Confirming what most employers have long assumed to be true, this week the U.S. Supreme Court held that severance payments made to terminated employees are “wages” subject to the Federal Insurance Contributions Act (FICA) tax withholding requirements. Specifically, United States v. Quality Stores, Inc. was a bankruptcy case which involved an attempt by Quality Stores to claw back taxes paid in connection with severance to workers. The issue on appeal was whether supplemental unemployment compensation benefits, which was how both the taxing authorities and Quality Stores ...

In a brief memorandum recently issued to the Secretary of Labor, President Obama directed the Department of Labor (DOL) to update federal overtime rules. As noted in the memorandum, the Fair Labor Standards Act (FLSA) provides basic rights and wage protections for American workers, including Federal minimum wage and overtime. Most workers covered under the FLSA must receive overtime pay of at least 1.5 times their regular pay rate for hours worked in excess of 40 hours per week (Alaska, California and Colorado have established additional requirements, including daily ...

QUESTION: Before the Commercial Code was amended a few years ago, it provided that a receiver becomes a lien creditor over personal property in the receivership estate and can avoid unperfected security interests in such property. I can’t find that provision in the amended code. Does it still exist, and if so where is it?

ANSWER: The concept of a receiver becoming a lien creditor upon his appointment, with the ability to avoid unperfected security interests in property of the estate, still exists in the amended Commercial Code; it’s just harder to find than it used to ...

On January 1, 2014, the IRS standard mileage deduction rate decreased from 56.5¢ to 56¢ per mile for business miles driven. The rate for medical or moving purpose mileage also decreased from 24¢ to 23.5¢. The rate for miles driven in service of a charitable organization remained set at 14¢ per mile. The business rate is based on an annual study of the fixed and variable costs of operating an automobile. The medical and moving rate is based on the variable costs. The charitable rate is based on statute.These rates impact all California employers because California requires that all ...

QUESTION: Should receivers appear only through counsel to avoid civil liability?

ANSWER: In Re Shattuck, 411 B.R. 378 (10th Cir. BAP 2009), which held that a receiver, who is not a lawyer, cannot appear in federal court without a lawyer. The decision was based not only on 28 U.S.C. §1654 but also on the fact that a receiver acting in a representative capacity and, not being a lawyer, cannot represent third parties or entities. In thinking further about this issue it dawned on me, like the boy who suddenly realized “the emperor has no clothes”, what authority does a California ...

When they are not properly paid. A number of law firms and corporate employers consider paralegals to be exempt from overtime. At the federal level, the Department of Labor (DOL) has stated that most paralegals lack sufficient specialized education to qualify for the learned professional exemption and are therefore not exempt from overtime. In this regard, the State of California generally applies more strict standards and will likely follow the DOL.Nor is it likely that paralegals could qualify as exempt from overtime under the other most common exemptions. Specifically ...