December 11, 2009
Anthony Davis wrote an article in the New York Law Journal on November 4th summarizing the state of the law with regard to privacy matters when one is using his work computer to send personal e-mails.
The Scott court also held that even if the attorney had a standard notice at the bottom of each e-mail that the contents of the e-mail were to be private between the attorney and the client, that such notice is ineffective to save the communication from the client’s constructive waiver of the privilege resulting from the client’s decision to use his office computer to communicate with his attorney. Thus, the court suggested that attorneys should advise their clients that they should not use their office computers for communications between them, especially if the attorney feels that there is some risk that the employer might have a motivation to look into the employee’s personal e-mails.
On the other hand, a New Jersey court, in Stengart v. Loving Care Agency Inc., 973 A.2d 390 (N.J. Super. A.D. July 29, 2009), came to the opposite conclusion. In that case, the court held that even an employer’s e-mail policy granting it access to all employees’ e-mails on their computers, will not be valid to waive the employee’s attorney-client privilege. The employer-defendant in that case has appealed that case to the New Jersey Supreme Court, which just heard arguments on the case. When that court comes to a decision in the matter, at least New Jersey will have come up with a definitive conclusion on the matter.
For the time being, in New Jersey, and especially in New York, you should not send any e-mails, using one’s work computer, that you would like to keep private. This is especially true if you are writing your attorney regarding a case against the employer on whose computer you are sending the e-mail.
It is better to either wait until you have access to your home computer after work to send private e-mails, or to use a cell phone, iPhone, or (privately owned) Blackberry if you have to send private e-mail during business hours.
As always, if you need help with any kind of personal injury, contract, or other litigation, you can call our office 24/7 at 800-344-6431 or send us an e-mail (not necessarily on your boss’ computer!)
Picture courtesy of The Office Rat.
September 29, 2009
Many employers in New York employ those with a relatively low salary. Both the employer and the employee may be concerned that the employee remain eligible for the Child Health Plus health plan, WIC, free and reduced cost lunch programs, and food stamps. Thus, they both have an interest in making sure that the employer does not erroneously report too much income for the employee on pay stubs and W-2 forms, which may negatively affect the employee’s eligibility for these programs.
For example, does the employer have to report health insurance contributions made on behalf of the employee as part of the employee’s gross pay?
An employer must give the employee, with every paycheck, a statement (pay stub) indicating (1) the employee’s gross wages, (2) deductions from salary for taxes, benefit contributions, etc., and (3) net pay. NY Labor Law § 195(3).
In order to understand which wages and non-cash benefits an employer must report as gross income to the employee, we must first understand whether § 195(3)‘s requirement to specify the employee’s “gross wages” means that the employer must report the health plan contributions it made on the employee’s behalf.
The NY Labor Law Definitions do not define either “wages” or “gross wages.” Therefore, we turn to how the Internal Revenue Code defines “wages.” 26 USC § 3401(a)(21) says that “wages” means all remuneration an employer gives to an employee, including the cash value of non-cash benefits except for, among other things, payments made for the benefit of an employee if the non-cash benefit would not be included in the employee’s gross income under 26 USC § 106(b).
§ 106 says that generally, “gross income of an employee does not include employer-provided coverage under an accident or health plan.” U.S. Tax Court judges have interpreted this section to mean that payments by an employer to reimburse an employee for medical expenses or pay the employee’s health insurance premiums are not included in the employee’s gross income. Schmidt v. Comm’r, 2003 WL 22790862, *6 (T.C. Nov. 25, 2003). An earlier Tax Court clarified that “[s]ection 106 provides that an employee’s gross income does not include employer-provided coverage (e.g., accident and health insurance premiums) under an accident and health plan.” Rugby Productions Ltd. v. Comm’r, 100 T.C. 531, 535 (T.C. 1993).
Oddly, payments made directly to an employee for “personal injury or sickness” by a health plan which are attributable to an employer provided health insurance plan are included in the employee’s gross income. 26 USC § 105(a). But if the employee laid out the money directly and is being reimbursed for those payments by the health plan, then the reimbursements are not included in the employee’s gross income. 26 USC § 105(b).
Thus, because health insurance premium payments by an employer are not counted towards the employee’s “gross income,” they should not need to be listed as part of the employee’s “gross wages” under the NY Labor Law pay stub requirement mentioned above.
Standard disclaimer applies. But as always, if you need assistance with any kind of legal issue, whether it be Matrioninal/Family Law, Bankruptcy, Personal Injury, Wills, Trusts, & Estates, Real Estate, or Criminal/DWI, you can always contact us by e-mail or calling 800-344-6431.
Picture courtesy of About.com.
August 14, 2009
As reported here, and as Mitchell Rubenstein predicted, the Appellate Division of the Supreme Court will consider a teacher’s appeal of a Kings County Supreme Court’s nullification of a rabbinical arbitration panel’s decision in an employment case.
Following a dispute between the Hebrew Academy of Five Towns and Rockaway and one of its teachers, Nachum Brisman, regarding the school’s decision to terminate his employment, both sides agreed to have their dispute arbitrated by a well-known rabbinic panel, the Beth Din of America. The rabbinic panel’s arbitration decision favored the teacher in the dispute and when the teacher brought the decision to the Kings County Supreme Court to enforce the decision, it instead vacated it. Judge Balter’s decision can be read here.
Now, Brisman has appealed the lower court’s vacature of the arbitration before the Appellate Division. Three major orthodox Jewish organizations, the Orthodox Union, Agudath Israel of America, and Torah U’Mesorah, joined together last week to file a “Friend of the Court” brief, arguing that the Appellate Division should reverse Judge Balter’s vacature of the arbitration panel’s decision.
You can read the amicus brief here.
The organizations’ amicus brief emphasized that their support of Brisman’s appeal “should not be construed as advocacy on behalf of either party with respect to their underlying claims.” Rather, they clarified in the brief that they are advocating for the reversal of the Supreme Court’s vacature of the rabbinic arbitration agreement in order to prevent the weakening of the rabbinic arbitration system in general.
Indeed, it is difficult to fathom how the court could nullify an arbitration decision that both parties had agreed in advance to abide by. Such a decision seems to encourage the losing party in any kind of arbitration decision to appeal any decision if he knew that the state courts would vacate any decision that the losing party was unhappy with, as long as he could convince the court that the arbitration panel’s decision is “irrational.”
We will see if the Appellate Division agrees. Update 2/19/10: It does!
Picture courtesy of vosizneias.com
March 31, 2009
Adjunct Law Prof Blog just posted that employers who hire an employee must verify their legal status to work and fill out the new I-9 form. Employers must have the employee sign the form within three days of starting work. It would be wise to see the form and instructions right away, if you haven’t already done so. Those items are available here.
February 9, 2009
Paul L. Caron at the TaxProf Blog reported on an interesting 3rd Circuit case, Eshelman v. Agere Systems, Inc. Basicially, an employer fired an employee in violation of the Americans With Disabilities Act (the “ADA”). The District Court, the trial court, held that the employer had to pay not only the back pay it owed to the employee, but also had to pay an additional amount to cover her additional taxes. Since the lump-sum back-pay payment would put the employee into a higher tax bracket than she would have otherwise been in had she been continuously employed the whole time, the District Court ruled that the employer had to pay the additional amount the employee would have to pay in taxes.
The 3rd Circuit affirmed this ruling, holding that the only way the employee could be “made whole” for the pay she should have received but didn’t because she was fired illegally, was to have her additional taxes paid by the employer as well. Otherwise, because of the higher tax rate that she would have paid at the time of the back-pay payment, she would end up with less than she would have, if she’d been paid smaller amounts over a longer period of time.
Giving an employee back pay, but forcing her to pay extra taxes because of it, reminds me of the time Oprah Winfrey gave everyone in her audience both a new car, and an obligation to pay income taxes on the receipt of that car. They had to either come up with up to $7,000 of their own money to pay for the income taxes on the car, forfeit the right to get the car, or sell the car (at a used car price) to pay the taxes, and keep the difference.
Thanks but no thanks. I can definitely see the logic behind awarding an employee an additional amount to pay the higher-bracket taxes on the back pay. If you’re going to give someone money or something of monetary value, whether as a gift or because you have to, it’s only fair that you also pay the additional tax liability you’re causing the person by giving the gift/money!
January 29, 2009
The Illinois State Supreme Court will soon consider the case of In re Estate of Max Feinberg. With thanks to John T. Brooks from T&E.com, I found this interesting case. Max and Erla Feinberg created a trust with their substantial assets to care for their children and grandchildren. They placed a provision in the trust that if any of their five grandchildren married outside of the Jewish faith, unless their spouses converted to Judaism within one year of marriage, they were not to benefit from the trust at all. Only one of the five grandchildren actually married within the faith.
The numerous adversely affected parties sued, arguing that the “Jewish Clause” created an unconstitutional restraint on marriage, and should not be enforced by the court, because it violates public policy. In accordance with the majority of the cases that related to similar clauses in Wills and trusts throughout the country, the trustees argued that since the grandchildren were still able to marry many people, it was only a “partial restraint on marriage,” and the Clause should be enforced.
Both the trial court and the Illinois appeals court held that that the clause was unenforceable and violated public policy. They argued that even though the trend until recently has been to enforce such clauses because they are only “partial restraints” on marriage, since the authors of the Restatement (Third) of Trusts §29 (2003) approves breaking with that legal tradition and supports voiding any, even partial, restraint on marriage, they would do so as well.
Given the vociforous debate between the majority and dissenting opinions in this case, the Supreme Court of Illinois may hear the case. The case was on the Court’s 11/18/08 “Leave to Appeal” docket, but I can find no record regarding whether they have agreed to hear the case. Given that the current cases in the Illinois courts attempt to reverse the general trend that American courts have traditionally validated these “religion clauses,” it will be interesting to see whether the tide has turned, or whether the Illinois court is going to be the “odd man out” on this issue.
It would make sense for anyone making an estate plan, with or without a “religion clause,” to consult with an attorney who is competent in these matters and can advise you of the latest developments.
Picture courtesy of the ChicagoJewishNews.com