Congress Takes Aim at Independent Contractor Misclassification Through New Legislation
On April 22, the U.S. Senate and House of Representatives introduced identical legislation aimed at curtailing and preventing misclassification of workers by employers. The Employee Misclassification Prevention Act (EMPA) would amend the Fair Labor Standards Act (FLSA) by requiring employers to maintain certain records for both employees and independent contractors in an effort to more effectively prevent employers from improperly classifying employees as independent contractors.
DOL Targets Employer Misclassification of Non-Exempt Employees
Recently the Department of Labor (DOL) Wage and Hour Division (WHD) announced that it is considering implementing a new rule that would revise recordkeeping requirements relating to classifying workers as exempt from the overtime requirements of the Fair Labor Standards Act (FLSA). If implemented, the rule would result in more stringent disclosure and recordkeeping requirements for covered employers which exclude workers from the FLSA’s minimum wage and overtime requirements. If approved and implemented, the new rule will result in significant changes for employers.
Financial Institution Bulletin
Financial institutions and their clients continue to face a wide range of issues and the latest Financial Institution Bulletin from Davenport Evans recognizes that. Sarah Larson explores the uncertainty with the federal estate tax while Monte Walz reminds institutions of new overdraft rules going into effect July 1. In addition, Keith Gauer examines a South Dakota Supreme Court decision on recovering debts from joint tenants of deceased borrowers. A variety of employment issues are also addressed including the federal WARN Act governing layoffs and plant closings, the workplace implications of social networking and whether mortgage loan officers are entitled to overtime.
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WARN Act Impacts Certain Employer Layoffs
WARN stands for “Worker Adjustment and Retraining Notification.” The WARN Act is a federal law requiring larger employers to give 60 days written notice in advance of plant closings or mass layoffs. It is intended to give displaced workers and their families transition time to seek alternate employment or training before the end of their employment.
The Capital Purchase Program and Privately-Held Financial Institutions
Plenty of publicity surrounded the $700 billion Emergency Economic Stabilization Act of 2008, the so-called "bailout" plan enacted by Congress due to the recent financial crisis. Little of the publicity, though, looked at the details of various aspects of the plan. One of those is the Capital Purchase Program, announced by the U.S. Treasury Department on October 14 and created pursuant to the Act's mandated Troubled Asset Relief Program. While most observers are aware the program will allow the Treasury Department to purchase senior preferred shares of qualified financial institutions desiring to participate in the program, the applicable terms vary for publicly held and privately held financial institutions
FDIC Adopts Interim Rule on Temporary Liquidity Guarantee Program
On October 23, 2008, the Federal Deposit Insurance Corporation (“FDIC”) adopted an interim final rule establishing the Temporary Liquidity Guarantee Program (“TLG Program”). The TLG Program consists of two primary components: (i) a Transaction Account Guarantee Program (“TAG Program”), through which the FDIC will guarantee certain noninterest-bearing transaction accounts of participating depository institutions; and (ii) a Debt Guarantee Program, through which the FDIC will guarantee the payment of certain newly-issued senior unsecured debt of participating entities. The TAG program may be of special interest to bankers and their customers because of the unlimited amount of insurance coverage it provides for certain types of deposits.
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