Workers Can't Sue Employer For FICA Taxes

A U.S. district court has held that alleged employees have no private right of action under FICA against an employer arising from the employer's failure to withhold and pay FICA taxes. Agricultural workers signed agreements acknowledging they were independent contractors and agreed to comply with federal and state tax laws. Consistent with those agreements, the company did not withhold taxes or pay FICA taxes. The company issued Forms 1099 rather than Forms W-2. In spite of the agreements, the plaintiffs sued the company alleging they were employees and the company had violated the Internal Revenue Code. The court dismissed the case.

Why This Is Important... While it is important for employers to correctly classify workers, if the employer misclassifies its workers and fails to withhold taxes or pay FICA, the workers will be unable to recover damages against the employer as a result of the failure.

SEC Shortens Holding Period For Some Securities

Securities purchased from an issuer which have not been registered with the SEC ("restricted securities") and securities held by affiliates of the issuer ("control securities") are subject to restrictions on their unregistered resale. The SEC has shortened the holding period requirements to permit the resale of limited amounts of restricted securities by any person after a one year holding period, rather than two years. In addition, non-affiliates may make unlimited resales of restricted securities after a holding period of two years, rather than three years.

Why This Is Important... These changes, which took effect in late April, are expected to reduce the cost of capital, particularly for small business issuers.

Burden Of Proof In Age Discrimination Cases

Where an employee sues an employer saying he or she was terminated because of his or her age in violation of Massachusetts law, he or she has the burden of establishing a case of discrimination. The employer can counter the employee's claim and win a summary judgment if the employer can establish a nondiscriminatory reason for the termination. However, the employee can survive the summary judgment if he or she can show either that the employer's reasons are a pretext or by direct evidence that the real motivation for the termination was discrimination.

Why This Is Important... This standard makes it easier for plaintiffs in state cases in Massachusetts to survive summary judgment motions

Managed Care Agreements

Managed care is quickly becoming the predominant delivery system for medical care. Active Nicolai Law Group clients have received a memorandum which describes the workings of the agreement between physicians and managed care organizations. If you would like a copy, e-mail us and we will be happy to send you one.