Archive for September, 2010

In late May, the Internal Revenue Service adopted a new position regarding taxation of registered domestic partners in its Private Letter Ruling 201021048 (the “PLR”).   See Pender, Kathleen, “IRS adopts state domestic-partner property law,” San Francisco Chronicle (June 3, 2010) available at SFGate.com.   Previously, the IRS did not apply California community property principles to registered domestic partnerships in terms of federal tax law since “[t]he relationship between registered domestic partners under the California Act is not marriage under California law.”  See IRS Chief Counsel Advice 200608038.

However, now the IRS will treat the income earned by California registered domestic partners as community property income for federal income tax purposes.   This means that each partner must report to the IRS one half of the total income earned between the two partners, not just his or her separate income.   While this does not change the format in which the domestic partners must file their California state taxes, it may have significant federal tax benefits for partners with very disparate incomes.

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California Labor Code section 226 requires that California employers furnish employees with wage statements that contain specific information. Generally, wages statements must include:
(1) gross wages earned;
(2) total hours worked by the employee, except for any employee whose compensation is solely based on a salary and who is exempt from payment of overtime;
(3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis;
(4) all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item;
(5) net wages earned;
(6) the inclusive dates of the period for which the employee is paid;
(7) the name of the employee and (only the) last four digits of his or her social security number or an employee identification number other than a social security number;
(8) the name and address of the legal entity that is the employer; and
(9) all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.

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On September 10, 2010 the Honorable W. Bruce Watson granted preliminary approval to the settlement of the longest civil trial in Humboldt County history.   The settlement comes after the jury returned a $677 million dollar verdict in July.   Plaintiffs’ counsel Timothy Needham and Michael Crowley advised the Eureka Times-Standard that they were confident the settlement was in the best interest of the class given the threat of bankruptcy that faced the nursing home entity after the verdict was announced, and given that the court’s injunction order will guarantee adequate staffing in Skilled Health’s facilities.

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On August 27, 2010, the Honorable Judge W. Bruce Watson denied Skilled Healthcare’s Motion for Mistrial Based on Alleged Juror Misconduct.   After reviewing the declarations submitted by the defendants and the counter declarations submitted by plaintiffs the Court ruled that there was no juror misconduct and that “Defendants did not meet their burden of establishing misconduct, although the three affidavits presented constitute a prime facie showing of misconduct, they are rebutted in all important aspects by the counter declarations.”   Contrary to claims by defendants, the counter declarations revealed that the juror in question did not make any false statements, did not fail to disclose any information, and did not know one of the plaintiffs or have prior knowledge of an event regarding one of the defendants.

The Court’s Order preserves the largest jury verdict in the United States this year and the largest recorded jury verdict in Humboldt County.

Read the court’s entire ruling here.

In Humboldt County, as throughout California, the law requires that all employers “engage in a timely,  good faith,  interactive process with the employee or applicant to determine effective reasonable accommodations, if any, in response to a request for reasonable accommodation by an employee or applicant with a known physical or mental disability or known medical condition.”  (California Government Code section 12940, subdivision (n).)   An employer who fails to engage in the interactive process will be liable under the Fair Employment and Housing Act (“FEHA”).

The statute’s phrasing, “in response to a request[,]” makes one think that there must be some formal request by the employee, but that’s just not true.   California courts have decided that there are “no magic words necessary” to be used by the employee, and furthermore, the employer’s “obligation arises once the employer becomes aware of the need to consider an accommodation.”  In other words, employers must be extremely careful to hear “requests” by employees that the employer engage in the interactive process.

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