HOUSE BILL WOULD ALTER INDEPENDENT CONTRACTOR CLASSIFICATION RULES:Rep. Jim McDermott (D-Wash.) July 30 introduced the Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (H.R. 3408) in the House of Representatives, which would significantly modify the rules for when employers are allowed to classify workers as independent contractors.
H.R. 3408 would amend the Internal Revenue Code of 1986 to include a provision that would only allow employers to avoid employment tax liability if they are able to show a “reasonable basis” for applying the independent contractor status. In addition, the measure would repeal the “safe harbor” provision in Section 530 of the Revenue Act of 1978.
The legislation would also significantly increase the penalties for employers that misclassify employees as independent contractors, including raising the minimum penalty for each incorrect tax return filed from $50 to $250 not to exceed $3 million a year and raising the fine for each employer that intentionally disregard the filing requirement from $100 to $500 per tax return.
Under the bill, “reasonable basis” is met if there is a written determination classifying the worker, or a worker in a similar position, as an independent contractor; a completed employment tax examination classifying the worker as an independent contractor; or if the employer has not classified any worker performing a similar function (as defined by the Fair Labor Standards Act) as an employee for employment tax purposes any time after Dec. 31, 1977.
ABC opposes H.R. 3408 and any other proposals that would limit the flexibility of employers to use independent contractors. ABC will continue to advocate for a clear, concise, and reasonable definition of independent contractors and preservation and clarification of section 530 of the Revenue Act of 1978, which provides good faith businesses with a safe harbor.
PROPOSED RULE WOULD RESCIND NO-MATCH REQUIREMENT: The Department of Homeland Security (DHS) Aug. 19 published a proposed rule that would rescind the “no-match” regulation which requires a notice be sent to employers from DHS or the Social Security Administration (SSA) when an employee’s name does not match the Social Security number provided.
DHS first issued its final rule on the no-match procedures in August 2007, but a coalition of business groups, labor organizations and immigrant rights groups challenged the rule in the U.S. District Court for the Northern District of California. As a result, an injunction was issued and SSA suspended the distribution of employer no-match letters until the lawsuit was resolved.
DHS July 8 announced its intention to rescind the rule, which was still blocked by the court and had not gone into effect. Instead, DHS will focus on enforcement efforts using E-Verify and other programs. The comment period for the proposed rule is open until Sept. 18. To read the proposed rule, click here.
NEW GUIDE ADDRESSES QUESTIONS ABOUT HOW DIVERSITY HELPS BUSINESSES: ABC Aug. 17 announced the release of the ABC Employer Guide for Diversity and Inclusion, which will provide guidance, direction, information and reference materials for members companies that are initiating or looking to improve an existing diversity program.
The Diversity Guide is free to all ABC members and will help employers to overcome the challenges and take advantage of the opportunities associated with having a diverse workforce. In addition, the guide will provide information on how creating diverse teams will lead to success in market development, business management, company performance, risk management and business image and how to use a diverse workforce as a competitive advantage.
“Focusing on building a diverse workforce, including subcontractors and suppliers, is the right thing to do to help our businesses grow and, increasingly, something that construction owners expect from those they hire,” said Tim Steigerwald, vice president of Messer Construction, Co., Indianapolis, and a member of ABC’s Diversity Committee. “ABC’s Diversity Committee is proud to offer the Diversity Guide as another tool to help chapters and members build their diversity programs and get ahead in the industry.”
For more information or to request a guide, contact Jen Huber at ABC, huber@abc.org, or visit www.abc.org/DiversityGuide.
TITLE VII UPDATE: On August 14, the EEOC issued its revised Compliance Manual section concerning time limits on the filing of compensation discrimination claims. The Lilly Ledbetter Fair Pay Act was signed by President Obama in January and overturned a U.S. Supreme Court decision. That decision concluded that the time limit to file a Title VII compensation discrimination claim begins to run when the employer’s decision is made and that subsequent paychecks do not trigger new EEOC filing periods. The new law provides, and the EEOC Compliance Manual now reflects, that a Title VII plaintiff alleging compensation discrimination based on sex, race, disability or age files a timely EEOC charge if it is filed within 300 days in Nebraska of the receipt of a paycheck or other benefits allegedly impacted by past discrimination. The revised section of the EEOC Compliance Manual may be accessed at http://www.eeoc.gov/policy/docs/threshold.html#2-IV-C-4. This action on the part of the EEOC is a reminder to all Nebraska construction industry employers to make decisions concerning employee compensation on a neutral and job related basis, rather than the fact that an employee is in a protected class. The longer timelines to file discrimination charges mean that there is a much greater likelihood that discriminatory pay practices will be challenged before the EEOC and in federal court. By Bill Harding, Chapter Attorney
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ABC AFTER-WORK WEDNESDAYS!
Come on by for an “ABC Business-to-Business After-Hours Event.” This will be a casual gathering of ABC members and prospects/guests purely to socialize in a relaxed environment. The event is slated to begin at 4:30 p.m., and will probably wrap up around 7:00 p.m. There will be prize drawings around 5:45 so don’t miss out on the fun. Everyone is welcome to come and go as they please. Networking is the fun way of doing business.
WHEN: August 26th(Wednesday)
WHERE: Lazlo’s
210 North 7th Street (Haymarket)
Lincoln, NE
TIME: 4:30 – 7:00 p.m. (come and go as you please)
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