Archive for the ‘Vacation’ Category

You may recall my recent posting on whistleblower protections provided to employees under both state and Federal Laws. Well, the the recent Federal health care legislation provides new whistleblower protections to employees under the recently enacted Patient Protection and Affordable Care Act (“PPACA”).

Congress included whistleblower and retaliation protections in the recently-enacted Patient Protection and Affordable Care Act (“PPACA”), the comprehensive health care legislation signed by President Obama in March 2010. The whistleblower provisions encourage employees to report fraud or waste under the statute.

The PPACA clearly showed an intent by Congress to extend whistleblower protection to those who report abuses or fraudulent conduct in the delivery of health care through the use of public monies.

Any employee who believes that he or she has been discharged or discriminated against in violation of law is entitled to seek relief using the same procedures provided in 15 U.S.C. §2087(b), which contains the extensive whistleblower protections contained in the Consumer Product Safety Improvement Act of 2008. These procedures include filing a complaint concerning discrimination or retaliation with the Department of Labor, going through an administrative process to determine whether the employee’s conduct protected by Section 18C was “a contributing factor in the unfavorable personnel action” alleged by the employee, and providing for the filing of a civil action in federal court after exhaustion of the administrative process.

Interestingly, however, Section 1558 explicitly limits application of Section 18C only to violations of Title I of the PPACA. Title I covers the statute’s core provisions for medical care in conventional settings, such as the provision of health care services at hospitals, clinics and physician offices; hence, employees who report fraud, waste or violations in those settings fall under the protections afforded by Section 1558.

Finally, Section 1313 of the PPACA makes any “[p]ayments made by, through or in connection with an Exchange” subject to the False Claims Act, 31 U.S.C. 3729, et seq., if the payments involve any Federal funds. The False Claims Act prohibits the “knowing” presentation of a false or fraudulent claim for approval or payment; hence, any “knowing” presentation of a bill or invoice for health care services through an Exchange set up under the PPACA that contains overcharges is subject to a civil penalty. The penalties include a fine of up to $10,000, a civil penalty of between 3 to 6 times the amount of the overcharge, and repayment of the cost to the Federal government of bringing the civil action to prove the violation. Note that Section 1313 contains the threat of a civil penalty up to 6 times the amount of damages sustained by the Federal government as a result of a violation, which is twice as high as the maximum available under the False Claims Act. Coupled with the whistleblower provisions contained in Medicare and Medicaid statutes, any payment for health care services that involves Federal funds could be expected to be subject to the protection of a whistleblower provision.

Since these statutory provisions and processes are complicated, if you work in a healthcare setting and believe you have been retaliated against or terminated based upon complaints of illegalities in your medical office, you probably want to consult with a skilled employment lawyer to evaluate your next course of action.

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The Federal Government and President Obama have announced that they with the IRS will be cracking down on enforcement of employers that misclassify their employees as 1099 independent contractors rather than W-2 employees. With a W-2 employee, the employer deducts federal and state employment taxes for the employee while with a 1099 contractor, the employee is responsible for paying their own taxes. What is most disturbing about this trend by some employers is that in many instances the employees do not even know that they are being claimed 1099 contractors until they get a large tax bill.

Companies can hold down labor costs by as much as 30 percent if they use independent contractors, because they don’t have to pay Social Security and Medicare taxes, provide vacation or sick leave, pay for workers’ compensation and unemployment compensation insurance, or follow minimum wage or overtime provisions. Additionally, employers are protected from potential legal troubles since independent contractors aren’t protected by Title VII of the Civil Rights Act which prohibits discrimination.

So how do you know whether you should be classified as an employee or an independent contractor? Well the IRS has some regulations that address this issue.

Facts that provide evidence of the degree of control and independence fall into three categories:

Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.

In the event that you believe you employer has misclassified you, you can file an IRS Form SS-8 with the Internal Revenue Service. This form can be filed by either an employee or employer. The IRS will review all relevant factors and make a determination whether an employee is an independent contractor or employee. The determination can take up to six months but if the IRS determines that you are an employee they can than force your employer to pay required payroll taxes on your behalf.

The IRS Form SS-8 link document is here for your review.

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If you have lost your job one of the very typical questions that I will get is whether after being terminated you still get your vacation or sick pay that you earned. Generally, the first place you should look to determine this is what the employment handbook of your employer has to say on the issue. A good employment manual from an employer should spell out what happens with your vacation or sick pay after you leave employment. If the employment manual does not address it, and if the vacation or sick pay is earned, then my advice normally is that you are entitled to be paid that vacation pay after termination or leaving your employment. Of course, this issue may be affected by laws in your state, so make sure to consult with an employment law attorney in your state before proceeding with any action.

Another issue that frequently comes up is whether you are entitled to receive commissions you earned during your employment that have not yet been paid to you. In most instances you are entitled to be paid these commissions with one general exception. In some cases, if receiving your commission was based upon providing service to the customer after the sale, the employer may have a basis to not pay you your commissions. In addition, most good employment manuals will address in detail what happens to your commissions when your leave the employment of your employer.

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