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Employment

Why the Proposed New York Nanny Law is a Bad Idea.

by Fred Abramson on June 3, 2010

nanny service Why the Proposed New York Nanny Law is a Bad Idea. Zoe Baird watch out.  If you employ a Nanny, even one who is here illegally, a new proposed New York Law is in the works that will place new burdens on their employers. The State Senate passed a bill last week that would protect Nannies. According the New York Times, this law is likely to be passed into law.

The new law will require the following:

  1. Paid holidays, sick days and vacation days for domestic workers, along with overtime wages.
  2. It would require 14 days’ notice, or termination pay, before firing a domestic worker.

The law would cover citizens, legal immigrants and those here illegally as well.  It seems highly unlikely that those who are here illegally would make complaints to the Department of Labor for workplace violations.

This bill is a bad idea.  The reality is that many working parents cannot afford a Nanny and pay her(always a women) taxes, workers compensation and overtime wages.  My estimate is that the cost of  Nanny would skyrocket to the $35,000.00 a  year. Many families may decide to lay off their Nannies and let the parent who makes less money stay at home.  Other families may decide to let their homes go into foreclosure.

There is a whole underground economy when it comes to domestic workers that benefits the workers as well. A brief sample of acquaintances who currently employee  Nannies in the New York metropolitan area revealed that the average wage for a Nanny who is in the United States illegally is about $500.00 a week. Since they don’t pay taxes their earning power is up to a third more.  Nannies are not regulated. There is no certification process and a criminal check is often impossible.

For this bill to work, the legislature should increase the child care tax credit to $10,000.00 a year per child.  In addition, Nannies who have been here for 2 years should be given a path to citizenship. What do you think?

FYI, my kids are in daycare.

If you have a question about labor and employment law, contact me at the Law Office of Frederic R. Abramson at 212-233-0666.

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Employer Misclassification May Become a Crime

by Fred Abramson on April 29, 2010

biz employer Employer Misclassification May Become a Crime

I have written extensively about the potential problems employers can have by misclassifying their workers as employees.  The IRS has been cracking down on companies that try to pass off regular employees as independent contractors. It now may become a crime.

Congress is about to act on a bill entitled the Employee Misclassification Prevention Act that would impose criminal penalties on companies that misclassify workers. It appears that both the House and Senate is behind the bill, so it is likely to become law.

If this new law is passed, it would impose finds of $5,000.00 for each worker that is misclassified as an independent contractor. According to the American Bar Association Journal, the new law would also require employers to provide new hires with notice concerning their rights

There is an excellent and lengthy article on the subject by the large law firm Pepper Hamilton, LLP.

The new law is a natural progression of the Obama administration focus on cracking down on employers who improperly classify employees as independent contractors.

I would suggest that companies review all of their employment classifications to avoid potential criminal liability. You may be able to minimize the risk to your company by:

  • Wholesale review of all of your workers.
  • Restructuring the relationship that you have with your independent contractors that fall within a gray area of the law by re-classifying them as employees. I would suggest that you should err on the side of caution and classify your workers as employees if you are not sure.
  • Draft written agreements with all of your workers stating their employment status.
  • If you want to limit the workers that you classify as employees, you may have a third-party such as a staffing agency performing the hiring.

If you have any questions regarding independent contractor agreements or classification of employees, contact me at the Law Office of Frederic R. Abramson at 212-233-0666.

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What are the penalties for misclassifying an independent contractor?

by Fred Abramson April 16, 2010 Employment Law

Share I have a technology company as a client who recently retained my office to advise them on a relatively common employment law. The company signed a contract with financial institution to perform help desk related work.  They hired ten people to perform the work and had each of them sign an independent contractor agreement.  [...]

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Wage and Hour Lawsuits are Rising

by Fred Abramson March 17, 2010 Business Law

Share Wage and Hour lawsuits are rising according to Kiplinger.com. Due to the faltering economy, workers who have been let go are looking to the courts to seek monetary damages.  Usually the lawsuits are based upon allegations that hourly workers are not paid overtime. This is a violation of the Federal Labor Standards Act. According [...]

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Misclassification of Independent Contractors Crackdown

by Fred Abramson March 2, 2010 Business Law

Share Misclassifying an an employee as an independent contractor is one of the most expensive mistakes that a business owner can make. It does not matter whether you intentionally made the mistake. You can be subject to large penalties, fines and even subject the criminal liability.  I have recently reported that the IRS has been [...]

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Employers with Independent Contract Workers are Targeted by the Government

by Fred Abramson February 19, 2010 Business Law

Share According to the New York Times, the IRS is cracking down on companies that try to pass off regular employees as independent contractors. More than two dozen states are cracking down on employers that improperly claim regular employees as independent contract workers. The federal government believes that enforcement could yield $7 billion during the [...]

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