Monthly Archives: January 2014

Minimum Wage Under New Federal Contracts to Increase to $10.10/hour

??????????????????????????????????????????????????????????????During last night’s State of the Union Address, President Obama announced that he would issue an Executive Order raising the minimum wage for employees working under new federal contracts to $10.10.  President Obama pushed Congress to raise the regular  minimum wage to $10.10 per hour and peg it to inflation.  The general minimum wage increase is being championed by Democrats in both Houses of Congress, but with the current congressional deadlock, its passage remains unlikely.

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Supreme Court says safety gear = clothes. Should I care?

gavelpictureYes, at least a little. It’s true that the Supreme Court’s decision today in Sandifer v. United States Steel Corp. only directly impacts employers whose employees are unionized, wear safety gear and aren’t paid for the time spent “donning and doffing” their safety gear before and after their shift.  However, Sandifer is a unanimous decision (other than a footnote with which Justice Sotomayor disagreed) from the Supreme Court that relies on a common sense interpretation of the statutory language and reaches an employer-friendly result.  The decision also includes an interesting discussion of the de minimis rule (which employers often rely on to avoid paying employees for incidential, very short periods of off the clock work).  It remains to be seen how courts will interpret today’s decision.

Do you E-Verify?

United States FlagMore than half a million U.S. employers are now enrolled in the E-Verify program. The E-Verify program is an electronic system that employers can use to verify eligibility to work in the United States.  And while the system initially faced significant challenges and skepticism (due in large part to reliability issues), the program has improved and become more accepted.  Illinois’ ban on using E-Verify no longer applies and many states have made use of E-Verify mandatory.  Whether to use E-Verify is a very company-specific decision, but more and more businesses are deciding it makes sense.

To commemmorate the 500,000 participant milestone, the U.S. Citizenship and Immigration Services (USCIS) has released a new video that introduces the program’s benefits.  USCIS has also launched an updated E-Verify website.

Supreme Court to Hear Arguments on whether FICA is Owed on Severance Pay

taxToday the Supreme Court will hear arguments in the case of U.S. v. Quality Stores.  The issue before the Court is whether FICA needs to be withheld and paid on severance payments.  The question is whether severance payments are “remuneration for employment” which are taxable for FICA purposes (as the IRS and Obama administration argue) or “supplemental unemployment benefits” which aren’t taxable for FICA purposes (as the former employer Quality Stores argues).  In September 2012, the 6th Circuit Court of Appeals ruled in Quality Stores’ favor, holding that the severance payments to former employees were not taxable under FICA and that the amounts paid to the government should be refunded.   While the amount at issue in the Quality Stores case is relatively modest, a decision in Quality Stores’ favor would open the door to employers across the country seeking FICA refunds.  We expect a decision in June and will post an update when it’s issued.