Provided by: Judge Ruth B. Kraft

I have some potentially good news for employers. The failure, to date, of the federal government to reach consensus on the 2014 budget means many things including:

 

  • Unemployment insurance benefits will be limited to the number of weeks designated on a state-by-state basis, and no federal additional compensation or extensions (which were up to 99 weeks until recently) will be paid
  • The EEOC will be on an austerity budget. Its contingency plan provides for only essential services. It will accept employee’s allegations of discrimination and hearing requests but it won’t even investigate them except in circumstances in which it determines that immediate relief, in the form of a temporary restraining order, would be necessary. It will not engage in mediation of charges or process Freedom of Information Act requests. All litigation will be suspended, except where a continuance is not granted by the court. Should you attempt to call the EEOC, expect a telephone message to the effect that it isn’t answering questions!
  • Although the joint task force on employee misclassification continues to snare employers, we have not seen IRS investigations on the uptick. Again, based on budgetary concerns, the IRS is not aggressively pursuing these cases, although the state agencies are cross-referring to one another. Frankly, the IRS has always negotiated down payments due on the misclassifications, whereas the state departments of labor, pursuant to federal law, demand dollar for dollar payments.

On the state level, we have been very successful in obtaining significant reductions in fines from the Workers’ Compensation Board and Disability Benefits Board in misclassification cases. The state is anxious to obtain some revenue and to see workers reclassified appropriately going forward. Putting an employer into Chapter 11 is not going to do it! I have obtained reductions of between 75-90 percent recently and, in my discussions with the state, it has been made apparent that officialdom is being lenient in categorization of industry groups and giving great weight to subsequent compliance activities.

We cannot be complacent. The NYC Human Rights Commission finds for employees in well over 90 percent of cases. However, defending a federal claim is a much more complex process so any restriction in regulatory enforcement is a very good thing.


Have a question or comment?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or at (516) 747-6700 x. 302.