Customers Now Jointly Liable with Port Trucking Companies for Certain Labor Violations

Truck in port

Photo credit: iStock.com/nightman1965

By Susan Kohn Ross

One of the bills signed into law by California Governor Edmund G. Brown from the most recent legislative session aims to hold customers accountable when hiring trucking companies that have a record of Labor Code violations. Under SB 1402, customers who utilize trucking companies to deliver goods from California’s ports may be held jointly and severally liable for certain Labor Code violations committed by those trucking companies. Here is the explanation for the need for this new law: “Holding customers of trucking companies jointly liable for future labor law violations by port drayage motor carriers who they engage, where the customer has received advance notice of their record of unsatisfied judgments for labor law violations, will exert pressure across the supply chain to protect drayage drivers from further exploitation.” And “Customers have the market power to exert meaningful change in the port drayage industry that has eluded California drivers for more than a decade.” (more…)

IRS Announces 2019 Exemption Amounts and Confirms Increased Exemption is “Use It or Lose It”

By Jeffrey K. Eisen

Just before Thanksgiving, IRS made two key pronouncements concerning the estate tax and gift tax.

1.    In Revenue Procedure 2018-57, the IRS announced that for gifts made in 2019 or deaths occurring in 2019, the combined gift tax/estate tax exemption amount will be $11,400,000 per person (or $22,800,000 per couple with proper planning). This is up from $11,180,000 per person in 2018 (or $22,360,000 per couple).  These exemption amounts also apply to the generation-skipping transfer tax. (more…)

Minors Ages 14 to 17 To Receive Sexual Harassment Prevention Training Before Issuance of Entertainment Work Permit

By Jeremy Mittman and Erica Parks

In September, along with many other new employment bills, Governor Jerry Brown signed into law AB 2338, which includes a provision requiring minors 14-17 years of age and their parents/guardians to receive sexual harassment prevention training prior to the issuance of an entertainment work permit by the Labor Commissioner (with few exceptions, such permits are required in order for a minor to appear in any television show, movie, recording, etc.)

The new law provides that the training “shall consist of training administered by a third-party vendor, on-site, electronically, via Internet Web site, or other means” and must cover, at a minimum, the components specified in the Department of Fair Employment and Housing’s informational pamphlet on sexual harassment (Form 185). (more…)

Employee Nonsolicitation Provisions May No Longer Be Lawful in California

By Danton Liang

In 2008, the California Supreme Court in Edwards v. Arthur Andersen LLP (2008) 44 Cal. 4th 937 set forth a broad prohibition against non-compete provisions, but left open the question of whether employee non-solicitation provisions are enforceable.  A decade later, the California Court of Appeal for the Fourth Appellate District may have finally answered that question in the negative.  (more…)

Delinquent Taxpayers May Need to Rethink Travel Plans

By Jeffrey Davine

A taxpayer with a “seriously delinquent tax debt” may be in for a surprise if he or she has overseas travel plans.  This is because the IRS has begun implementing its authority to instruct the State Department to pull delinquent taxpayers’ passports.

In 2015, Congress passed the Fixing America’s Surface Transportation Act, (“FAST”).  In this context, FAST should be renamed “STOP” because it added Section 7345 to the Internal Revenue Code, which authorizes the IRS to disclose certain tax information to the State Department concerning taxpayers who owe the IRS more than $50,000.  Armed with this information, the State Department may revoke, deny, or place limitations on, the delinquent taxpayer’s passport.  (more…)

Section 199A: Deal Considerations When Buying or Selling a Partnership or LLC Interest

By Daniel M. Cousineau

Internal Revenue Code section 199A attracted immediate attention when it was enacted last December, since it created a new tax benefit.

Section 199A allows individuals to deduct up to 20% of the “qualified business income” from certain types of businesses operated in “pass-through” form. Partnerships, limited liability companies, S corporations and sole proprietorships meet this definition because there is no corporate level tax and the earnings from the business pass through to the owners for tax purposes.

While the intent of Section 199A was to generally put business owners operating in pass-through form on the same footing as businesses who received a reduced 21% federal corporate tax rate, the complexity of the rules left many questions in need of clarification.

On August 8, 2018, the Treasury Department issued proposed regulations addressing some of these questions. One such clarification is the extent to which a buyer of a pass-through entity can avail themselves of the 20% deduction. (more…)

California Supreme Court’s Independent Contractor Ruling Only Applies to Claims Brought Under California Wage Orders

By Jeremy Mittman

Recently, in Garcia v. Border Transportation Group, LLC, the California Court of Appeals weighed in on the scope of the California Supreme Court’s April 2018 ruling in Dynamex Operations West, Inc. v. Superior Court.  In Dynamex, the Supreme Court adopted a new standard for determining whether a California worker is an employee or independent contractor under the California Industrial Welfare Commission’s (“IWC”) wage orders.  This new standard, called the “ABC test” holds that a worker is properly considered an independent contractor to whom a wage order does not apply only if the hiring entity establishes: (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity. (more…)

California Expands Sexual Harassment Training for Employees

By Jeremy Mittman and Erica Parks

In his final bill-signing period as governor, California Governor Edmund G. Brown signed into law numerous employment-related bills and vetoed others.  One bill that passed significantly expands the scope of required sexual harassment training for employees in California.

Currently, the relevant provisions of California’s Fair Employment and Housing Act (“FEHA”), sections 12950 and 12950.1 of the California Government Code, require employers with 50 or more employees to provide sexual harassment training for all supervisory employees. SB 1343 amends these provisions, instead requiring employers of five or more employees—including seasonal and temporary employees—to provide sexual harassment training for both supervisory and non-supervisory employees by January 1, 2020.  (more…)

New York State Provides Model Sexual Harassment Prevention Materials for Employers

By Gregory Hessinger

Following its passage of new laws requiring that all New York State employers provide annual sexual harassment prevention training and implement sexual harassment prevention policies, effective on October 9, 2018, New York State has now published final versions of compliance materials for employers on a dedicated website, which includes:  (1) a model sexual harassment policy; (2) model training materials; (3) a model complaint form; (4) Frequently Asked Questions (“FAQs”) relating to the model materials and new laws; and (5) lists of minimum standards for sexual harassment policies and trainings for employers who wish to prepare their own.  (more…)

NLRB Proposes Rule Changing Joint-Employer Standard

By Anthony J. Amendola

Recently, the National Labor Relations Board (NLRB) published its “Notice of Proposed Rulemaking; request for comments” in the Federal Register setting forth a proposed new standard for establishing a joint-employer relationship.  The joint-employer analysis is significant because entities found to be joint employers may be jointly liable for alleged unfair labor practices or under collective bargaining agreements.  In various circumstances, parent/subsidiary companies, franchisers/franchisees and client/temporary services providers have been argued to be joint employers. (more…)