LEGISLATIVE UPDATES
Your GAPS dues at work!
LEGISLATIVE UPDATE
GAPS Joins Sandy Springs Perimeter Chamber of Commerce
Membership to directly benefit from from the SSPC’s many programs, service offerings and events
February 19, 2010
Recap of state legislation in SSP Chambers legislative agenda and issues impacting the business community.
The General Assembly recessed yesterday for two- weeks to allow the House and Senate Appropriations committees to work on the FY 2010-11 state budget proposal. Thursday was Day 20 (the half-way point) of the 40-day regular legislative session.
State Budget
Comments by House Majority Leader Jerry Keen (R- St. Simons Island) reported in the AJC (2/19) highlight the economic conundrum resulting from the continued decline in state revenues: Keen indicated that a joint session of the House and Senate Appropriations committees this late in the legislative session is unprecedented in recent memory. He went on to say, We have a difficult, difficult budget task in front of us.
State revenue for January fell for the 14th consecutive month. The FY10-11 budget proposal submitted by the Governor anticipated that by July state revenues would have stabilize and that over the following months state revenue would see a small increase. The states budget year runs from July 1 to June 30.
Some recent legislative action of interest.
Energy
SB 402. Georgia Energy Freedom Act of 2010. Would permit the Governor to delay implementation of the requirements of any federal program to implement a cap and trade system or any other program to address greenhouse gas emissions or motor vehicle fuel economy until a comprehensive assessment of such program can be made and the Governor finds that the implementation will benefit the citizens of Georgia.
Businesses/Employers
SB 433. Prohibit Employers Requesting Credit Reports. Bill would prohibit employers from requesting credit reports on employees or prospective employees with certain exceptions: such report is required by law; is substantially related to the employee’s current or prospective job, or employer reasonably believes that the employee has engaged in specific activity that constitutes a violation of the law.
Status: Referred to Industry & Labor Cmte.
SB 408. Health Group Cooperatives. Bill would provide for small employer health group cooperatives.
Status: Referred to Industry & labor Cmte.
SB 237. Prohibit Gas/Petroleum Price Gouging. Bill would prohibited pricing practices during a state of emergency, so as to prohibit certain pricing practices during an abnormal market disruption significantly affecting the production, distribution, supply, sale, or availability of oil, gasoline, or other petroleum products.
Status: Passed Senate.
Taxation
HB 1029. Abolish State Income Tax for Corporations, provide for prior collection and prosecution.
Status: House Second Reader.
HB 998. Repeal Corporate Net Worth Tax relating to specific, business, and occupation taxes. To be effective Jan 1, 2011.
Status: House Second Reader 02/01
HB 1069 Tax Credits. (Rep. Wilkinson- Sandy Springs). Provide for tax credits for certain qualified equipment that reduces business or domestic energy or water usage.
Status: Ways & Means
HB 1204. Income Tax Credit for Job Creation. Provide for an additional income tax credit for job creation for a limited period of time (Jan 1, 2010 through Dec 31, 2011).
Education
HB 1097. Local Schools Opening Date. Bill provides that local boards of education shall adopt a school year calendar that in no event shall commence the first day of instruction of a school year prior to the third full week of August. For purposes of this paragraph, Sunday shall be considered the first day of the week.” Sponsors include SS Reps. Edward Lindsey and Joe Wilkerson.
Status: House Second Reader (2/8/)
GAPS Legal Update – July 2009
The U.S. Immigration and Customs Enforcement (ICE) issued notices of inspection for a Form I-9 audit to 652 businesses nationwide on July 1, 2009. The notices were “a direct result” of ICE’s new strategy to build criminal cases against businesses suspected of hiring undocumented immigrants before they raid workplaces.
In just one day, ICE issued more notices of inspection than the 503 similar notices it issued in all of 2008, and there is still more to come. “This nationwide effort is a first step in ICE’s long-term strategy to address and deter illegal employment,” said U.S. Department of Homeland Security (DHS) Assistant Secretary for ICE John Morton.
As part of its shift in strategy, it appears that ICE is going after employers instead of undocumented workers.
Who Was Targeted?
In its statement announcing the recent notices, ICE said that because of “the ongoing, law enforcement sensitive nature of these audits, the names and locations of the businesses will not be released at this time.” A document reporting the notifications of 650 of the charges by ICE regional offices as follows: Atlanta 26; Baltimore 13; Boston 20; Buffalo, N.Y., 13; Chicago 32; Dallas 20; Denver 20; Detroit 26; El Paso, Texas, 26; Honolulu 6; Houston 26; Los Angeles 45; Miami 39; New Orleans 26; New York 45; Newark, N.J., 20; Philadelphia 20; Phoenix 32; San Antonio 39; San Diego 39; San Juan, P.R., 13; San Francisco 26; Seattle 26; St. Paul, Minn., 13; Tampa, Fla., 26; and Washington, D.C., 13.
ICE stated that it decided to audit businesses “as a result of leads and information obtained through other investigative means.” Leads for audits sometimes come from unions. E-Verify also might be used to identify employers that might not be in compliance with immigration laws, as “DHS now is doing data mining from E-Verify,” The DHS has developed algorithms that supposedly indicate if an employer is not using E-Verify properly.
The DHS is said to be updating a memo of understanding with the Wage and Hour Division of the U.S. Department of Labor (DOL) in order for the DOL to “play a much stronger role in voluntarily identifying which employers” might be in violation of immigration laws.
What ICE Wants
When ICE conducts an I-9 audit, it might seek a wide variety of information, which might include:
Original I-9s. Forms I-9 must be retained for three years after the date of hire or one year after the date of termination, whichever period is longer.
A spreadsheet alphabetically listing all current and terminated employees with hire and termination dates in electronic form Word or Excel, non-PDF, including the names, Social Security numbers and dates of birth of each employee.
Copies of quarterly wage and hour reports and/or payroll data for all employees—current and terminated—covering the period of inspection, as well as quarterly tax statements.
Business information, including the employer identification number, taxpayer identification number, owner’s Social Security number, owner’s contact information (e.g., address, information, phone numbers and e-mail addresses), articles of incorporation (if applicable) and copies of business licenses.
Copies of Social Security no-match letters.
A copy of any I-9 policy.
The name and responsibility of those who complete I-9 forms.
The date the business was established, form of the business, where it is incorporated and its revenue.
The department or job titles of employees.
Quarterly unemployment insurance reports with the state or quarterly returns for Federal Income Contributions Act taxes.
ICE may also ask whether the company is a current or previous participant in E-Verify or the Social Security Number Verification Service.
The nationwide audits signal early in the Obama administration that enforcement of the Immigration and Reform Control Act and criminal law prohibitions on the employment of illegal immigrants are “not going away, and in fact they’re upping the ante.”
What you can do
Temporary staffing firms need to exhibit leadership in the field of immigration compliance. Immigration compliance is not overseen by any specific key person at firms and frequently is not being monitored for consistency. Designate a lead person to spearhead immigration compliance at the your firm and adopt an immigration compliance policy that incorporates recommended ICE best practices that make sense for your company and become thoroughly familiar with ICE’s I-9 handbook. Conduct annual immigration audits in cooperation with legal and provide annual training, keeping the big picture clearly in focus as enforcement strategies and laws change.
Periodically, NAPS provides legal updates to its members, below are excerpts from their most recent update.
Legal Update from NAPS
Court Awards $131,500 Fee for Employees Who Worked Three Weeks
Will a court imply a guarantee when the parties have put none in their agreement? Does the term “first year’s base salary” mean the anticipated annual salary or the amount actually earned by the placed employee?
In its June 25, 2009 decision in Asta, L.L.C. v. Telezygology, Inc., the United States District Court for the Northern District of Illinois answered both questions in a manner which is favorable to recruiting and staffing firms.
The case arose in the context of a conversion of temporary workers to the client’s payroll, rather than a more typical placement, but the decision would seem to be equally applicable in either context. The plaintiff assigned sales personnel to the defendant. The sales personnel were paid by the staffing company, and the client paid fees to the staffing company. The agreement between the parties contained the following provision:
“Should [client] decide to hire any of the sales personnel that [staffing company] refers to [client], [client] shall pay [staffing company] 50% of each hired sales person’s first year base salary due on the date the sales people are hired by [client].” The contract was silent as to whether the fee would have to be refunded in the event the employment period was a relatively brief one.
The staffing company assigned five salespersons to the client’s account. The client hired two of them, a couple of months later, at salaries of $133,000 and $130,000, respectively. Both employees were terminated after less than a month. The staffing firm sued for a fee of $131,500. The defendant argued it shouldn’t have to pay that much, because the employees never earned the salaries upon which the recruiting firm based its suit. The defendants also claimed that the interpretation of the contract urged by the staffing firm would give it a windfall, because the employees never actually earned the base salary.
Early in its opinion, the court indicated it did not look favorably upon the defense. “Obviously, an agreement to pay 50% of each hired person’s first year base salary might appear a bit steep, for the first year’s cost to the employer then becomes 150%. But that is what the parties agreed to, and, as sophisticated commercial parties, they were free to agree on any terms that were mutually acceptable.”
The Court explained why “first year’s base salary” did not mean how much the employees actually earned.
“The parties did not agree that that the defendant would be obligated to pay 50% of the “salary” the defendant paid to a person who it hired from [the staffing company]. Had that been the phrasing, the defendant’s argument might be persuasive. But the clause explicitly tied the amount [the client] must pay [the staffing company] not to the person’s salary but to the “first year’s base salary.”… It would be a tortured reading to hold that “first year’s base salary” means what the two earned in the three weeks they worked for [the client].”
The Court also noted that the fee was due on the date the employees were hired. If the fee were to be based on actual earnings, there would be no fee due immediately, because the employees had yet to earn anything. The Court also made it clear that it was not going to assume there was a guarantee when the parties did not insert one into their agreement. “Alternatively, the parties would have agreed that if the sales person did not last a year, there would have to be a pro rata repayment by [the staffing company]. No such provisions exist, and their absence further demonstrates the untenability of the defendant’s construction of the contract.”
The decision is a trial court decision, not binding upon other courts. It does demonstrate, however, that courts first look at contract language, not to general concepts of “fairness” or “custom.” Is your contract language clear?
Staffing Firm Pays $250,000 to Settle Discrimination Claims
Preferred Labor, a North Carolina based national staffing firm which did business under the name “Preferred People Staffing,” has agreed to pay $250,000 to settle sex discrimination claims, the Equal Employment Opportunity Commission announced on July 9, 2009.
According to the EEOC, Preferred restricted women to certain types of work, and accepted discriminatory job order from customers to send only male workers. As those of you who have earned the CPC or CTS designation know, acceptance of an unlawful job order is a violation of the Civil Rights Act, regardless of whether the staffing company fills it in a discriminatory manner.
The settlement was accomplished after Preferred sold its day labor business to another firm, but if it gets back into that business, Preferred will have to conduct anti-discrimination training for its employees and managers, and implement policies and procedures prohibiting unlawful employment practices.
For more information:
Contact: James Dyak, SPHR Phone: 770-857-0002
Email: jim@hrdracc.com
