• Discrimination Claims Based on Disability, Religion and National Origin Increase
• Independent Contractor Enforcement
• Million Dollar Overtime Bill
• EEOC to Re-Define Age Bias Defense?
• IRS More Aggressive Regarding Employment

Discrimination Claims Based on Disability, Religion and National Origin Increase

The U.S. Equal Employment Opportunity Commission (EEOC) has announced that 93,277 workplace discrimination charges were filed in fiscal year 2009. That’s the 2nd highest total ever. Over $376 million dollars were collected for discrimination victims. Discrimination charges based on disability (up 10%), religion (1% increase) or national origin (up 5%) hit record highs.

Age claims reached the 2nd highest level ever. A change last year in the ADA which, in effect, expanded the definition of disability may be driving some of the increase in ADA claims.The most frequent types of charges continued to be those based on race (36%), retaliation (36%) and sex (30%).

Several types of discrimination can be included in a single claim. The high number of complaints may be due to a number of factors, including the economy, increased diversity, and demographic changes.

Independent Contractor Enforcement

The proposed federal budget includes new incentives and resources for the United States Departments of Treasury (i.e. the IRS) and Labor to increase enforcement efforts against businesses that misclassify workers as independent contractors.

State governments, via the unemployment compensation system, also are cracking down on misclassification. Governments are more proactive on this issue now, than in recent memory, primarily because they are seeking additional sources of revenues for shrinking public budgets.

The distinction between an employee and independent contractor hinges on several factors, but primarily on how much control the business exercises over a worker’s activities. A useful description of the employee/contractor distinction can be found at the IRS website at: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Million Dollar Overtime Bill

EEOC to Re-Define Age Bias Defense?

The Federal Equal Employment Opportunity Commission (EEOC) has proposed a new rule that would redefine an important defense to certain age discrimination claims. The defense at issue applies to what are called “disparate impact” claims, or claims that certain employer actions have an adverse impact on older workers.

Under current law, an employer can defend an adverse impact claim by proof that the policy at issue was based on a reasonable factor other than age (“RFOA”). The proposed EEOC regulations seek to flesh out the RFOA defense with defining factors such as:

1. Whether the employer took steps to assess any adverse impact on older workers;
2. The extent older workers are harmed; and
3. What other options were considered or available. The proposed regulations also require employers to bear the burden of factually proving the RFOA defense.

Comments on the proposed regulations are due by about April 18, 2010.

IRS More Aggressive Regarding Employment Taxes

State and federal tax agencies around the country are aggressively seeking more revenue to deal with burgeoning budget deficits.

The IRS is planning to institute its first Employment Tax initiative since 1984. It intends to audit 6000 companies looking for:

1. Misclassification of employees as independent contractors,
2. Problems with reporting tips,
3. Issues regarding underreporting of compensation of officers and owners in S corporations and
4. Problems with reporting fringe benefits such as car allowances, club memberships, payment for equipment and tools, and personal use of company owned vacation property.

All employers should closely review their pay and benefits practices. The trend of government looking for more and more tax revenue will likely escalate.