U.S. Supreme Court Clarifies That Severance Pay is Taxable— in Most Cases
The U.S. Supreme Court, in an 8-0 decision, recently ruled that severance payments made to employees who are involuntarily terminated are taxable wages under the Federal Insurance Contributions Act (FICA). Quality Stores, Inc., et al., 12-1408. The Court reversed the Sixth Circuit Court of Appeals ruling in favor of Quality Stores, which was seeking...
Notice to the IRS of Change in Address or Responsible Party Now Required Within 60 Days
Effective January 1, 2014, any entity with an Employer Identification Number (EIN), including a nonprofit organization, must use Form 8822-B to notify the IRS of a change of (i) a mailing address, (ii) a business location or (iii) the identity of a "responsible party". An organization’s original "responsible party" was the individual or entity...
New Lease Rules
California Amends Sexual Harassment Law
Governor Brown recently signed Senate Bill 292, amending the Fair Employment and Housing Act to allow an employee claiming sexual harassment to prevail without having to show that the allegedly harassing conduct was motivated by the harasser’s "sexual desire." S.B. 292 was authored by Senate majority leader Ellen M. Corbett and principally sponsored by...
California’s Minimum Wage Expected to Increase to $10
Assembly Bill (AB) 10, signed into law by Governor Brown, raises the current state minimum wage of $8 per hour to $10. Employers will be required to raise wages to $9 per hour by July 1, 2014, and $10 per hour by January 1, 2016. This would be the first minimum wage increase in...
FMLA/CFRA Certifications: How to Properly Designate Absences and Stop Leave Abuse
Medical certifications may just be the most effective tool in your arsenal for combating abuse of leave rights under the Family and Medical Leave Act and its California counterpart, the California Family Rights Act. They provide valuable insight into whether a claimed condition qualifies as a serious health condition.
Surprisingly, many employers don't take...
Second Circuit Finds CEO Personally Liable for a $3.5 Million Wage and Hour Settlement
The U.S. Court of Appeals for the Second Circuit recently sent a chilling reminder to business owners, executives, and other high-ranking employees that they may be held personally liable for their company’s violations of the Fair Labor Standards Act (FLSA). In Irizarry v. Catsimatidis, 2013 U.S. App. LEXIS 13796 (2d Cir. 2013), the court...
Effective January 1, 2014, Commercial Common Interest Developments Will Now Have Their Own Governing Statutes
Commercial and Industrial Common Interest Developments ("Commercial CIDs") in California have historically been governed by the same provisions that apply to planned residential developments and condominiums: the Davis-Stirling Common Interest Development Act ("Davis-Stirling"). However, some of those provisions have resulted in unnecessary burdens and requirements for Commercial CIDs that were really tailored to provide...
Important Tax Implications in the Supreme Court DOMA Case
On June 26, the U.S. Supreme Court held that Section 3 of the federal Defense of Marriage Act (DOMA) is unconstitutional (E.S. Windsor, SCt., June 26, 2013), which brings up an important question: what are the major tax planning implications of this ruling? Immediately after the decision, President Obama directed all federal agencies, including...