LEGAL CHALLENGES TO NLRB POSTER RESULTS IN FURTHER DELAYS

Jan 12

Posted by Attorney Lindsey R. King in Business Management, Employer-Employee Relationship, Labor Relations | No Comments

The NLRB has once again delayed the date that its somewhat controversial poster, required by the NLRB to be posted in all workplaces, must be posted.  As noted in prior blog posts, the poster was originally to be posted on or before November 14, 2011.  Legal challenges to the rule requiring the poster were filed, and as such the NLRB delayed its posting date to January 31, 2012.

Further legal challenges to the poster, and the time the NLRB needs to address these challenges are cited as the reasons for now changing the required posting implementation date to April 30, 2012.  No changes to the content of the required posting will result from this delay.  The criticism against the poster was almost instantly, with employers complaining that the NLRB is overreaching its authority and placing unnecessary additional burdens on employers.  Other criticism arose because almost all employers are required to post this poster, even if their workforce is not unionized, because the poster informs these employees of their rights to unionize.  In a prior blog post, some of the deficiencies to the poster, in that author’s opinion, were identified.

In other NLRB news, this week three individuals were sworn in to the NLRB by President Obama to fill vacancies on the Board, giving the NLRB a full five member panel for the first time since August of 2010.  These appointments were immediately criticized by many, in part because of the way these appointments were made.  Prior efforts to appoint individuals to these vacancies were denied because the Senate would not vote to approve Mr. Obama’s nominations.  During a brief congressional recess Mr. Obama exercised his authority to issue recess-appointments, filling the NLRB vacancies.  Such an action was necessary to keep the NLRB up and running as the NLRB lost its third member on January 3, 2012, and the NLRB requires a minimum of a three person quorum to take essentially any action.

 

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Ten New Year’s Resolutions for Human Resource Professionals

Jan 9

Posted by Attorney David McClurg in Business Management, Employer-Employee Relationship, Human Resources, Labor Relations | No Comments

1)         I will focus on improved documentation to support employment decisions.

 

2)         I will routinely engage employees with physical or mental impairment in an interactive process to evaluate potential accommodations.

 

3)         I will ask job applicants about potential accommodations (but never about the existence or nature of any disability) ONLY if:

a) I reasonably believe the candidate has a need for accommodation because of an obvious disability;

b) I reasonably believe the candidate may need accommodation based on a disability the candidate has voluntarily disclosed to me; or

c) the candidate asks for accommodation. I will ask candidates to demonstrate or explain how they would perform the essential functions of the position only if I ask this of all candidates for the position;

 

4)         I will be prepared to post the new “Employee Rights under the National Labor Relations Act” poster on or before April 30, 2012 (the most recently announced implementation date after a second delay by the NLRB based on a request from the Federal Court hearing a legal challenge to the NLRB Rule requiring this posting.)
5)         I will carefully evaluate potential misclassification of employees as independent contractors under the varying tests applied for purposes of payroll tax withholding, payment of minimum wage and overtime, and worker’s compensation and unemployment insurance coverage.

6)         I will eliminate “off the clock” work and “comp time” practices that can lead to wage and hour claims.

 

7)         I will help my company’s managers avoid retaliatory decisions based on an employee’s exercise of protected rights, including both union and non-union employees’ right to engage in concerted protected activity”.

8)         I will inform only those managers with a “need to know” about an employee’s complaints, requests for leave or participation in other protected activities in order to avoid claims that decisions by others outside this group were made in retaliation for the protected conduct.

9)         I will avoid online reference checks that may provide decision makers with information regarding applicant’s protected status which could subsequently support discrimination claims by rejected candidates.

10)       I will comply with “compensable time” rules, including:

a)         Time clock rounding – policy must be balanced and not result in routine underpayment of wages;

b)         Time for training and seminars must be paid unless:

 

  • Attendance is outside regular work hours;
  • Attendance is voluntary:
  • The substance of training is not directly related to the employee’s job; and
  • The employee does not perform productive work during participation in the program.

c)         Meal breaks of 30 minutes or more can be uncompensated only if the employee is completely relieved from duty. Note: if the employees take three 10 minute breaks instead of one 30 minute break, the break time must be compensated.

d)         “On call” time is compensable unless the employee can use the time effectively for his or her own purposes; and

e)         Unauthorized overtime in violation of company rules may subject the employee to disciplinary action, but does not allow the employer to withhold payments for the hours worked.

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THE FORBIDDEN PHRASES DON’T WORK

Dec 30

Posted by Attorney Roger L. Pettit in Business Management, Employer-Employee Relationship, Human Resources | No Comments

In my last post I explained that using the forbidden phrases when terminating employees can foster lawsuits.  Those phrases will never satisfy an opposing counsel or a fact finder in a lawsuit brought by disgruntled employees.  The following fictionalized cross examinations illustrate why employers may wish they had been more forthright in the first place:

 

Question: “Did you give Mr. Smith a reason for his termination?”
Answer: “Yes.  I told him the company was going in a different direction.”
Question: “Which direction were you planning to go? North? South?  East? West?  Up?
Down?  Frontwards?  Or backwards?”
Answer: “No, that’s not what I meant.  I just meant that the company was going to make a change.”
Question: “Were you going to change product design?
Were you going to change manufacturing techniques?  Were you going to change locations?”
Answer: “No, no, no, no, we were going to change the employee.”
Question: “I see, you were going to change Mr. Smith for another employee.  Now that that is cleared up, please tell the court why you decided to terminate Mr. Smith, and if the reason is a legitimate one, why you didn’t tell Mr. Smith at the time of his termination?”

____________________________________________________________________

Question: “Did you tell Mr. Smith why you were terminating his employment?”
Answer: “Well, I told him I was letting him go at-will.”
Question: “What does that mean?”
Answer: “Well, Mr. Smith was an employee at-will so I could let him go.”
Question: “Is that why you let Mr. Smith go, simply because you could?”
Answer: “No, I had a reason.”
Question: “If your reason was legitimate you would have told him when you sent him to the
unemployment line, wouldn’t you?”

____________________________________________________________________

Question: “When you terminated Mr. Smith did you give him a reason?”
Answer: “No.”
Question: “Why not?”
Answer: “Because I was told that I don’t have to have a reason to terminate an employee.”
Question: “In fact, isn’t it true that when you terminated Mr. Smith you told him that you didn’t
have to give him a reason?”
Answer: “Yes, I did.”
Question: “So you terminated Mr. Smith for no reason?”
Answer: “No, I have a reason.”
Question: “If your reason was legitimate you certainly would have told Mr. Smith at the
time of his termination.  Correct?”

__________________________________________________________________

Question: “Now, Mr. Smith tells me that on the day that you terminated his employment you
told him that he was not a good fit. Is that correct?”
Answer: “Yes.”
Question: “What did you mean by that?”
Answer: “Well, he was always late.”
Question: “Do you have other employees that you have not terminated who are late?”
Answer: “Yes.”
Question: “Are they bad fits as well?”
Answer: “No.  Their lateness wasn’t as often as Mr. Smith’s.”
Question: “Do you tolerate a certain level of poorly fitting employees?”
Answer: “No, that’s not what I meant.”
Question: “Is Mr. Smith not a good fit in some other manner?”
Answer: “Well, he really didn’t get along with his co-workers.”
Question: “Do you allow your co-workers to determine hirings and firings?”
Answer: “Of course not.”
Question: “Was there any other way in which Mr. Smith failed to fit?”
Answer: “Well, if you must know, he was the least productive member of his team and it required the other team members to do extra work in order to get our projects completed on time.”
Question: “If that was the real reason, you certainly would have told him that at the time he was
terminated.  Correct?”

__________________________________________________________________________

Answer: “I told Mr. Smith when we let him go that it just wasn’t working out.”
Question: “What wasn’t working out?”
Answer: “Mr. Smith’s employment.”
Question: “Was he on time to work every day?”
Answer: “Yes.”
Question: “Did he miss any days from work?”
Answer: “No.  He was always at work.”
Question: “Was he respectful of his co-workers?”
Answer: “I never heard any complaints.”
Question: “Was he respectful of authority?”
Answer: “Yes.”
Question: “Did Mr. Smith violate any rules or company regulations?”
Answer: “Not that I can think of.”
Question: “Isn’t it true that of all of the employees in your company from time to time you
would run across individuals who would sometimes be late?”
Answer: “Oh yes.”
Question: “Sometimes be absent for no excusable reason?”
Answer: “Yes.  Unfortunately we have some of those once and awhile.”
Question: “Do you sometimes have to counsel employees for violating one rule or another?”
Answer: “Oh yes, that’s all part of the daily life of a HR Director.”
Question: “Have many of those employees been employed for a good length of time?”
Answer: “Oh, yes.  A lot of our employees have been around for more than 5 years.”
Question: “And even those employees from time to time had attendance problems, and committed
other work rule infractions and are still employed.  Those employees are ‘working out.’ Correct?”
Answer: “Well, I suppose so if you put it that way.”
Question: “Well then you must have made a mistake when you fired Mr. Smith because as you have so helpfully explained, employees with a record such as Mr. Smith are
‘working out’ as employees of the company. Correct?”
Answer: “No, no, you don’t understand.  Mr. Smith’s quantity and quality of work was less than his co-workers on his team and it required his team members to put in extra time and effort to get projects done in a timely manner.  In fact, when he did submit a report on behalf of the team, it was poorly written, there were several misspellings and grammatical errors, and the report showed his lack of understanding of the significance of the project.”
Question: “Well, if that was the real reason you certainly would have explained that to him at
his exit interview.  Correct?”

_____________________________________________________________________

At trial the employer wants the evidence to focus on facts that support the stated reason for terminating the employee. Trial is not the time to articulate for the first time an employment related reason.

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THE FORBIDDEN PHRASES: How to increase the chance of litigation over an employee’s termination.

Dec 15

Posted by Attorney Roger L. Pettit in Business Management, Employer-Employee Relationship, Human Resources | No Comments

Unless the employee is covered under a Collective Bargaining Agreement or a contract for a definite term, most states, including Wisconsin, consider the employment relationship to be at-will, i.e. an employer may terminate an employee without a defined level of “cause”.  While many factors may contribute to the decision to terminate an employee, being honest and forthright in the termination process is an important consideration.

No employee is ever terminated without a reason.  There is always a reason and unless it is an unlawful reason there is no purpose to be gained by not being forthright with the employee.  When discussing the termination process with employers, I have heard them suggest that the employee be given an explanation that really has nothing to do with the purpose for the termination. I will call them the “forbidden phrases”.  Using these phrases to explain to the employee why he or she is being discharged can foster as opposed to avoid employment litigation.  Here they are:

“We are going to go in a different direction.” This comment is very popular today, but it tells the employee nothing about why he or she is being terminated.  It raises more questions than it answers such as “why can’t you change directions and still keep me?”  “Does this mean you are going to stop cutting hair and begin manufacturing airplanes?”  But more importantly it tells the employee that there is a “real” reason that the employer is choosing not to disclose.

“I am letting you go at will.” This is a favorite phrase of employers who are unaccustomed to removing undesirable employees.  They have likely been told that an at-will employee may be terminated for any reason or no reason at all.  A close relative is the phrase “We are terminating your employment and I don’t have to give you a reason.” Both of these statements regarding at-will employment may be true but the affected employee couldn’t care less.  The employee knows there is a reason behind the termination and the use of these statements instead of the real reason will convince the employee that the employer is hiding something.

The following phrases are often used by employers when an employee has not been able to successfully become part of the culture of the workplace or it has been decided that the employee does not work well in a team setting.  Instead of using the performance issue as a basis for the termination, employers will often prefer to say “you are not a good fit” or the more unhelpful quote “it just isn’t working out.” Since more employees than not are or have been at some point in their work lives, members of a protected class, being terminated with the statement that “you are not a good fit” or “it isn’t working out” is often perceived by the employee as a cover to mask a discriminatory reason for the termination.

In a recent decision, the 7th Circuit Court of Appeals sent a case back to the lower court for trial, to require the employer to explain why its decision to “eliminate her position”, and the reason given to Human Resources that the employee “doesn’t fit into our culture”, didn’t really mean the employer disliked pregnant employees. (Makowski v. SmithAmundson, LLC, No. 10-3330, 7th Circuit, November 9, 2011).

 

Employers should keep these points in mind when deciding to terminate an employee:

 

1.         Employers don’t fire employees without a reason.  Setting aside unlawful terminations, the employer from its perspective always has a legitimate reason to terminate an employee.  Even though it is rare that an employee will agree with the employer’s analysis, that factor should not motivate the employer to mask the real reason with the use of one of the forbidden phrases.

2.         Telling an employee the truth just might avoid a lawsuit.

3.         When an employer articulates the reason for termination it is reassurance that the decision to terminate was the correct one.

4.         Being able to justify the reason for an employment termination is the essence of a successful defense to a lawsuit.  It is important for employers to remember that in the employment at-will setting the only reason that does not justify an employee termination is a reason that is unlawful.

In my next blog I will demonstrate how problematic it is for employers to articulate a defense when an employee is terminated using the forbidden phrases.

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Concealed Carry – What’s Your Policy?

Dec 8

Posted by Attorney David McClurg in Business Management, Employer-Employee Relationship, Uncategorized | No Comments

Wisconsin’s Concealed Carry Law took effect on November 1, 2011, and the Department of Justice was immediately inundated with applications for concealed carry (“CC”) licenses. While employers have the right to ban weapons in their facilities, in company owned vehicles and at their remote work locations, they cannot prohibit CC license holders from storing handguns in their own vehicles in the employer’s parking lot. Employers can, however, impose reasonable restrictions on the method of storage of handguns in vehicles on their property – such as requiring that the handguns be stored out of sight in a locked vehicle. Employers wishing to ban weapons inside their facilities must post appropriate conspicuous signage at all entryways.

Many employers have chosen to “post” their facilities based on concerns that weapons in the workplace may lead to injuries. Others have decided not to post based on a variety of considerations, including a belief that this will dissuade criminals from using firearms on their premises, and reduce their liability exposure given the “immunity” provisions in the CC Law. It is unclear at this point how broad the “immunity” provided under the CC law will be, since it extends only to the decision not to prohibit concealed weapons on the premises, and may not cover liability for claims such as negligent hiring and negligent supervision of employees.

Similarly, it is unclear whether the decision to post will create any new liability exposure for those employers that take that route. In the past, Wisconsin Courts have not imposed liability on employers when third parties have come onto their premises and intentionally injured individuals on the premises with firearms that they brought with them. While some have suggested that Employers who post take on a broader duty to protect their visitors, we have found no cases imposing such a heightened duty.

An additional issue that may impact employers’ decisions on whether to post their premises has received relatively little attention. The CC Law significantly expanded the right to openly carry loaded handguns in Wisconsin. This is sometimes referred to as “constitutional carry” because the Wisconsin State Constitution includes a provision giving residents the right to bear arms for defense, hunting and certain other purposes without a license.

The Concealed Carry Law expanded “open carry” rights in two significant ways. First, residents can now openly carry loaded handguns in their cars, boats, airplanes and ATVs. It is also legal to load a handgun in those vehicles. Previously all firearms in vehicles needed to be cased and unloaded except for certain excluded individuals such as peace officers. Second, local law enforcement officers are now prohibited from issuing citations for disturbing the peace to individuals who are openly carrying a handgun unless the individual is exhibiting malicious intent or threatening behavior.

Since no special license is required to openly carry a handgun, and loaded handguns can now be openly carried in vehicles, it is likely that the prevalence of “open carry” will significantly increase in Wisconsin. This may create problems for employers who do not post “No Firearms” signs, as there will be nothing to prohibit open carry in their facilities, and it may make their employees and visitors nervous to see a handgun on another person’s hip.

Whether an employer decides to post or not, it should carefully review its policies on workplace violence, and determine how it will respond to individuals appearing in the workplace with handguns. For those employers that post and do not wish to assign an employee the task of asking an armed visitor to leave the premises, an alternative may be a policy directing that the police be contacted, since carrying a firearm on properly posted property constitutes criminal trespass. For employers worried about potential liability exposure, the best policy may be a special insurance policy providing liability coverage for violence in the workplace.

 

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NLRB Pushes Ahead on “Quickie Election” Rule

Nov 23

Posted by Attorney David McClurg in Labor Relations, Uncategorized | No Comments

The National Labor Relations Board (“NLRB”) has announced that on November 30th it will conduct a public meeting at which it will vote whether to issue final rules regarding certain provisions of the so called “quickie election” procedures the NLRB proposed on June 22, 2011.  The specific provisions of the final rules are not yet known, but it seems likely that they will provide for significantly faster processing of union-filed petitions for elections, electronic voting procedures, and a requirement that employers provide a petitioning union with detailed contact information regarding employees in the proposed unit early in the process.

Member Brian Hayes, the Ione Republican on the NLRB, submitted a highly critical and unusual response to Congressman John Kline, Chairman of the Committee on Education and the Workforce, which has oversight responsibilities over the NLRB.  Member Hayes asserted, among other things, Chairman Mark Pearce and Member Craig Becker were improperly attempting to rush the rule to final issuance prior to the expiration of Member Becker’s recess appointed later this year, without regard to established NLRB practices and without affording member Hayes “the requisite opportunity to review and draft a dissent to the rule.”  The NLRB’s longstanding procedural traditions and internal operating rules cannot, said Member Hayes, “simply be cast aside in pursuit of a singular agenda without doing irreparable harm to the Board’s legitimacy.”

The outcome of the November 30th public meetingwill be of great interest to all employers.

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IMMUNITY FOR WHAT? WHAT DOES THE EMPLOYER IMMUNITY UNDER WISCONSIN’S NEW CONCEALED CARRY LAW REALLY PROVIDE?

Nov 10

Posted by Attorney Roger L. Pettit in Business Management, Employer-Employee Relationship | No Comments

Wisconsin Act 35 became effective November 1st. one of the act’s provisions provides immunity for employers “from any liability arising from its decision” to allow employees and invitees who are properly licensed to carry a concealed weapon.

The purpose of the grant of immunity no doubt was to encourage acceptance of weapons in the workplace for those who have gotten a license to do so. But what does this immunity really mean? In order to put the discussion into context, employers need to keep in mind that the new law doesn’t protect the gun carrying employee from the effects of carrying the weapon. That is, if an employee causes harm to the person or property of another, or commits a crime with a weapon, he or she is not immune from the consequences of the action just because the employee was carrying the weapon legally.

Using an example in an area with which most of us are more familiar, if an operator of an automobile causes injury by it use, that person is responsible for the injury even if properly licensed. Conversely, if a collision causing injury was not the fault of the operator, then even if the operator had no driver’s license, he or she would not be liable. But if an employee was injured by a fellow employee or invitee, would the employer be immune from suit solely because the user had a license to drive the car?

The question of employer liability will focus on the duty that an employer has to it’s employees and others. In the automobile example, if an employer allows an impaired, but licensed driver operate a company vehicle and the impared driver injures someone while driving, the employer may be responsible. I see no distinction between the driver in my example and a situation where an employee
even though properly licensed, injures a co employee or other person where the employer has a duty to protect against such behavior. I doubt that an employer’s duty in such situations will be determined by whether the weapon user was licensed to carry the weapon used to cause the harm.

What does this mean for employers? It is my opinion that the employer’s focus should be on how the allowance of weapons in the workplace will affect other obligations that the employer has. One very important obligation that an employer has is to provide a safe workplace. For several years, there has been a nationwide emphasis on addressing violence in the workplace, and the Occupational Safety and Health Act (OSHA) considers the control of violence to be a part of the employer’s duty to provide a safe workplace.

It would be little more than speculation as to how the immunity granted by Wisconsin’s Concealed Carry Law will actually work, but the employer’s duty to its employees just may be of more importance than its duty to satisfy a few employees and customers who wish to legally carry a weapon. And it is improbable that the duty to provide a safe place to work will be satisfied just because weapon carrying employees are properly licensed.

There is a happy ending to this dilemma.  Make sure your workplace is properly insured. National carriers have had experience in forty-eight other states, and workplace violence is still an insurable risk. My  contacts in the industry advise me that regardless of the employer’s decision to allow or not allow concealed carry, the carriers like to see an insured have written policies for weapons much as the employer would have a drug and alcohol policy in place. Workplace violence insurance is available, and it may be prudent to look into it as employer’s  wrestle with the decision to allow or not to allow concealed carry.

References, which include model policies, to literature on the subject of workplace violence- including a link to the OSHA web site on the subject- are included below:

Bank – Workplace Violence Prevention & Response Policy; Concealed Carry – Questions & Answers; Example of Workplace Violence Policy;OSHA Sample Workplace Violence Program & Forms, Sample Workplace Violence Policy; Workplace Violence – Issues in Response – FBI and Workplace Violence Policy & Procedures – UCSC.

I am from Kansas, a state that has allowed licensed concealed carry for over ten years. According to the Kansas Attorney General only 35,000 permits have been issued in a state with a population of close to 4 million, with only 7,106 of the permits going to residents of the county that houses the state’s largest city Wichita. If the Kansas experience holds true for Wisconsin, interest in this subject will wane over time. What will not go away is the expectation by employees and government that the workplace be reasonably safe from workplace violence. Is the immunity granted by the new concealed carry law may not be enough.

 

 

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Wisconsin Employers Should Consider the Likely Increase in “Open Carry” when Developing Their Weapons/Firearms Policies

Nov 5

Posted by Attorney David McClurg in Business Management, Human Resources | No Comments

Much has been written of late regarding the legalization of concealed carry of weapons by holders of valid permits in Wisconsin. However, little attention had been paid to the significant expansion of the right to openly carry loaded handguns in Wisconsin under Wisconsin’s Concealed Carry Law. “Open carry” is sometimes referred to as “constitutional carry” because the Wisconsin State Constitution provides that “The people have the right to keep and bear arms for security, defense, hunting, recreation or any other lawful purpose.”

The Concealed Carry Law expanded “open carry” rights in Wisconsin in two significant ways. First, residents can now openly carry loaded handguns in their cars, boats, airplanes and ATVs. It is also legal to load a handgun in those vehicles. Previously firearms in vehicles needed to be cased and unloaded except for certain excluded individuals such as peace officers.

Second, local law enforcement officers are now prohibited from issuing citations for disturbing the peace to individuals who are openly carrying a handgun unless that individual is exhibiting malicious intent or threatening behavior.

Since no special license is required to openly carry a handgun, and loaded handguns can now be openly carried in vehicles, it is likely that the prevalence of open carry will increase in Wisconsin in the coming years. This may create problems for employers with heavy foot traffic who do not post “No Firearms” signs, as there will be nothing to prohibit open carry in their facilities, and it may make their employees and visitors nervous to see a gun on another customer’s hip.

There remain a number of areas where individuals are prohibited from carrying a handgun, whether open or concealed, (courtrooms, police stations, sheriff’s offices, schools, prisons and areas beyond the security checkpoints in airports). Additionally, while a permit holder can carry a concealed weapon in a tavern if they are not drinking alcohol, open carry is prohibited in any tavern. This being said, it is still likely that Wisconsin will see a significant increase in open carry of handgun,
and employers should take this into account as they consider their firearms/weapons policies.

The Concealed Carry Law prohibits employers from banning handguns in their parking lots if those handguns belong to persons holding a valid concealed carry license. However, employers can ban all firearms other than those handguns legally in the possession of the holder of a valid license – which would cover all firearms other than handguns, and all handguns in the possession of individuals without a concealed carry license. Business operators should consider the effect on
their employees and patrons of open carry on their premises if they do not post
appropriate “No Firearms/Weapons” signs.

 

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NRA weighs in on Wisconsin’s Concealed Carry Rules

Oct 21

Posted by Attorney Lindsey R. King in Business Management, Employer-Employee Relationship | No Comments

The National Rifle Association has voiced its displeasure over the emergency rules published by the Wisconsin Department of Justice.  In particular the NRA takes issue with the rule that requires before an individual may be licensed to carry a concealed weapon, he or she must first complete a minimum of four hours of training and such training must include hands-on training.  This rule arises from the Concealed Carry law’s requirement that before an individual may be eligible for a license to carry a concealed weapon, he or she must present proof of training.

The NRA voiced its displeasure immediately upon publication of this rule and has stated today that they are considering all their options in addressing this rule.  The NRA is critical of this rule, because it believes Wisconsin law allows instructors to design their own training, dependent upon the course.  Furthermore, it criticizes what it classifies as a “one-size-fits-all” approach, because it believes the minimum number of hours of training will be too little for some and too much, or redundant for others.  The NRA representative, in his letter to State Attorney General, J.B. Van Hollen, expressed concern the training requirement may “dissuade some otherwise eligible applicants from exercising their rights under the law because of the financial and logistical burdens involved.”  Van Hollen responded, defending his rule as both necessary and lawful.

State legislators who defend the rule believe a minimum number of hours was necessary to ensure people are getting full training, and not for example, just being told to read a book before taking a test.  The NRA contends Wisconsin lawmakers initially rejected a requirement of a minimum number of hours in a proposed amendment to the law.

Governor Walker signed the emergency rules into effect on Friday October 14, 2011, and they will last a minimum of 150 days, and can be extended beyond that.  Governor Walker indicated he felt the emergency rules were necessary due to the impending enactment of the Concealed carry law on November 1, 2011, but also hinted that he may tend to side more with the NRA, indicating he hoped once permanent rules were published, the minimum number of hours requirement would be eliminated.

What if anything does this mean for business owners?  It certainly will not change the implementation of Wisconsin’s Concealed Carry law on November 1, 2011.  Business owners who have not yet firmed up their policies, provided proper notices and made appropriate postings are again urged to do immediately.  However a continued fight over these rules may impact how many otherwise interested persons ultimately become licensed.

If you have any questions about Wisconsin’s Concealed carry law, its requirements or how it may effect your business, please contact Lindsey R. King or any one of our Labor & Employment Team.

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IRS Announces Amnesty Program For Independent Contractor Misclassification

Oct 17

Posted by Attorney David McClurg in Business Management | No Comments

The IRS recently announced a new program which will allow businesses to voluntarily reclassify independent contractors as “employees” for federal employment tax purposes.  Employers participating in this Voluntary Classification Settlement Program (“VCSP”):

1.         Will have to pay only 10% of the employment tax liability that may have been due on compensation paid to the workers for the most recent tax year (about 1% of the wages paid to the classified workers for the past year);

2.         Will not be liable for any interest or penalties on that employment tax liability; and

3.         Will not be subject to an employment tax audit with respect to worker classification of the workers in question for prior years.

The program applies to tax payers who are currently treating their workers as independent contractors and who have filed all required 1099 Forms for those workers for the prior three (3) years. This program is not available to companies that are currently under audit by the IRS or a state governmental agency, though the IRS does offer a somewhat similar classification settlement program for tax payers that are being audited. Companies wishing to participate in the program must submit an application to the IRS at least sixty (60) days before they wish to begin treating the workers as employees.

Participation in the program is voluntary, but not without risk.  If a company is participating in the program it must agree to increase the limitation period on assessment of employment taxes from three (3) to six (6) years in connection with the first three (3) calendar years after the date on which a company has agreed to begin treating workers as employees.

More significantly, the IRS and the Department of Labor (“DOL”) have entered into a memorandum of understanding under which they have agreed to share information regarding worker misclassification.  Further, workers that are reclassified under the program will be alerted to potential past misclassification.  This will expose employer’s participating in the program to potential claims under the Fair Labor Standards Act by both the previously misclassified employees and the DOL, including claims for under payment of overtime compensation.

Thus, even though the VCSP may significantly reduce exposure that some employers might have to tax assessments and penalties should they be audited by the IRS, it would appear to increase the employer’s exposure to claims under the Fair Labor Standards Act.

If you have any questions about the VCSP please contact David A McClurg at 414-223-6956.

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