The Texas Supreme Court officially closed the door on the ability of workers’ compensation claimants to seek supplemental relief under the Texas Insurance Code. In Texas Mutual Ins. Co. v. Ruttiger, — S.W.3d —, No. 08-751 (Tex. Aug. 26, 2011), the Court held that the Texas Workers’ Compensation Act (“Act”) preempts claims against workers’ compensation insurers for unfair or “bad faith” settlement practices under the Texas Insurance Code.
Unemployment compensation is a federal-state program that provides benefits to eligible workers who become unemployed through no fault of their own. Under the system, the IRS collects from employers an annual payroll tax pursuant to the Federal Unemployment Tax Act (FUTA). The states also collect a payroll tax on a quarterly basis, which they use to pay benefits. The states are permitted to determine their own benefit eligibility requirements, the amount and duration of benefits and set the tax structure for employers so long as their standards do not conflict with federal law.
On December 13, 2010, New York passed the Wage Theft Prevention Act (“WTPA”). The WTPA, which amends the state’s labor law regarding wage payments, and becomes effective on April 12, 2011. It heightens the requirements of employers as relating to notice and the payment of wages while also stiffening the penalties for notice and payment failures.
The law currently in effect requires employers to inform new hires in writing of their designated pay date, rate of pay, and overtime rate, if applicable. The WTPA revises this portion of the law, placing further obligations on employers by requiring this notice to be issued not only upon hire but also by February 1 of every subsequent year. The WTPA also expands the information to be provided to include: the employee’s rate of pay and how it is paid (hourly, weekly, commission, etc.); allowances claimed against minimum wage (e.g., tip, meal or lodging credits); the employer’s regular pay day; the employer’s name and any “doing business as” names; the address of the employer’s main office or principal place of business and mailing address if different; the employer’s telephone number, plus any other information the Commissioner of Labor deems “material and necessary.” The notice must be provided in English, or in the employee’s primary language if his/her primary language is not English, and must be signed and acknowledged by the employee each time it is received.
In yet another employee misclassification case, Kentucky Attorney General, Jack Conway, brought suit against FedEx Corp. alleging that FedEx violates Kentucky state law by misclassifying its drivers as independent contractors. The Complaint contends that FedEx violated state law in regards to unemployment insurance, workers compensation, payroll taxes, and the Kentucky Consumer Protection Act. The lawsuit asks the Court to order FedEx to classify its drivers as employees and to pay the contributions and penalties required by state law, which includes back pay dating to 2000 and totaling at least $10 million.
Though the primary focus of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) is the reduction of systemic risk in financial markets and increased regulation of large financial institutions, Dodd-Frank also contains executive compensation, corporate governance and enforcement provisions applicable to most public companies. Some of these provisions are highlighted below. For more insights on the full range of business and legal issues associated with current market and regulatory changes, including the Dodd-Frank Act’s executive compensation, corporate governance and enforcement provisions, please visit Hunton & Williams LLP’s Financial Industry Resource Center.
A recent decision from the California Supreme Court has provided a rare victory for companies with employees in that state. In Schachter v. Citigroup, Inc., the Court ruled that a forfeiture provision in an employee incentive compensation plan did not violate California wage laws.