Effective April 9, 2011, all private sector employers must provide employees with a written notice that contains the following information:

1. The rate of pay, including the overtime rate of pay for non-exempt employees;
2. How wages are paid, whether hour, shift, day, week, salary, piece, commission, etc;
3. Any additional allowances such as part of the minimum wage, including tip, meal, or lodging allowances;
4. The day the employee will be paid;
5. The name of the employer, including any “doing business as” names;
6. The physical address of the employer’s main office or principal place of business, and a mailing address if different; and
7. The telephone number of the employer.

Employers must provide employees with this written notice at the time of their hire AND between January 1 and February 1 of each subsequent year of the employee’s employment. The first yearly notice to existing employees must be given between January 1, 2012 and February 1, 2012.

The notice must be provided in the employee’s primary language, as identified by the employee, through translated notices provided by the Department of Labor. The employee must sign and date the notice, and this notice must be kept in the employee’s personnel file. The Employer must keep this acknowledged notice for a period of six (6) years from the date it is signed. The written acknowledgement shall include an affirmation by the employee that the employee accurately identified his or her primary language to the employer, and that the notice provided by the Employer to such employee pursuant to this subdivision was in the language so identified.

The Department of Labor has templates on their website of appropriate forms for the written notice, as well as notices in different languages. These templates can be found at http://www.labor.ny.gov/formsdocs/wp/ellsformsandpublications.shtm

Employers can be assessed damages by the Department of Labor of $50.00 per week per worker if the written notice is not given. Also, an Employee can sue the Employer for not receiving the required notice, but damages are capped at $2,500.00 per worker.

If you have an issue or a question on business law or need business attorneys in Albany, please call on us to help you make the right decision.

The General Accounting Office (GAO) has estimated that 38 percent of employers examined misclassified “independent contractors.” In fact, big companies such as WalMart and FedEx have lost lawsuits or paid penalties relating to misclassification of employees. Some employers look for a simple test to justify such a decision and that simply is not the way this determination is made. Each case should be considered independently; but there are specific factors which one can consider in making the decision which usually make the correct classification very clear. According to the IRS, in order to determine whether a worker is an independent contractor or an employee under common law, you must examine the relationship between the worker and the business. All evidence of control and independence in this relationship should be considered. The facts that provide this evidence fall into three categories – Behavioral Control, Financial Control, and the Type of Relationship.

Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done, through instructions, training, or other means. A worker is an employee when the business has the right to direct and control the worker. The business does not have to actually direct or control the way the work is done – as long as the employer has the right to direct and control the work. In
liability claims this factor is considered to be the “most crucial factor” in the analysis according to a recent appellate court decision (Barat v. Chen, Sept. 13, 2011.)

Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job. This includes:
• The extent to which the worker has unreimbursed business expenses
• The extent of the worker’s investment in the facilities used in performing services
• The extent to which the worker makes his or her services available to the relevant market
• How the business pays the worker, and
• The extent to which the worker can realize a profit or incur a loss

Type of Relationship covers facts that show how the parties perceive their relationship. This includes:
• Written contracts describing the relationship the parties intend to create
• The extent to which the worker is available to perform services for other, similar businesses
• Whether the business provides the worker with employeetype benefits, such as insurance, a pension plan,
vacation pay, or sick pay
• The permanency of the relationship, and
• The extent to which services performed by the worker are a key aspect of the regular business of the company

In making your decision ask yourself the following questions:
Q. When and where will the work get done and who controls this decision?
Q. What tools or equipment will be used and who owns them?
Q. What workers will be hired to assist with the work and who will hire and pay them?
Q. Who will purchase supplies and services?
Q. What order or sequence will be followed when performing the work and who decides this?
Q. What kind of training is provided and who provides it?
Q. Does the worker have a significant investment in the equipment he or she uses in the work?
Q. Is the worker responsible for unreimbursed expenses?
Q. Is there an opportunity for the worker to make a profit or suffer a loss?
Q. Are the worker’s services available to the market?
Q. How is he or she paid?
Q. Is there a written contract covering the work?
Q. Does the worker get any benefits?
Q. How permanent is the relationship?
Q. Are the services provided a key activity of the business?

While there is no specific rule that requires “correct” answers to all of these questions, when considered in their totality, the answers to these questions will usually make it pretty obvious whether a worker is an employee or can be treated as an independent contractor. Making the wrong decision can be very costly in that it may subject the employer to substantial penalties for nonpayment and for late payment and may in some cases require that taxes which could have been withheld from the employee be paid by the employer. It can also make an employer liable to pay the medical expenses for a worker’s injury which would have been covered by workers’ compensation or disability.

If you have an issue or a question, please call on us to help you make the right decision.

It is important to note that a judgment obtained from a lower court, such as a town or city court, is not effective as a lien against property owned by the debtor and must be transcribed into the County Clerk’s Office to become effective as a lien. Furthermore, if the debtor moves from one county to another, and buys property in the new county of residence, the creditor must transcribe the judgment into that new county in order for it to be a lien on that property.

The primary use of a judgment lien is to secure the creditor’s money judgment. The lien is a cloud on the debtor’s title to the real property. And, according to the language of CPLR 5203, “no transfer of an interest of the judgment debtor in real property, against which property a money judgment may be enforced, is effective against the judgment creditor.”

For these reasons, we often encourage creditors to spend the relatively nominal amounts upfront to pursue a judgment against a debtor, knowing that, even if collection is not an option in the immediate future, if the debtor has property, or acquires property down the road, the creditor will have a good chance of eventually getting his or her money back.

People also frequently post photographs on their Facebook or MySpace pages and comment on other peoples’ postings and photographs. In New York, even what appear to be mundane postings may be discoverable in civil litigation.  New York has fairly liberal civil discovery laws, allowing a party to discover a wide range of information from other parties in a case. In September of this year, a New York State Supreme Court Judge held that a defendant could access a plaintiff’s private postings on her Facebook and MySpace pages. That case, Romano v. Steelcase, Inc., is a personal injury case wherein the plaintiff claimed that she had suffered injuries such that she was largely confined to her house and bed.

However, photographs on her public Facebook profile appeared to contradict these claims, and the Judge allowed defendants to discover her private Facebook postings and photographs. Her choice of privacy settings on her Facebook page was deemed to be irrelevant. The Court held that it was “reasonable to infer from the limited postings on Plaintiff’s public Facebook and MySpace profile pages that her private pages may contain materials and information that are relevant to her claims or that may lead to the disclosure of admissible evidence.” The Judge ordered the plaintiff to authorize the defendant to access Facebook and MySpace records,including deleted or archived records.

Similarly, the New York State Bar Association Committee on Professional Ethics also recently released an opinion concerning whether, under New York’s Rules of Professional Conduct, it is ethical for an attorney to view a party’s social network pages. The committee determined that so long as the attorney did not engage in any deception, the attorney could access and view the public social network pages of a party to search for impeachment material.

Although Romano was a personal injury case, it has implications for discovery in other types of civil litigation. In fact, an Indiana Federal Court, in a case from May 2010 involving sexual harassment resulting in severe emotional distress, found that content from social networking sites like Facebook must be produced when relevant to the claim or defense. (EEOC v. Simply Storage Management, LLC).

Despite a number of cases ruling that Facebook postings and comments may  be discoverable, on May 26, 2010, a California Federal Court ruled that the Stored Communications Act portions of the Electronic Communications Privacy Act (enacted in 1986 prior to the advent of most social networking sites and generally not appropriately worded to apply to such sites) would provide some protection to content on social networking sites and, if an individual chooses the appropriate privacy settings, some material may remain undiscoverable. The California case, Crispin v. Christian Audigier, Inc., quashed subpoenas for material on MySpace and Facebook sites related to the plaintiff’s postings on those sites. As of the date of publication of this article, the need for amendment of the Electronic Communications Privacy Act was being addressed by the Senate Judiciary Committee in order to bring it in line with modern technologies.

Despite the California case which found that some protection exists for postings on social networking sites, parties to litigation would be wise to limit their postings and to be aware that anything they post may be discoverable in litigation. Furthermore, because such postings may have an impact on employment law cases, such as the sexual harassment case in Indiana, New York employers may want to establish policies preventing or limiting employees from posting content related to the employer, to the office environment and, particularly, related to any other employees.

Although it is unclear how any individual court may rule in this new arena, it is important to be aware that your postings may not be private, regardless of your privacy settings.

Under New York Labor Law §193, Employers are only allowed to make certain authorized deductions from an employee’s paycheck as authorized by the law such as FICA, Social Security, etc.  There are also specifically enumerated deductions that Employees are authorized to deduct if the deduction is for the employee’s benefit and authorized in writing as follows:  “insurance  premiums,  pension  or health and welfare benefits, contributions to  charitable  organizations,  payments  for  United  States  bonds,  payments for dues or assessments to a labor  organization, and similar payments for the benefit of the employee.”

Until recently, the New York State Department of Labor (NYSDOL) did not seem to object to Employers deducting advancements from an employee’s final paycheck because it was a “similar payment(s) [to those authorized by the law] for the employee’s benefit,” as long as the employee signed an agreement authorizing the deduction. Then if an employee was terminated from his employment, Employers would deduct these advances from the employee’s final paycheck.

The NYSDOL has now changed its position, and Employers can no longer deduct advanced salaries or loans from an employee’s paycheck under any circumstances.  In addition, if an Employer overpays an employee’s salary, he cannot deduct that overpayment from the employee’s next paycheck.  The NYSDOL has relied primarily on a Court of Appeals case and articulated its new view point in two opinion letters.  The New York State Court of Appeals in Angello v. Labor Ready (2006), discussed the issue of an employer deducting monies for a salary processing fee from an employee’s wages.  Specifically, the Court of Appeals in Labor Ready explained that payments that go “directly to the employer or its subsidiary violates both the letter of the statute and the protective policy underlying it,” and wages should not be deducted.

In two opinion letters from the NYSDOL in August 2009 and January 2010, the NYSDOL changed its interpretation of NYS Labor Law §193, and instead relies on the holding in Labor Ready.  In the August 3, 2009 Opinion Letter (RO-09-006), an employer requested an opinion whether it was permissible for an employer to make a deduction from an employee’s final paycheck to recover unearned salary and/or benefit which have been advanced to the employee.  Relying on Labor Ready¸ the NYSDOL determined that these types of deductions are no longer permissible since the over-payments are neither authorized by law nor are they “similar payments,” especially since the money is going back to the employer.

The January 10, 2010 letter reiterated its opinions from the August 2009 letter, but explained how an Employer can get repaid if they advance monies to employees.  The NYSDOL’s answer is that the Employer could always sue the employee, while that employee continues to work at the business, or the Employer could request the employee repay the monies in a separate check.  If the Employer desires to have the employee write a separate check to repay the monies,   the Employer must clearly communicate to the employee that they cannot be disciplined or retaliated against if they refuse to pay back the money.  The reasoning behind this is that under Labor Law §193(2) Employers are prohibited from requiring an employee to make any payment by separate transaction.  The purpose of this law is to assure that “unequal bargaining power between an employer and an employee does not result in coercive economic arrangements by which the Employer can divert a worker’s wages for the Employer’s benefit.” Labor Ready at 586.

With these recent opinion letters, Employers should no longer advance monies to employees or allow them to take unaccrued paid vacation time, unless the Employer is willing to take the risk of not being paid back for these advancements.

One matter which is surprising to most employers is that they cannot discriminate in hiring based on the applicant’s prior arrest record or even conviction (Human Rights Law §296 and New York Corrections Law Article 23-A).

However, if there is a careful analysis of the specific duties and responsibilities necessary to the employment sought and if it can be demonstrated that the criminal offense for which the person was arrested and convicted is directly related to such duties and responsibilities, then the employer may decline to hire the person. There are other factors to be weighed as well, including the age of the person at the time of the offense, subsequent history of good conduct and rehabilitation, etc.

More employers are now obtaining background checks on their employees or potential employees and that is often how criminal arrests or convictions come to an employer’s knowledge. If an employer orders an investigative consumer report as part of a background check, which can only be obtained with the consent of the applicant, then, as of February 1, 2009, the potential employer must provide a copy of Article 23-A of the Corrections Law to the proposed applicant so they will know their rights not to be discriminated against on the basis of prior arrests and convictions. That new law also requires the posting of a copy of Article 23-A of the Corrections Law in a conspicuous place at the worksite in the event investigative consumer reports are obtained in connection with either retaining or hiring employees.

The law, however, now recognizes that in this litigation prone society, employers must have some protection if they hire previously convicted persons and later such convicted persons engage in wrongful actions. When third parties are adversely affected by such wrongful actions and sue the employer claiming that there had been a negligent hiring or retention of that employee, previously there were no statutory protections for the employer even though it was merely trying to comply with the non-discrimination provisions of the law.

Section 296 of the Human Rights Law has just been amended (and is presently effective), to provide that if an employer hires a person who has been convicted and there has been an evaluation of different factors discussed above under Corrections Law Article 23-A and the employer makes a reasonable good faith determination that such factors militate in favor of hiring or retention of the employee, they are protected from such suits based on negligent hiring or retention. This protection is in the form of a rebutable presumption against permitting the introduction of the criminal conviction of a hired employee into evidence at such a trial. While such newly enacted protection is not an immunity,it will make bringing such a lawsuit against an employer much more difficult and therefore affords some breathing room for an employer who wishes to hire someone previously convicted of a crime. Being cautious may help in avoiding unnecessary litigation. business litigation.

The other part of the new law which may make it more challenging to either be a health provider or do business with such a provider is that HITECH also made some substantial changes to HIPAA (Health Insurance Portability and Accountability Act of 1996). Some highlights of these changes include: (1) a requirement that covered entities notify individuals of breaches involving their PHI (protected Health Information); (2) that new Business associate agreements are required that provide that Business associates will be directly responsible to HHS for the use and disclosure of PHI and that they will be directly subject to civil and criminal penalties; (3) that Covered entities must account to HHS for disclosures of PHI; (4) that Covered entities are prohibited from selling PHI without an authorization from the patient; (5) a limitation on the potential for using PHI for marketing purposes; (6) a major increase in the civil penalties for HIPAA violations and (7) a provision that permits the enforcement of HIPAA by State Attorney Generals.

Before ARRA, HIPAA required that covered entities such as hospitals, physicians and health plans had to enter into contracts (known as “business associate agreements”) with entities performing functions or providing services on their behalf if those functions or services involved the exchange of health information. The contracts had to require that business associates use appropriate security safeguards to protect the health information they received from the covered entity. These agreements also set forth the permitted uses and disclosures of such health information. However, prior to ARRA, business associates themselves were not directly subject to governmental enforcement action: the only remedy available against a business associate was for a covered entity to sue for breach of contract. Under the new law, business associates are now required to directly comply with most provisions of the HIPAA Security Rule. They also must comply with any changes to the Privacy Rule that were part of ARRA regardless of whether or not their contracts with covered entities contain those provisions Business associates can now be held directly accountable by federal or state authorities for any failure to comply with HIPAA as amended by ARRA or applicable regulations.

Additionally the new law requires that covered entities which become aware of breaches of “unsecured” health information comply with certain notification provisions. ARRA includes specific provisions regarding the content, methods and timing of notification. Notice must be afforded no later than 60 days after the discovery of the breach. A breach is considered to be “discovered” when at least one employee of the entity (other than the person responsible for the breach) knows (or reasonably should know) of the breach. Notice is required to be provided to media outlets if the information of more than 500 individuals is involved. Notice of all breaches also must be provided to the Secretary (immediately if the breach involves the information of more than 500 individuals and in an annual log for breaches that do not trigger this threshold.) The Secretary is required to include a list on the HHS website of covered entities involved in breaches of more than 500 individuals’ information, and must annually report to Congress on the number and nature of any breaches that occurred during that year.

If you have any questions about how this new law may affect you or your business, be sure to visit our Business Litigation page, or contact us directly to deal with an experienced business attorney.

When the Federal Estate Tax law was in effect, the assets of an estate would receive a step-up in the tax basis on property owned by a decedent based upon the date of death value, whether or not any estate taxes were owed. Under the current law, this step-up is limited to the first $1.3 million of assets for bequests made to people other than a spouse and the first $3 million for assets passing to a surviving spouse. This creates a greater burden for the executor unless a Will is clear as to how assets are to be distributed, as the executor now needs to not only determine the allocation of assets but also which of those assets will be allocated the step-up in tax basis. Additionally, the executor must determine the tax basis of all the assets of the estate. This may prove to be very difficult, especially for those estates in which a decedent held stock or other assets for many years. The IRS has clarified that an heir’s basis will be zero unless the heir can provide proof as to how the tax basis was determined.

Unless Congress acts prior to the end of the year, on January 1, 2011 the estate tax law will revert back to the way it existed in 2001 and a Federal Estate Tax will return into being with a higher 55% tax rate and an effect on Estates as small as $1 million. Many Estate planners continue to believe that Congress will enact changes to avoid the Estate Tax being revived in 2011 with higher rates and lower limits. We will of course keep you advised as events develop.

The Internal Revenue Service has also announced that the Annual Gift Tax exclusion will be maintained at its current $13,000.00 per year per person level for the year 2010. This means that in 2010, each person can continue to give the sum of $13,000.00 to as many people as they want without incurring any gift tax. A married couple can give up to $26,000.00 per recipient. The current rules regarding tuition and medical expenses continue. This means that in addition to the $13,000.00, payments of tuition paid directly to an educational institution and payments of medical expenses paid directly to the provider of services are not considered taxable gifts.

Questions? Visit our Probate, Estate Planning or  Estate Administration Pages, or email us at gwmain@gwlaw.com.

The Homeownership Law of 2009 gives an $8,000.00 tax credit to “first time homebuyers” who buy or enter into a binding contract to buy a house to be used as their principal residence. The contract must be signed on or before April 30,2010 and the sale must close by June 30, 2010. Certain income limitations which are outlined below will apply. A first time homebuyer is defined as a person who has not owned a primary residence during the three years up to the date of purchase. Therefore, this purchase does not necessarily need to be your first home in order to qualify for the credit.

The new law also expands the credit to certain persons who are considered “long time residents”. They will receive a credit of up to $6,500 if they buy a new home. The buyer must have owned and used the same home as their primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence. The new law also raises the income limits for people that purchase a new home after November 6, 2009. The full credit of $8,000.00 will be available to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit. Anyone with income higher than that amount does not qualify for the credit. If you purchase your home in 2009 or 2010, the credit does not need to be paid back unless you do not keep the home as your principal residence for a 3 year period following the purchase.

For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return. A first time homebuyer will need to submit Form 5405 to the IRS along with a copy of the HUD-1 settlement statement. This statement is a federal government form that you should receive at the closing which reflects the purchase price and all the closing costs. With tax season upon us and the end of the first time homebuyer tax credit in sight, homebuyers should be aware of the relevant tax credits.

The American Recovery and Reinvestment Act of 2009 has it’s own website at www.recovery.gov.

Federal Title VII of the Civil Rights Act only applies to employers with 15 or more employees, and the New York State Human Rights Law discrimination section applies to employers with four or more employees.

Sexual Harassment is defined as the unwelcome overtures of a sexual nature which alter the terms and conditions of employment offered to women (or in some cases to men) in a way in which the terms and conditions of other employees are not effected. There are two types of sexual harassment: Quid Pro Quo sexual harassment and hostile work environment.

Quid Pro Quo sexual harassment involves the actual demand for sexual favors as a term or condition of employment, and is only applicable in the supervisor/ employee scenario. A hostile work environment claim arises when sexually charged unwanted conduct and verbalizations occur in the workplace. The type of conduct must be severe or pervasive. Employees who are successful in bringing a claim for sexual harassment can receive a wide range of remedies including reinstatement, back pay, front pay, compensatory damages, and punitive damages.

Claims of sexual harassment can be very costly to an employer. So what can employers do to protect themselves from these sorts of claims? The Supreme Court has handed down two decisions which give some directions to employers: Burlington Industries v. Ellerth, 524 U.S. 742 (1988) and Faragher v. Boca Raton, 524 U.S. 775 (1998). In those cases, the Court found that if the employer has a handbook which has an anti-harassment policy and has a reasonable and effective method for the employee to complain and seek redress for inappropriate conduct then if the employee fails to utilize such a known and effective policy and procedure, the employer will prevail because it never got a chance to solve the problem before the situation got so bad as to be declared a matter worthy of federal litigation.

The question remains what is an effective sexual harassment policy. All employers should have the following:

1. Employee handbooks stating that the Company will not tolerate sexual harassment;
2. Complaint procedures setting forth how to report harassment;
3. Investigative procedures in place for supervisors to follow upon receiving a complaint;
4. Training.

A recent New Jersey Appellate Division case, Cerdiera v. Martindale-Hubbell, 402 N.J. Super. 486 (App. Div. Sept. 2008) held that an employer could be liable where the employer has failed to have in place effective and wellpublicized sexual harassment policies that provide employees with reasonable avenues for voicing sexual harassment complaints. Although there is not yet a case in New York, New Jersey has been a bellwether state in indicating how other states’ case law will change in the employment realm.

Beginning in 2009, our firm will offer Harassment Training for Managers/Supervisors in order to assist our business clients to create and maintain an effective anti-harassment policy. Contact us to set up such training for your employees.