ineligible to participate. The legislation would direct the Department of Labor to establish an oversight and monitoring process for state agencies to ensure that participating employers adhere to the terms of their work share plans. Employers found in violation of their plans and/or act in bad faith by failing to retain their employees would be required to reimburse the state for the amount expended under the program.
This bill has been referred to the Senate Committee on Finance.
Last week Rep. Jim McDermott (D-Wash.) reintroduced the Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (H.R. 3408), a bill that would entitle individuals deemed independent contractors by their employers to petition the Internal Revenue Service (IRS) for a determination of whether they are properly classified as independent contractors, significantly increase employer penalties in the event of misclassification, and make it more difficult for employers to avoid employment tax liability for such misclassification.
Specifically, the new legislation would add a new section to Chapter 25 of the Internal Revenue Code (IRC) that would enable employers to avoid employment tax liability only if they are able to demonstrate that they had no reasonable basis for classifying the independent contractor as an employee. This new Section 3511 would supplant the safe harbor provisions of Section 530 of the IRC. Under the more stringent terms of Section 3511, an employer’s decision would be deemed “reasonable” if the employer reasonably relied on a written determination addressing the employment status of the individual or another individual holding a substantially similar position with the employer, or a concluded employment tax examination that did not find that the individual (or one holding a substantially similar position) should be considered an employee. In addition, the employer or its predecessor must not have treated any other individual holding a substantially similar position as an employee for employment tax purposes for any period beginning after December 31, 1977. The assessment of whether an individual holds a substantially similar position held by another would be made using criteria established by the Fair Labor Standards Act.
Employers that misclassify employees as independent contractors would be subject to the following penalties:
- A minimum of $250 (up from the current $50) per incorrect tax return, up to $3,000,000 (currently $250,000) per year. Lower penalties would be imposed if the returns are corrected within a specified period of time, although the amounts are significantly greater than those currently imposed on employers for misclassification.
- Smaller employers (those with gross receipts not exceeding $5,000,000) would be subject to fines of up to $1,000,000 per year, up from the current $100,000 limitation.
- In the event of intentional disregard for the filing requirement, employers would be subject to a $500 fine per tax return, up from the current $100 amount. The $3,000,000 per year penalty ceiling would not apply in this instance.
If enacted, the provisions of this bill would apply to information returns required to be filed after December 31, 2009. This bill has been referred to the House Committee on Ways and Means.
On Thursday, members of both the House and Senate reintroduced the Federal Oversight, Reform, and Enforcement of the WARN (FOREWARN) Act (H.R. 3042, S. 1374). This legislation would amend the Worker Adjustment and Retraining Notification (WARN) Act by requiring more and smaller employers to notify workers of mass firings or plant closings and increasing employer penalties and enforcement mechanisms.Continue Reading...
Bills Would Require OSH Standard for Nurses and Other Health Care Workers and Establish Nationwide Nurse-to-Patient Staffing Ratios
A couple of bills introduced in recent weeks would have significant impact on the health care industry. A bill introduced last week by Rep. John Conyers (D-MI) would require the establishment of a safe patient handling and injury prevention standard for direct-care registered nurses and other health care workers. The Nurse and Health Care Worker Protection Act of 2009 (H.R. 2381) would order the Secretary of Labor to propose a standard under the Occupational Safety and Health (OSH) Act within one year of the bill’s enactment. The final standard – which would, among other things, eliminate manual lifting of patients through the use of assistive patient handling equipment and other mechanical devices – would be issued within two years of this date.Continue Reading...
Recently-introduced legislation would require employers to provide Worker Adjustment Retraining Notification (WARN) Act notices to employees in the event of mass layoffs that occur at more than one worksite, and would double the penalties for violations. The Alert Laid off Employees in Reasonable Time (ALERT) Act (H.R. 2077), introduced by Rep. Luis Gutierrez (D-Ill) and co-sponsored by four others, expands the current WARN requirement that employers provide 60 days’ notice of an impending mass layoff affecting either 500 employees or 33 percent of the workforce impacting at least 50 employees at one particular worksite.Continue Reading...
Senator Richard Durbin (D-IL) has reintroduced a bill in the Senate designed to use the tax code as a carrot to encourage U.S. companies to create and maintain domestic jobs with specific pay and benefits standards and maintain neutrality toward union organizing efforts. The Patriot Employers Act (S. 829) was initially introduced by Durbin – and co-sponsored by former Senator Obama – in 2007. While the current bill has not yet been released for publication, it is believed to contain the same provisions set forth in the earlier version. That bill would provide “Patriot Employers” with a 1 % tax credit if they do the following:Continue Reading...
Legislation introduced by Rep. Thaddeus McCotter (R- MI) would amend the Internal Revenue Code to provide employers with a tax credit for hiring veterans. The Veterans’ Employment Transition Support Act of 2009 (VETS Act of 2009) (H.R. 1647) would grant a one-time tax credit to employers, and apply to the employment of any veteran certified as such by the designated local agency.
Employers would be granted credit in the amount of 40 percent of the employee’s first-year wages. A greater tax credit is available for the hiring of disabled veterans. The Act creates a sliding percentage tax benefit scale based on the degree of the employee’s disability. The amendments made by this Act would apply to veterans who begin work after the date of enactment.
This bill has been referred to the House Committees on Energy and Commerce, Education and Labor, and Ways and Means.
As expected, many of the failed labor and employment-related bills from the 110th Congress are being recycled this year. Just last week, the Eagle Employers Act (H.R. 989) was reintroduced by Rep. Jim Gerlach (R-PA). This bill would use the tax code as an incentive to encourage U.S. companies to create and maintain domestic jobs instead of outsourcing positions abroad. The Act would provide a 1% tax credit to employers with 50 or more employees that do the following:
- Maintain their headquarters in the United States;
- Pay at least 60% of their employees’ health care premiums;
- Maintain or increase the number of their full-time workers in the United States relative to their full-time workers outside of the country;
- Provide full differential salary and insurance benefits for all National Guard and Reserve employees called to active duty; and
- Provide its employees with certain higher levels of compensation and retirement benefits.
The bill may garner wider appeal and pass in some form during this legislative session for the following reasons: 1) the choice to become an “Eagle Employer” is completely voluntary; 2) the bill had bi-partisan support in the last Congress; and 3) President Obama has emphasized the need to create jobs for Americans.
This bill was referred to the House Committee on Ways and Means.
As economic conditions decline, scrutiny over executive compensation increases. On February 17, President Obama signed into law the massive stimulus package (Pub. L. No. 111-5) containing a number of provisions limiting executive compensation for entities receiving funds under the Troubled Asset Relief Program (TARP). A new bill introduced last week would augment these provisions by creating additional government oversight for companies receiving TARP assistance.Continue Reading...
In-Depth Analyses of the Employment-Related Provisions Contained in the Stimulus Package Are Now Available
The stimulus legislation signed into law as the American Recovery and Reinvestment Act of 2009 (ARRA) by President Obama contains sweeping revisions to the group health plan continuation coverage provisions contained in the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The ARRA also impacts other areas of employment law. For an in-depth analysis of these changes, see Littler's ASAPs: Stimulus Package: An In-Depth Look at the New COBRA Subsidy in the ARRA by: Steven J. Friedman, Susan K. Hoffman, and J. René Toadvine, and Besides COBRA: What Does the Stimulus Package Have for Employers by: Ellen N. Sueda, GJ Stillson MacDonnell, Patricia A. Haim, and Chadwick M. Graham.
The massive $787.2 billion economic recovery package signed into law as the American Recovery and Reinvestment Act of 2009 (ARRA) by President Obama on Tuesday will impact employers in several ways. Embedded in this stimulus package are provisions relating to COBRA, business tax credits, executive compensation, and H-1B visas, among others areas.Continue Reading...
Given the bleak economic forecast, it is inevitable that layoffs will continue to occur as the next Administration takes office. As a result, expect the reintroduction of the Federal Oversight, Reform, and Enforcement of the WARN Act (FOREWARN Act), first introduced in both the House and Senate (and co-sponsored by President-elect Obama) in 2007 (S. 1792 and H.R. 3662). Given the almost daily announcements of major companies laying off significant numbers of employees, this bill could get immediate attention. If enacted, this law will:
- Revise the definitions of “employer,” “plant closing,” and “mass layoff” found in the Worker Adjustment and Retraining Notification (“WARN”) Act to cover more and smaller employers.
- Require an employer to provide a 90-day written notice (up from the 60-day requirement) to employees and appropriate state and local governments before ordering a plant closing or mass layoff, thus forcing employers to predict their economic futures.
- Require the employer to notify the U.S. Secretary of Labor within 60 days of a closing or layoff.
- Make employers liable for double back pay in the event of a notice violation.
- Empower the Secretary of Labor to bring civil action on behalf of employees.
In essence, more and smaller employers would be required to foresee economic downturns and notify workers of mass layoffs or plant closings, and would be required to give more notice and face stiffer penalties in the event of a violation. Because President-elect Obama emphasized his support for the unemployed and middle class, and because many in Congress might find it hard to explain a vote against giving laid off employees more notice in the current economic environment, employers can expect serious consideration of the FOREWARN Act or similar legislation.
This trend toward increased employee protection in the event of a layoff is already evident at the state level. A growing number of states have passed their own notice laws. New York’s new WARN Act, for example, requires employers to provide 90 days’ notice prior to a plant closing, mass layoff or relocation occurring on or after February 1, 2009. Contrary to previous written statements it has issued, New York’s Department of Labor is now stating that an employer planning a layoff shortly after February 1, would have to provide notice prior to the law’s effective date to meet the 90-day requirement. The New York law applies to private employers with 50 or more employees who lay off at least 25 employees. Thus, this act not only provides for broader coverage and notice requirements than those articulated in the federal WARN Act, but offers a lower threshold for triggering those requirements. Some other state laws do the same.