Since 1908, Mitchell Silberberg & Knupp LLP (MSK) has proven its ability to understand the complex, demystify the mysterious, and define the unknown. With more than 130 lawyers and offices in Los Angeles, New York, and Washington D.C., MSK is often distinguished as a “go-to” firm by industry and legal insiders, and has extensive experience in a variety of practice areas, including Entertainment & IP Litigation, Labor & Employment, Motion Picture, Television & Music Transactions, Immigration, Corporate Securities, Regulatory, Tax, Trusts & Estates, Real Estate and International Trade. Relentlessly innovative, our lawyers have developed groundbreaking legislation, established influential precedents, and shaped the legal landscape. For more information, visit www.msk.com.
On Thursday, May 2, in Vazquez v. Jan-Pro Franchising International, Inc., a three-judge panel of the Ninth Circuit Court of Appeals held that the California Supreme Court’s ruling in Dynamex Operations West, Inc. v. Superior Court applies retroactively. 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. As we have previously discussed (see here, here, and here), Dynamex’s reach continues to grow and the Ninth Circuit’s ruling in Vazquez should be of particular concern to employers, who now face potential liability for their past decisions to classify workers as independent contractors rather than employees under a standard that did not exist at the time. (more…)
In early March, the U.S. District Court for the District of Columbia revived an Obama-era rule that requires larger companies to report workers’ pay data broken down by gender, race, and ethnicity. Last week, the Court issued an order requiring employers to submit 2018 EEO-1 pay data by September 30, 2019. Just this morning, the EEOC announced it will also collect 2017 data. This means that employers with 100 or more employees (and federal contractors with 50 or more employees) will be required to report their employees’ 2017 and 2018 W-2 compensation information and hours worked by the September deadline. The deadline to submit all other EEO-1 data, such as race and gender information, remains May 31, 2019. (more…)
Pursuant to a recent announcement by the U.S. Embassy in Israel, E-2 Investor visas will be available to Israeli citizens starting May 1, 2019. While the bill granting Israeli citizens eligibility for the United States E-2 Treaty Investor visa was signed into law in 2012, the availability of visas was delayed by lengthy negotiations over the final terms of the reciprocal agreement between Israel and the United States. Fortunately, the terms of the reciprocal agreement between the two countries have now been finalized, allowing for the issuance of E-2 investor visas to Israel citizens starting in May.
The E-2 investor visa is available to citizens of qualifying countries who are actively engaged in the development and direction of a United States enterprise. In order to qualify for the E-2 visa, the foreign investor must have already invested, or be in the process of investing, a substantial amount of capital into the United States company. Although the list of qualifying nations for the E-2 visa includes over 70 countries, that list did not include Israel – until now. (more…)
On April 17, 2019, the highly anticipated, second round of proposed regulations (the “April 2019 Proposed Regulations”) were finally issued, and taxpayers were rewarded for their patience.
The primary tax benefit for a qualifying investment in a QOF is the investor’s ability to step up his or her QOF investment basis to FMV if a 10-year holding period is met. The plain language of the statute appears to limit the benefit of the basis step-up to the equity interest in the QOF itself, but not the QOF’s assets. (more…)
Late last week, the California Court of Appeals ruled in Diaz v. Sohnen Enterprises that an employee must arbitrate her discrimination suit against her employer because she consented to an arbitration agreement by continuing to work. The split, three-judge panel sent the employee’s claims to arbitration even though she never signed the written arbitration agreement and verbally rejected it.
In short, the Court held that “California law in this area is settled: when an employee continues his or her employment after notification that an agreement to arbitration is a condition of continued employment, that employee has impliedly consented to the arbitration agreement.” (more…)
There are many ways employers may run afoul of the anti-discrimination provisions in U.S. immigration law. As a very clear starting point, the general rule for a long time has been and remains an employer may not make hiring, firing, or recruitment / referral decisions based on a worker’s citizenship status. However, there are notable exceptions and the one relevant here relates to controlled goods.
For these purposes, the definition of controlled goods includes their documentation – typically referred to as technical data – and means those goods which are subject to either the International Traffic in Arms (ITAR) or Export Administration Regulations (EAR) laws and regulations. ITAR is the export license restrictions which regulate military and defense articles, whereas BIS controls other higher tech exports which are subject to export license restrictions. As part of their regulatory regimes, both agencies (and some others of more limited scope) regulate when and how non-U.S. persons may gain access to either the actual good, the technical data or both, and require some form of notice to and pre-approval by the agency. (more…)
On April 2, 2019, the Division of Corporation Finance of the Securities and Exchange Commission issued a no-action letter to TurnKey Jet, Inc. in connection with a proposed sale of tokens in the United States. It was the first no-action letter relating to cryptocurrencies and was widely heralded as a watershed event (e.g., “SEC Issues First ‘No-Action’ Letter Clearing ICO to Sell Tokens in US”) (see here).
But what does the SEC’s no-action letter really mean? First, a no-action letter is the SEC’s staff response to a request that the SEC not take enforcement action against the requestor based on the specific facts and circumstances set forth in the request. In most cases, the staff will not permit parties other than the requester to rely on the no-action letter. As was the case here, the staff’s response often is based in part on the legal opinion rendered by the requester’s lawyer that the proposed conduct is not a violation of the federal securities laws. (more…)
California has no estate tax, but that could change in the near future. California State Senator Scott Wiener recently introduced a bill which would impose gift, estate, and generation-skipping transfer tax on transfers during life and at death after December 31, 2020.
California law requires that any law imposing transfer taxes must be approved by the voters. This means that, if the California Legislature approves the California bill, it will be put before the voters at the November 2020 election. (more…)
Historically, a like-kind exchange under Internal Revenue Code Section 1031 was the preferred mechanism for the deferral of gain from the sale of certain types of assets. As a result of the 2017 Tax Cuts and Jobs Act (“TCJA”), 1031 exchange treatment is now limited to exchanges of real property. If executed properly, a 1031 exchange allows investors to defer paying capital gains tax – potentially indefinitely – on the sale of property by reinvesting the sales proceeds into a new property. However, an investor is taxable on any capital gains realized on the sale to the extent that any sales proceeds are not reinvested. (more…)
In March, there was a good deal of consternation in the general press trying to understand news that President Trump had overruled the actions of the Office of Foreign Assets Control (“OFAC”) to impose additional sanctions on North Korea. Beside the oddity of a President overruling actions by a part of the Executive branch after they had been taken, it remains a mystery what the President was seeking to overrule. Not being deterred, OFAC marched on, and in so doing, it provided multiple examples again how compliance programs need to not be just written, but also followed and enforced, and cost at least one American company $1,869,144 plus significant compliance upgrade costs. (more…)