Don’t Show Me The Money

Massachusetts Pay Equity Law Has Implications for California and New York Employers That Seek or Use Applicant Wage History

By Samantha Grant and Erica Parks
August 23, 2016

The Massachusetts Equal Pay Act (“MEPA”) has prohibited employers from paying men and women differently for “work of like or comparable character” since 1945, nearly two decades before the federal Equal Pay Act (“EPA”) was passed and before any other state passed pay equity legislation.  This month, Massachusetts Governor, Charlie Baker, signed into law Senate Bill 2119 (“S.2119”), which makes several significant changes to the MEPA, most of which are similar to recent amendments to California and New York equal pay legislation.  Notably, however, S.2119 makes Massachusetts the first in the nation to prohibit employers from requesting or seeking an applicant’s salary history.  S.2119 can be read in full here.

Once S.2119 goes into effect, on July 1, 2018, the previously undefined term “comparable character” will be replaced by “comparable work,” which is defined as “work that is substantially similar in content and requiring substantially similar skill, effort, and responsibility and performed under similar working conditions.”  This new definition mirrors California’s recently expanded Fair Pay Act (“CFPA”), which broadened the scope of claims that can be pursued under the law from claims for jobs that require “equal skill” to claims for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” By comparison, New York Labor Law § 194(1) (“NYLL”) and the federal EPA require equal pay for “equal work.”

The MEPA currently permits variations in pay based on differences in seniority.  Once S.2119 goes into effect, however, employers can defend allegedly disparate pay practices by showing that any such disparity is based on: (i) seniority, provided that pregnancy, parental, family and medical leave does not reduce seniority; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; (iv) geography; (v) education, training or experience to the extent such factors are reasonably related to the particular job in question and consistent with business necessity; or (vi) travel that is a necessary condition of the particular job. By comparison, the CFPA and NYLL currently place a different burden on employers to justify wage differentials. For example, geography is not a defense under the CFPA.  Likewise, while pay disparities based on seniority, merit, or earnings measured by quantity/quality are permitted under both the CFPA and NYLL, any other factor must be job-related and consistent with “business necessity.” Similarly, both the CFPA and NYLL provide that an employee can defeat certain employer defenses by showing that an alternative practice exists that would serve the same purpose without causing a pay disparity. (more…)

ACE Allows for Stricter Customs Enforcement

First published by Journal of Commerce, August 2016

In the face of its recent reorganization and enhanced computer system, it was really only a matter of time before the trade community started to see Customs and Border Protection (“CBP”) better organize its enforcement efforts, and now the first tangible step has been publicly disclosed.

When the concept for the Centers for Excellence and Expertise was rolled out, it was logical to expect that CBP would combine the enhanced computer capabilities of the Automated Commercial Environment with information developed from the industry focused CEEs. That meant, we would eventually see CBP relying on computer analytics and internal expertise to help the agency pinpoint where to focus its enforcement efforts. Over the years, we had seen those with the most experience retire. CBP and Immigration and Customs Enforcement seemed to lose their ability to make serious fraud cases. Yes, criminal cases for trade fraud, involving for example for antidumping and export license violations, continued to be brought, but it has been a long time since we have heard about a really significant civil penalty. Sure, some smaller fish got caught, and many of them did some really dumb things. Others who got caught just plain cheated. Now, however, CBP has launched a round of “informed compliance” letters, which are really warning letters to the trade community. (more…)

Intellectual Property Tips

By Emily F. Evitt

businesswoman holding Light bulb lamp on blackboard background with copy space

Here are 10 ways to build a rock-solid foundation for your new
company and avoid constructing a masterpiece on top of quicksand:

  1. Make sure your company’s name isn’t already taken. As a starting point, search the name on Google and other Internet search engines. Then search the U.S. Patent and Trademark Office website (uspto.gov). Important: repeat this process each time you pick the name of a new product or service.
  2. Check if the domain name you want is available – if so, get it. Create Twitter, Facebook and Instagram accounts for your company, and start using them. (more…)

4 Things Beneficiaries Who Receive IRS Form 8971’s Schedule A Must Know

By Jacey L. Hayes

When someone inherits assets, he or she is supposed to have a tax basis in the inherited asset for income tax purposes equal to the “fair market value” of the inherited asset at the date of death. The IRS is concerned that it is losing billions of dollars due to improper basis reporting for inherited assets: that is, the executor reports the assets on the estate tax return at one value, and then when those same assets are later sold, exchanged, or transferred by the beneficiary, the beneficiary reports the basis at a higher value. To tackle this concern, all estates which file an estate tax return after July 31, 2015, also must now file, within 30 days after filing the estate tax return, new IRS Form 8971, and provide a Schedule A to each beneficiary. A beneficiary’s Schedule A must also be given to the beneficiary within the same time frame. (Note that for all estate tax returns filed between August 1, 2015 and May 31, 2016, the due date of Form 8971 was postponed to June 30, 2016, leading to a flood of recent filings.) (more…)

IRS Confirms – No More Phone Calls (At Least Not Initially)

By Jeffrey D. Davine

It has been somewhat of an epidemic. Lots of taxpayers have received calls from persons who claim to be from the IRS and who assert that the recipient of the call has an outstanding federal tax liability. The caller then threatens some kind of draconian penalty (e.g., the police will be immediately dispatched to arrest the recipient of the call) unless immediate payment is made by wire transfer, debit card, or some other mechanism whereby the caller can extort some quick money.  (more…)

Brexit and the Impact on Trademark Rights in Europe

By Evan Kent and Alexa Lewis

Last week, the United Kingdom voted to leave the European Union. The process, however, will take at least two years to be completed. Your European Union registered trademarks, which currently cover the United Kingdom, will continue to be enforceable in the United Kingdom for some time. Eventually, this will no longer be the case, but we expect that a transitional procedure will be established allowing for the maintenance of rights in the United Kingdom once it has officially departed the European Union. Because there is no precedent for such an event, there is no way to predict whether this will take the form of an automatic extension of existing European Union rights to the United Kingdom, require re-registration in the United Kingdom, or another conversion procedure altogether.

(more…)

Employers Should Take Note of the Department of Labor’s Final “Persuader Rule”

 

By Steven M. Schneider and Jessica Iglesias
June 28, 2016

The Department of Labor (“DOL”) recently issued its final rule concerning the controversial “persuader rule” that greatly expands employers’ obligations under the Labor-Management Reporting and Disclosure Act of 1959 (the “LMRDA”). The persuader rule, scheduled to take effect July 1, 2016, not only impacts employers with union-represented employees, but it also may impact employers who presently do not have union-represented employees or union-organizing activities.

Under the LMRDA, any person who pursuant to any “agreement or arrangement” with an employer undertakes to persuade employees to exercise or not exercise their right to organize and bargain collectively, is obligated to report specific information about such agreement or arrangement to the DOL. Historically, the DOL has treated most legal work to be exempt from these reporting requirements, provided that the attorneys avoided direct communication with their clients’ rank and file employees and the client was free to accept or reject the attorney’s advice.  However, the DOL’s revised persuader rule extends the reporting requirements to “indirect persuader activities” engaged in by attorneys. (more…)

New Los Angeles Ordinance Provides for Paid Sick Leave and Increased Minimum Wages

 

By Brett Thomas
June 27, 2016

Joining the ranks of five other municipalities in California (including Santa Monica), the city of Los Angeles recently enacted a new paid sick leave ordinance that imposes requirements more stringent than those required under California law. The Los Angeles Minimum Wage Ordinance (“Ordinance”) provides little time for employers to comply with its new requirements – being that it was passed on June 1 and becomes effective July 1, 2016 for most employers. As set forth in detail below, the Ordinance doubles the amount of paid sick leave an employer is required to provide and increases the group of people for whom an employee may use paid sick leave to provide care. The Ordinance also provides a schedule of minimum wage rates for employers from July 1, 2016 through the year 2022.

To enforce the new Ordinance, the city also passed the Los Angeles Office of Wage Standards Ordinance, which creates a new Office of Wage Standards (“OWS”) under the Bureau of Contract Administration that is charged with enforcing the Ordinance and establishes the framework for enforcing the Ordinance.  As of the time of this publication, the OWS has prepared draft rules and regulations implementing the Ordinance, but has yet to post the final version. (more…)

Valuation Rule for Early Termination of Net-Income Charitable Remainder Unitrusts

By David Wheeler Newman

Under Internal Revenue Code § 664, a qualified charitable remainder unitrust each year during its term distributes to a non-charitable beneficiary a fixed percentage (5% or greater) of the value of trust assets, determined annually (the unitrust amount).  Assets remaining in the CRUT at the end of its term are distributed to charity.  Section 664(d) provides that a qualified CRUT may limit distributions to the non-charitable beneficiary to the lesser of the unitrust amount or trust income under fiduciary accounting principles (a net-income CRUT, or NICRUT), and may pay the non-charitable beneficiary any trust income in excess of the unitrust amount to the extent that aggregate distributions in prior years were less than the aggregate unitrust amounts as a result of the net-income limitation (a net-income with make-up CRUT, or NIMCRUT). (more…)

The EEOC Is Keeping Busy: EEOC Issues Additional Guidance About the ADA & Final Rules on Wellness Programs

By Emma Luevano and Justine Lazarus

EEOC Guidance on Employer-Provided Leave and the Americans with Disabilities Act

Concerned about the number of complaints filed against employers for failing to provide reasonable accommodations under the Americans with Disabilities Act (“ADA”), the Equal Employment Opportunity Commission (“EEOC”) recently issued a reminder to employers about their obligations. While clarifying that the additional guidance does not create any new obligations, the EEOC reminded employers about the following:

* It is not sufficient to grant employees the maximum amount of leave under the Family and Medical Leave Act (“FMLA”) and/or state equivalent (such as California’s Family Rights Act (“CFRA”)) to meet obligations under the ADA.  Instead, under the ADA, employers must also consider granting additional leave as a form of reasonable accommodation (beyond that required by the FMLA or CFRA), unless doing so will create an undue hardship for the employer.  As the EEOC indicated, “the Commission takes the position that compliance with the FMLA does not necessarily meet an employer’s obligation under the ADA, and the fact that any additional leave exceeds what is permitted under the FMLA, by itself, is not sufficient to show an undue hardship.”  As you already may know, the “undue hardship” standard is not easy for employers to meet.

* To the extent employers use form letters to instruct employees to return to work after they exhaust FMLA/CFRA leave, such form letters should explain that additional leave may be requested as a form of reasonable accommodation.

* To the extent employers use a third party to administer FMLA leaves, that contractor should communicate often with the employer’s Human Resources department to avoid mishandling accommodation requests. [Indeed, it is not uncommon to see miscommunication or lack of communication between the leave administrator and Human Resources in disability discrimination litigation.] (more…)