Wyatt Employment Law Report


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Secretary of Labor Solis Is Resigning

By Edwin S. Hopson 

On January 9, 2013, U.S. Secretary of Labor Hilda L. Solis submitted her resignation to President Obama.  She is apparently returning to private life in California.  In a press release on the Labor Department’s website, she is reported to have stated, in part: “Growing up in a large Mexican-American family in La Puente, California, I never imagined that I would have the opportunity to serve in a president’s Cabinet, let alone in the service of such an incredible leader.”


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Would the WARN Act Apply in the Event of a Federal Budget Sequestration?

By Edwin S. Hopson

On July 30, 2012, an Assistant Secretary of the U.S. Department of Labor issued an advisory and guidance to federal contractors concerning the applicability of the Worker Adjustment and Retraining Notification Act (WARN Act) to possible layoffs occasioned by federal government sequestration on January 2, 2013, under the Balanced Budget and Emergency Deficit Control Act of 1985, and the Budget Control Act of 2011, should the Congress and President not come to agreement on a federal budget.  That guidance was “no” — the WARN Act would not be triggered by such action and affected, covered federal contractors would not be in violation of the WARN Act for NOT providing 60 days’ notice of mass layoffs or a plant closing affecting at least 50 employees.

The issuance of this guidance has been criticized by the Republican House Education and Workforce Chairman, John Kline, and the Subcommittee on Workforce Protections Chairman, Tim Walberg, in a letter to Secretary of Labor Hilda Solis.  They argue that the Department of Labor’s guidance has no legal effect and may be misleading employers into not following the WARN Act’s requirements.

With the recent agreement on a short-term budget extension, this issue has now been pushed off for several months.

The Labor Department’s guidance can be found at: 

http://wdr.doleta.gov/directives/attach/TEGL/TEGL_3a_12.pdf

The Kline/Walberg letter may be found at:

http://edworkforce.house.gov/UploadedFiles/08-02-12_Letter_WARN_Act_Sequestration.pdf


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Tax Issues Associated with Misclassification of Persons as Independent Contractors

By George J. Miller

When the Wage and Hour Division of the U.S. Department of Labor or a state department of labor determines that an employer has misclassified employees as independent contractors and has failed to pay them minimum wage or overtime pay required by law, the remedy at the administrative level typically has been for the employer to pay the affected employees back pay sufficient to make up for the lost wages.  Of course, an employer which has misclassified employees in this fashion has not been withholding federal, state, or local income taxes, or FICA, and has not been remitting those taxes (including the employer’s share of FICA) or filing quarterly payroll tax returns with the government regarding the misclassified workers. 

 A lingering, worrisome question in settling such disputes with the Wage and Hour Division or a state department of labor has been whether the employer will be reported to state or federal internal revenue agencies and will be required to pay taxes, penalties, and interest in addition to back pay.  The specter of facing the tax man in such matters became more real yesterday, when U.S. Secretary of Labor Hilda Solis announced that she has signed memoranda of understanding (MOU’s) with the Internal Revenue Service and the state labor commissioners and other state agencies in the states of Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah and Washington, pledging greater cooperation to share information in an effort to protect employees from being improperly classified as independent contractors.   Continue reading


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Secretary of Labor Announces Her New “Vision” For American Workers

By Edwin S. Hopson

On December 7, 2009, U.S. Secretary of Labor Hilda L. Solis laid out her “vision” in the Fall 2009 Regulatory Plan for the Labor Department’s mission of ensuring “there are good jobs for everyone.” [Emphasis in the original].  Secretary Solis described a “series of 12 specific strategic outcomes” which she hopes will result in achieving her vision.  According to the Labor Department’s website, they are:

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