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Do Business In California? How To Avoid An Enforcement Action By The California Attorney General

The California Consumer Privacy Act (CCPA) became effective on January 1, 2020, and the California Office of the Attorney General (OAG) has been bringing enforcement actions against companies since July 1, 2020. With a year under our belt, we’ve gained important insight into the types of violations the OAG is focusing on. Notably, in July 2021, the OAG published an exemplary list of CCPA enforcement actions that the office has taken over the last year. This list helps provide further insight into the types of violations that the OAG has investigated, sent notices for, and seen remedied over the last year. ... READ MORE


New IRS Retirement Plan Corrections For Overpayments And Other Errors



Privacy is Power - Episode 5: Top 5 Data Privacy and Security Topics In The News



Corporate Planning When Multiple Owners Are Involved

A cross purchase agreement is the simplest form of a buy-sell agreement, as it involves a contract solely among the business owners. Under this structure, a withdrawing owner agrees to sell their interest to one or more of the remaining owners. This form is most suitable for businesses with only a few owners. A redemption agreement provides that the entity itself will purchase the withdrawing owner’s business interest. Such a purchase may be funded by life or disability buyout insurance acquired on the owner. Hybrid agreements combine these two structures and allocate purchase rights and obligations between the entity and the remaining owners. Typically, the entity has the first option to purchase the interest. To the extent the entity does not exercise that option, the remaining owners have the right or the obligation to purchase the interest. ... READ MORE


Eighth Circuit Sides With Employer's Attendance Requirements In FMLA And ADA Case



OSHA's Long Awaited COVID-19 Standard- Does It Apply To Your Business?



Practical Considerations For Bringing Employees Back To Work In A Vaccinated World



The American Jobs Plan: What's The Potential Impact To Employers?



Lawsuit Challenging "Mandatory Vaccinations" Dismissed



Privacy is Power - Episode 4: The Next Normal: Privacy Considerations for Return to Work



EEOC Guidance Removes Limits On Certain Vaccination Incentives



IRS Answers Open Questions On ARPA COBRA Premium Subsidy



"Our Family Will Always Get Along. Period. (We Hope)"



DOL Breaks Silence On Cybersecurity Guidelines For Benefit Plans



Privacy is Power: Episode 2 - Papering Compliance: Understanding and Negotiating Data Privacy Agreements

Whether required by U.S. or international law, or simply a best practice, data privacy and security agreements are key when sharing data. Additionally, these types of agreements are often thought to be form documents that are non-negotiable. However, recent privacy law developments have made clear that review and negotiation of privacy agreements is more important than ever as these agreements are often used to not only ensure legal compliance between the parties, but also to shift legal liability and risk, including with respect to regulatory compliance, data incidents and mitigation efforts. It is in every organizations’ best interest to properly protect its data from improper disclosure, and best practices suggest that organizations should be mindful of every disclosure of its proprietary, confidential information to ensure it is entering into appropriate privacy agreements that adequately safeguard the data from improper use, disclosure and retention. ... READ MORE


Top Five Takeaways From The Eagerly-Awaited COBRA Subsidy FAQs



The American Rescue Plan Act Expands Voluntary Paid Leave For COVID-19



After working from home, lawyers turn to implications of return-to-work policies.



Privacy is Power: Episode 1 - The Anatomy of a Data Breach Response



U.S. House Passes Landmark Pro-Union Rights Bill: Key Provisions

On March 9th, 2021, the U.S. House of Representatives passed the most pro-worker labor legislation since the 1930s. If it passes the Senate, where it faces an uphill battle, the Protecting the Right to Organize Act (PRO Act) would amend the National Labor Relations Act of 1935 (NLRA), the federal law that allows employees the right to unionize, engage in collective bargaining and strike. Passage of the PRO Act would dramatically tilt the law in favor of unions and deprive U.S. businesses of many longstanding legal rights. ... READ MORE


American Rescue Plan Impacts COBRA And Dependent Care FSAs

President Biden has signed the American Rescue Plan Act of 2021 (the “Act”) into law, and the Act includes notable provisions that will impact employee welfare benefit plans. Not only does the Act implement a COBRA subsidy for certain qualified beneficiaries, but it also increases the Dependent Care Flexible Spending Account limit. This client alert summarizes the key benefit provisions within the Act. ... READ MORE


Distressed Debt - How Can an Unsecured Creditor Ensure Payment?

With chapter 11 bankruptcy filings on the rise, all vendors should use this opportunity to evaluate the credit risks that their customers present. Short of terminating the relationship for nonpayment, there are some actions that vendors can take to minimize the risk of continuing to do business with a struggling customer. Below we discuss a variety of possibilities, including some that are not often used but can be very helpful in protecting a vendor’s position. ... READ MORE


Can You Enforce The Unenforceable? Three Ways Courts Can Respond To Overlybroad Noncompete Clauses

Covenants not to compete are one tool used by employers and buyers of a business to protect valuable business assets. To learn the basics on covenants not to compete, read our noncompete article from February. It is important to keep in mind that the drafting of noncompetes, whether in the employment context or in connection with the sale of a business, is not a “one-size fits all” process. If you are drafting, seeking to enforce or trying to contest a covenant to not compete, you need to know more than whether the covenant is enforceable as written.  You also need to understand how the law governing enforcement of the noncompete may or may not allow a court to respond if faced with an overlybroad noncompete. ... READ MORE


"Show Me The Money!": Financing An M&A Deal

How a buyer plans to pay for a business it is acquiring must be decided early on in the process because it can have a significant impact on the timing and complexity of the deal. A buyer may use cash, debt, equity, stock swaps, mezzanine financing, leveraged buyout, seller financing, or a combination of any of these methods to pay the purchase price. ... READ MORE


Two Wrongs Don't Make A Right – Ratifying Defective Corporate Actions

As part of incorporating and conducting your business, Nebraska statutes generally provide that certain formalities be followed — whether you’re appointing a board of directors, authorizing and issuing shares to shareholders, or obtaining director or shareholder approval for certain actions. Performing these formalities incorrectly (or not at all) can create questions as to their validity. If a director’s appointment or a shareholder’s shares are invalid, it can discredit subsequent transactions (such as declaring dividends, borrowing funds, buying assets, etc.). ... READ MORE


Agribusiness Enters 2021 With Optimism, Headed For Growth

McGrath North Partner James Powers was quoted in the February 19th issue of the Midlands Business Journal within the story titled “Agribusiness Enters 2021 With Optimism, Headed for Growth.” ... READ MORE


FY2022 H-1B Cap-Subject Filing Season Is Almost Here

U.S. Citizenship and Immigration Services (USCIS) announced that the registration period for H-1B cap-subject visas will be open from March 9, 2021, to March 25, 2021. USCIS intends to notify selected registrants by March 31, 2021. Selected registrants can file their H-1B cap-subject petitions as early as April 1, 2021. USCIS also announced that it will continue to use a random selection process for this year’s H-1B lottery and not the selection based on wage-level as previously proposed. ... READ MORE


Stepping Up To The Plate: Taking A Final Swing At Stepped-Up Income Tax Basis For Veteran Irrevocable Trusts

At times in an estate planning practice, advisors are faced with long-term irrevocable trusts which own appreciated assets with a fair market value (“FMV”) far in excess of the income tax basis of such assets. In situations where such trusts are scheduled to terminate in the near term, and the appreciated assets are subject to likely sale by the trust remainder beneficiaries receiving the appreciated assets as a result of the trust termination, the resulting potential taxable gain is a significant concern. Discussed below are the following potential strategies to seek a “step-up” in the income tax basis of such appreciated trust assets to address this concern: (1) springing the Delaware Tax Trap; (2) decanting; (3) filing a late qualified terminable interest property (“QTIP”) election; and (4) trust reformation under state law. [1] ... READ MORE


401(k) Plans: New Eligibility Rules For Long-Term, Part-Time Employees



Is Virginia Next In The Data Privacy Race?

On February 5, 2021, the state Senate of Virginia passed the Consumer Data Protection Act (CDPA), which identically mirrors a bill earlier approved by Virginia’s House of Delegates. Legislators have until March 1 to amend and finalize the details of the legislation, but it is not expected that any material modifications will be made. The bill is anticipated to be signed by Virginia’s governor later in March. ... READ MORE


When Is A Deal A Deal? Letter Of Intent Fundamentals

When parties begin the negotiation process for the sale of a business, a buyer will usually present a letter of intent summarizing the material terms of the offer. A letter of intent may also be called a term sheet or memorandum of understanding. The goal of a letter of intent is to settle the key material terms up front and specify what each party brings to the table. ... READ MORE


As Vaccinations Increase Across The Country – What Does It Mean For Employers?

With the FDA’s issuance of an Emergency Use Authorization (EUA) for multiple COVID-19 vaccines, and vaccines becoming more widely available, many U.S. employers, eager to safely transition employees back to work or transition workplaces back to normal, are considering implementing vaccine recommendations or mandates in the workplace. The fluidity of the pandemic has yielded yet another decision point for employers – can employees be required to obtain a COVID-19 vaccine as a condition of employment? ... READ MORE


Bankruptcy Update – Protecting Secured Claims In The New Year

With chapter 11 bankruptcy filings on the rise, all businesses are expected to begin feeling the impacts this year. This article provides a summary of significant changes to the bankruptcy code that lenders should be aware of as they navigate anticipated increased bankruptcy filings from borrowers. ... READ MORE


Restrictions On Non-Compete Restrictions – Are Covenants Not To Compete Still Enforceable In Nebraska?

More and more states are enacting laws severely restricting or altogether banning non-compete agreements. During his campaign, President Biden even proposed to eliminate all non-compete agreements, “except the very few that are absolutely necessary to protect a narrowly defined category of trade secrets,” and an outright ban on all no-poaching agreements. So, are covenants not to compete still enforceable? The answer to this question varies depending upon individual state laws and whether the covenant was entered into ancillary to an employment relationship or the sale of a business. In Nebraska, the answer is yes for properly drafted agreements. ... READ MORE


Is Canada Reforming Its Decades Old Privacy Regime? - The Digital Charter Implementation Act, Canada's Potential New Data Privacy Law

Since the turn of the century, Canadian data privacy law has been defined primarily by the Personal Information Protection and Electronic Documents Act (PIPEDA). Two decades later, a new bill proposing the Digital Charter Implementation Act (DCIA) is being considered to succeed PIPEDA. DCIA is a large piece of legislation, as three smaller acts comprise the whole omnibus bill. These three acts are the Consumer Privacy Protection Act (CPPA), the Personal Information and Data Protection Tribunal Act (PIDPTA), and the Electronic Documents Act (EDA); each of these acts addresses a different area of data privacy. In short, DCIA would repeal Part I of PIPEDA, retain and rename Part II of PIPEDA and create new enforcement frameworks for violations of Canadian data privacy law. ... READ MORE


Ready To Sell – How To Prepare Your Business During Pandemic Times

The pandemic has been challenging for all industries. McGrath North understands our clients are facing challenging decisions and questioning whether this is the time for an exit. ... READ MORE


USDA Releases Final Rule For Hemp

On Friday, January 15, USDA published a final rule that provides regulations for the production of hemp (“Final Rule”). As our readers will recall, the 2018 Farm Bill directed USDA to establish a national regulatory framework for hemp production. In October 2019, USDA released an interim final rule (which we previously wrote about HERE), covering licensing requirements, recordkeeping requirements for maintaining information on the land on which hemp is produced, procedures for testing the THC concentration levels for hemp, procedures for disposing of noncompliant plants, compliance provisions (including annual inspections to verify compliant hemp is being produced), and procedures for handling violations. ... READ MORE


What Do You Do When A Neighbor's Landscaping Is A Nuisance?

Many homeowners, in a Homeowners Association, have had difficulty with a neighbor whose landscaping detracts from their home’s value or beauty. This could be because the neighbor’s landscaping might have trees that block your view or hang over property boundaries and cause damage to your house. What can an owner do to combat these types of nuisances or invasions? ... READ MORE


Intellectual Property Laws Get Updates Under The Coronavirus Relief Package



So, You're CCPA-Compliant…But Are You Ready For CPRA?

The California Consumer Privacy Act (CCPA) went into effect on January 1, 2020. While many entities who do business in California have worked tirelessly to achieve compliance with CCPA, California voters approved Proposition 24 in November of 2020, which has solidified the California Privacy Rights Act (CPRA) as CCPA’s replacement (effective January 1, 2023). Despite the change in name, CPRA is not a revolution; instead, CPRA iterates upon the foundation of CCPA to further refine California privacy law, more closely emulate the European Union’s General Data Protection Regulation (GDPR), and grant greater data protections to consumers. ... READ MORE


Regulators Put A Spotlight On Transparency For Health Plans

Group health plans and related providers must not ignore the new price transparency rules set to take effect in 2021 and 2022. In addition to the final rules issued over the past couple years, the year-end Consolidated Appropriations Act, 2021 (or “CAA”) also includes new price transparency rules. These rules reflect the recent regulatory push to provide more information to health care consumers in order to encourage better health care spending decisions. This article explores the new transparency rules, and how they will impact your company’s group health plan and related service provider contracts. ... READ MORE


USPTO Increases Trademark Fees

As of January 2, 2021, the USPTO increased many of its official fees for trademark activities, the first in nearly three years. While a fee increase in the middle of a pandemic may seem ill-timed, the USPTO indicates such increases are necessary to cover increasing costs of operation, due in part to the constantly growing number of trademark filings. Specific fee increases for some of the most relevant or common actions are set forth below (all of which reflect fees for electronic filings). ... READ MORE


What You Need To Know About The Latest COVID-19 Relief Package



New "No Surprises Act" Aims To Reduce Surprise Billing Practices

Through passage of the recent COVID-19 relief legislation, the “Consolidated Appropriations Act,” Congress used bipartisan support to enact rules to curb surprise billing practices that commonly confuse and burden patients across the U.S. The “No Surprises Act” comes on the heels of recent efforts by a number of states to regulate surprise and balance billing practices implemented by various health care entities. ... READ MORE


Employee Benefits Considerations In The Year-End COVID-19 Relief Legislation

Another COVID-19 stimulus package passed just before the end of the year, and the legislation includes a number of changes impacting benefit plans. This alert briefly summarizes the benefit plan changes included within the Consolidated Appropriations Act, 2021 (the “Act”). Please note that the Act contains health plan related provisions not included in this article, such as legislation governing surprise billing, price transparency, prescription drug reporting, and mental health and substance abuse. These provisions will be covered in separate client alerts written by McGrath North. ... READ MORE


Omaha Condominium Association Doesn't Maintain The Common Elements Of A Condominium

An Omaha condominium unit owner says that he or she has been paying assessments for years, but notwithstanding that, the Association doesn’t have any funds to make repairs to the common elements of the condominium. In one particular lawsuit filed in Omaha in 2019, the Association told the owner that it didn’t have funds to make repairs to the foundation and exterior walls of the condominium. Notwithstanding the fact that the owner had been paying assessments for years. Other owners had also been paying those assessments and this work was not being done. ... READ MORE


Removing Condominium Association Board Members In Omaha

How can condominium unit owners in Omaha, who are not members of the Board of Directors of the condominium Association, remove board members on their own? Pursuant to Section 76–861(g) of the Nebraska code, the unit owners themselves can remove Board members. This makes sense since the unit owners initially elected the Board members. ... READ MORE


Harassment By An Omaha Condominium Neighbor

Living in an Omaha condominium, like all condominiums, is like living in an apartment complex. One of the problems with condominium living is that you have neighbors on the other side of your exterior walls or immediately above or below you. As a result, obnoxious behavior by a next-door neighbor can have negative effects on your ability to enjoy your condominium in a peaceful way. Your neighbor might play loud music, smoke, have loud fights or harass you when you see the neighbor on the elevator or in the hallway. ... READ MORE


How To Deal With An Omaha Condominium Neighbor Who Smokes

What do you do if you live in a condominium in Omaha, and your neighbor or somebody in a nearby condominium unit smokes? And you find that the smoking is inconvenient to you, unhealthy or downright dangerous to your health? ... READ MORE


HHS Proposes Significant Changes To HIPAA Privacy Rule

Earlier this month, the Department of Health and Human Services (through the Office of Civil Rights, or “OCR”) issued proposed changes to Health Insurance Portability and Accountability Act (“HIPAA”) under a Notice of Proposed Rulemaking that would impact both individuals and Covered Entities alike. The changes aim to increase patient access to their own health data and medical records, while also promoting care coordination and treatment of individuals. However, this increased flexibility is coupled with some heightened, more restrictive rules than those previously applied to Covered Entities. Covered Entities under the HIPAA Privacy Rule are generally health care providers, health plans, and health care clearinghouses. If your organization is a Covered Entity or a Business Associate (vendor) to a Covered Entity, these new proposed changes may impact your HIPAA policies and procedures, business associate agreements, internal and consumer facing materials, data disclosure practices and more. This alert briefly summarizes the proposed changes. ... READ MORE


Housing For Persons 55 And Older

James Brown and Jeffrey Daubman, as joint tenants, owned a condominium unit in The Latvian Tower condominium in southwest Omaha. Sometime in 2003 they decided to sell their condo and on December 12, 2003, listed the condo with a real estate agent for sale for $479,950. Between 2005 and December 2007, several potential buyers were discouraged from purchasing the condo because the Master Deed for the condominium contained a restrictive covenant that read: “No unit shall be sold or leased for any period of time to any person who, at the date of said purchase or lease, has children who will occupy or reside in the unit 180 days or more in any 1 calendar year.”[i] For purposes of that paragraph “children” meant persons under the age of 16 years or such younger age as may be established by the Board of Directors of the condominium association. ... READ MORE


PACE: A Tool For Financing Green Energy Improvements

PACE is a financing tool which has a green halo around it. Its purpose is to promote energy efficiency and the use of renewable energy. PACE, an acronym for Property Assessed Clean Energy, was passed by the Nebraska Unicameral in 2016. By comparison, it has existed in California since 2007. There are currently 36 states with some form of PACE legislation. ... READ MORE





What's Old Becomes New: Nebraska Adopts The Uniform Trust Decanting Act.

Estate and gift tax planning frequently involves the use of irrevocable trusts that are established during life. Moreover, establishing an irrevocable trust at death is a very common estate planning tool to assist in the protection of wealth for the benefit of family and other beneficiaries. Some trusts are designed to hold assets perpetually into the future. Since Nebraska allows trusts to last “forever” due to the abolition of the so-called rule against perpetuities, it is important for trusts to include provisions that address changes in circumstances. One way to allow a Trustee or other named “fiduciary” to make changes to a trust is by including a so-called “decanting” provision. ... READ MORE


What Else Is In The "Grand Compromise?" 2020 Nebraska Tax Law Changes Beyond The Imagine Nebraska Act

To close out its 2020 Session, the Nebraska Legislature passed LB 1107, which was referred to as the “Grand Compromise” by many Nebraska senators. This is because it represented a compromise on numerous Nebraska tax and incentive issues that were unresolved with very little time left in the Session. ... READ MORE


The Target Moves Again: DOL Revises FFCRA Regulations



Are COVID-19 Business Interruption Losses Covered? Initial Court Rulings Favor Insurers



The EEOC Weighs In On Employer Actions Towards Employees Returning To The Workplace



School Is In: The DOL Issues Revised Guidance For Childcare Leave



UPDATE: President Trump's Payroll Tax Deferral: What We Do (And Don't) Know



The Imagine Nebraska Act: Nebraska's Third Generation Tax Incentive Platform Is Now Law

As we work across Nebraska with Business and Economic Development Leaders to deploy the best ways to grow companies beyond COVID-19, Governor Ricketts and the Nebraska Legislature have just provided a strong, timely and helpful new Tax Incentive Platform: The 2020 Imagine Nebraska Act. The Imagine Nebraska Act was enacted August 17, 2020, and becomes effective on January 1, 2021. It replaces the 2005 Nebraska Advantage Act, which had previously replaced the 1987 Employment and Investment Growth Act. ... READ MORE


President Trump's Payroll Tax Deferral: What We Do (And Don't) Know

In response to failed stimulus talks on Capitol Hill in early August, President Trump issued a memorandum titled “Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster.” The memorandum defers employees’ 6.2% share of Social Security tax per paycheck on wages paid September 1 through December 31 of this year. The memorandum states the purpose of the deferral is to “put money directly in the pockets of American workers and generate additional incentives for work and employment, right when the money is needed most.” However, the memorandum has left employers with more questions than answers on how the deferral actually works. It is important to note the memorandum does not forgive the tax, but simply permits a temporary deferral, meaning, at least for now, the tax will eventually come due. President Trump has indicated that he hopes that if he is reelected, he will be able to get the deferred tax totally forgiven. Additionally, the memorandum directs the Secretary of Treasury to explore avenues to forgive the deferred taxes. ... READ MORE


Interested In Deferring and Reducing your Capital Gain Tax Bill? Follow The Yellow Brick Road To The Land Of OZ

Sally recently sold some stock she held for decades, generating a $500,000 gain that will result in a hefty tax bill when she files her federal income tax return in early 2021. Sally is looking for ways to minimize her tax bill by reinvesting the proceeds. Her trusted advisor recommended investing in a Qualified Opportunity Fund. ... READ MORE


Nebraska Tax and Incentive Update: Dealing With the Effects Of COVID-19

In light of the workplace changes caused by the COVID-19 crisis, the Nebraska Department of Revenue announced a number of new Nebraska tax and incentive policies and statements, which are intended to deal with the tax and incentive implications of these changes. These include the implications from significant numbers of employees working remotely. ... READ MORE


The Leeway Provided In An Employer's Workplace Violence Policy Found To Support A Discharge

A cardinal rule of both employment and human resources-based law is that an employer must follow its own policies and treat similarly-situated employees in a uniform manner. The failure to do so is relevant evidence of pretext for the discharge, but is not necessarily dispositive in every case. That same principle provides that similarly-situated employees must be similarly situated in all relevant respects and that the violations be of “comparable seriousness.” ... READ MORE


Assistance In Applying For Another Job Within The Company Found To Be A "Reasonable Accommodation" Of An Employee's Religious Beliefs

Although the process of seeking a reasonable accommodation is most commonly encountered in analyses under the Americans with Disabilities Act (ADA), employers subject to the protections of religious beliefs under Title VII of the Civil Rights Act of 1964 also must engage in an analysis of religious accommodation and undue hardship. However, the bar for establishing undue hardship and the existence and offer of a reasonable accommodation normally is much lower under Title VII than the ADA. ... READ MORE


Court Decides That Frequent Rest Breaks Are Not Covered By The FMLA

An employee’s request, supported by adequate medical certification, that he or she should be allowed more frequent breaks while at work due to his or her medical condition has proved difficult for courts to analyze. A recent decision by a federal court in Texas examined that issue and determined that such at-work breaks are not the type of “leave” protected by the Family and Medical Leave Act (FMLA). ... READ MORE


A Failure To Keep And Preserve Records To Support An Employee Termination Forces A Jury Trial

A recent decision by a federal court in Michigan did not establish any new legal standards, but it did highlight the crucial importance of documentation and record keeping to support an employee discharge. ... READ MORE


Written Disclaimer Does Not Protect Against Commission Cap Suit

Can a company reserve the right to unilaterally reduce sales employees’ commissions in certain situations?  Two courts that recently faced that issue answered “not always!”  Although it is a common business practice when  sales commissions are to be paid  to have the salesperson agree in writing that the company has the right to revise or depart from the compensation plan in certain situations, such agreements may be cancelled out by other statements or communications by the company. ... READ MORE


Bostock Filters Down: 8th Circuit Reverses 31-Year Position And Sheds Light On Future Tensions Between Religion And LGBTQ Rights

The historic U.S. Supreme Court decision in Bostock v. Clayton County, which barred employers from discriminating on the basis of sexual orientation or gender identity, has begun to filter down to the U.S. Circuit Courts of Appeals. ... READ MORE


Agencies Provide Additional Guidance On Group Health Plan Coverage For COVID-19 Tests



Privacy Shield Invalidated – The Future Of The EU-US Privacy Shield

Questions about how to move forward, please contact a member of McGrath North’s Privacy and Cybersecurity Practice Group. ... READ MORE


USMCA Guidance Unveiled

The US-Mexico-Canada Agreement became effective on July 1, 2020, replacing trade rules that had been established under the North American Free Trade Agreement for over 25 years. Major differences between the USMCA and NAFTA were briefly set out in an earlier posting. For businesses involved in North American trade, there are several procedural and other considerations worth highlighting as well. ... READ MORE


DOL Seeks To Improve Availability Of Retirement Investment Advice

In an effort to improve the variety of retirement plan investment options available to workers and retirees, the Department of Labor (DOL) recently published a proposed class exemption that would place investment advice fiduciaries under a retirement plan or individual retirement account (IRA) into an exempt class, free from previous restrictions on receiving compensation generated by self-dealing, third-party payments, and principal transactions. ... READ MORE


IRS Clarifies And Expands On Retirement Plan Relief Under The CARES Act



Doing Business In New York – Are You Compliant With The New York Shield Act?

The “Stop Hacks and Improve Electronic Data Security” (SHIELD) Act went into effect in New York on March 21, 2020. The Shield Act requires businesses to implement safeguards with respect to “private information” of New York residents collected by a business and broadens New York’s security breach notification requirements. ... READ MORE


Administration Expands Ban On Legal Immigration



Supreme Court Upholds DACA

On June 18, 2020, the Supreme Court ruled against the government’s attempt to end the DACA program and remanded the case for further consideration. This was a long-awaited decision that came after years of complex litigation. In a 5-4 decision, the Supreme Court found that the administration’s attempt to terminate DACA was unlawful. The Supreme Court held that the decision by the Department of Homeland Security (DHS) to terminate DACA was reviewable in federal court and also “arbitrary and capricious” under the Administrative Procedure Act (APA). On the merits, the Supreme Court reasoned that the “agency must defend its actions based on the reasons it gave when it acted” and further that DHS failed to consider “reliance” interests such as a broader renewal period for DACA recipients or a more accommodating termination date. The Supreme Court stated that while DHS was not required to consider all of the policy alternatives, “it was required to assess whether there were reliance interests, determine whether they were significant, and weigh any such interests against competing policy concerns.” The Supreme Court’s decision will allow hundreds of thousands of young people in the United States to temporarily keep work authorization and have protection from deportation. The Supreme Court emphasized that the Trump administration can still end DACA, but it must go through the proper process to do so. ... READ MORE


New Nebraska Small Business And Livestock Producer Grants



Legal Implications Of Implementing Temperature Screening Procedures



U.S. Supreme Court Rules Title VII Protections Extend To Gay And Transgender Workers



Finally! – California Attorney General Submits Final Proposed CCPA Regulations

On June 1, 2020, the California Attorney General submitted the final proposed regulations under the California Consumer Privacy Act of 2018 (CCPA). The California Office of Administrative Law (OAL) now has 30 days to review and approve the final proposed regulations, but like many other state procedural matters, the COVID-19 pandemic may affect this timeline. Under Governor Newson’s Executive Order N-40-20, this review window could be extended. However, in order to have the statutorily required regulations approved prior to the July 1, 2020 enforcement date (set forth in the CCPA), the California Attorney General has asked the OAL to complete its review within the 30-day period. The California Attorney General has previously indicated that the enforcement date will not be delayed. ... READ MORE


FDA Relief Measures For The Food And Beverage Industries During The COVID-19 Pandemic



Pending Amendments To The Condominium Act, And Further Proposed Revisions, Which Will Make Condominium Development More Likely

Condominium development was booming in the 2000s. This came to a screeching halt with the advent of the Great Recession. Single family home development, similarly robust prior to the Great Recession, also came to a halt. However, starting about 2012, single family home development took off again and has remained fairly robust since (present pandemic-related circumstances excluded). Interestingly, condominium development never bounced back. For instance, in the 5 year period prior to 2010, over 60 condominiums were developed in Omaha. However, for the period 2015-2019, less than 20 condominiums were developed. ... READ MORE


Department Of Labor Finalizes Rule To Allow Employers To Ditch Paper Disclosures For Retirement Plans

On October 22, 2019, the Department of Labor (“DOL”) released proposed regulations updating the electronic disclosure rules for ERISA notices. In response to commentary from the public, the DOL made several modifications and additions to these proposed regulations, which have been published as a final rule. Given the significant advances in technology over the last decade, employers have long-awaited a meaningful update to the current, outdated electronic disclosure safe harbor. Although employers may continue to provide paper notices to employees, the DOL anticipates that most employers will migrate to the new safe harbor for electronic disclosure of ERISA notices. The new safe harbor is expected to create efficiency, increase participant awareness, and result in cost savings for employers. The only downside – the safe harbor does not apply to health and welfare plans. ... READ MORE


PPP Loan Alert – New Developments



Back To The Future: Ramping Up After COVID-19 Shutdowns



Employee Benefit Plan Deadline Relief Due To The COVID-19 Virus



Moving Successfully Through And Beyond The COVID-19 Pandemic



President Trump's Executive Order To Suspend Immigration Following The COVID-19 Outbreak



Estate Planning During COVID-19: A Silver Lining To Gift Your Depreciated Stock



Novel Coronavirus (COVID-19) Checklist: Key Considerations For Your Business



USPTO Extends Certain Deadlines In Response To COVID-19



IRS Releases Guidance On Documentation Needed To Obtain Tax Credits Under The FFCRA



Paycheck Protection Forgivable Loan Program: SBA Issues Guidance and Loan Application



DOL Issues Additional Guidance On The FFCRA

March 30, 2020 ... READ MORE


Coronavirus Aid, Relief, And Economic Security Act: Key Elements

March 27, 2020 ... READ MORE


Identifying Possible Recovery Of Business Losses From COVID-19 Within Insurance Policies

March 27, 2020 ... READ MORE


Taking Care Of Essential Business During COVID-19

March 26, 2020 ... READ MORE


COVID-19 Impacts On Immigration

March 26, 2020 ... READ MORE


New (And Existing) Laws Designed To Provide Financial Relief To Businesses Coping With The COVID-19 Pandemic

March 25, 2020 ... READ MORE


DOL Sheds Light On Some FFCRA Open Issues

March 25, 2020 ... READ MORE


Department Of Labor Reveals Required Poster For Families First Coronavirus Response Act

March 25, 2020 ... READ MORE


COVID 19: Cyber Insurance Coverage And The Teleworker – Are We Covered?

March 25, 2020 ... READ MORE


COVID 19: Keeping Your Employees Safe and (Cyber) Secure While Working From Home

March 25, 2020 ... READ MORE


Force Majeure And Other Remedies Amid COVID-19

March 24, 2020 ... READ MORE


Treasury Department And IRS Indicate More Tax Relief Is On Its Way

March 23, 2020 ... READ MORE


COVID-19: Expansion Of Unemployment Benefits To Nebraska And Iowa Workers

March 20, 2020 ... READ MORE


COVID-19: Questions & Answers for Concerned Employers

Our firm has been receiving numerous questions relating to COVID-19.  In an effort to assist our clients with navigating employment-related issues concerning COVID-19, our Labor and Employment Group has put together the below brochure entitled “COVID-19: Questions and Answers for Concerned Employers.”  We will continue to update this brochure as new information becomes available.  We encourage you to reach out to our firm if you have any questions on other business-related issues you may be encountering. ... READ MORE


Top 10 Employee Benefit Plan Considerations During The COVID-19 Pandemic

March 20, 2020 ... READ MORE


Congress Enacts A Sweeping Leave Bill In Response To COVID-19

March 19, 2020 (revised March 24, 2020) ... READ MORE


COVID-19: Employer Tax Relief Included in New Coronavirus Response Act

March 19, 2020 ... READ MORE


COVID-19: What Should Employers Communicate And What Should Employees Report?

March 17, 2020 ... READ MORE


Coronavirus (COVID-19) Litigation Update

March 13, 2020 ... READ MORE


McGrath North COVID-19 Resource Guide



McGrath North COVID-19 Response Team

March 12, 2020 ... READ MORE


Proposed CFIUS Filing Fees Announced

As we have previously written about, Final CFIUS Regulations Significantly Expand Jurisdiction, the Foreign Investment Risk Review and Modernization Act of 2018 (FIRRMA) and the regulations thereunder expand the scope of transactions that are subject to the US Committee on Foreign Investment in the United States (CFIUS) review to include non-controlling foreign investments in certain US businesses and certain real estate transactions. FIRRMA also authorized CFIUS to impose filing fees not to exceed the lesser of 1% of the transaction value or $300,000. ... READ MORE


Non-Disclosure Agreements In The #MeToo Era: Are They Still Viable?

A hot topic that has been the subject of recent legal, political, and media comment is the use of non-disclosure agreements (NDAs) in sexual harassment settlement agreements to silence the employee who made the complaint. These types of NDAs prohibit the employee from speaking about the allegations for a period of time, sometimes indefinitely. Employers commonly use these agreements to settle employment discrimination and harassment claims in order to avoid publicity, including situations in which the allegations are believed to have no validity. If an employee breaches the NDA, he or she may be liable for monetary penalties or be required to return the settlement payments if a court enforces the agreement. NDAs, however, have come under increasing attack on both the federal and state level. ... READ MORE


Updates To The CCPA Proposed Regulations – What Changes Now?

On Friday, February 7, 2020, the California Office of the Attorney General (OAG) released revisions to its proposed implementing regulations to the California Consumer Privacy Act (CCPA). The OAG will accept comments regarding the proposed changes until Monday, February 24, 2020. ... READ MORE


Hot Health Care Matters Surface In Anticipation Of 2020 Election

As the presidential election quickly approaches, you may have noticed the uptick in changes to health care-related laws and regulations. Not only have Congress and the court system continued to deconstruct the Affordable Care Act (“ACA”), but agencies have also released guidance aimed at increasing price transparency for health care across the board. Regardless of whether you sponsor a group health plan, participate in the health care industry as a provider, provide services to plans and providers, or are simply an individual seeking health insurance, the recent changes to health care regulations may impact you or your business. ... READ MORE


The SECURE Act: How The Elimination Of The "Stretch IRA" Will Impact Your Estate Plan

Congress encourages retirement savings by giving income tax breaks to people who make contributions to an IRA or other qualified retirement plan. Until recently, surviving beneficiaries also enjoyed tax advantages on plan distributions received after the owner’s death. However, a new federal law known as the “SECURE Act” is designed to limit these post-death tax benefits for many designated beneficiaries. These changes, which are discussed below, are effective as of January 1, 2020. ... READ MORE


NLRB: The Pendulum Swings Toward Common Sense

The National Labor Relations Board (the “Board”) is at it again. In recent months, the current Board has “revised” a number of unprecedented decisions that were issued by it under the previous Obama administration. This article highlights one significant change by the Board along with another that is in the works. ... READ MORE


DOL Sets A Higher Bar For "Joint Employer" Status

The U.S. Department of Labor (DOL) recently announced its makeover of the rule defining joint employer status under the Fair Labor Standards Act (FLSA). The final rule becomes effective March 16, 2020 and clarifies when employers can be held jointly and severely liable for wage and hour violations under the FLSA. ... READ MORE


Is Nebraska Next – Introduction of the Nebraska Consumer Data Privacy Act

On January 8, 2020, the Nebraska Consumer Data Privacy Act (LB746) was introduced in the Nebraska Legislature. For those companies that have implemented data privacy programs to comply with the California Consumer Privacy Act (CCPA), the bill looks very similar to the provisions of the CCPA, with certain caveats. ... READ MORE


NLRB Allows Employers To Control Union Access To Its Email Systems

A union’s biggest challenge in an organizing campaign is communicating effectively with the employees it wants to organize. The National Labor Relations Board (NLRB), under the previous administration, strongly limited an employer’s ability to deny use of union organizers’ access to the company’s email systems. Recent decisions of the “new” membership of the NLRB have restored an employer’s right to control its email systems. ... READ MORE


Court Reviews An ADA Claim And Concludes – "No Overtime? No Job!"

One of the most common issues that we deal with under the Americans with Disabilities Act (“ADA”) is how an employer should respond when an employee’s healthcare provider imposes certain work restrictions. Often, a healthcare provider will restrict the employee’s hours of work. On this point, the Eighth Circuit Court of Appeals recently held that, due to the circumstances of the Plaintiff’s job, working overtime was an essential function of her position. Because the Plaintiff was restricted from working overtime, she was therefore not qualified to perform the essential functions of the position and could not maintain an ADA claim against the employer. ... READ MORE


Major Change To H-1B Cap Petitions – New Electronic Registration Process

On January 9, 2020, the Department of Homeland Security (DHS) published a notice in the Federal Register to formally announce implementation of a new electronic registration for H-1B cap petitions. The implementation of the registration process now requires employers filing H-1B cap petitions for fiscal year (FY) 2021 to first electronically register and pay the associated $10.00 H-1B registration fee. ... READ MORE


Calling All California Employers – Are YOU CCPA Compliant?

The California Consumer Privacy Act (CCPA) went into effect January 1, 2020. Many California employers have improperly ignored its application to their businesses. While most employee rights were carved out of the CCPA’s application until January 2, 2021, there are still key requirements under the CCPA that employers of California residents must abide by starting January 1, 2020. ... READ MORE


NAFTA On Life Support: USMCA On Deck

Having been reworked and passed by the U.S. House of Representatives in December and most recently approved by the Senate, the U.S.-Mexico-Canada Agreement (USMCA) is now set to be signed by President Trump. Once it also receives the expected ratification by Canada – it has already been passed by Mexico – USMCA will become effective. ... READ MORE


U.S.-China Trade Agreement: Phase 1 And Done (For Now)

The U.S. and China have now signed the so-called “Phase 1” trade agreement, bringing at least a temporary pull-back in the 18-month trade tussle between the two economic powers. The full text was only made available at the time of signing – which is unusual – with only a one-page Fact Sheet having been previously circulated. ... READ MORE


Final CFIUS Regulations Significantly Expand Jurisdiction

The US Department of the Treasury issued final regulations (“Final Rules”) last week that expand the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to review non-controlling foreign investments in certain US businesses and certain real estate transactions. The existing jurisdiction of CFIUS to review any transaction in which a foreign person acquires control of a US business with national security concerns has not changed. The final regulations become effective February 13, 2020. ... READ MORE


New Flexibility For Health Reimbursement Plans

In an effort to reverse another aspect of the Affordable Care Act (“ACA”), the Trump Administration published a proposed rule in late October that would allow employers to reimburse employees for medical expenses through a stand-alone health reimbursement account (“HRA”).  Health care reform imposes a large excise tax on arrangements that reimburse employees for health care expenses without also providing a group health plan to employees.  The penalty was intended to drive employers to purchase group insurance plans for their employees but posed a huge challenge for small employers who saw such reimbursements as a natural alternative to offering employee health care coverage.  In the wake of rising health care costs, the Internal Revenue Service (“IRS”) recognized the burden such prohibition posed on small employers.  As a result, in 2017, the IRS chipped away at the prohibition by allowing employers with less than 50 full-time employees to offer special stand-alone HRAs, known as “Qualified Small Employer Health Reimbursement Accounts” or “QSEHRAs.”  The government now takes one step further by proposing to allow both small and mid-size employers to offer HRAs to their employees, even if they do not offer traditional group coverage.  The Proposed Rule intends to accomplish two major goals: (1) permit HRAs to be integrated with individual health insurance coverage; and (2) expand the definition of benefits in order to allow reimbursement for stand-alone dental, limited scope vision, and other plans. ... READ MORE


Ringing In The New Year With The SECURE Act

In connection with the federal spending legislation, Congress has passed, and the President has signed, the Setting Every Community Up for Retirement Enhancement Act or the SECURE Act. The SECURE Act includes significant changes to the laws affecting retirement plans. The law focuses on encouraging lifetime income or annuity forms of benefit payments and increased contributions through 401(k) plan automatic enrollment. The various provisions of the SECURE Act have their own effective dates. Below is a brief summary of the changes. ... READ MORE


How To Avoid The 24 Family Business "Train Wrecks"

We weren’t surprised by our meeting with Andy.* We had seen it many times before. Andy and his brother Al had founded and built a very successful construction company thirty-five years ago. Double A Construction Company* had operations across the region which had consistently produced significant year-to-year profitable net cash flow until the past few years. ... READ MORE


Estate Planning – It's Really Not That Hard To Plan

Some people are just not planners. They just let things happen, feeling like they really cannot control the outcome. Well that’s just not true when it comes to estate planning. Estate planning is an area that you can get very predictable outcomes if you put some time and effort into it. The purpose of this article is to summarize several key points about estate planning, and how you can achieve great results and avoid surprises. ... READ MORE


FDA Issues Warning Letters To 15 Companies Selling CBD Products

This week, FDA issued warning letters to 15 companies for selling products containing cannabidiol (CBD) in violation of the Federal Food, Drug, and Cosmetic Act (“FD&C Act”). The covered products include pet products, topicals, dietary supplements, and conventional foods (including peanut butter, water and gummies). ... READ MORE


USDA Releases Proposed Hemp Rules

On October 29, the USDA released  the much-anticipated draft rules for hemp manufacturing (the “Proposed Rules”).  As we have previously written about HERE, the 2018 Farm Bill removed hemp from the Controlled Substances Act and ordered the USDA to establish a Domestic Hemp Production Program and implementing regulations. The Proposed Rules cover the requirements for where hemp can be grown, THC testing standards, the disposal process for “hot hemp” (hemp with THC content in excess of the permitted limit) and licensing protocols. ... READ MORE


New "Notice And Access" Safe Harbor Would Allow Employers To Ditch Paper Disclosures For Retirement Plans

On October 22, 2019, the Department of Labor (“DOL”) released proposed regulations updating the electronic disclosure rules for ERISA notices. Given the significant advances in technology over the last decade, employers have long-awaited a meaningful update to the current, outdated electronic disclosure safe harbor. Although employers may continue to provide paper notices to employees, the DOL anticipates that most employers will migrate to the new, proposed safe harbor for electronic disclosure of ERISA notices. The new safe harbor is expected to create efficiency, increase participant awareness, and result in cost savings for employers. The only downside – the safe harbor does not apply to health and welfare plans. ... READ MORE


CCPA Amendments – Do The Delays Affect You?

The California Consumer Privacy Act (CCPA) will go into effect on January 1, 2020. In September, the California legislature passed a handful of amendments that may have large impacts on your business’s overall plan for compliance with the CCPA. The Governor of California has until October 13, 2019 to sign the amendments into law or veto the bills. ... READ MORE





California Attorney General Issues Draft CCPA Regulations – Has The Playing Field Changed?

The California Attorney General (AG) has issued the long-awaited draft regulations for the California Consumer Privacy Act (CCPA), which regulations will be officially filed on October 11, 2019. The AG stated that July 1, 2020 is the expected effective date of final regulations and enforcement. This is not to be interpreted as a safe harbor, but simply an enforcement delay. The public may submit written comments to the proposed regulations prior to December 6, 2019 at 5:00pm. The CCPA is effective on January 1, 2020. ... READ MORE


DOL's New Overtime Rule Reduces Obama Administration's Attempt To Expand Overtime To 4.2 Million Workers

The wait is over. The U.S. Department of Labor (DOL) has revealed its final rule extending overtime pay to an estimated 1.3 million workers under the Fair Labor Standards Act. ... READ MORE


Ch-Ch-Changes* – Immigration Updates

As we have seen the last two years, there are changes to the U.S. immigration system almost daily. Whether it be a new proposed regulation, case, executive order, blocking of court order, policy, or tweet, immigration has been a moving target. Some policies are proposed, suspended, and some are passed and now in place. Now more than ever it is imperative to keep up to date with the never-ending changes the immigration system is experiencing as increased scrutiny continues. ... READ MORE


Protect Your Tax-Exempt Status: Inurement And Private Benefit In The Healthcare Sector

Qualification as a nonprofit affords an organization tax benefits in the form of exemptions from federal and, often, state taxes.  In addition, most organizations described in section 501(c)(3) of the Internal Revenue Code are eligible to receive tax-deductible contributions. ... READ MORE


Lurking In The Shadows – How The California Consumer Privacy Act May Affect Your Business

Unless you have been paying attention to data privacy news, you may not realize that January 1, 2020, is the implementation date of the California Consumer Protection Act (CCPA) and that July 1, 2020, is the current deadline for the California Attorney General to implement regulations under CCPA. ... READ MORE


Challenges To The Corporate Rule Of Stockholder Primacy

Background ... READ MORE


Participant Data And Fiduciary Liability: The Current Regulatory Environment, The Vanderbilt Lawsuit, And Best Practices For Benefit Plan Sponsors

With cybersecurity risks on the rise and increased awareness of the sophisticated ability of hackers in the modern world, many plan sponsors have expressed growing concerns that they may have fiduciary liability with respect to protection of participants’ personal information. By now, most plan sponsors have become accustomed to complying the Health Insurance Portability and Accountability Act (“HIPAA”) with respect to participant data within their employer-sponsored health plan. However, employers are not accustomed to applying such standards in the retirement plan context. Given the heightened cybersecurity risks in today’s digital society, employers serving as plan sponsors of retirement and welfare benefit plans should begin to implement policies and procedures to protect participant data and carefully monitor their service providers as they handle participant data. ... READ MORE


Recent FDA Warning Letter Valuable Reminder To CBD Industry – Don't Ignore Basic Regulatory Compliance

Following similar announcements by CVS and Walgreens, Kroger became the latest retailer to join the CBD craze when it announced plans to sell CBD-infused products. Sales of products containing CBD are expected to top $5 billion this year, a 700% increase from 2018, and could reach nearly $24 billion in sales by 2023, according to analysts. However, a recent warning letter from the FDA contains important reminders for the industry. ... READ MORE


Turning Vacation Days Into Cash And Other In-Demand Benefits

Redesigning a paid-time-off (PTO) program to provide employees with the option to buy, sell or donate their PTO may help employers meet the wants and needs of a wide range of workers.  Employers should pay attention to the tax implications as well as state laws when designing a program. ... READ MORE


An Employee's Notice Of Her Need For Medical Leave Was Not Sufficient To Invoke Protections Under The FMLA

The importance of carefully scrutinizing an employee’s stated reasons for seeking medical leave was underscored in a recent federal court decision. The failure to do so may lead to unintended liability for violating the Family and Medical Leave Act (FMLA). ... READ MORE


Court Finds That Different Responsibility Levels In Similar Jobs Preclude A Finding Of An Equal Pay Violation

The Eighth Circuit Court of Appeals recently, in an unpublished decision, concluded that a female fine arts teacher failed to prove that a male, who she alleged held the same job position, was paid more in violation of the federal Equal Pay Act. ... READ MORE


NLRB Allows Company To Eject Union Organizers From Its Public Cafeteria

The National Labor Relations Board (NLRB), in a recently issued decision, upheld the right of a company to eject union organizers from its cafeteria, even though the cafeteria was accessible to the public. In doing so, it concluded that the company’s property rights outweighed the rights of union organizers to enter into a public area of its otherwise private facility. However, the NLRB noted that a company may not discriminate against union organizers when regulating access to its public areas. A deciding factor in this decision was that the company had also ejected other outside soliciting organizations from the cafeteria including members of a religious order who were attempting to distribute handbills in the same cafeteria. ... READ MORE


Payroll Problems When Paying Bonuses To Hourly Employees

When employers pay bonuses to hourly employees, they often overlook payroll issues relating to the calculation of overtime. For example, employers may pay nondiscretionary bonuses to hourly employees based on production, quality of work, attendance or longevity. In many cases, the employer simply pays the bonus without considering how this could impact the employee from a payroll standpoint with respect to overtime. ... READ MORE


The Department Of Labor Warns Against Extending FMLA Past Twelve Weeks

A recent opinion letter issued by the Department of Labor (DOL) advised that employers may not allow employees to use paid time off before FMLA leave takes effect. This opinion letter was issued as a result of an employer inquiring whether it may delay designating leave as FMLA leave or permit employees to expand their FMLA leave beyond the statutory 12-week entitlement (26 weeks for certain servicemember situations). The federal courts had previously been split on those issues, which would generally arise when an employee stated that they did not want their leave categorized as FMLA leave, but rather wanted to use vacation and sick pay and then have their FMLA leave kick in. The employer cited an applicable FMLA regulation which stated, in relevant part, that the employer must observe any employee benefit or program that provides greater family and medical leave rights to an employee than those in the FMLA. ... READ MORE


HIPAA-Covered Entity Exemption To CCPA, Don't Be Mistaken – You May Still Have To Comply

With the California Consumer Privacy Act’s (CCPA) compliance deadline fast approaching (January 1, 2020), companies are preparing to comply with the additional complex data privacy and security requirements. HIPAA-Covered Entities may mistakenly overlook the fact that the CCPA does not wholly-exempt personal information collected by HIPAA-Covered Entities, but in turn only exempts information already protected by HIPAA. HIPAA, the Health Insurance Portability and Accountability Act, requires health care organizations, employer-sponsored group health plans, healthcare clearinghouses, and other Covered Entities to ensure the privacy and security of Protected Health Information (“PHI”). Although the CCPA exempts data that constitutes PHI, a HIPAA-Covered Entity or related Business Associate must still protect personal data (or even health data) that is covered by the CCPA but does not satisfy the definition of PHI under HIPAA. ... READ MORE


CCPA Doesn't Apply To Financial Institutions? Think Again – Big Impacts On Banks Privacy Operations

Financial Institutions have always banked their privacy practices on the requirements under Title V of the Gramm-Leach-Bliley Act (GLBA) and its implementing regulations. That day is now over! The California Consumer Privacy Act (CCPA) is sweeping in and changing the financial privacy landscape. Many had hoped the CCPA would have an all-inclusive exemption for financial instructions already subject to compliance under GLBA; however, the California legislature has made clear that CCPA’s application will apply to portions of data held by financial institutions. ... READ MORE


New Law Allows ESOP Ownership Of CPA Firms In Nebraska

Joe and Pete have been CPA partners for 25 years. Their CPA firm has been successful over the years. They have been bringing on young CPAs and have seen a nice grassroots growth pattern. But Joe and Pete want to expand the firm and want a plan for their succession. The young CPAs have too many financial obligations and little extra cash to buy any stock from Joe or Pete. They’ve thought about selling to a bigger CPA firm or merging with a national firm, but they’re worried about those two options. They could probably get a good price for the business, but they’re worried about the buyer moving their CPA firm out of the community where it is, and they’re really worried about what a sale or merger will do to their firm culture. They’ve worked hard to build a culture of team spirit, a willingness to help each other, to pitch in when extra work is needed on a project, and to bring positive energy to the firm. They’ve seen the merger of other companies fail. Joe and Pete feel like they do not have a good solution for transition of their ownership of their CPA firm. ... READ MORE


Eeny, Meeny, Miny, Moe: C Corporations, S Corporations, and Partnerships: A Quick Guide to Entity Selection

When a new business begins, or an existing business acquires another business or a significant asset (such as real estate), entity selection is often a topic of discussion. When evaluating the right entity type, it is important to understand the income tax rates that are involved. C corporations are subject to a 21% federal income tax rate under the 2017 Tax Act (“Act”). Individuals are subject to a progressive federal income tax rate structure, with a top rate of 37%. Higher-income taxpayers are subject to a 3.8% tax on net investment income (certain income from passive sources) (“NIIT”). ... READ MORE


IRS Expands Correction Procedures For Retirement Plans

The IRS recently issued Revenue Procedure 2019-19 (the “2019 Revenue Procedure”), which restates and expands the Employee Plans Compliance Resolution System (“EPCRS”). EPCRS offers plan sponsors three plan correction methods: the Self Correction Program, permitting plan sponsors to correct failures under certain conditions without having to submit the correction to the IRS for approval and paying any fee; the Voluntary Correction Program (“VCP”), under which the failure and proposed correction may or must be submitted to the IRS for approval with the imposition of the applicable fee; and the Audit Closing Agreement Program (“Audit Cap”), which applies if an error is discovered upon IRS audit. The good news for practitioners and plan sponsors is that the 2019 Revenue Procedure has expanded the list of items that can be self-corrected. ... READ MORE


GDPR One Year Later: Has Your Company Sorted Through The Confusion And Risks – What U.S. Companies Need To Remember

It’s been more than 1 year since Europe’s General Data Protection Regulations (GDPR) went into effect, and the data protection regulatory front still remains confusing and difficult to trudge through for many U.S. based companies. However, it is clear, there is no slowing down when it comes to increased data privacy regulation. Below is a refresher on the basics of GDPR, as last year we saw many U.S. based companies put aside the issue of whether they needed to focus dollars and time on complying with GDPR. As the regulatory front continues to grow and there is increasing pressure from consumers, customers and vendors to pay attention to data privacy laws (like GDPR), companies who avoided GDPR should review the jurisdictional requirements to confirm their compliance obligations. ... READ MORE


Tackling The California Market From The Midwest? What A Business Needs To Know About The California Consumer Privacy Act (CCPA)

The data privacy regime is starting to look like more of the wild west every day. A year after companies had to focus resources on complying with Europe’s onerous requirements under the General Data Protection Regulations (GDPR), companies must once again gear-up for the first round of U.S. state efforts to tighten up data privacy rules with California’s new California Consumer Privacy Act (CCPA), which comes into effect on January 1, 2020. Whether you were able to ignore GDPR or not, CCPA sets the data privacy bar higher for most U.S. based companies. ... READ MORE


New Health Plan Opportunities for Small Businesses



A Brief Overview of the SEC Proposed Fiduciary Rule Package

After the 2016 publication of the Fiduciary Rule by the Department of Labor (“DOL”), and subsequent Fifth Circuit ruling casting doubt on such rule, the U.S. Securities and Exchange Commission (“SEC”) proposed two rules and an interpretation in order to clarify and provide an overview of the standards of conduct for investment professionals.  On April 18, 2018, the SEC published proposed rules targeting broker-dealers and investment advisers.  In publishing these rules and the interpretation, the SEC aims to raise the standard of conduct for broker-dealers when they provide recommendations to retail investors and reaffirm and clarify the terms of relationships that retail investors have with their investment professionals.  Additionally, the SEC seeks to preserve retail investor access investment services and products, as well as raise retail investor awareness of whether they are a transaction with registered financial professionals. ... READ MORE


Employee Benefits Statutory Civil Penalties

The following summary describes the most common penalties applicable to retirement, health, and welfare plans in 2019 through ERISA and other federal laws. This list serves as an important reminder that noncompliance with laws relating to your company’s benefit plans could result in significant penalties. ... READ MORE


I Didn't Know I Still Live In Nebraska: How To Avoid Accidental Residency In Nebraska

Frank* was at a loss. Although Frank and his wife had moved to Arizona upon retirement, they had kept a house in Omaha to use for visits to see family and friends who remained in Nebraska. They used their Nebraska house for a few months each year. They also kept up their membership in a few Nebraska organizations, including their church. Frank and his wife did not realize that the Nebraska Department of Revenue would contend that those actions meant Frank and his wife were still Nebraska residents for tax purposes. So, Frank and his wife were facing a significant Nebraska tax bill. To compound that, Frank and his wife were still treated as residents of Arizona for tax purposes as well. Frank’s goodwill towards Nebraska was lost. ... READ MORE


Estate Planning For Millennials: Why You, Or Your Children, Need To Start Planning Now

Estate planning is not an easy conversation for anyone, particularly young adults with a lot a life ahead of them. However, young adults may have some of the most important non-tax reasons to plan. This article highlights just a few of them. ... READ MORE


What's The Deal With Reference-Based Pricing?

Physicians Bulletin • March/April 2019 ... READ MORE


Estate Planning Is For Everyone: 10 Non-Tax Reasons To Plan

With the newly-enacted federal estate tax laws, which allow married couples to pass up to $22,800,000 in value to their heirs in 2019 free of the federal estate tax ($11,400,000 for single individuals), many people have the misconception that they do not need to do any estate planning. However, apart from tax planning, the main reasons for estate planning exist now as much as ever. This article will discuss 10 non-tax reasons to implement an estate plan. ... READ MORE


H-1B Cap Petitions Updates and Changes

U.S. Citizenship and Immigration Services (USCIS) has just announced updates and changes to the FY 2020 H-1B cap season. The “cap season” is related to the number of H-1B petitions which will be accepted and processed in light of the limited number of 85,000 H-1B petitions for each government fiscal year. USCIS will begin accepting H-1B petitions for the FY 2020 cap on April 1, 2019, which is the first day that H-1B petitions for the upcoming fiscal year can be accepted. It is anticipated that no further petitions will be accepted after the first week in April. ... READ MORE


DOL Announces New Proposed Overtime Rule: The Potential New Salary Threshold

On March 7, 2019, the Department of Labor (“DOL”) announced the long-awaited proposed rule containing the new salary threshold for employees to be exempt under the Fair Labor Standards Act. The new proposal would update the salary threshold from the current $455 per week (or $23,660 annually) to $679 per week (or $35,308 annually). ... READ MORE


The H-1B Filing Date for "Cap" Petitions is Fast Approaching

H-1B visas allow highly skilled foreign workers to temporarily work in the United States. The worker must have a bachelor’s degree or higher. Under the current H-1B system, 85,000 petitions may be granted – 65,000 “H-1B regular cap” visas (new hires) and 20,000 “master’s exemption” visas (professionals who graduate with a master’s degree or doctorate from a U.S. university). However, the number of petitions filed over the past several years have vastly outnumbered the 85,000 cap. In the last government fiscal year, for example, approximately 190,000 petitions were filed. ... READ MORE


Buying And Selling Paid Time Off The Ins And Outs Of A PTO Purchase Plan

Whether your employees want more vacation or more cash, a paid time off (“PTO”) purchase plan is an attractive benefit that allows employees the flexibility to receive what is most important to them. More companies are offering employees the option to buy and sell vacation days in exchange for compensation. These PTO purchase plans, sometimes referred to as “PTO buy-sell programs” can be designed in a number of ways to suit each employer’s and employee’s specific needs. These plans can be implemented as standalone programs, but certain tax advantages attach if they are offered through a company’s cafeteria plan. As a result, most PTO purchase plans are offered through a cafeteria plan. ... READ MORE


Federal Gift Tax Returns: What You Need To Know

In December, many of our clients are thinking about year-end gifts to family and others. However, not everyone is aware that such gifts may need to be reported on a federal gift tax return (IRS Form 709), and many gift tax returns that should be filed are missed. These mistakes can result in unpaid gift taxes, interest and even penalties. With that in mind, this article will provide a brief overview of the federal gift tax and also review some of the basic requirements for filing gift tax returns. ... READ MORE


Iowa Medicaid Cuts Benefits






McGrath North Recognized in Chambers High Net Worth Guide

McGrath North is pleased to announce that their Tax, Trusts and Estates practice group earned a top ranking (Band 1) in the 2018 Chambers High Net Worth (HNW) guide. McGrath North is one of two Nebraska firms to receive the Band 1 honor for private wealth law. ... READ MORE


The Anatomy Of Resolving State Tax Matters

As many people realize, State and Local Taxes are a significant percentage of the overall taxes paid by companies and individuals. In 2017, State and Local governments in the United States collected $1,400,000,000,000 in state and local individual income, corporate income, sales and property taxes. This is equal to approximately 41% of the amount of 2017 U.S. income taxes collected by the federal government. ... READ MORE


Attorney Entitled To Telecommuting As A Reasonable Accommodation

The issue of whether telecommuting is a reasonable accommodation for a disability has been a controversial one. If the employer wishes to refrain from offering telecommuting, it must establish that physical presence in the office is an “essential function” of the job. The Sixth Circuit recently upheld a jury verdict in favor of an in-house attorney finding that her employer violated the Americans with Disabilities Act by not allowing her to work remotely while she was on bed rest during her pregnancy. ... READ MORE


NLRB's General Counsel Adopts A New "Employer-Friendly" View On Handbook Rules

Over the last several years, employers have been scratching their heads in response to the NLRB’s (National Labor Relations Board) crackdown on workplace rules contained in employee handbooks. Employment policies requiring individuals to be “respectful” and work “harmoniously” with one another, as well as prohibitions relating to “disparagement” have been struck down by the NLRB. The NLRB concluded that standards of conduct and civility rules may potentially infringe upon an employee’s right to engage in protected concerted activities under Section 7 of the National Labor Relations Act. In other words, such policies could have a chilling effect on employees and prevent them from complaining about their managers, wages, hours, working conditions or other terms and conditions of their employment. As a result, many employers have been scrambling in recent years to modify their handbook rules to avoid any language that may be deemed offensive by the NLRB. ... READ MORE


Release The Hounds!: ICE Dramatically Increases Work Site Investigations

In November, the acting Director of ICE (Immigration and Customs Enforcement) announced that the agency planned to quadruple or even quintuple work site enforcement. Between October 1, 2017 and May 4, 2018, ICE opened 3,510 investigations of employer compliance with immigration laws. It had initiated 1,716 investigations for all of fiscal year 2017. ICE has also launched 2,282 audits of employers’ I-9 employment verification form compared with only 1,360 audits last fiscal year. ... READ MORE


Tax Reform Incorporates Employer Credit For Offering Paid FMLA

In light of the current trend toward state-mandated paid family and medical leave laws, recent tax reforms added a provision to the tax code allowing certain employers to claim a business credit based on wages paid to employees on family and medical leave, subject to certain conditions. The new provision, added by the Tax Cuts and Jobs Act, offers a general business credit of up to 25% of wages paid to certain qualifying employees while they are on family and medical leave. The credit will incentivize employers to offer paid family and medical leave, which will also help prepare employers for impending state and local paid leave laws. The credit is generally effective for wages paid in taxable years beginning after December 31, 2017 and is not available for wages paid in taxable years beginning after December 31, 2019. Therefore, employers interested in utilizing the credit should act quickly in the event Congress does not act to extend the credit beyond 2019. ... READ MORE


When Is A Settlement Of A Wage And Hour Claim Not A Settlement?

Okay – your employee threatens a lawsuit based on your alleged failure to pay all the overtime he or she claims they are entitled to. You just want to get rid of the claim. The employee accepts your “low ball” offer to settle and signs a release. You are home free, right? Maybe not! The general assumption is that when an employee signs a release and waiver of all claims, that puts an end to the dispute. Under wage and hour law, that is not necessarily so, as a recent court decision illustrates. ... READ MORE


Medical Device Maker Awarded $248.7 Million In Patent Case



The Forgivable Loan: A Recruitment Tool With Tax Implications For Physicians And Employers

It has become commonplace for hospitals and health systems to extend loans to newly recruited physicians to entice them to join the hospital. The loans are often forgiven over time, assuming the physician satisfies certain conditions. A common condition is to remain employed and in good standing at the hospital or with the health system for a period of time (anywhere from one to five or more years is common). With each year of service, a portion of the principal amount of the loan plus accrued interest is forgiven. From a tax standpoint, the amount of the loan plus interest forgiven in any given year is treated as income to the physician. ... READ MORE


Keeping The "S" In "S Corp." – Avoiding S Election Terminations In Estate And Succession Planning

Pass-through entities (excluding entities taxed as sole proprietorships) are the most common form of business enterprise, with S corporations being the most prolific. In 2014, nearly 1 million more S corporation income tax returns were filed than partnership income tax returns, with total S corporation return filings in excess of 4.6 million. In addition, S corporations employ a greater percentage of the private sector work force than partnerships and sole proprietorships. Given the popularity of S corporations and the pass-through income tax treatment for federal and state income tax purposes that S corporations enjoy, estate planning and business succession for many investors and business owners will inevitably involve an S corporation. ... READ MORE


State Tax and Site Development Action Guide

Click on the link below to view the complete State Tax and Site Development Action Guide. ... READ MORE


The Delaware Tax Trap and Irrevocable Credit Shelter Trusts: Using An Old Pitfall To Create A New Windfall

For years Nebraska estate planning lawyers have utilized credit shelter trusts established for the benefit of a decedent’s surviving spouse and/or a decedent’s children to help couples protect their combined wealth from the federal estate tax. Credit shelter trusts are also referred to as family trusts or bypass trusts by estate planning lawyers. One downside of such planning was that the assets in a credit shelter trust did not get a step up in income tax basis upon the death of the decedent’s surviving spouse. This lack of a step up in income tax basis created potential income tax exposure on sales of “low basis” assets from the credit shelter trust after the death of the surviving spouse. ... READ MORE


The Top Four (4) Not So Well-Known Tax Law Changes

A lot has been written recently about HR 1, known as the Tax Cuts and Jobs Act (“Act”), signed into law in December of 2017. This article will highlight important, but perhaps lesser known, changes in the Act. ... READ MORE


U.S. Supreme Court Opens A Can Of Worms With Design Patent Decision



Harassment Policy Checklist

An employer’s first line of defense to address harassment in the workplace is to adopt an anti-discrimination and anti-harassment policy and procedure. Having an “effective” policy can provide an affirmative defense to harassment claims lodged against the employer. However, if your company’s policy does not include essential terms, you run the risk that the policy will be rejected by the Equal Employment Opportunity Commission (EEOC) or the courts. ... READ MORE


Top Five Best Practices When Investigating A Claim Of Sexual Harassment

With sexual harassment dominating the headlines, an increase in harassment complaints in the workplace will likely follow. Employer investigations of harassment complaints should not be overlooked and are vital when providing a defense to harassment claims filed against an employer. The following are five best practices to keep in mind when investigating claims of harassment: ... READ MORE


Sexual Harassment By A Supervisor: Can An Employer Escape Liability?

Harassment by a supervisor can trigger absolute or “strict” liability for an employer under certain circumstances. The employer’s liability will depend on just what the supervisor did in the course of the harassment of an employee, whether sexual or other unlawful workplace harassment. ... READ MORE


Workplace Romance: When Coworkers Date

In a recent survey, upwards of 50% of employees say that they have been involved in some type of office romance. In another survey, 41% of employees reported that they have actually dated a coworker. With these odds, it is likely that this is a scenario lurking somewhere within most employers’ workplaces. ... READ MORE


The Top 10 Tax Reform Impacts On Employee Benefit Plans, Executive Compensation, And Fringe Benefits

On December 20, 2017, Congress passed the Tax Cuts and Jobs Act (the “Act”), which some consider to be the most sweeping tax reform in 30 years. While the main focus of tax reform is to reduce tax rates for corporations and individuals, the law also impacts employee benefit plans and fringe benefits offered to employees. This client alert summarizes key provisions of tax reform and its impact on employee benefit plans. ... READ MORE


Tax Alert: Significant Federal Tax Changes from the Tax Cuts and Jobs Act

On December 20, Congress passed, and President Trump later signed, the Tax Cuts and Jobs Act (“Act”). The Act includes numerous tax changes, which will impact the taxes owed by most Americans. While we can’t address each change in this article, we did want to highlight some significant changes that we believe will impact many taxpayers. ... READ MORE


Cybersecurity And Section 401(k) Plans: What's A Plan Sponsor To Do!



LIBOR Update

As has been widely reported, on July 27, 2017, the UK Financial Conduct Authority (FCA) announced that the London Interbank Offered Rate (LIBOR) will be phased out by the end of 2021. Industry experts have anticipated the cessation of LIBOR due to a number of scandals and resulting fines and convictions related to manipulation of the benchmark rate. ... READ MORE


Is Your After-Acquired Property Clause What You Think It Is?

The “after-acquired property clause” has become a staple of security agreements and wisely so. Without inclusion of such a clause in the granting language of a security agreement, some courts have held that a security interest does not extend to after-acquired property. Unwilling to take any risk and as a best practice, secured lenders have built after-acquired property clauses into their security agreements. Commonly, secured lenders have used the language “whether now owned or hereafter acquired” or a close variant thereof and have felt secure that such language fully protects their interest in after-acquired property. A closer look at the Uniform Commercial Code (the “UCC”), though, reveals that this widely used phrase unnecessarily shrinks the scope of the secured lender’s collateral. ... READ MORE


Issues With Standby Letters Of Credit With Financially Troubled Customers – A Refresher Course For Trade Creditors

When a customer is financially troubled or sliding into possible bankruptcy, the trade creditor faces two distinct risks: non-payment or a suit to recover a payment that has been received usually under a “preference” theory. Creditors have long relied upon standby letters of credit to provide a valuable risk reduction tool when they are dealing with these types of financially unstable customers. For those unfamiliar with this tool, a standby letter of credit is essentially a promise by a financially sound bank to honor the payment obligations of its customer to a trade creditor upon the creditor’s request for payment. In a letter of credit transaction, the customer (“Applicant”), will have its bank (the “Issuing Bank”) issue an irrevocable standby letter of credit (“Letter of Credit”) in favor of the trade creditor (the “Beneficiary”). The Issuing Bank via the Letter of Credit undertakes the direct obligation to pay the Beneficiary when it requests payment in the manner specified in the Letter of Credit. If the Beneficiary’s request complies with the requirements of the Letter of Credit, the Issuing Bank pays the Beneficiary. This mitigates the payment risk by substituting the obligations of the financially secure Issuing Bank for those of the financially troubled Applicant. The separation between the Issuing Bank and the Applicant is known as the independence principle. The principle takes on an important meaning if the Applicant files bankruptcy. ... READ MORE


GST Tax 101: What Is It And How To Avoid It

At the federal level, wealth transfers are subject to three separate, but overlapping, taxes: (1) the federal gift tax; (2) the federal estate tax; and (3) the federal generation-skipping transfer tax. Each of these wealth transfer taxes must be considered whenever one person transfers cash or other property to another person, during lifetime or at death, without receiving full and adequate consideration (i.e., a gift or inheritance). This article provides a brief overview of the generation-skipping transfer (GST) tax and a discussion of planning that may be used to avoid or lessen its impact. ... READ MORE


QSEHRAs Serve As Option For Small Employers Amidst Rising Premium Costs



IRS Allows Late Claims For Estate Tax Portability, But You May Need To Act Now

Federal estate tax rules allow everyone to pass a certain amount of wealth – now $5.49 million – to their heirs (other than spouses) without tax. You can pass an unlimited amount of wealth to your spouse without federal estate tax. This free passage of wealth can be thought of as an estate tax “coupon.” ... READ MORE


Planning To Travel Internationally? Not If You Are Behind On Your Taxes

In 2015, then President Obama signed legislation that allowed the government to revoke or deny passports for persons with certain unpaid tax debts in excess of $50,000. This rule was added as part of a transportation spending bill, likely as one basis to pay for that spending. ... READ MORE


The Tax Implications Of Crowdfunding

One of the new ways to raise money is through crowdfunding, which involves asking a large number of people to contribute money to fund a cause or activity. This is typically done via the Internet, using a third-party intermediary. Crowdfunding campaigns include donations to charity, raising money for personal expenses, funding a specific project or raising debt or equity capital for a new business. ... READ MORE


When Is Work-Related Time Too Minimal To Require Compensation?

It is clear that employees are required to be compensated for “all” work time. Sometimes, however, the time spent on the job is so minimal (or “de minimis”) that the time need not be compensated. Two recent court cases diverge, at least in part, and illustrate how difficult it is to determine when the time is so “de minimis” that the employer is relieved from its obligation to compensate the employee. ... READ MORE


Use Of New Form I-9 Now Mandatory

As of September 18, 2017, the use of the Form I-9, Employment Eligibility Verification dated 07-17-17 N to verify the identity and work authorization of employees is mandatory. No forms dated prior to that described above may be used after September 18, 2017. ... READ MORE


Do Employees In Non-Union Companies Have A Right To Be Represented When Investigated?

If a company is non-union, and an employee is called into a meeting to investigate for possible discipline, may the employee demand to be represented by another employee? The NLRB has swung back and forth on this issue, and continues to do so. ... READ MORE


A True Statement To An Ex-Employee's Prospective Employer May Be Retaliation

Can telling the truth during a reference check get an employer in trouble? Maybe! ... READ MORE


The Antitrust Division Announces That Employee "No-Poaching" Agreements May Be Unlawful

A representative of the Justice Department’s Antitrust Division, at a recent symposium in Washington, announced that agreements between employers to refrain from hiring or “poaching” employees of another employer are “per se illegal” and may result in criminal prosecution. The representative stated that antitrust guidance issued in 2016 had announced that policy. It was clarified that the policy would be applied to all employers, regardless of whether they are a competitor of any product or provide the same services, since they could still be competitors for certain types of employees. ... READ MORE


Is The DOL's Overtime Rule Under Obama Dead?

In our last newsletter, we reported that the Department of Labor (DOL) abandoned its position that would have resulted in doubling the overtime salary threshold under the Fair Labor Standards Act (FLSA) from $23,660 to $47,476. This came after the new overtime rule was blocked by a federal district court in Texas. ... READ MORE


After Completing FMLA, The Employer Uses The Interactive Process And Lawfully Terminated Its Employee

The crossroad between the protections of the FMLA and the ADA is somewhat difficult to navigate. However, a recent federal court decision in Pennsylvania provides an example of the steps employers should follow after FMLA leave is used up to enforce its work rules and lawfully terminate an employee. ... READ MORE


IRS To Tax Certain Payments From Fixed Indemnity Health Plans

According to the IRS, payments made to participants under certain fixed indemnity insurance policies must be included in the employees’ gross wages, unless the premiums are paid on an after-tax basis. Fixed indemnity health plans are plans that pay covered individuals a specified amount of cash for the occurrence of certain health-related events such as hospital visits or the diagnosis of a particular condition or disease (e.g., cancer).  The benefit amounts paid to participants in the plan are not related to the amount of medical expenses actually incurred by the employee. ... READ MORE


Consumer Response Options To The Equifax Security Breach

Equifax, one of the three major consumer credit reporting agencies, was the victim of a criminal cyber-attack this summer that potentially impacted 145.5 million people in the United States. Hackers gained access to company data that contains highly sensitive information, including social security numbers, driver’s license numbers, addresses, birth dates, credit card information, and more.  Although there have been other cyber-security breaches in recent years, this attack is particularly concerning for many consumers due to the ultra-sensitive nature of the information.  Additionally, the information that Equifax maintains in their databases is much more extensive than the information that was exposed in previous publicized security breaches. ... READ MORE


IRS Annual Cost-Of-Living Adjustments Employee Benefit Dollar Limitations for 2018

Making a few adjustments, the IRS has released the 2018 cost-of-living adjustments applicable to the dollar limits and thresholds for retirement plans and health and welfare benefit plans.  Plan sponsors should update their systems and formulas to include the limits that have been adjusted. ... READ MORE


Trump's NLRB Nods On Their Way To Confirmation

A Senate Committee has approved President Donald Trump’s two nominees to the National Labor Relations Board (NLRB). Nominees, Marvin Kaplan and William Emanuel, went before the Senate, Health, Education, Labor and Pensions Committee last Wednesday and skirted through by a 12-11 vote. Kaplan is chief counsel for the OSHA Review Commission, and Emanuel is a shareholder with Littler Mendelson, a prominent management-side employment law firm. ... READ MORE


The Latest On The DOL's Overtime Rule

Late last year, many employers were scrambling to comply with the new overtime rule which was scheduled to take effect on December 1, 2016. The new rule, which was near the top of the Obama administration’s labor agenda, would have more than doubled the overtime salary threshold under the Fair Labor Standards Act (FLSA) from $23,660 to $47,476. The rule was enjoined by a federal district court in Texas and the case is currently pending appeal with the Fifth Circuit Court of Appeals. In the interim, the Department of Labor (DOL) has issued a Request for Information (RFI) to the public which provides some insight as to how the new administration may handle the issue. ... READ MORE


Court Reinstates Baseball Minor-Leaguers' Wage And Hour Lawsuit

Spring is here, and the national pastime is back! The crack of the bat, an umpire’s calls, the smell of popcorn, the shouts of the beer vendors and the filing of a class-action wage and hour lawsuit by minor league baseball players. It doesn’t get any more American than that! ... READ MORE


Calling Your Employer A #$&@%! On Facebook Is Protected Activity?

If you follow decisions from the National Labor Relations Board (NLRB), you are aware that an employee’s postings on Facebook may be considered protected activity under the National Labor Relations Act (NLRA). In a recent decision, a federal appellate court concluded that even the most vulgar rants by an employee are entitled to protection under certain circumstances. ... READ MORE


Employee Unlawfully Terminated When His Employer Failed To Seek Necessary FMLA Information

Normally, an employee is required to present sufficient evidence to support his or her need for FMLA leave. However, a recent court decision found that an employer’s denial of leave to take care of an employee’s ill grandfather violated the FMLA when the employer failed to seek additional information to determine whether the employee had an “in loco parentis” relationship with his grandfather. The employee took the leave anyway and was terminated. The Court held that the leave request should have been approved. ... READ MORE


Employee's Harassment Claim Falls; The Employer Did Not Respond Negligently

When an employee alleges harassment by fellow employees or co-workers, the employer does not have an absolute duty to prevent the harassment and is not automatically liable for the harassment. Rather, the employee must prove that the employer was negligent in discovering or remedying the harassment. ... READ MORE


Vague Doctor's Note And Repeated Leave Extension Requests Doom Employee's Disability Discrimination Claim

In a recent decision, the Seventh Circuit slapped down an employee’s disability discrimination claim after the employee submitted vague doctor’s notes requesting additional leave, offering employers guidance relating to the often-requested reasonable accommodation of leave under the Americans with Disabilities Act (ADA). ... READ MORE


The Empire Strikes Back: Yet Another New Form I-9 Is Issued

The previous Form I-9, the 12th version since it was introduced in 1986, was issued on 11/14/16 and was effective as of that date. As of January 17, 2017, the use of that form became mandatory and the use of the previous form, dated 3/8/13, became improper. Although U.S. Citizenship and Immigration Services announced that they would issue yet another Form I-9 on July 17, 2017, there was doubt as to whether they would follow through on that goal. ... READ MORE


FTC Gets Thumbs Up to Act as Cybersecurity Cop: What Does It Mean for Your Business?



Tom Kelley Listed in The Best Lawyers in America© 2016 in the Field of Privacy and Data Security Law.

McGrath North is pleased to announce that Tom Kelley was recently selected by his peers for inclusion in The Best Lawyers in America 2016 in the field of Privacy and Data Security Law.  Inclusion in The Best Lawyers in America 2016  is based upon an exhaustive peer review survey comprising more than 6 million confidential evaluations by top attorneys in the U.S. ... READ MORE


FAA Issues Landmark Rules Authorizing Drones For Commercial Use

On June 21, 2016, the Federal Aviation Administration (FAA) finalized its long-awaited rules authorizing the commercial use of small unmanned aircraft systems (UAS or “drones”). The new rules take effect in August and will allow drones to be flown commercially to benefit a host of industries such as agriculture, construction, real-estate photography, power and utilities, media coverage and emergency response.  The rules are estimated to “generate more than $82 billion for the U.S. economy and create more than 100,000 new jobs over the course of the next 10 years.”  Press Release, Federal Aviation Administration, DOT and FAA Finalize Rules for Small Unmanned Aircraft Systems (June 21, 2016) (available at ... READ MORE


President Obama Signs Defend Trade Secrets Act Of 2016: What Does This Mean For Your Business?

Until now, the federal government has only provided criminal sanctions for misappropriation of trade secrets, leaving civil remedies for businesses exclusively to the states. However, President Obama signed the Defend Trade Secrets Act of 2016 (DTSA) into law on May 11, 2016 effective immediately. DTSA creates a civil action for businesses to seek redress under federal law for the misappropriation of their trade secrets. This new federal law does not preempt state law, but provides businesses with the option to file their claims under either state or federal law. Federal courts can provide many benefits to plaintiffs, such as uniformity in law in all jurisdictions and efficiency given the federal system’s smaller case load. ... READ MORE


McGrath North Receives 2017 Business Excellence Award

McGrath North has been selected as a 2017 Greater Omaha Business Excellence Award winner.  This award celebrates companies and individuals who dedicate themselves to excellence and help make Omaha a more vibrant place to do business, work and live. As one of 24 businesses selected from around the metro area, McGrath North representatives will receive the award at a public event scheduled for May 9, 2017 at the Embassy Suites-La Vista from 4pm – 6pm. ... READ MORE


The President's FY 2015 Budget Again Takes Aim at Estate and Gift Tax Planning



ABLE Accounts: Another Useful Option For Special Needs Planning

Overview of ABLE Accounts ... READ MORE


State And Local Tax Update: Two Significant Proposals Are Not Passed By Nebraska Legislature

We wanted to update you on two Nebraska tax proposals which the Legislature did not pass as well as keep you informed regarding South Dakota’s remote sales tax collection statute (which is being challenged now in the South Dakota courts). ... READ MORE


Approval Of 403(b) Prototype Plan Announcement

Good news! We have received formal IRS approval of our new 403(b) prototype plan document. Previously, 403(b) plans had not been reviewed or approved by the IRS. Now our 403(b) prototype plan is approved for tax-exempt organizations. The new 403(b) prototype plan is in addition to our 401(k) and profit sharing prototype plan documents. We are currently awaiting IRS approval of a defined benefit pension prototype plan document. We provide prototype plans as a convenience to our clients and to assure them that the plan is always updated. Employers can change recordkeepers without changing the plan document which sometimes causes mistakes. We are very excited to be able to restate 403(b) plans on our prototype plan with advance assurance from the IRS. Please let us know if you have any questions or interest in utilizing our prototype plans. ... READ MORE


Why An ESOP Might Be The Right Way To Exit Your Business

We are often asked what companies are right for an ESOP. The short answer is a company that is a corporation with 20 or more employees (non-union), revenue of $5 million or more, payroll of $1 million or more and profitable growth. This thumbnail sketch provides a minimum threshold for who may be eligible to sponsor an ESOP, but why set up an ESOP? There are two basic answers for this question. First, it is an exit strategy for owners to sell their stock in a strong succession plan. Second, it enables the company’s loyal employees to share in the company’s growth and profits. There are also significant tax benefits provided through an ESOP, but often it is not the tax benefits that sway the decision-maker to choose an ESOP. ... READ MORE


Compensation Clawbacks in 2017

Recent Media Coverage ... READ MORE


Premium Increases Expected for 11 Million Americans

The Affordable Care Act requires adjusted community rating for plan years beginning on or after January 1, 2014.  Specifically, premium rates in the individual and small group market for fully-insured, non-grandfathered health plans may vary based only upon the following characteristics: ... READ MORE


Manufacturer Not Liable Of Patent Infringement For Constructing One Component In U.S. And Remaining Components Abroad

On February 22, 2017, the United States Supreme Court addressed whether a manufacturer—who shipped a single component of a multicomponent invention outside the U.S. for assembly abroad—could be held liable for patent infringement under 35 U.S.C. § 271(f)(1) of the Patent Act. In Life Techs. Corp. v. Promega Corp., the Supreme Court chose quantity over quality and held that the supply of a single component cannot constitute a “substantial portion” of an multicomponent invention to trigger patent infringement liability.  No. 14-1538, 2017 WL 685531 (U.S. Feb. 22, 2017). ... READ MORE


Lurking in the Shadows – Is Your Business Affected By The California Consumer Privacy Act?

Unless you have been paying attention to data privacy news, you may not realize that January 1, 2020, is the implementation date of the California Consumer Protection Act (CCPA) and that July 1, 2020, is the current deadline for the California Attorney General to implement regulations under CCPA.  As currently drafted, the CCPA directs the California Attorney General to forego bringing any enforcement action under the CCPA until six months after publication of such final regulations, or July 1, 2020, whichever is sooner. ... READ MORE


Small 401 (k) Plans – Compliance Watch

According to recent IRS examinations, small 401(k) plans—plans with less than $250,000 in assets) often suffer from two compliance problems: ... READ MORE


McGrath North To Host January 26th IAPP Privacy After Hours Event

McGrath North is pleased to host the International Association of Privacy Professionals (IAPP) Privacy After Hours event coming to Omaha on January 26, 2017. Privacy After Hours is a fun and easy way for IAPP members and non-members to get to know other local privacy professionals. There’s no agenda, just show up to the designated location and have a good time! The event is open to anyone who works in or is interested in privacy. The Omaha event will be Thursday, October 15, from 5:30 – 7:30 p.m. at Fox and Hound, Western Crossing Shopping Center, 506 N 120th Street, Omaha, NE 68154. ... READ MORE


A New Executive Order Suspending Certain Travel To The U.S. Has Been Blocked

Notice: This article was originally drafted for release during the week of March 13. Due to the rapidly changing legal background with respect to the challenges to the new Executive Order, a determination was made to hold the release of the article as to more fully inform our clients and friends of the status of the matter. It is clear; however, that status will continue to evolve, and so this article is being released even though some of the information in it will be dated by the time it is received by the reader. ... READ MORE


Premium Processing Of H-1B Petitions Temporarily Suspended

On March 3, 2017, it was announced that, starting April 3, 2017, there will be a temporary suspension of expedited handling or “premium processing” for all H-1B petitions. “Premium Processing” is a program whereby, for an additional fee, an H-1B petition would be adjudicated within 15 calendar days of its receipt, as opposed to a much longer period for non “premium processing” petitioners. This suspension may last up to six months. ... READ MORE


McGrath North Celebrates National Ag Day



Obtaining A Double Step-Up: IRS Confirms Expanded Use Of QTIP Elections

In 2012, Congress passed the American Taxpayer Relief Act. That Act, in addition to implementing the $5,000,000 federal estate tax exemption amount per person (adjusted for inflation which, as of 2017, results in an exemption per person) also implemented new so-called “portability” rules. Under the portability rules, if a decedent passes away without utilizing the entire $5,490,000 federal estate tax exemption amount, any “unused” exemption may be “ported” or transferred to the decedent’s surviving spouse if certain conditions are met (such as filing a federal estate tax return for the decedent). ... READ MORE


ERISA Plan Mistakes to Avoid

At some point, all benefit plans experience operational errors.  The trick is to identify and remedy the errors before the Department of Labor or IRS notice them.  The following is a list of common errors made by plan sponsors to assist you in identifying compliance “blind spots.” ... READ MORE


Pension De-Risking In 2017

As companies fine-tune their future plans for 2017 and beyond, many employers are looking to evaluate the long-term viability of their defined benefit pension plans. Due in part to low interest rates, poor investment performance, volatility of plan investments and participants living for longer periods, plan sponsors are closely evaluating two options—maintaining the pension plan but utilizing “de-risking” strategies to minimize some of the pension burden or getting out of the pension business entirely by terminating the plan. Pension plan de-risking and plan terminations can take a variety of forms and can be approached in many different ways, largely driven by the funded status of the plan. This article provides an overview of the utility and rationale for pension de-risking strategies and termination options. ... READ MORE


An Update From Lincoln: Department Of Revenue Contentions Impacting Many Nebraska Companies And Business Owners

In our state and local tax practice, we are currently seeing some issues that are impacting a number of Nebraska companies and business owners that we wanted to comment on. ... READ MORE


USPTO Begins Random Audits Of Registrations

The United States Patent and Trademark Office (USPTO) is implementing a permanent audit program for certain U.S. federal trademark and service mark registrations. The audit will request certain additional information from trademark owners to verify the accuracy of claims that a trademark is in use in commerce in connection with the goods/services listed in the registration. ... READ MORE


"On Call" Employees: Do I Have To Pay Them?

Employers often wonder whether they are required to compensate hourly, non-exempt employees for time outside of normal working hours that they spend “on call.” Unfortunately, as with most legal questions, the answer is: it depends. This article will provide guidance on this topic as it relates to hourly employees. This guidance is also applicable to salaried, non-exempt employees for overtime purposes. ... READ MORE


Don't Overlook Overtime When Paying Bonuses To Hourly Employees

Many employers reward hourly employees by paying non-discretionary bonuses. Such generosity; however, can lead to significant liability issues under the Fair Labor Standards Act (FLSA). Under certain circumstances, bonuses must be considered part of the employee’s earnings for purposes of calculating overtime under the FLSA. ... READ MORE


OSHA's New Anti-Retaliation Rule: A Game Changer For Employer Post-Accident Drug Testing And Safety Incentive Programs.

In May 2016, the Occupational Safety and Health Administration (OSHA) announced a final rule changing the way workplace injury and illness data is collected and reported by employers. The new rule requires covered employers to electronically submit injury and illness data to OSHA and it also makes certain data publicly available via the OSHA website. ... READ MORE


May Employees Be Required To Provide A Doctor's Note For Each Intermittent FMLA Absence?

The scenario is one that happens far too often. An employee obtains a medical certification pursuant to the Family and Medical Leave Act (FMLA) indicating that the employee suffers from a serious health condition that can flare up at any time causing the employee to miss work a few times a month. Conveniently, the flare ups seem to always occur on Fridays and Mondays and on those rare 70 degree days in February in the Midwest. In order to prevent FMLA abuse, an employer comes up with a fool-proof plan: requiring employees to provide a doctor’s note for each of their intermittent FMLA absences. But, is this plan lawful under the FMLA? Although the regulations are silent on this issue, the courts have answered no—employers may not require a doctor’s note for each intermittent FMLA absence. ... READ MORE


Employer That Failed To Count Mandatory Overtime For FMLA Entitlement Violated The Act

When employers determine how much Family and Medical Leave Act (FMLA) leave an employee might be entitled to, it is crucial to keep in mind that the FMLA standard is 12 weeks of leave, and not automatically 480 hours. The number of hours an employee would be entitled to use would depend on the number of hours worked weekly by the employee. That calculation might not be as easy as it might seem. An Iowa employer recently learned that lesson the hard way when it was found to have interfered with an employee’s use of FMLA by not counting mandatory overtime hours toward the employee’s basic entitlement. ... READ MORE


New Executive Order May Impact Travel For Foreign National Employees

President Trump signed an Executive Order on January 27, 2017 called “Protecting the Nation from Foreign Terrorist Entry into the United States.” The most publicized portion of the Executive Order is the portion banning virtually all refugees for the next 120 days; however, there are other provisions in the Order that may affect many foreign national employees with respect to international travel. ... READ MORE


What Businesses Need to Know About Immigration Law

There are two facets of immigration law that all businesses should be aware of. The first is the obligation to document the work authorization and identity of all employees, regardless of whether they appear to be foreign born. The second is the related process of seeking work authorization from the Department of Homeland Security (DHS) suitable for your particular organization for those persons who are neither citizens or green card holders. ... READ MORE


The "Legal Check-Up": Common (And Avoidable) Issues For Business Owners

As advisors, one of our jobs is to proactively anticipate legal issues that business owners commonly encounter, and then provide the owner with the steps that can be taken now to avoid them. Oftentimes the “rub” in this equation is that the business owner does not see the need (read “value”) in addressing issues that are not an immediate problem. Said another way, trying to get the business owner to slow down enough to act on issues they would just as soon ignore is oftentimes a real challenge from the advisor’s perspective. What oftentimes happens is that the issues the advisor tried to get the business owner to focus on eventually do surface, at which time it is too late and both the advisor and the business owner are left with picking up the pieces to an issue that could have likely been avoided altogether with proper planning. ... READ MORE


New Form I-9 Is Available For Employer Use

At this time, Form M-274 “Hndbook for Employers, Guidance for Completing Form I-9,” has not been updated to be consistent with the new Form I-9. The USCIS promises that it will be updated soon. ... READ MORE


Texas Judge Slams The Brakes On The New Overtime Rules

st. ... READ MORE



Making a few adjustments, the IRS has released the 2017 cost-of-living adjustments applicable to the dollar limits and thresholds for retirement plans and health and welfare benefit plans. Plan sponsors should update their systems and formulas to include the limits that have been adjusted. ... READ MORE


Road Block or Speed Bump? DOJ Files Lawsuit to Halt Deere's Acquisition of Precision Planting's High-Speed Planting Technology

On August 31, 2016, the U.S. Department of Justice (“DOJ”) filed a civil antitrust lawsuit to halt Deere & Co.’s acquisition of Precision Planting, LLC from Monsanto, Co. The DOJ argues the lawsuit is necessary in order to preserve competition in the agriculture industry for high-speed planting technology.  High-speed planting technology allows farmers to plant corn, soybeans and other row crops up to 10 mph—approximately twice the speed of a traditional planter—without sacrificing accuracy.  This helps farmers get their crops in faster during the spring planting season to increase growers’ yields and lower costs. ... READ MORE


Should You Fight a Patent Infringement Demand Letter or Ignore it?

Recently in The Wall Street Journal, Colleen Chien—an associate professor at Santa Clara University School of Law—suggests that the best way to respond to a cease and desist letter alleging patent infringement “may be to take a deep breath—and then do… nothing.”  Ms. Chien clarifies that “[t]his means… looking at the claim, determining that a license isn’t needed—and then filing the letter away, rather than responding.”  According to Ms. Chien, patent infringement demand letters often originate from so-called “patent trolls” on fishing expeditions looking for a quick settlement.  A “patent troll” is a pejorative term for a non-practicing entity that earns the majority of its revenue from the licensing or enforcement of its patents.  The Wall Street Journal article found patent trolls brought the majority of patent cases in the U.S. between January-June of 2015 and half the time targeted companies making less than $100 million.  Patent trolls also embark on campaigns that target entire industries for their use of another’s technology, such as Wi-Fi.  In these cases, a company’s contract with its technology provider might provide for patent infringement indemnification.  Ms. Chien recommends that “[a] company that keeps cool and does nothing is more likely to fly below the radar.” ... READ MORE


New OSHA Regs Will Prohibit Most Mandatory Post-Accident Drug Tests

It has long been the position of OSHA that certain policies issued by employers may discourage employees who wish to report a job-related injury. An example would be a policy which rewards either individual employees or groups of employees for perfect safety records.  It has been OSHA’s opinion that the prospect of receiving certain cash or other benefits if no injuries were reported would discourage employees from pursuing the injury reporting process the law provides for them. ... READ MORE


Don't Send That Fax!

In many offices, fax machines now seem like ancient relics, but fax machines still generate significant litigation because of a federal statute called the Telephone Consumer Protection Act (“TCPA”) that, among other things, prohibits specified “junk faxes.” ... READ MORE


Motion Denied

Nebraska Supreme Court Denies Motion For Rehearing In PTO Payment Case ... READ MORE


The Federal Trade Commission Has Issued Important Guidance Regarding How To Respond To A Data Breach.

On October 25, 2016, the Federal Trade Commission (“FTC”) issued a guide and instructional video regarding how to respond to a data breach. Both the guide and video are available at this link, which also contains a summary by the FTC. ... READ MORE


Tips And Traps For Economic Expansion In Nebraska – A Guide To Receiving The Nebraska Advantage Incentives

“Bill”, tax manager at “XYZ, Inc.”, was facing quite a problem. His company had just purchased a business which had a Nebraska Advantage project. The owners of his company were planning on receiving Nebraska Advantage incentives for that project. Those incentives were factored into the price his company had paid. But, because his company had moved a number of employees between the project site and the company’s other locations, the Nebraska Department of Revenue was claiming that the project no longer met the new employment threshold. In addition, during an audit, the Department determined that the prior company’s contract with its building contractor did not contain certain language that was required to receive Nebraska Advantage incentives for the investment at that building. The Department was also claiming many of the incentives which had already been earned at the project could not be received because the Department was not properly notified of the project transfer. ... READ MORE


Estate Planning For Pet Owners

Many people view their pets as valued members of their families. Sometimes, however, pets can be overlooked following a person’s unexpected death or disability. Pets that are not adopted by family members (or otherwise cared for) may be sent to animal shelters or worse. To prevent this from happening to your beloved pet, you may want to consider making specific arrangements in your estate plan that cover the care of your pets. ... READ MORE


The PATENT Act (S. 1137)



"Patent Trolls" In The United States Supreme Court



Insurers And Health Plans—Do You Have Your HIPAA House In Order?



IRS Takes Steps to Simplify Tax-Exempt Applications

Organizations that have gone through the IRS’s application process for recognition of tax-exempt status know that it is a time-consuming and complex process. The current application, Form 1023, is lengthy, fraught with technical terms, and daunting for many small up-and-coming organizations. In addition, the IRS has been known take over one year to approve applications, which may prevent many organizations from obtaining needed donor contributions, grants and other funds. ... READ MORE


Bipartisan Budget Act Impacts Hardship Withdrawal Rules



Congressional Sparring Over The New Overtime Rules

The sparring in Congress is heating up over the new overtime rules issued last month by the Department of Labor (DOL). Not surprisingly, lawmakers are split along party lines. Under the new rule, which takes effect December 1, 2016, the salary threshold for workers to be considered exempt from overtime will be raised from $23,660 to $47,476 a year. Because the DOL is simply revising an existing regulation, the new rule does not require congressional approval. ... READ MORE


Federal Defend Trade Secrets Act Imposes Notice Requirements For Employers

President Obama signed into law the Defend Trade Secrets Act of 2016 (DTSA) on May 11, 2016 effective immediately. DTSA provides businesses with a federal basis to bring a misappropriation of trade secrets claim. Previously, only state law governed civil misappropriation of trade secrets. An important aspect of DTSA is that it provides immunity from criminal and civil liability for an individual disclosing a trade secret to any federal, state, or local government official, or to an attorney, for the purpose of “reporting or investigating a suspected violation of law.” Immunity is also provided to individuals who disclose a trade secret to his or her attorney in an action against an employer for retaliation for reporting a violation of law. Additionally, this immunity allows the individual to use the trade secret in the retaliation court proceeding. ... READ MORE


EEOC: It's Time To Rethink Harassment Policies And Training

During fiscal year 2015, the EEOC received approximately 90,000 charges of employment discrimination. Nearly a third of those charges included harassment claims based on sex (including sexual orientation, gender identity, and pregnancy), race, disability, age, ethnicity/national origin, color, and/or religion. The EEOC has long recognized harassment as a persistent problem in the workplace and, in 2015, created a task force to study harassment in the workplace. The Report resulting from the study, authored by Chai R. Feldblum and Victoria A. Lipnic, EEOC Commissioners and task force co-chairs, was released on June 20, 2016, and called upon employers to rethink and revamp their policies and training on harassment. ... READ MORE


Jury To Decide Whether Company's Response To Documented Fragrance Sensitivities Stinks

A federal court in Arkansas found that even if a request by an employee with a fragrance sensitivity for a mandatory scent-free workplace was not reasonable, other reasonable accommodations in the workplace could be plausible. In Rotkowski v. Arkansas Rehabilitation Services, a federal district court examined an employer’s motion to dismiss a lawsuit filed by an employee with fragrance sensitivities. That employee had medically documented sensitivity to certain fragrances and chemicals. Exposure to those fragrances caused severe head pain, nausea, breathing difficulties and fatigue, along with other adverse physical reactions. ... READ MORE


NLRB Finds That A Company's "Positive Workplace" And "No-Recording" Policies Are Unlawful

In a recent decision, the National Labor Relations Board (NLRB) continued its assault on employers’ work rules and policies by finding that policies which require employees to maintain a “positive work environment” in the workplace and which also prohibited employees from making recordings in the workplace, could reasonably be found to chill employees in the exercise of their rights protected by the National Labor Relations Act. ... READ MORE


When Does A Request For Further Information Under The ADA Violate The Law?

It is clear under the Americans with Disabilities Act (ADA) that, in certain situations, an employer is entitled to seek additional medical documentation regarding the nature of an employee’s restriction and their need for accommodation. However, employers making a request for such information must be wary of crossing the line so that their request does not constitute interference with the employee’s rights under the ADA. ... READ MORE


Attention Nebraska And Iowa Companies Who Sell In South Dakota: Get Ready To Collect Sales Tax, Even If You Have No Physical Presence There. What's Going On And What Should You Do?

Under new laws just enacted in South Dakota, companies who have more than $100,000 in South Dakota sales or at least 200 individual transactions in South Dakota are required to collect and remit South Dakota sales tax. This is true even for companies that have no physical presence in South Dakota. This change becomes effective May 1, 2016. ... READ MORE


The Nebraska Department Of Revenue Now Requires Approval Of A Special Apportionment Method Before A Return With That Method Is Filed

When it comes to preparing a tax return, creativity is usually a bad thing. It is not allowed (with good reason). ... READ MORE


Nebraska Court Of Appeals Rules That, If Land Is Held Within A Revocable Trust, An Appeal Of A Property Tax Valuation To That Court Must Be Filed By An Attorney

In a recent court case, the Nebraska Court of Appeals considered whether a couple who, as part of their estate planning, placed real property into a revocable living trust could themselves file a property tax appeal to that Court. ... READ MORE


The IRS' Case Against Sumner Redstone, Former Head Of CBS And Viacom, Demonstrates That The Statute Of Limitations For Gift Tax On Unreported Gifts Never Runs Out.

In a recent federal case, the U.S. Tax Court held that Sumner Redstone, the former head of CBS and Viacom, owed nearly $750,000 in gift tax on 1972 gifts to his children of stock in a family corporation (“Gift Tax Shares”). Furthermore, because the tax was due in 1972, the interest on this judgment will dwarf the actual taxes due. ... READ MORE


Who Owns Farm Data?

As farmers gear up for planting season, a common question asked is who owns farm data generated by agriculture technology providers (“ATP”)? The answer isn’t as simple as it should seem. ... READ MORE


Update On Patent Trolling Legislation In The 114th Congress



Clarity In Distributions In An S Corporation ESOP

In March 2014, the IRS issued a private letter ruling to an S corporation ESOP to clarify whether distributions from the S corporation (dividends in a C corporation) are what is called “annual additions” and limited under Internal Revenue Code Section 415(c)(2) to the annual contribution and other additions limit. Although this is the way many tax professionals interpreted the law, this confirmation through a private letter ruling is welcome news. ... READ MORE


Some Clarity For Partial Retirement Plan Terminations



McGrath North To Host January 28 IAPP Privacy After Hours Event

McGrath North is pleased to host the International Association of Privacy Professionals (IAPP) Privacy After Hours event coming to Omaha on January 28.  Privacy After Hours is a fun and easy way for IAPP members and non-members to get to know other local privacy professionals. There’s no agenda, just show up to the designated location and have a good time! The event is open to anyone who works in or is interested in privacy. The Omaha event will be Thursday, January 28, 2016, 6:15 pm – 7:45 pm at Fox and Hound, Western Crossing Shopping Center, 506 N 120th Street, Omaha, NE 68154. ... READ MORE


The FAA's Proposed Regulations on Drones and their Impact on Agriculture

Amidst falling farm prices and lower income, the agriculture industry is turning towards an emerging technology in an attempt to deploy resources more efficiently and increase profit margins. Drones, also called Unmanned Aerial Vehicles (“UAV”) or Unmanned Aerial Systems (“UAS”), offer a futuristic approach to farm management that provide many benefits over traditional methods.  Under the traditional approach, crop scouters would periodically inspect fields along their perimeter to judge crop conditions.  Because farms typically encompass hundreds or thousands of acres, the interior of the field was often left unchecked during the growing season.  Today, farmers may utilize UAVs equipped with high definition cameras to obtain complete aerial views of their fields and monitor crop conditions in real-time.  Thus, farmers may quickly and efficiently respond to circumstances affecting crop health, poor drainage, and areas requiring replant to boost yields.  As technology evolves, UAVs are also coming equipped with infrared cameras and advanced sensors that allow farmers to check for signs of crop disease, recognize nutrient deficiencies, assess drought conditions, identify weed hot-spots, apply pesticides, irrigate on an as-needed basis, and predict harvest yields.  The livestock sector has further taken note of this cutting edge technology, wherein a leader in the cattle feeding industry recently filed a patent application with the United States Patent and Trademark Office for incorporating UAVs into livestock feeding operations.  For all of these significant reasons, the Association for Unmanned Vehicle Systems International has predicted that the agriculture industry will capture up to 80% of the commercial drone market. ... READ MORE


Don't Overlook Your "Temp" Workers Under The FMLA

One of the hottest topics right now in the labor and employment world is how far the government will go in finding a company liable as a “joint employer.” From large corporations that operate franchises across the country to small companies that utilize temporary staffing, government agencies have been expanding the concept of a “joint employer.” Recently, the National Labor Relations Board (NLRB) found that McDonalds could be held “jointly” liable along with its franchisees for federal labor violations. Now, the U.S. Department of Labor (DOL) has weighed in on the “joint employer” issue with respect to leave under the Family and Medical Leave Act (FMLA). See Fact Sheet No. 28N at . ... READ MORE


Drug Rehab Participant Refused Employment Gains An EEOC Settlement

A recent settlement entered into by a private employer and the EEOC illustrates that an across-the-board drug test may not be a foolproof device for excluding employees when they test positive or are in danger of testing positive. ... READ MORE


Joint Employment – The DOL Issues the Broadest Interpretation Yet

“As broad as possible.” This is how the U.S. Department of Labor Wage and Hour Division (DOL) recently described the scope of employment relationships and joint employment under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). ... READ MORE


NLRB Finds Rule Prohibiting Recording Of Employee Meetings Unlawful

On December 24, 2015, the National Labor Relations Board (NLRB), in a 2-1 decision held that Whole Foods rules which prohibited the recording of certain meetings in the workplace violated employees Section 7 rights to engage in protected concerted activity. ... READ MORE


Your Company's Post-Offer Fitness For Duty Exam Revealed A Disability. . .Now What?

Well, first take the test! Should you: ... READ MORE


Managing Sensitive Personal Data Collected And Used By Businesses: Privacy/Data Security Principles To Reduce The Risk Of Data Compromise

The Federal Trade Commission (FTC) in its recent publication “Start with Security: A Guide for Business” (Guide) noted that from personal data on employment applications to network files with customers’ credit card numbers and social security numbers, sensitive information pervades every part of many businesses. The result is that many businesses are simply overwhelmed by the task of managing such “sensitive information.” ... READ MORE


Nebraska Department Of Banking And Finance Proposes New Exemption For Advisers To Private Funds

The Nebraska Department of Banking and Finance has proposed new regulations related to the registration of investment advisers. The regulations will establish a private fund adviser exemption from registration. The regulations were the subject of a rulemaking hearing held on January 7, 2016. There was no opposition to the regulations at the hearing and the regulations are expected to be adopted in the spring or summer of 2016. ... READ MORE


Washington's Christmas Gift To America: A Summary Of Some Key Federal Tax Changes Passed In December

Just before the 2015 holidays, Congress passed, and President Obama signed, both the “Protecting Americans from Tax Hikes Act of 2015” and an omnibus budget bill for FY 2016. In total, these acts made permanent a number of commonly used and key tax provisions. The acts also extended many other key provisions and made some significant changes to tax provisions of the Affordable Care Act (“ACA”, commonly known as Obamacare). Key provisions of these acts include the following: ... READ MORE


Insurance Proceeds – Does Article 9 Perfection Protect You?

Lenders routinely describe a security interest in proceeds, “including insurance proceeds” as part of the collateral description in their security agreements, believing that this description plus the filing of a UCC-1 financing statement will perfect their security interest in such insurance proceeds under Article 9 of the UCC. Is this really the case? ... READ MORE


Crowdfunding: SEC Final Rules

Background ... READ MORE



The IRS has released the 2016 cost-of-living adjustments applicable to the dollar limits and thresholds for retirement plans and health and welfare benefit plans.  Plan sponsors should update their systems and formulas to include the limits that have been adjusted.  Generally, the limits have remained the same as 2015. ... READ MORE


Court Finds References To "Communication Issues" Could Be Evidence Of National Origin Discrimination

The plaintiff in Artunduaga v. University of Chicago Medical Center was born in Colombia, practiced medicine there for three years but then completed a post-doctoral research fellowship at Harvard Medical School. She then applied for and was accepted into a residency at the University of Chicago Medical Center. ... READ MORE


6 Pointers To Curb FMLA Intermittent Leave Abuse

If the employee is eligible for FMLA, the employer must comply with the regulations when addressing issues of abuse. The regulations provide some tools to assist employers in this area. Here are some pointers: ... READ MORE


A Mishandled Medical Certification Leads To The Reinstatement Of An FMLA Discrimination Claim

What is the employer’s obligation when presented with a medical certification in support of a request for FMLA if it is found to be “insufficient” rather than “negative on its face”. . . and what is the difference between those two categories? In a recent case, a federal appeals court found that a medical certification was “insufficient,” and the employee should have been given an opportunity to cure it, rather than “negative on its face,” which would have doomed the employee’s request for FMLA. ... READ MORE


Court Refuses To Decide Whether An Ineligible Employee Became Eligible For FMLA Because Of The Employer's Statements

Can an employer’s misstatements about FMLA coverage entitle an ineligible employee to FMLA benefits? That was a question which faced a Circuit Court in a recent appeal of the dismissal of an employee’s complaint of FMLA interference. ... READ MORE


Employees Required To Take DNA Test Awarded $2.2 Million Under GINA

The Genetic Information Nondiscrimination Act of 2008 (GINA) makes it an unlawful employment practice for an employer to request, require or purchase genetic information with respect to an employee. Nonetheless, because an unknown number of employees had been defecating in one of its warehouses, necessitating the destruction of grocery products on at least one occasion, a company proceeded to narrow down the list of employees who might have been involved by retaining an outside lab to analyze employees’ DNA and match it to fecal material. The lab found no matches. ... READ MORE


Supreme Court to Issue Critical Health Care Reform Ruling


November 4, 2015

Government Delays Health Plan Identifier Requirement Indefinitely



New IRS Plan Limits Announced for 2015

  1. Salary deferral contributions have been increased from $17,500 to $18,000.  This salary deferral limit applies to 401(k), 403(b), and eligible 457(b) plans.
  2. Catch-up contribution limits for those age 50 and over has been increased from $5,500 to $6,000.  This limit also applies to 401(k), 403(b), and eligible 457(b) plans.
  3. The total contribution limit for defined contribution plans in 2015 has been increased from $52,000 to $53,000.  Note, the limit on contributions is the lesser of 100% of compensation or $53,000 for a defined contribution plan in 2015.
  4. The annual compensation limit has been increased from $260,000 to $265,000.  Note, this means that any compensation paid over and above $265,000 may not be taken into account in calculating contributions to a defined contribution plan.
  5. The dollar limit for the definition of key employee in a top-heavy plan is unchanged at $170,000.
  6. The definition of HCE (highly compensated employee) has been increased from $115,000 to $120,000.
  7. The limit on the annual benefit under a defined benefit pension plan remains unchanged at $210,000 for 2015.
  8. The annual limit on contributions to an IRA remains unchanged at $5,500 and the catch-up contribution for those 50 and over stays at $1,000.
  9. The taxable wage base is increasing from $117,000 to $118,500 by the Social Security Administration for 2015.

These are just a few of the changes in plan limits (or lack of changes) for 2015.  If you have any questions or need any additional information on other adjustments for 2015, please do not hesitate to give us a call. ... READ MORE


EU Court Declares "Safe Harbor" Data-Transfer Agreement Invalid: Is Your Company Affected?

Background. ... READ MORE


McGrath North To Host October 15 IAPP Privacy After Hours Event

McGrath North is pleased to host the International Association of Privacy Professionals (IAPP) Privacy After Hours event coming to Omaha on October 15.  Privacy After Hours is a fun and easy way for IAPP members and non-members to get to know other local privacy professionals. There’s no agenda, just show up to the designated location and have a good time! The event is open to anyone who works in or is interested in privacy. The Omaha event will be Thursday, October 15, from 5:30 – 7 p.m. at Fox and Hound, Western Crossing Shopping Center, 506 N 120th Street, Omaha, NE 68154. ... READ MORE


401(k) Plans: Time To Restate And Perhaps Revise

The Internal Revenue Service maintains procedures designed to assist plan sponsors in preserving the tax qualified status of their retirement plans. With respect to prototype and volume submitter plans, the IRS procedures require that such plans be restated every six years. Under the current cycle, such plans must be restated no later than April 30, 2016. As a result, the majority of plan sponsors should review their qualified plans within the upcoming months, if they have not already done so, and make decisions regarding plan provisions. ... READ MORE


Gift Tax Preparers Beware: Abbreviations and EIN Errors Might Eliminate the Statute of Limitations

As most gift tax return preparers know, the IRS generally has a three (3) year time limit to challenge the gifts reported on the return. If the property that has been transferred by the donor is comprised of interests in a closely held corporation, LLC or partnership, or a fractional interest in real estate, the value reported on the gift tax return will likely be a discounted value, reduced as a result of lack of marketability and minority interest. If the IRS decides to audit the gift tax return, it may challenge the values reported on the return, including the extent of the valuation discounts. ... READ MORE


New Due Dates For Filing Common Tax Returns And Other Recent Tax Compliance Changes

On July 31, 2015, President Obama signed into law the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015”. This new law revises the due dates for filing some common tax forms and includes other important tax-related provisions. Business owners should also be aware that the IRS recently issued temporary regulations affecting filing extensions for W-2 wage statements. The following information provides a brief overview of these changes. ... READ MORE


Forbearance Agreements – When Can You Safely Walk Away From the Negotiation Table

Lenders who find themselves with a troubled loan that requires modification and a formal workout agreement can end up spending several weeks negotiating terms of the final forbearance agreement that will govern the remainder of the parties’ lending relationship, or at least get them past the immediate problem. During this process, the parties typically exchange term sheets, have phone calls and meetings discussing the major terms, and from the bank’s perspective usually presume that nothing is binding until a final agreement is executed by all parties. Is that really the case? ... READ MORE


Applying Code Section 409A To Severance Agreements Or Not?

Ten years ago, the passage of Internal Revenue Code Section 409A significantly changed the rules relating to non-qualified deferred compensation arrangements. This includes how we look at severance agreements. In general terms, Section 409A applies to compensation or in-kind benefits which are earned in one year for services rendered and are paid in a later year. Severance agreements or separation pay plans are either subject to Section 409A or are exempt from Section 409A. If a severance agreement is exempt from Section 409A, then the agreement does not have to comply with all of the technical requirements of Section 409A including definitions of key terms, timing and form of distribution, etc. The agreement and the administration of the agreement will also be exempt from any Section 409A tax penalties associated with noncompliance. ... READ MORE


Nebraska's Tax Law Changes In 2015

Nebraska’s 2015 legislative session has come and gone. During that session, Nebraska’s Legislature enacted a number of tax law changes which may affect you and your clients. Significant changes include the following: ... READ MORE


The Dilemma That Won't Go Away: Are Your Workers Employees Or Independent Contractors?

There are a few fundamental issues in tax law that seem to never go away. As tax attorneys, we’ll be dealing with these issues for our careers. One of those fundamental issues is whether a worker should be classified as an employee or independent contractor. In fact, because many parts of Obamacare rely on the classification of a worker as an employee, the question is actually becoming more important. ... READ MORE


IRS Limits Scope of Determination Letter Program

The IRS will allow “Cycle A” plans (certain plans sponsored by controlled groups or plan sponsors with EINs ending in 1 or 6) to submit determination letter applications between February 1, 2016 and January 31, 2017 to ensure a smooth transition to the revised program. Furthermore, the IRS recognizes that there will be other, limited circumstances in which plan sponsors may need permission to submit determination letter applications. Therefore, the IRS has requested that comments be submitted regarding the new program and issued specific questions that it would like the comments to address: ... READ MORE


Pension Plan Sponsors—Consider New Funding Relief

On August 8, 2014, President Obama signed the Highway and Transportation Funding Act (“HATFA”) of 2014. Part of the funding of this bill stems from the extension of pension funding relief (originally provided by the MAP-21 legislation) for several more years. Corporations that sponsor pension plans will be allowed to set aside less cash for their plans, which increases profits and taxes.  The impact of HATFA on a plan can vary significantly based on the plan’s funded percentage, whether or not the plan is frozen, plan demographics, and other factors. ... READ MORE


Gifters Should Act Now: The I.R.S. Signals That It May Stop A Popular Gifting Technique By Eliminating Discounts

Longtime football fans may remember Don Meredith’s work as a commentator on Monday Night Football. When a game was effectively over, he was known for singing “Turn out the lights, the party’s over.” Unfortunately for many high net worth individuals, Don may be warming up his vocal cords for a very popular wealth transfer planning technique known as valuation discounts. People who want to take advantage of this technique may need to act very quickly to do so. ... READ MORE


The Implications Of Universal Same-Sex Marriage For Employee Benefit Plans

The recent landmark decision of Obergefell v. Hodges held that state laws banning same-sex marriages are unconstitutional. The Obergefell decision extends the Court’s prior 2013 decision in United States v. Windsor  which held unconstitutional the section of the Defense of Marriage Act prohibiting the federal government from recognizing state laws that allow same-sex marriage. Obergefell moves beyond Windsor and prohibits the states from banning same-sex marriage. This Client Alert discusses the implications of Obergefell in the context of employee benefit plans. ... READ MORE


Don't Make Your Cyber Insurance Coverage Illusory – Address Cyber Security Practices Before Purchasing Coverage

The risks of purchasing cyber insurance coverage before a business addresses its existing cyber security practices has just been made painfully clear by a recent case filed by an insurer in California.  Columbia Casualty, a unit of Chicago-based CNA, is seeking a judicial ruling that it is not obligated to pay a $4.125 million class action settlement paid by California based Cottage Health System, a nonprofit organization that operates a network of hospitals in Southern California, arising out of a data breach at the hospital. ... READ MORE


PCORI Fees Due July 31

What is the PCORI fee? ... READ MORE


Beware Upcoming 409A Audits



Department Of Labor Releases Proposed Rule To Expand Overtime Protections For Employees

Today the Department of Labor (DOL) announced a long-awaited proposed rule to extend overtime protections to employees. The primary purpose of the new rule is to update the salary and compensation levels needed for white collar workers to be exempt. Currently the salary threshold is $455 a week, which is the equivalent of $23,660 a year. As proposed, the rule would raise the salary threshold in 2016 to about $970 a week, which is the equivalent of $50,440 a year. Obviously, if and when the rule goes into effect, all employees who presently are exempt would lose that exemption and would be entitled to overtime pay if their salary does not meet the new minimum amount. ... READ MORE


Health Care Subsidies Upheld

Today, in King v. Burwell, the United States Supreme Court voted 6-3 to uphold the availability of subsidies provided by the Affordable Care Act (“ACA”) in federal Exchanges. This ruling means that, for most employers, the threat of ACA penalties is a reality. ... READ MORE


Asking An Employee On FMLA Leave To Work: Interference Or Not?

The timing of FMLA leave is not always convenient for employers. But, what can a company do when an employee who is important or even essential to a business function goes on FMLA leave before the work has been completed? Although a recent court decision did not directly answer this question, it did frame the issue of how much work-related contact with an employee on FMLA leave constitutes interference with that leave. ... READ MORE


Court Finds That The Breadth Of An Investigation Supports A Manager's Credibility Resolution

Many disciplinary actions involve a determination by the company as to who is telling the truth. As illustrated by a recent court decision, a review of an employer’s credibility resolution may turn on how thorough the investigation of the differing versions of events actually was. ... READ MORE


Do You Have An ADA Policy In Your Handbook?

Every employee handbook should have a policy preventing discrimination and harassment in the workplace. These policies generally cover several protected groups including individuals with disabilities under the Americans with Disabilities Act (ADA). However, employers need to take their handbook one step further and create a policy that addresses accommodations in the workplace for disabled applicants and employees. ... READ MORE


Employee's Lawsuit Based On A Non-Obvious Mental Disability Dismissed

Under the provisions of the Americans with Disabilities Act, an employee who wishes to seek an accommodation of the restrictions imposed by their disability must bring their disability to the attention of the employer, if it is non-obvious. The Eighth Circuit Court of Appeals, in Walz v. Ameriprise Financial, Inc., upheld the dismissal of a lawsuit because the plaintiff had not informed her employer of either her disability or that an accommodation was necessary to perform the essential functions of her job. ... READ MORE


Prohibiting The Prohibition Of Disrespectful Conduct: An Encore To Our Masters Series

During our Masters Series presentation in April, we addressed the National Labor Relations Board’s (NLRB) General Counsel’s memorandum relating to conduct policies. In the memorandum, the General Counsel contended that certain policies, including what appeared to be standard handbook provisions, violate employees’ rights to engage in protected concerted activity under Section 7 of the National Labor Relations Act (NLRA). Concerted activity generally is two or more employees discussing or taking action with regard to terms and conditions of work or even one employee taking action on a matter involving terms or conditions of employment. ... READ MORE


When Bad Things Happen To Good Plans: IRS Enhances Plan Correction Methods

The Employee Plans Compliance Resolution System (“EPCRS”) is a program offered by the IRS that allows plan sponsors to correct retirement plan compliance violations on a voluntary basis. Plan sponsors whose plans experience operational errors or mistakes can avail themselves of EPCRS and pay a penalty that is a fraction of the penalty that would otherwise be assessed if the defect is discovered under an IRS audit. In some cases, if the defect qualifies for self-correction without IRS approval, the sanction or penalty can be entirely avoided. ... READ MORE


Your Snowbird Friends Are Back; Are You Considering A Move Out-Of-State?

Your “snowbird” friends are back in the Midwest for the summer. You hear how much they did not miss our extreme cold weather, shoveling snow, driving in a snowstorm or sliding on ice. Some of your snowbird friends talk about golf in January, February and March. Others talk about being closer to children and grandchildren. ... READ MORE


Good Housekeeping: The Importance of Diligent Investment Committee Meetings

It’s that time of year again—time for your quarterly investment committee meetings.  It’s no coincidence that the ‘failure to operate benefit plans in a prudent manner’ is at the top of the Department of Labor’s (DOL) list of common plan failures. (See the full list of common plan failures at the link below.)  The DOL has a variety of investigative initiatives intended to root out these types of compliance issues.  For instance, the DOL currently has a compliance initiative focusing on the types of compensation paid to plan consultants and investment advisors. Additionally, the DOL has initiatives focusing on certain types of benefit plans (e.g., multiple employer welfare arrangements, employee stock ownership plans, etc.).  In 2013, the DOL’s enforcement branch collected over $1.6 billion in penalties and assets recovered as a result of its examination efforts.  ... READ MORE


Interviewing Applicants: How To Avoid The Pitfalls

Employee interviews can provide a valuable means for employers to learn about a prospective employee, but the process can also be fraught with legal minefields. For example, consider a lawsuit that was filed in federal court against Wal-Mart Stores. In that case, the interviewer asked the applicant “What current or past medical problems might limit your ability to do the job?” Although not apparent to the interviewer at that time, the applicant’s right arm below his elbow had been amputated and he had been fitted with a cosmetic prosthetic device. The applicant was not offered the job and he filed suit under the Americans with Disabilities Act. The jury awarded the Plaintiff $157,500 because the Wal-Mart interviewer asked an illegal question. This award included $100,000 in punitive damages for the unlawful inquiry, $50,000 in punitive damages for discriminatory failure to hire, and $7,500 in compensatory damages. ... READ MORE


The Anthem Breach – Assessing Employer Notification Requirements

On February 13, 2015, Anthem, Inc. (Anthem) announced that on January 29, 2015, it discovered that cyber attackers executed a sophisticated attack to gain unauthorized access to Anthem’s IT system and obtained personal information relating to consumers who were or are currently covered by Anthem or other independent Blue Cross and Blue Shield plans that work with Anthem.  Anthem stated that it believed the suspicious activity may have occurred over the course of several weeks beginning in early December, 2014.  Anthem has reported that the information accessed may have included individual names, dates of birth, Social Security numbers, health care ID numbers, home addresses, email addresses and employment information, including income data.  For more information concerning the breach, click here to access the website created by Anthem to update employers about the breach. ... READ MORE


The Wait is Over

Earlier this week, the IRS published the long-awaited final rules relating to the employer mandate, often referred to as the “pay or play” mandate.  Under the mandate, which is set forth in Internal Revenue Code Section 4980H, large employers that fail to offer their full-time employees health coverage that is (i) affordable and (ii) provides minimum value may be subject to penalties.  Penalties will be imposed if a full-time employee of the employer enrolls in health coverage through an Exchange and receives a federal subsidy. ... READ MORE


Cyber Insurance: A Valuable Tool In The Cyber Security Readiness Toolbox

Cyber security breaches impose significant costs on affected businesses that can materially affect their finances and reputation. Such costs include expenses related to various federal and state law breach notification requirements, as well as significant civil liability and regulatory fines. Now more than ever, stakeholders in businesses that handle a significant amount of personal identifying information, or hold key trade secrets, must educate themselves about the threat of a potential cyber security breach, as well as the tools available to help mitigate that threat. ... READ MORE


Commonly Overlooked Compliance Problems

For many Americans, retirement savings represent one of their most significant assets.  For this reason, whether and how to divide an individual’s interest in a retirement plan are often important considerations in divorce proceedings.  While the division of marital property generally is governed by state law, any division of retirement benefits must also comply with Federal law, namely the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code (the “Code”).  Specifically, the Department of Labor and the IRS have set forth specific requirements that must be met before retirement plans may be divided in a divorce proceeding.  These requirements make up the “qualified domestic relations order” or “QDRO” rules.  Unless a court’s order constitutes a QDRO and satisfies all the requirements of the Code and ERISA, an individual’s retirement benefits cannot be shared with anyone other than the participant.  This typically requires parties to obtain a separate order from the court; divorce decrees, standing alone, rarely satisfy the QDRO requirements. ... READ MORE


Supreme Court Revives Pregnancy Discrimination Case

“[W]hy, when the employer accommodated so many, could it not accommodate pregnant women as well?” This is the question the United States Supreme Court posed to the Fourth Circuit in Young v. United Parcel Service, Inc., as it voted 6-3 to revive a pregnancy discrimination case where a pregnant employee was denied an accommodation. This is the Court’s first ruling since 1991 on employers’ duties toward pregnant workers. ... READ MORE


Securities Liability And Statements Of Opinion

The United States Supreme Court issued a significant decision on March 24 dealing with securities liability for statements of opinion. The Court held that a public company may be liable for statements of opinion if the Company (1) in fact failed to hold the belief or (2) failed to disclose material facts about the basis for the opinion that rendered the statements misleading. ... READ MORE


District Court Judge Rules That Douglas County Assessor Must Abide By Certain Procedures During Informal Meetings With Taxpayers

If you own real property in Douglas County and you have ever questioned how property valuations are determined, you are not alone. Fortunately, a Douglas County District Court judge recently issued a ruling that specifies the process the Assessor’s office must follow when taxpayers have questions regarding the valuation of their property. ... READ MORE


The McGrath North Tax Group Is Pleased To Welcome Joan Cannon, Peter Langdon And Austin Bradley To The Group.

Joan M. Cannon ... READ MORE


Not So Fast My Friend: Tax Court Holds That A Part-Time Landlord Was Not Really A Real Estate Professional

Many people invest in rental real estate as a way to build wealth and invest for the future. However, one negative aspect of real estate investing is that, for many small-time investors, losses incurred in rental real estate cannot be immediately deducted. This is because of the IRS’ rules on passive losses. The U.S. Tax Court recently rejected one taxpayer’s attempt to avoid those passive loss rules and immediately claim real estate losses. ... READ MORE


President Proposes Taxing Capital Gains At Death And Raising Capital Gains Rate

In his State of the Union address, President Obama proposed that the government could raise tax revenues by imposing capital gains tax on the appreciation within a decedent’s assets at death and by raising the tax rate on capital gains to 28 percent. ... READ MORE


Revocable Trusts May Help To Protect The Inheritance Of Children In Second Marriage Situations

The decision to get remarried is typically a cause for celebration. But second marriages can also present unique estate planning challenges, especially when there are children from the prior marriage. A careful balance must be struck between providing for one’s spouse and providing for one’s children. Oftentimes, spouses in second marriages, especially those who marry later in life, want to keep their assets separate in order to provide for their respective families in the event of death or divorce. Thankfully, a decision by the Nebraska Supreme Court makes it easier to protect the inheritances of children from the prior marriage from the potential claims of a surviving spouse, as is discussed further below. ... READ MORE


New Rule Issued Defining Spouse Under The FMLA

The Department of Labor has just published its Final Rule, to be effective March 27, 2015, which revised the definition of “spouse” as it applies to same-sex couples for the purpose of taking FMLA leave to care for a spouse. The new rule, called the “place of celebration rule,” is based on where the marriage was entered into rather than the previous definition, which depended upon the state of residence. Thus, if the marriage was legal in the jurisdiction where the couple was married, they will be considered spouses even if they reside in a location that does not recognize the marriage. The obvious difficulty with the previous interim rule was that an employer whose place of business is near a state border, or whose employees move or work from one state to another, could be faced with a situation in which same-sex couples’ eligibility for spousal care FMLA leave would depend upon where they live at the time the leave is requested, regardless of whether they were legally married in another jurisdiction. ... READ MORE


Job Offer Found To Be "Real" Under The ADA, Even Though Employment Was Conditioned Upon More Than Just A Medical Exam

In the course of determining whether a plaintiff’s ADA Complaint should be dismissed, a court had the opportunity to examine an innovative technical attack upon a hospital’s rejection of a CNA’s application for a job which required heavy lifting. The plaintiff alleged that since an offer of employment was contingent not just upon a medical exam, but also upon an employment verification and a criminal background check, the job offer was not a “real” offer. ... READ MORE


Top Ten Things To Cover When Documenting Performance And Discipline

When employment claims and lawsuits are filed against employers, corrective actions and discipline records become key pieces of evidence. It goes without saying that a supervisor will have a difficult time convincing a jury that an employee deserved to be terminated if the underlying conduct is not properly documented. Judges and juries generally distrust employers who fire their employees without warning or without written proof that the employee was treated fairly under the circumstances. ... READ MORE


Make Sure Your Employment Background Check Authorization Forms Are Updated

If an employer wishes to conduct a background check on an applicant, an authorization with specified language on a separate piece of paper from any other information or authorization must be signed by the applicant. It must also be accompanied by the current version of the document “A Summary of Your Rights Under the Fair Credit Act.” In the January, 2013 edition of this newsletter, an article referred to a new background check form – New Fair Credit Reporting Act Disclosure Form Issue . The article noted that a new version of the document entitled “A Summary of Your Rights . . .” had been issued. On January 1, 2013, the responsibility for enforcing the FCRA transferred from the Federal Trade Commission to the Consumer Financial Protection Bureau, as noted in the document’s first paragraph. A copy of the notice which must be used after January 1, 2013 is attached here – CFPB – A Summary of Your Rights Under the Fair Credit Reporting Act . If the form you presently are using refers to the Federal Trade Commission in its first paragraph, it should immediately be replaced with the new form which refers to the Consumer Financial Protection Bureau. ... READ MORE


Does A Degree Make An Employee Exempt Under Wage And Hour Law?

A recent federal court decision examined the potential exempt status of entry-level audit associates working for KPMG. In that case, the U.S. Court of Appeals for the Second Circuit found that those employees were exempt under the “professional exemption” even though they performed many routine tasks. Would that decision be the same for all professionals with certain degrees? The answer to that question will depend upon the particular facts of the case. ... READ MORE


NLRB's Quickie Election Rules Challenged In Court

In an article in the December edition of this newsletter, we noted changes made by the NLRB in its election rules which would dramatically accelerate the date upon which elections would be held, from approximately six to seven weeks after the filing of the petition to as few as two weeks – The NLRB Issues Its Quickie Election Regs. On January 5, 2015, a lawsuit was filed in U.S. District Court for the District of Columbia asserting that, in issuing those rules, the Board exceeded its authority. The rules currently have an effective date of April 15, 2015. The Complaint does not indicate whether the plaintiffs will seek an order enjoining the NLRB from implementing the new election rules on that date, but it is likely that an injunction will be sought. We will keep readers informed of the progress of this lawsuit. ... READ MORE


Anthem Data Breach – What Does It Mean For Your Health Plan?

Earlier this month, Anthem announced that hackers had stolen information on tens of millions of Anthem Inc. customers in a massive data breach that ranks among the largest in corporate history. While the full scope of the damage is still being assessed, the compromised database contained up to 80 million customer records. So far, we do know that the stolen data includes personal information on insureds including names, birthdays, medical identification numbers, Social Security numbers, street addresses, e-mail addresses and employment information, including income data. Anthem has said that the data compromised does not appear to include credit card or medical information. ... READ MORE


A Roadmap To Cybersecurity Readiness

Deputy Treasury Secretary Sarah Bloom Raskin recently outlined ten questions that bank CEOs should ask to assess their institutions’ cybersecurity readiness. Speaking at a Texas Bankers Association conference in Austin, Secretary Raskin stressed the importance of using the following questions as a roadmap to deal with cyber threats: ... READ MORE


The NLRB Issues Its Quickie Election Regs

On December 12, the National Labor Relations Board (“NLRB”) issued its long anticipated, or perhaps dreaded, regulations designed to expedite elections, thus improving organized labor’s opportunities to organize. The issuance of those rules follows, by one day, the NLRB decision in Purple Communications, which is described elsewhere in this newsletter. ... READ MORE


Supreme Court Narrows Categories Of Work Covered By The FLSA

On December 9, the Supreme Court unanimously ruled that a staffing agency was not required to pay workers at Amazon warehouses for the time they spent waiting to go through a required security screening at the end of the day. In that case, Integrity Staffing Solutions, Inc. provided warehouse staffing to throughout the United States. The warehouse employees were employed to retrieve products from the shelves and package those products for delivery to Amazon customers. Integrity Staffing required the warehouse employees to undergo a security screening before leaving the warehouse at the end of each day. During the screening, employees were required to remove items such as wallets, keys, and belts and pass through metal detectors. ... READ MORE


What To Do When You Don't Agree With A Doctor's Medical Release

When an employee returns from medical leave, employers often question the employee’s “fitness” to return to duty. Most employers have written policies requiring employees to produce a medical note from their doctor releasing them back to work. However, a medical release does not always resolve the issue and the employer may have additional concerns. ... READ MORE


Employees Can Use Company Email For What?!

On December 11, 2014, the National Labor Relations Board (the “NLRB”) issued the long-awaited decision regarding employee use of company email in Purple Communications, Inc. The NLRB held that employee use of email for protected communications during non-working time is presumptively an employee right for any employee provided access to a company’s email systems. ... READ MORE


Employer Off-Duty No-Access Rules: The NLRB Flops Again!

Many employers have policies that prohibit employees from hanging around the facility before or after working hours. Often, these policies are adopted as a mechanism for ensuring security of the facility, providing a distraction-free workplace, and preventing employees from working off the clock. ... READ MORE


Year-End Compliance Checklist

Group Health Plans ... READ MORE


The President's New Immigration Initiative: Its Potential Impact on U.S. Businesses

Green Card Status: ... READ MORE


Buying Or Selling An Aircraft? Begin Your Planning Well Before You Land The Deal

We received a frantic call from an aircraft buyer who had recently taken delivery of a beautiful plane. The buyer had been careful to follow the Internet “advice” he found that suggested he could avoid paying sales tax by taking delivery of his aircraft in a state that had no sales tax. The plane was then brought into the buyer’s home state, from which the plane was operated. A while later, the buyer received a letter from his home state’s taxing authority asking where the aircraft was hangared, and whether sales or use tax was paid to the owner’s home state. Unfortunately, the new owner was now on the defensive, calling us to attempt to mitigate the sales or use tax that may have been reduced or avoided had careful planning occurred before the purchase. The scenario is common and highlights the importance of tax planning well before an aircraft is purchased. Below are a number of tax considerations in planning for the purchase of your next aircraft (note that similar issues may apply to many other types of business assets). ... READ MORE


Don't Lose Your Privileges: What You Should Know To Protect Your, Or Your Clients', Privileged Information From Unintended Disclosure To The Government

It is a fundamental principle of American court proceedings that parties should generally be able to discover and utilize evidence which supports their case. However, courts have also recognized that certain relationships are of such societal importance that sacrificing evidence which may be learned from persons in those relationships is justified. Based upon this principle, courts have developed and recognized the attorney-client, marital and physician-patient privileges. ... READ MORE


Connecticut Court Allows HIPAA Negligence Claim



Point-of-Sale Systems – Protect Your Business Against Data Breaches

Signature Systems Inc., a vendor that provides point-of-sale (POS) systems for restaurants, recently announced that 324 restaurants, including 216 Jimmy John’s locations, may have been compromised when malware that captures payment card data from cards swiped through terminals in affected restaurants was inserted into their system.  According to a September post on Krebs on Security, a well-known security expert, “there are questions about whether Signature’s core product — PDQ POS — met even the most basic security requirements set forth by the PCI Security Standards Council for point-of-sale payment systems. According to the council’s records, PDQ POS was not approved for new installations after Oct. 28, 2013. As a result, any Jimmy John’s stores and other affected restaurants that installed PDQ’s product after the Oct. 28, 2013, sunset date could be facing fines and other penalties.” ... READ MORE


Tippers and Tippees and Securities Liability

The Wall Street Journal recently reported on an SEC investigation of several hedge funds. The hedge funds traded on material nonpublic information concerning a change in Medicare reimbursement rates. Over a period of approximately one hour, an employee of the House Ways and Means Committee communicated information to a law firm lobbyist, who relayed the information to a political intelligence firm, who emailed the information to its clients including the hedge funds. The hedge funds bought shares in several large insurance firms before the close of trading. The stock of the insurance firms rose as much as 6% immediately prior to market close. These facts raise the question: Did any of these tippers or tippees violate the securities laws? ... READ MORE


EEOC And The Federal Trade Commission Remind Employers Of Their Duties When Using Background Checks

In two technical assistance documents issued earlier this year, the EEOC and the Federal Trade Commission (FTC) joined together to remind employers and employees of their obligations and rights when employers conduct background checks of employees. Such background checks must comply with the provisions of the Fair Credit Reporting Act, which is enforced by the FTC. ... READ MORE


Clicking The "Like" Button On Facebook Is Now A Protected Activity?

In recent years, the National Labor Relations Board (NLRB) has issued decisions that protect employees using Facebook and other social media to criticize their employers. Posting comments on Facebook and other social media may be a protected concerted activity under the National Labor Relations Act (NLRA). Evidently, the NLRB is now expanding its reach to cases where an employee simply clicks the “like” button under a Facebook post. ... READ MORE


NLRB Allows Union To Carve Out A Small Voting Group

One of the most important elements when a union petitions for an election to represent certain employees is the size of the voting unit or voting group. Generally, the smaller the voting unit, the easier it is for a union to organize and win the election. A recent decision by the National Labor Relations Board (NLRB) illustrates the activist tendencies of the current version of the NLRB and its movement in a direction which will allow unions greater opportunities to organize and to win elections. ... READ MORE


How Fit Is Your Fitness-For-Duty Testing Process? The EEOC Weighs In.

In a new lawsuit filed on September 9, 2014, the EEOC takes new aim at employers for their fitness-for-duty exams. But this time, there’s a twist. Rather than focusing on the exam itself as a violation of the ADA, this new lawsuit, filed in a federal court in Minnesota, alleges that the employer violated both the ADA and Genetic Information Nondiscrimination Act (GINA) by requiring an employee to submit overbroad medical release forms in order to complete a fitness-for-duty examination. ... READ MORE


Five Practical Tips For Providing Reasonable Accommodations In 2014

In recent years, the EEOC has put an emphasis on reasonable accommodations under the Americans with Disabilities Act (“ADA”) and its amendments, which has led to increase in failure to accommodate claims under the ADA. Set forth below are five practical tips to remember when a disabled employee is entitled to a reasonable accommodation. ... READ MORE


Small Employers Offering Health Care—This One's for You

The small employer health insurance tax credit was enacted by the Patient Protection and Affordable Care Act (the “ACA”) to help small businesses and small Sec. 501(c) tax-exempt organizations afford the cost of providing health insurance coverage for their employees. Because the maximum potential credit increased for 2014, employers that take the time to make the calculation may find that they are eligible for a substantially larger credit than in prior years. The following is a brief review of the original credit and how the credit has evolved under the final guidance recently released by the IRS. ... READ MORE


Sell It For "Free" – IRS Continues To Approve Life Insurance Sales Between Trusts

Life insurance trusts are an extremely popular estate planning tool. Since the proceeds of life insurance policies are generally included in the taxable estate of the insured-owner, many individuals transfer policies to an irrevocable trust during life to remove the death benefit from later federal estate tax. One significant downside to the use of an irrevocable life insurance trust is; however, the fact that such trusts cannot be changed by the insured-owner. As changes in family circumstances occur over time (marriages, deaths, births, divorce, etc.), the irrevocable dispositive provisions of the trust may become less suitable. ... READ MORE


Department Of Revenue Announces New Procedure For Issuing Public Guidance

The Nebraska Department of Revenue has recently issued a new revenue ruling (Rev. Rul. 99-14-1) concerning the public disclosure of the Department’s legal guidance to taxpayers. This ruling creates new opportunities for you or your clients to request authoritative guidance from the Department. ... READ MORE


EEOC Releases New Guidelines On Pregnancy Discrimination

The guidelines provide that the Pregnancy Discrimination Act (PDA) covers discrimination based on current pregnancy, past pregnancy, a woman’s potential to become pregnant, a woman’s intention of becoming pregnant, and medical conditions related to pregnancy and childbirth. Regarding a woman’s potential to become pregnant or intention, the guidelines explain that employment decisions related to infertility treatment and the use of contraceptives may implicate Title VII. The guidelines provide that employers can violate Title VII by providing health insurance that excludes coverage of prescription contraceptives, regardless of whether the contraceptives are prescribed for birth control or for medical purposes. The U.S. Supreme Court’s recent Hobby Lobby decision involving closely held corporations’ religious rights to refuse to provide certain contraceptives puts an interesting spin on this provision. ... READ MORE


Do I Really Need To Come To Work? New Frontiers In ADA Accommodation

Can an employer require a disabled employee to actually come into work and perform their job duties? “Maybe not” one federal appeals court recently held. ... READ MORE


Maximum Leave Policy Found To Be Fair And Lawful

Over the last several years, the EEOC has been cracking down on employers who terminate employees for exceeding the maximum amount of leave available under company policy. For example, a policy may allow an employee to take a medical leave of absence for up to six (6) months. If the employee is unable to return to work at that time, they are automatically terminated. ... READ MORE


FMLA Leave May Be Used, In Part, To Care For Grandchildren

When an employee of Harbor Crest applied for FMLA leave, she indicated that she would be caring for her daughter who had cancer. However, when the employer found that she was also caring for her grandchildren and was not the primary caregiver for her daughter, it attacked her eligibility for FMLA leave. The Seventh Circuit Court of Appeals rejected the attack and found that the employee’s discharge was unlawful. ... READ MORE


NLRB Reinstates Employee Who Engaged In A Profane Attack On His Manager

In Plaza Auto Center, Inc., a case decided May 28, 2014, the National Labor Relations Board (NLRB) found 2-1 that that an employee who shouted profanities and personally attacked his boss did not lose the protections of the National Labor Relations Act (NLRA). ... READ MORE


New Sheriff In Town: FTC Enters The Fray As A Federal Enforcer Of Healthcare Data Breaches

Over the last several years, the U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) has significantly increased its HIPAA healthcare data breach enforcement posture, resulting in aggregate fines exceeding more than $10 million since June 2013.   Despite these increased enforcement efforts, however, the Federal Trade Commission (“FTC”) has now entered the fray as an additional federal enforcer of healthcare data breaches. ... READ MORE


Cyber-Risk: It's Not Just An IT Issue, It's A Board Issue

On June 10, 2014, U.S. Securities and Exchange Commissioner Luis A. Aguilar spoke at the New York Stock Exchange “Cyber Risks and the Boardroom” Conference.  With the high number of recent successful cyber-attacks, Commissioner Aguilar suggests that cyber-risk must be considered a part of a board’s overall risk oversight. It is the board’s responsibility to ensure the adequacy of the company’s cybersecurity measures.  Aguilar cites to suggestions for how this can be done, including boards reviewing annual budgets for privacy and IT security programs, assigning roles and responsibilities for privacy and security, and receiving regular reports on breaches and IT risks.  Aguilar encourages companies to conduct regular risk assessments and cites the recently released Framework for Improving Critical Infrastructure Cybersecurity by the National Institute of Standards and Technology (“NIST”) as the likely standard for best practices in assessing a company’s cybersecurity risks. In short, boards need to be or get educated on cybersecurity risks and be proactive in trying to minimize such risks. ... READ MORE


HIPAA Compliance Fines To Increase Next Year

Jerome B. Meites, a chief regional civil rights counsel at HHS, advised a June 12 American Bar Association conference in Chicago that enforcement efforts by HHS in the next 12 months regarding privacy breaches and/or security lapses regarding protected health information will likely result in aggregate fines exceeding the more than $10 million in fines assessed since June 2013.  Mr. Meites based his remarks on previous statements in which leaders at HHS’ Office of Civil Rights have signaled an increasing desire to send strong messages.  As part of his remarks, Mr. Meites also noted that portable media causes an enormous number of the complaints that OCR deals with.  The message here for businesses subject to the HIPAA Privacy, Security and Data Breach Notification rules is to is to perform a comprehensive risk analysis and then address any vulnerabilities raised by the analysis, with a particular focus on mobile devices.  For questions about HIPAA compliance issues, contact a member of the McGrath North Privacy and Data Security Group. ... READ MORE


Iowa Expands Reach Of Data Breach Notification Law



Highlights Of Some Advanced (And Not So Advanced) Estate Planning Techniques

This Article is only a high-level summary of the techniques outlined herein. Please consult with a member of McGrath North’s Tax Group for a more detailed discussion of these planning techniques, along with any related pros, cons and restrictions. ... READ MORE


The Nebraska Supreme Court Creates Tax Refund Opportunity For Manufacturers – But They May Need To Act Fast

A recent Nebraska Supreme Court case has created a potential tax refund opportunity for Nebraska’s manufacturers – but they may need to act quickly. Manufacturers, and their advisors, should be aware of this potential opportunity if they have equipment which they use partially, but not exclusively, in their manufacturing activities. ... READ MORE


Nebraska's New Property Valuation Protest Process

Effective for the 2014 property tax year, property owners in larger counties (over 150,000 people) who wish to protest their property value can request a hearing in person before a referee appointed by the County Board of Equalization. Referees will generally be independent appraisers who will assist the County Board in examining all protests. ... READ MORE


Obama Proposing Big Changes To Overtime Exemption

In an effort to make millions of workers eligible for overtime, the President is proposing to increase the salary threshold to qualify as an exempt employee under the Fair Labor Standards Act (FLSA). Currently, in order to qualify for the executive, administrative, learned professional, or creative professional exemptions, the employee must be paid at least $455 per week on either a salary basis or a fee basis (i.e., an annual salary of $23,660). The last time this amount was updated was 2004. ... READ MORE


Designation Of FMLA Leave – An Employee's Choice?

In Escriba v. Foster Poultry Farms, the Plaintiff, an 18-year employee, requested two weeks’ vacation to care for her ailing father in Guatemala. This request was granted. The employee then requested two weeks of unpaid leave in addition to the two weeks of paid vacation; however her supervisor rejected this request. The employee’s supervisor later asked the employee twice if she needed more time than two weeks in Guatemala to care for her ill father and the employee replied “no,” both times. The supervisor completed the Plaintiff’s vacation paperwork and told her to contact human resources if she later decided she needed more time. The employee left for Guatemala and did not return as scheduled two weeks later and did not contact her supervisors. She was ultimately terminated for violating the Company’s three day no-call, no-show rule. ... READ MORE


Do Data Breach Guidelines Signal Coming Enforcement Efforts Against Businesses With Customers Or Operations In California?

Any business that has customers or operations in California should pay attention to California law regarding privacy and data security.  The State of California has been active in the areas of breach notification, privacy policies for online services that collect personal information from California residents, privacy practices for the mobile app industry, online privacy rights for California minors, and disclosure by operators of websites regarding whether third parties may be collecting personally identifiable information relating to a consumer’s online activities.  Last year alone, fourteen pieces of legislation involving privacy and data security were introduced in California’s legislature, three of which were signed into law by Governor Brown. ... READ MORE


The EEOC Issues Guidelines On Religious Dress And Grooming Accommodations In The Workplace

The EEOC’s guidance reminds employers that “religion” is broadly defined and includes not only traditional religious beliefs but those that are new, uncommon and not a part of a formal church or sect. The number of individuals who hold the belief in question is not significant. The key to determining whether a religious practice may be protected is whether it consists of moral or ethical beliefs as to what is right or wrong that are “sincerely held” with the “strength of traditional religious views.” The EEOC points out that a belief may be “religious” even if it is not followed by others in the same religious sect, denomination or congregation. ... READ MORE


Health Care Reform: New Employer Reporting Rules Issued

Beginning in 2016, insurers and employers offering self-funded group health plans will be required to report certain information relating to coverage offered in 2015. This information must be reported to both the IRS as well as the covered individual. Additionally, large employers with 50 or more full-time equivalent employees will be required to report information about health coverage offered during the prior year to full-time employees. The regulations specify that the information will be reported on new IRS Forms 1094 and 1095, which have not yet been released, and not on Form W-2, as many had hoped. ... READ MORE


NLRB: Targeting Employer Attempts To Rule Out "Negativity" In The Workplace

In Hill and Dales General Hospital, a hospital attempted to improve its work culture, which was plagued by low morale, departing employees and patients seeking care in other hospitals. The Hospital issued a new “Values and Standards of Behavior” policy, which  provided: ... READ MORE


A Temporary Impairment May Be A Disability Under The ADAAA

When does an impairment become a covered disability under the Americans with Disabilities Act? In the first published federal appellate court decision to apply the expanded definition of “disability” contained in the Americans with Disabilities Act Amendments Act of 2008 (“ADAAA”), the Fourth Circuit held that a temporary impairment caused by an injury may be a disability if it’s sufficiently severe to substantially limit a major life activity. ... READ MORE


What Happens In Vegas, Stays In Vegas, But May Also Be Covered By FMLA

Can a vacation to Las Vegas be covered by FMLA? According to the Seventh Circuit Court of Appeals, if an employee can prove he or she was providing care to a disabled family member while gallivanting in casinos, that employee will qualify for FMLA leave. ... READ MORE


Court Finds Employee Tape Recording Of Confidential Conversation Not Unlawful

Can an employee record a confidential conversation with her employer and get away with it? “Yes” said a court in Kansas as it rejected the employer’s argument that such a recording was improper and unlawful. ... READ MORE


NLRB Strikes Down Another Employer Confidentiality Policy

In a recent decision, the National Labor Relations Board (NLRB) struck down another confidentiality policy maintained by an employer. The employer, MCPc, Inc., a technology services company, had a confidentiality policy in its handbook which provided that “dissemination of confidential information, such as personal or financial information, etc., will subject the responsible employee to disciplinary action or possible termination.” ... READ MORE


H-1B Visas Can Be Filed On April 1

An H-1B visa is one which applies to an applicant who has at least a bachelor’s degree and is seeking a job in the field in which they have the bachelor’s degree, which job requires such a degree. In addition, there are also advanced degree visas, 18,000 in number, for those applicants who have master’s degrees or above. ... READ MORE


NLRB Reissues Its Expedited Election Rule

The proposed rulemaking, which discussed a number of comments that already had been presented to the NLRB when it last tried, in 2012, to pass a similar bill, runs approximately 180 pages in length. It will be open for comments for 60 days. Proposed Rule ... READ MORE


The Coming Consolidation Of Community Banks: Are You Ready?

Stated simply, many community banks find themselves at a strategic crossroads. They may be presently large enough to thrive in the present environment. They may need to grow (either organically or through acquisition) to a size which enables them to operate efficiently and profitably. Alternatively, they may need to prepare to sell. ... READ MORE


Nebraska Residency For Tax Purposes: The Tax Trap Of Accidental Residency And A Tax Opportunity For Nebraska Resident Trusts

We wanted to alert you to two significant issues regarding Nebraska residency. The first involves a potential tax trap: whether a person has unknowingly taken actions that make that person a Nebraska resident. The second involves a potential tax opportunity: whether a trust may be able to avoid Nebraska taxation because Nebraska’s tax laws violate the U.S. Constitution. ... READ MORE


2014: What To Watch For

1.  Estate and Gift Tax Reform ... READ MORE


Use 2014 To Prepare For ObamaCare Penalties

Originally slated to be effective January 1, 2014, the “Pay or Play Mandate” or “Employer Shared Responsibility Mandate” of the Patient Protection and Affordable Care Act was delayed until 2015. That means that beginning in 2015, the employer mandate and its penalties will take effect. While many employers are enjoying this brief compliance respite, employers need to use 2014 to implement processes and procedures that will be up and running on January 1, 2015. The postponed implementation of the mandate has given employers an extra year to figure out their coverage plan and staffing strategy—time that can’t be wasted. ... READ MORE


Communications With Outside Counsel – It's Not All Privileged!

A recent case out of the Eastern District of New York serves as a helpful reminder to employers that not all communications with outside counsel will remain privileged as part of future employment litigation. In Koumoulis, et al. v. Independent Financial Marketing Group, Inc. (E.D. NY November 1, 2013), four current and former employees sued the defendant employers alleging that they discriminated against them on the basis of religion, ancestry, disability, and age; subjected them to a hostile work environment; and, retaliated against them for their complaints of unlawful discrimination. The dispute concerned the plaintiffs’ demands for the production of documents listed by the defendants on their privilege log and withheld as being subject to the attorney-client privilege. ... READ MORE


NLRB Throws In The Towel On Pro-Union Notice Posting Rule

Last year, two federal appellate courts concluded that the NLRB rule could not be enforced. The D.C. Circuit found that the rule violated an employer’s freedom of speech, which the National Labor Relations Act (NLRA) guarantees. The Fourth Circuit held that the NLRB did not have the statutory authority under the NLRA to issue such a rule. Following these decisions, employers were waiting to see whether the NLRB would appeal to the U.S. Supreme Court. ... READ MORE


The E-Verify System Will Be Modified To "Lock Down" Certain Misused Social Security Numbers

Employers who utilize the Department of Homeland Security’s E-Verify system to verify new employees’ work authorization have long struggled with one glaring deficiency in that program, namely that it does not alert employers to the use of a single otherwise valid social security number by multiple persons. Recently, the Department of Homeland Security (“DHS”) announced that E-Verify now has taken a step in the right direction and has the ability to lock down certain social security numbers in the E-Verify system. ... READ MORE


Same-Sex Marriage And The FMLA: What Are The Rules?

In the United States v. Windsor case, the Supreme Court held that Section 3 of DOMA, which stated that the term “spouse,” as used in any federal law or regulation, “refers only to a person of the opposite sex who is a husband or a wife,” was unconstitutional because the definition and regulation of marriage has belonged exclusively to the states by history and tradition and subject to certain Constitutional guarantees. Because the FMLA contains provisions using the term “spouse,” it was directly affected by the Court’s decision. ... READ MORE


Use 2014 To Prepare For ObamaCare Penalties

Originally slated to be effective January 1, 2014, the “Pay or Play Mandate” or “Employer Shared Responsibility Mandate” of the Patient Protection and Affordable Care Act was delayed until 2015. That means that beginning in 2015, the employer mandate and its penalties will take effect. While many employers are enjoying this brief compliance respite, employers need to use 2014 to implement processes and procedures that will be up and running on January 1, 2015. The postponed implementation of the mandate has given employers an extra year to figure out their coverage plan and staffing strategy—time that can’t be wasted. ... READ MORE


The Federal Tax Implications of the Supreme Court's Decision on Same-Sex Marriages

On June 26, 2013, the Supreme Court of the United States ruled in the well-publicized decision United States v. Windsor that Section 3 of the Defense of Marriage Act (“DOMA”) was unconstitutional. Section 3 of DOMA defined “marriage” as exclusively the union between a man and a woman and “spouse” as a person who is married to someone of the opposite sex. Prior to the Windsor decision, these definitions were to be used for all provisions of federal law, including the Employee Retirement Income Security Act (“ERISA”) and the Internal Revenue Code (the “Code”). In light of DOMA, many of the tax benefits available to spouses were not extended to same-sex spouses. Where employers attempted to provide comparable benefits (e.g., health plan benefits) to same-sex spouses, employers were required to impute the value of that coverage to the employee as income. This resulted in additional taxable income to the employee and additional employment taxes for the employer. ... READ MORE


Top 10 Steps You Can Take Now to Plan for and Reduce Your 2013 Tax Bill

If you are like me, it’s hard to believe that 2013 is nearly over and that it’s time to think about year-end tax planning. Unfortunately, income tax liabilities for 2013 may be higher than recent years. Taxpayers face higher top rates for ordinary income, capital gains, and dividends. There are two new taxes which apply to high income individuals: a complex 3.8% tax on net investment income and a 0.9% payroll tax on wages to pay for Medicare. The 0.9% payroll tax applies to individuals receiving wages in excess of $200,000 ($250,000 for married couples filing jointly). ... READ MORE


Raising Capital Through Crowdfunding: The Myth and the Reality

Background ... READ MORE


SEC Proposes Dodd-Frank Pay Ratio Regulations

The SEC was charged with issuing regulations in numerous areas under the 2010 Dodd-Frank legislation. Three years after enactment, the SEC had not yet issued regulations relating to (1) pay ratio rules, (2) compensation clawback provisions, and (3) company hedging policies. ... READ MORE


U.S. Tax Court Confirms that CRP Payments are Subject to FICA Self-Employment Taxes

Investors in real estate beware: government payments for enrolling land in the Conservation Reserve Program (CRP) may be subject to the federal FICA tax of 15.3%. This was the recent ruling of the U.S. Tax Court. ... READ MORE


President Obama's 2014 Budget Proposal Retreats From the "Permanent" Estate Tax Fix to Higher Rates and Lower Exemptions

In order to raise an estimated $72 billion over the next ten years, President Obama’s 2014 Budget proposes to lower estate tax exemptions and increase estate tax rates after 2017. The estate and gift tax rates would increase from 40% to 45% and the estate and gift tax exemptions would fall from $5.25 million for each tax to $3.5 million and $1 million, respectively. In addition, the Budget would eliminate indexing the exemptions for inflation. ... READ MORE


Mr. Belvedere's Revenge: The Tax Obligations of a Hiring a Household Employee

Household employees are a great plot device in television shows. Armed with the background of a hired nanny or housekeeper, writers can devise all sorts of wacky hijinks between characters from vastly different backgrounds and with wide ranging opinions. How else can you have a British butler interact with a Midwestern family? ... READ MORE


Department of Labor Publishes New Rules Re: Hiring Goals for Veterans and Disabled Applicants

The Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) has always provided that federal contractors and subcontractors may not discriminate against protected veterans. New rules published on August 27, 2013 amend VEVRAA and require federal contractors and subcontractors to take affirmative action to recruit, hire, promote, and retain protected veterans. A second rule amends the Rehabilitation Act by providing for hiring goals for qualified disabled employees. The rules will be effective 180 days after their publication. ... READ MORE


Who's The Boss? – Supreme Court Defines Supervisor Relating To Harassment Claims

Who is a supervisor for purposes of vicarious liability under Title VII harassment claims? Only employees who are empowered by the employer to take “tangible employment actions” against the victim, according to the United States Supreme Court in the recent case Vance v. Ball State University. This determination eases disputes as to who constitutes a supervisor under Title VII harassment claims. According to the Supreme Court, employees are supervisors only if they can take “tangible employment actions” against the harassed victim. “Tangible employment actions” are defined as significant changes in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities or decisions causing a significant change in benefits. ... READ MORE


Nebraska Supreme Court Denies Motion For Rehearing In PTO Payment Case

On May 3, 2013, in the Fisher and Norton cases, the Nebraska Supreme Court decided that earned but unused paid time off (“PTO”) constituted “vacation” under the Nebraska Wage Payment and Collection Act, and that Nebraska employers were obligated to pay PTO to departing employees, even though a part of PTO was designed to replace sick leave. The decision came in a spirited 4 – 3 decision, with a vigorous dissent by three of the Justices. ... READ MORE


ICE Issues New Practice Pointers On Form I-9

In a recent meeting with a committee of immigration lawyers, ICE issued “practice tips” based upon their interpretation of the requirements for using Form I-9. ... READ MORE


Having Too Many Reasons To Terminate Someone Is Not Always Better

Many of the articles we publish in our newsletters talk about the “right way” to terminate an employee. Some employers believe that it is better not to provide a reason when firing an employee. This approach may prompt the employee to suspect an unlawful motive. Other employers take the opposite view and believe that it is better to communicate multiple reasons for firing the employee. This approach, however, can also lead to problems as illustrated in a recent Seventh Circuit decision, Hitchcock v. Angel Corps., Inc. ... READ MORE


Court Holds Flexible Work Week Not Reasonable Accommodation

During her employment, Murphy experienced migraine headaches which at times required her to leave work. Initially, Samson permitted her to “make up” time missed for those unplanned absences but, over time, she was unable to make up all the time missed from work and in fact, had a negative paid time off balance. Additionally, some performance issues began to develop including data entry errors, payments to the wrong vendors and untimely payments. Those deficiencies were documented. ... READ MORE


Court Finds That An H-1B Visa Application Establishes An Employment Contract

H-1B immigration status involves an application by a company for work authorization for a specific employee who holds a college degree in a job which requires a college degree. In a recent state court decision in New York, the Court held that a petition for H-1B status, by itself, constituted an employment contract. ... READ MORE


HIPAA Omnibus Rule Compliance Deadline For Business Associates Is September 23, 2013

On January 25, 2013, the Department of Health and Human Services (“HHS”) issued the final “omnibus” Health Insurance Portability and Accountability Act (“HIPAA”) rule which made changes to the HIPAA Security Rule, Breach Notification Rule and certain provisions of the Privacy Rule. The omnibus rule implements changes under the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and affects nearly every business in the healthcare industry as well as those businesses providing services to such businesses in the healthcare industry. ... READ MORE


Why Everyone Needs Estate Planning

4-2012 Why Everyone Needs Estate Planning – Seminar ... READ MORE


IRS Promises No More Warrantless Searches

In response to a recent Freedom of Information request, the IRS recently released a memorandum issued by an IRS staff attorney to a revenue officer (in reply to a question) which states that the IRS believes it has the authority to subpoena and review taxpayer emails which are more than 180 days old without a warrant. Under the federal Stored Communications Act, the IRS acknowledged that it cannot review taxpayer emails or stored voice mails which are less than 180 days old without a warrant. ... READ MORE


IRS Grants Relief For Companies Who Voluntarily Reclassify Workers As Employees, But Some Companies Must Act Now

The classification of a worker as an “independent contractor” or “employee” continues to be a significant issue for the IRS. To encourage the voluntary classification of workers as employees, the IRS created the Voluntary Worker Classification Settlement Program (VCSP) in 2011. The program’s goal was to facilitate the voluntary reclassification of workers as employees without the employer having to endure the examination process and the normal correction procedures or to incur extraordinary tax liability to become compliant. ... READ MORE


Nebraska Supreme Court Finds Unused PTO Must Be Paid To Employees Upon Separation

Under the terms of the Nebraska Wage Payment and Collection Act all “wages” must be paid to employees upon their separation from employment. A specific section of that Act provides that wages include fringe benefits. By virtue of a 2007 amendment to that Act, paid leave, other than earned but unused vacation leave, is not to be included in wages due and payable at the time of separation, unless the employer and employee have specifically agreed otherwise. ... READ MORE


Complaint Of Hostile Work Environment Could Lead To OSHA Investigation And Enforcement

You’ve heard of hostile work environment claims in terms of sexual harassment or discrimination. But, what about in terms of an OSHA violation? In a recent news release, the Occupational Safety and Health Administration (“OSHA”) announced that it had filed a complaint in a federal district court against an employer under OSHA’s whistleblower statutes for terminating an employee who had reported workplace violence in the form of the owner’s verbal threats that created a hostile work environment. ... READ MORE


SEC Provides Conditional Okay to Use Social Media for Public Company Announcements

The Securities and Exchange Commission on April 2, 2013 issued a report that gives conditional approval for public companies to use social media outlets, like Facebook and Twitter, to announce key information in compliance with Regulation Fair Disclosure (“Regulation FD”). ... READ MORE


Employee's Falsification of Health Form Found to Support Termination

Under the provisions of the American with Disabilities Act, after a conditional employment offer is made, an employee may be required to either go through a physical examination or complete a health information form. In a recent unpublished decision in the Third Circuit Court of Appeals, in Reilly v. Lehigh Valley Hospital, the court examined an employer’s termination of an employee after it determined that employee had falsified certain answers on a health information form. ... READ MORE


The Importance of Documentation Can't be Overstated

Robert Antoine was hired by First Student, Inc. as a bus driver for a school district in Louisiana. The terms of his employment were governed by a collective bargaining agreement which provided that employees could exercise their seniority to bid for routes. Those routes which were not awarded pursuant to the bidding system were assigned in reverse order of seniority. Since Antoine was a new hire, his seniority rank was 114 out of 115 total drivers. Consequently, he was assigned another route which had not been selected by more senior employees. ... READ MORE


New Immigration Form I-9 Must be Used Beginning May 7, 2013

On March 8, 2013, the U.S. Citizenship and Immigration Services published a notice announcing a revised Form I-9. In the information published, it was incorrectly stated that the effective date of the new form was after May 7, 2013. The USCIS has just announced that was in error, and clarified that employers may no longer use prior versions of Form I-9 beginning on May 7, 2013. The new Form I-9 can be found at Additionally, a new version of the M-274 Handbook for Employers with guidance on the completion of new Form I-9 has been issued and is available electronically at The Handbook contains materials and guidance with respect to the new Form I-9. ... READ MORE


"Regarding" An Alcoholic As Disabled: Proof Problems

A police officer in Spokane, Washington was involved in a car accident and drove away. He was subsequently arrested for driving under the influence and told his employer that he had an alcohol “problem.” In order to avoid criminal prosecution, he entered into a diversion program which mandated that he only drive vehicles containing an Ignition Interlock Device (IID). When the City advised they were considering discharging the officer, his doctor supplied the City with a document which indicated the doctor believed the officer suffered from alcoholism. ... READ MORE


Warning About Confidentiality During Workplace Investigations

One of the first steps to addressing harassment and discrimination in the workplace is to adopt a policy and complaint procedure. Having an effective policy can provide an affirmative defense to harassment claims. According to the Equal Employment Opportunity Commission (EEOC), an anti-harassment policy and complaint procedure should contain, at a minimum: ... READ MORE


USCIS Issues New Form I-9, Effective Immediately

On March 8, 2013, U.S. Citizenship and Immigration Services (USCIS) released a new Employment Eligibility Verification Form I-9. As in the past, all employers are required to use the Form I-9 to verify the identity and employment authorization eligibility for their employees, and the form must be kept on file for 3 years after the date of hire or for one year after employment is terminated, whichever is longer. ... READ MORE


Department of Labor Releases New FMLA Regulations, Workplace Poster, and Forms

In conjunction with the 20th anniversary of the Family and Medical Leave Act (FMLA), the U.S. Department of Labor issued new regulations and published new versions of FMLA forms and a new workplace poster. The effective date for the new regulations and forms as well as the posting date for the new poster was March 8, 2013. ... READ MORE


The Fourth Quarter Game Plan™ – A Better Way To Address Business Owner Succession And Pre-Exit Planning

Larry could not figure out what had just hit him. ... READ MORE


Three State Tax Trends Business Owners And Their Advisors Should Understand

Both business owners and professional advisors should be aware of three important trends developing in state tax law and administration: ... READ MORE


Beyond the Sound Bites: Key Provisions of the "American Taxpayer Relief Act" (Or Fiscal Cliff Safety Line)

Rightfully so, the comprehensive tax and spending provisions passed by Congress and signed by President Obama (labeled the American Taxpayer Relief Act) to help the nation avoid the fiscal cliff have received a substantial amount of attention. While we won’t attempt to address all parts of the Act here, we thought it may be helpful to our clients and fellow advisers to summarize certain key tax provisions of the Act: ... READ MORE


Antitrust Update: Revised Hart-Scott-Rodino Thresholds Become Effective on February 11, 2013

The Federal Trade Commission (FTC) recently released the revised thresholds used in determining whether parties to certain acquisition transactions are required to comply with the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).  The thresholds are revised on an annual basis by the FTC to reflect changes in the gross national product.  The revised thresholds will become effective on February 11, 2013. ... READ MORE


EEOC And Inflexible Leave Of Absence Policies: A Hot-Button Issue For 2013?

Maximum leave of absence policies were developed as a way for employers to control the impact of employee leaves. In theory, these policies operate in a reasonable and non-discriminatory fashion since all employees are afforded the same duration of leave, regardless of the reason for the leave. However, over the past several years, the Equal Employment Opportunity Commission (“EEOC”) has taken the position that such policies violate the Americans with Disabilities Act’s (“ADA”) requirement of an individualized assessment regarding potential reasonable accommodations. ... READ MORE


New Fair Credit Reporting Act Disclosure Form Issue

Employers that use background reports from third-party credit reporting agencies or investigative agencies must issue employees and applicants a written statement of their rights. A new disclosure form has just been issued by the federal government and employers should discard their “old” forms and immediately begin to use the new form. ... READ MORE


What's The Problem With A "No Restrictions" Or "100% Healed" Policy?

When an employee is off work for medical or health reasons, it is common for the employer to require the employee to produce a release to return to work. Although such policies are perfectly lawful, employers often get into trouble when they take the policy one step further and require the employee to be “100% healed” or have “no restrictions” before returning to work. Employers often assume that such policies are permissible because they reflect a concern about the safety and well-being of the employee and their coworkers. ... READ MORE


Viva Las Vegas – Vacation To Las Vegas To Care For Mom Is FMLA Leave

Can an employee’s vacation to take care of a family member be considered FMLA leave? “Yes,” according to a recent federal district court decision from the Northern District of Illinois. In that case, the court upheld an employee’s right to take FMLA leave to care for her mother during a recreational trip to Las Vegas. ... READ MORE


Telecommuting And Timekeeping

More frequently, employees are now working from home, an action sometimes referred to as “telecommuting.” Since telecommuters are not at the employer’s place of business, they cannot be directly observed performing their work. It is thus more difficult to establish what and how much work was actually performed. Nevertheless, the employer still has the obligation to compensate its employees for hours worked under the federal Fair Labor Standards Act (“FLSA”) as well as related state compensation laws. It is therefore important for employers to be able to establish an accurate timekeeping system. Recently, a United States Court of Appeals for the Tenth Circuit in Denver upheld the grant of summary judgment to an employer in a telecommuting and timekeeping claim. ... READ MORE


Iowa Court Allows A "Fear Of Having Affair" Defense To Female Employee Termination

In a novel decision, the Iowa Supreme Court found that a dentist who fired a female employee because his wife was afraid he would have an affair with her had not engaged in unlawful gender discrimination. The decision was described as one based on his intent to calm his wife, not an intent to discriminate because of gender. Given the circumstances of this decision, the only rational take-away is that a termination’s “unfairness,” by itself, does not establish unlawful discrimination. ... READ MORE


Creditor's Alert: Enforceability of Subject to Approval Guaranty Provisions in Credit Applications Requires Approval by YOU.

Tuesday, December 18th, the Nebraska Court of Appeals handed down an important decision affecting creditors’ rights to enforce guaranty provisions contained in credit applications. If you use guaranties in connection with credit applications which provide the guaranty is subject to approval, this decision directly affects you. ... READ MORE


Year-End Tax Planning In Uncertain Times

Congress appears headed toward an epic battle over sun-setting tax rules, already expired tax breaks and soon-to-expire tax breaks, and it looks as if the dust won’t settle until late this year or possibly next year. While many pundits believe a reasonable scenario might be for Congress to buy itself time to cobble together a comprehensive tax reform plan by extending core expired or expiring tax provisions for one more year, in today’s highly charged political environment, such a reasonable solution may not prevail. This uncertainty makes year-end tax planning for 2012 an even bigger challenge than in past years. ... READ MORE


Court Rejects Employer's Claim That Post-Termination Notice Of FMLA Leave Was Too Late

Can an employee give notice of their need for FMLA leave after they have been fired? The Eighth Circuit Court of Appeals recently said “yes.” It rejected an employer’s claim that it had not interfered with an employee’s FMLA rights because it had fired the employee before receiving notice of FMLA leave. ... READ MORE


Does Your "At-Will" Handbook Statement Violate Federal Labor Law? NLRB General Counsel's Office Weighs In

Employers—both union and non-union—have routinely included at-will employment provisions in their employee handbooks and other employment documents, in order to put employees on notice that their employment relationship was terminable at will and the company’s policies do not constitute an employment contract. Within the last year, the National Labor Relations Board (NLRB) has made attempts to restrict this practice by finding certain at-will provisions unlawful under the National Labor Relations Act (NLRA). ... READ MORE


Eighth Circuit Holds Emergency Room Doc Is Independent Contractor And Cannot Pursue Discrimination Claims

If an individual worker is an independent contractor, any claims of discrimination will be precluded, as was recently confirmed by the Eighth Circuit. But it is important to make sure the individual is an independent contractor under the law. ... READ MORE


Medical Inquiries And Perceived Disabilities Under The ADAAA

Many of our clients contact our office for guidance about medical inquiries under the Americans with Disabilities Act (ADA). It is not uncommon for employers to conduct medical exams or medical inquiries to determine if an applicant can physically meet the demands of the job. When doing so, employers must be careful not to run afoul of the ADA and other federal anti-discrimination laws. ... READ MORE


Oops! Time To Hit The Reset Button

Kyle was in a much different mood than when he had first come to see me two years earlier. He had been referred in by an investment advisor who I knew from Illinois. He hadn’t been sure back then that he needed to come in, but his investment advisor had insisted. He didn’t engage us then on what turned out to be his first retirement. ... READ MORE


The Cinderella Estate Tax "Coupon" – Poof!

At the stroke of midnight on December 31st this year, the $5 million per person Federal Estate Tax “coupon” (exemption) will expire. Starting on January 1, 2013, this will go back to a $1 million “coupon” per person (unless and until Congress and the President enact something different). ... READ MORE


Court Dismisses Nursing Employee's Claims Under Affordable Care Act

With the recent furor over the Supreme Court’s decision regarding the Patient Protection and Affordable Care Act (ACA), many employers have lost sight of other provisions of the ACA which may offer protections to their employees. ... READ MORE


Eighth Circuit Rejects Post-Charge Retaliation Exception

It is well known that the general rule is that before an employee may sue his or her employer for discrimination, they must first file an administrative charge. Then after the administrative agency completes the investigation and either finds reasonable cause or dismisses the charge, a lawsuit may be filed. But, what happens if a current employee files a charge with the EEOC alleging race and gender discrimination and is terminated (for legitimate reasons of course!) after he or she has filed his or her charge? May the employee file another charge with the EEOC alleging retaliation for filing his or her first charge? Yes. May the employee immediately file a lawsuit in federal court alleging retaliation? No! ... READ MORE


How to Screw Up an Employment Termination

Employment terminations often occur in the heat of the moment without advance planning or consideration. This is the worst possible time for an employer to make such an important decision. There are many ways an employer can screw up an employment termination. Before showing your employee the door, you should consider the following: ... READ MORE


NLRB: Social Media Policy Revised? Time to Take a Look at the Way you Conduct Internal Investigations!

Just as you finalize your Social Media Policy to comply with the NLRB’s series of guidance memoranda, the Board is now taking aim at the way employers conduct internal investigations and the confidentiality expectations placed on employees participating in those investigations. ... READ MORE


NLRB's Employee Rights Posting Rule on Hold

The NLRB has issued a rule requiring a posting in the workplace of a notice informing employees of their rights to organize and seek union representation under the law. In separate actions filed in two federal district courts, one judge upheld the posting requirement but struck down the rule’s main enforcement provisions. In the other lawsuit, the rule was stricken in its entirety. As a result, the rule has been suspended pending the resolution of separate appeals before the DC Circuit and the Fourth Circuit. Obviously, those decisions could be inconsistent with each other, and so the dispute may not even be resolved at the circuit court level. We will keep clients informed of the status of the rule. ... READ MORE


Costco Blasted Because of Social Media Policy

The NLRB just issued its first decision on a social media policy in Costco Wholesale Corporation, 358 NLRB No. 106 (2012). The Board’s decision confirmed what many employers have feared for last few months: the current NLRB is targeting employers’ social media policies as inhibiting employees’ protected and concerted activity and their right to comment upon or indeed criticize their employer via social media. ... READ MORE


Buying From The Wrong Place Costs Millions In Tax: Nebraska Supreme Court Confirms That Contractor Options Have Real Meaning

In tax law, there is both a form and substance component to every result. If only one of the two are achieved, the ultimate result is often uncertain. ... READ MORE


Give It Away Before It's Too Late! Strategies to Accomplish Large Gifts in 2012

As noted in the July McGrath North newsletter, there is a limited window of opportunity for individuals to utilize the currently available $5,120,000 lifetime gift tax exemption amount. The “exemption” amount is the amount an individual may give away without incurring gift tax. Under current law, beginning in 2013, the lifetime federal gift and estate tax exemptions are scheduled to decrease to $1,000,000 with a top tax rate of 55%. As recently as last month, certain House Democrats proposed to establish the estate and gift tax exemptions at $3,500,000 with a top tax rate of 45% beginning next year. Although some Republican proposals have included maintaining the current exemption amounts and even repealing the estate and gift tax altogether, the future is very uncertain. Therefore, utilization of the lifetime exemption this year is an opportunity to effectively “cash in” on savings of potentially millions of dollars of estate and gift tax. ... READ MORE


You've Gotta Fight For Your Right to Make a Will! (Or What the Beastie Boys Can Teach Us About Estate Planning)

As with any musical group, people’s opinions of the music created by the group the Beastie Boys vary widely. But there is no denying that the Beastie Boys were popular among a significant segment of the population for decades – releasing songs in the 1980s, 1990s, 2000s, and even in this decade. I recall hearing songs on the radio from the Beastie Boys as a youth and I recall still hearing new songs on the radio from the Beastie Boys in the past year. ... READ MORE


Non-Competition Agreements in Nebraska – What are the Rules?

So, you are considering whether to require your employees to sign a non-compete agreement. Are they lawful? Can you implement them for current employees, or just new ones? What rules apply? For how long can you restrict the employee from working for a competitor? ... READ MORE


Are You Ready? The Launch Of New gTLDs

We know your brands are valuable assets to your business. We want you to be aware of the upcoming expansion of the Internet domain name system, and actions you or your company can take—as brand owners—to help protect your brands in this new landscape. ... READ MORE


2012: An Unsurpassed Opportunity to Avoid Federal Wealth Transfer Taxes for Generations to Come ?

For wealthy people, time is of the essence to consider and to implement  a substantial gift arrangement in 2012. An unsurpassed opportunity to transfer wealth for federal estate, gift and  GST tax purposes (collectively, I will refer to such taxes as “wealth transfer taxes” in this article) exists for planning done in 2012. After 2012 this opportunity will be lost or greatly reduced. Why? In 2012, a donor may make a gift of up to $5,120,000, outright or in trust, without incurring any wealth transfer taxes. After 2012, unless Congress enacts favorable legislation, a donor will only be allowed to gift up to $1,000,000, free of wealth transfer taxes. For a married couple, these figures (exemption equivalents, which I will call “exemptions” for ease of reference) are doubled to $10,240,000 for 2012, but are only $2,000,000 thereafter. Moreover in 2012, any gift above these exemptions results in a maximum wealth transfer tax of 35% of the value of the wealth transfer. After 2012, the maximum wealth transfer tax equals 55% of the value of the wealth transfer! ... READ MORE


Court Strikes Down Colorado Use Tax Reporting Law

We have been  watching  with  interest (the interest only tax attorneys would have) the progress of a constitutional challenge to Colorado’s use tax reporting law. As enacted, the law had three requirements for out-of-state retailers who did not collect Colorado sales tax: ... READ MORE


Investors Rejoice: IRS Limited To 3-Year Statute Of Limitations On Basis Misstatements

In tax law, one of the rules with the most impact is the statute of limitations, a rule which limits the time that the IRS may issue an assessment for underpaid taxes (and the time that a taxpayer has to file a claim for overpaid taxes). Under federal tax law, there are three key time periods: ... READ MORE


Nebraska Changes The Popular CDBG Loan Program

As referenced in a recent article appearing in the Omaha World-Herald, the State of Nebraska has instituted significant changes in its administration of the popular Community Development Block Grant (“CDBG”) program. Under the CDBG program, federal dollars have been earmarked for loans to businesses – to spur job creation and expansion. These loans have been made and administered by Nebraska city councils. Once those loans are repaid, cities were allowed to keep the money as a local fund which would make additional loans to other businesses. ... READ MORE


Nebraska State Tax Traps for the Unwary

Based on recent developments, I’ve updated the list of tax traps in Nebraska for companies and their advisors to be aware of: ... READ MORE


Goodnight Irene: Not The Exit She Had Expected ?

With all of the debate recently about who is responsible for business owner success, Irene’s story comes to mind. ... READ MORE


Filings of H-1B Temporary Work Authorizations – Update

In an ALERT forwarded to our clients on May 29, we noted that of the Petitions subject to the 65,000 cap, 42,000 Petitions had been received as of May 18, 2012. Of the additional 20,000 master’s degree H-1B Petitions allowed under that segment of the cap, 16,000 had been filed. ... READ MORE


60 Days Later: Significant Tax Changes From The Last Nebraska Legislative Session

The 2012 Nebraska legislative session is in the books and the Nebraska Legislature made a number of significant tax changes. We thought a review of several significant Nebraska tax law changes made by the Legislature was in order. ... READ MORE


Protecting Yourself and Your Business With A Buy-Sell Agreement

Regardless of whether a business is operated as a corporation, a limited liability company (“LLC”) or a partnership, a Buy-Sell Agreement can help protect the owners and the business. ... READ MORE


Filings of H-1B Temporary Work Authorization Petitions Close in on the Cap

H-1B Petitions, in short, are used to bring skilled workers who have a bachelor’s degree or the equivalent into the U.S. to temporarily perform work in job positions which require a bachelor’s degree or the equivalent. A second category of H-1B Petitions requires a master’s or advanced degree. They are normally issued for a period of three years, and renewable for another three. There is, however, a cap about the number of H-1B Petitions with certain exceptions, that will be issued in any fiscal year. The Fiscal Year 2013 begins on October 1, 2012. The main cap on H-1B Petitions which will be available on October 1, 2012, is 65,000. The first date upon which H-1B Petitions could be filed in FY 2013 was April 2. Since that time, as of May 23, 2012, 42,000 Petitions have been received. Of the additional 20,000 master’s degree H-1B Petitions which are available, 16,000 Petitions have been filed. ... READ MORE


IRS Payroll Tax Audits: What Every Business Owner Or Manager Needs To Know

Most business owners and managers are well aware of their federal payroll tax obligations. Many an owner or manager has been up until the wee hours of the morning completing payroll tax paperwork. But many owners and managers are not aware of their personal liability for payroll taxes or how the IRS can build a case for an owner’s or manager’s personal liability. A recent IRS memorandum provides guidance to IRS agents on documenting payroll tax cases against owners and managers. ... READ MORE


Congress Enacts Capital Raising Improvements

Congress today enacted a package of reforms designed to (1) ease the ability to raise capital in private offerings without SEC registration and (2) enable “emerging growth companies” to “go public” with reduced regulatory burdens. Some of the new provisions require SEC rulemaking before they become operative. ... READ MORE


Harry's Exit Plan – Misunderstanding The "X Factor" In Succession Planning

Harry couldn’t understand what had gone wrong.  He thought he had groomed the perfect team to take the reins of his biotechnology company – ready to step in and march the company forward just like he had done for the past 35 years. ... READ MORE


Antitrust Update: Revised Hart-Scott-Rodino Thresholds Become Effective On February 27, 2012

On January 24, 2012, the Federal Trade Commission (FTC) released the revised thresholds used in determining whether parties to certain acquisition transactions are required to comply with the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The thresholds are revised on an annual basis by the FTC to reflect changes in the gross national product. The revised thresholds announced on January 24, 2012 will become effective on February 27, 2012. ... READ MORE


Avoid Thoughts Of Revenge When Your Employee Leaves

Post-employment actions by an employer against an ex-employee can be the bases for a discrimination charge. Thus, although an employee may depart after an argument, go work for a competitor or just flat out leave the employer “high and dry” by quitting at the worst possible time, the employer must be careful. If the departing employee has previously filed an administrative charge or complaint, an employer’s decision to seek revenge may trigger a retaliation claim. Employers need to realize that even after the employment relationship is over, a former employee can still bring a charge against an employer who engages in retaliatory acts. The famous Chinese philosopher Confucius once said, “Before you embark on a journey of revenge, dig two graves.” ... READ MORE


Court Allows Private Employer To Refuse To Hire Bankrupt Applicant

A section of the U.S. Bankruptcy Code prohibits employers from taking certain action against people who are or have been in bankruptcy doesn’t necessarily mean private employers must hire them. The 11th Circuit Court of Appeals in Myers v. Toojay’s Management Corporation examined a situation in which an applicant was given a two-day on-the-job evaluation of his skills as a manager. During those two days, the company learned that he had filed for bankruptcy. They then denied him employment. ... READ MORE


Employers: Do You Need A Refresher In The Ellerth-Faragher Affirmative Defense?

Sexual harassment by supervisors presents special problems for employers. A recent decision out of the 8th Circuit Court of Appeals: Crawford v. BNSF Railway, Co., issued January 11, 2012, reiterates the importance of investigating and appropriately responding to employee claims against supervisors of harassment and discrimination. In order to establish the Ellerth-Faragher  “affirmative defense” when a supervisor is accused of harassment an employer must be able to show (1) that it exercised reasonable care to prevent and promptly correct any harassing behavior, and (2) that the employee(s) unreasonably failed to take advantage of any preventive or corrective opportunities (such as a grievance procedure). ... READ MORE


FMLA – 11th Circuit Holds A Pre-Eligible Request For A Post-Eligible FMLA Leave Is Protected By The FMLA

One might say the law under the FMLA is  “getting curiouser and curiouser.” In order to be eligible for FMLA leave, an employee must have worked 1250 hours in a 12-month period as of the date leave is taken. Under a recent decision of the 11th Circuit Court of Appeals, an employee may still have some FLMA protection, even before they become eligible for FMLA leave. ... READ MORE


Timing Is Everything – Except In Wrongful Termination

Employers must be aware of the potential for retaliation after an employee engages in a protected activity, such as filing a workers’ compensation claim. However, as exhibited by a recent Nebraska Court of Appeals case, this should not inhibit employers from terminating employees for legitimate, nondiscriminatory reasons. Although the timing of a termination may look suspect, in wrongful termination cases, timing isn’t everything. ... READ MORE


Gary's Exit Plan – Up In Smoke With His Perishable Business Model

I had just returned from presenting my “Break It And Make It” business model workshop to three CEO groups in Winnipeg when Gary came to visit with me. Fifteen years earlier he had gone “all in” by converting his commercial real estate business and becoming one of Blockbuster Video’s landlords. He had established a very efficient operation building and leasing Blockbuster Video stores to Blockbuster, Inc. throughout the Midwest. ... READ MORE


Iowa Law Alert: The Iowa Supreme Court Decides A Lender's Security Interest Is Inferior To Later Perfected Feed Supplier Liens

In 2010 we reported on an unfavorable decision for secured lenders to livestock producers in Iowa issued by the Iowa District Court for Sioux County, Doon Elevator Company v. American State Bank, Case No. LACV022572 (the “Doon Decision”). The Doon Decision allowed an elevator that supplied feed to a hog producer to prime a lender’s prior perfected security interest in the producer’s hogs and their proceeds. The Iowa District Court ruled in favor of the feed supplier despite the fact that the feed supplier had not complied with the notice to prior secured creditor requirements contained in I.C.A. §570A.2(3). We warned that the Doon reasoning, if eventually accepted by the Iowa Supreme Court, could have serious consequences to lenders who provide secured financing to Iowa livestock producers. ... READ MORE


Posting Date For Employee Rights Poster Delayed Again

In previous Alerts, we discussed the new rule issued by the National Labor Relations Board (NLRB) requiring most private employers to post in the workplace a notice of employee rights under the National Labor Relations Act. The rule contains a full list of employee rights, including the right to join a union, to bargain collectively and to act together to improve wages and conditions of employment, etc.  It also contains examples of unlawful conduct by employers and unions and informs employees how to contact the NLRB.  Because of a legal challenge to these requirements, the actual date of posting was delayed from November 14, 2011 until January 31, 2012.  As a result of a request by a U.S. District Court Judge related to ongoing litigation seeking to block the rule, the NLRB has again postponed the posting date, this time until April 30, 2012. ... READ MORE


Managing Frank And His Family's Personal Wealth – So He Can Exit His Business On His Terms

Frank was visibly upset when he came in to see me in the Fall of 2011. He had been planning to retire in three years by age 60, based on the combined value of his personal investments and his company. This was now on hold for an indefinite period of time. Like many, he had suffered a significant hit in the 2008 – 2009 stock market declines and the recession’s impact on his business. But this wasn’t what was bothering him. He had resolved the financial spending issues he had had with his wife and put his business back on solid footing with the help of a Business Model Strategic Plan. ... READ MORE


Nebraska's Angel Investment Tax Credit Adds A Reward For Investing In Nebraska

Our firm has received a number of inquiries regarding Nebraska’s new Angel Investment Tax Credit. In 2011, the Legislature passed the Nebraska Angel Investment Tax Credit Act, pursuant to which the Nebraska Department of Economic Development (“DED”) is authorized to issue up to $3,000,000 in refundable tax credits in each year commencing in 2011 and continuing through 2017. ... READ MORE


Penny Wise And Pound Foolish: How Scrimping On Certified Mail Now Could Cost You Or Your Client Later

Tax practitioners, and most taxpayers, are familiar with the rule that a tax return will be considered to be timely filed if postmarked by the due date. However, the postmark rule has a wrinkle: it only applies if the return is “delivered by United States mail” to the IRS. ... READ MORE


"You Have 60 Days to Respond": Handling Appeals And Tax Questions With The Nebraska Department Of Revenue

In our work with various departments of revenue around the country, we have the opportunity to see first hand how Nebraska’s Department of Revenue compares. As states grapple with their budget issues, many state departments of revenue have become much more aggressive and less reasonable to work with. ... READ MORE


Are My Obese Employees Disabled Under The ADAAA?

Does obesity qualify as a disability under the Americans with Disabilities Act (ADA)? According to the EEOC in a newly filed lawsuit, the answer is an unequivocal “yes.” On September 27, 2011, the U.S. Equal Employment Opportunity Commission (EEOC) filed a lawsuit against BAE Systems, Inc. (BAE), alleging that the company engaged in unlawful disability discrimination against employee Ronald Kratz. According to the complaint, Kratz had been affiliated with BAE Systems since 1994 and worked as a material handler from 2001 until his 2009 termination. Kratz weighed 450 pounds when BAE Systems hired him and gained 200 pounds over the 16 years he was employed. The EEOC contends that Kratz was “morbidly obese” at the time of his discharge, and his obesity substantially limited him in one or more major life activities and rendered him “disabled” under the ADA Amendments Act of 2008 (ADAAA). The EEOC further asserts in the alternative that the company “regarded” Kratz’s morbid obesity as a disability. The EEOC also alleged that the Company failed to engage in the interactive process to determine whether there were reasonable accommodations by which Kratz could perform the essential functions of his position. The EEOC further contends that, at the time of his discharge, Kratz was qualified to perform his essential job functions, earning overall satisfactory performance evaluations, and that he was replaced by an individual who was not morbidly obese. ... READ MORE


Defending an ADA Case: A Road Map of What Not To Do

A recent federal court decision in Pennsylvania provides something of a road map on how not to handle an ADA “reasonable accommodation” case. The employer in Zombeck v. Friendship Ridge was asleep at the switch with respect to an employee who had lifting restrictions and who ultimately was terminated. ... READ MORE


New NLRB Employee Rights Poster Delayed Until 2012

The posting of the NLRB’s Employee Rights poster which was to be required by November 14, 2011, has been postponed. That posting will require employers to notify their employees of their rights, under the National Labor Relations Act, to engage in such activities as organizing or seeking union representation. ... READ MORE


NLRB Provides Unions A Road Map For The Use of Lawsuits During An Organizing Drive

It is a common tactic, during union organizing drives or strikes, for a union to file lawsuits against the employer. Filing a wage and hour suit against the employer during a union-organizing campaign allows the union to create the impression it is the “champion” of the employees and the union hopes the filing of that suit will result in more union votes during an NLRB-supervised election. Similarly, the filing of lawsuits against an employer during a labor dispute such as a strike puts additional pressure on the employer to concede to the union’s demands. ... READ MORE


Can You Hear Me Now? – Not Returning Employee Calls May Be FMLA Retaliation

Can an employer’s failure to return an employee’s telephone calls while she is on FMLA leave be evidence of retaliation against the employee? “Yes” – according to a federal district court in Pennsylvania. ... READ MORE


Ruth Horvatich Joins McGrath North's Labor and Employment Group

We are pleased to announce that Ruth Horvatich has joined the Labor and Employment Group.  Ruth is a native of Hooper, Nebraska and is a magna cum laude graduate of Creighton Law School, where she was also an editor of the Law Review. Prior to her graduation, she clerked with McGrath North for two years. She has been admitted to practice in Iowa and her admission to the bar is pending in Nebraska.  We welcome Ruth to the Group and look forward to working with her to continue to serve our labor and employment clients. ... READ MORE


You Only Need To Have One Good Reason to Fire Your Employee

When terminating an employee, employers often believe that “more is better” and multiple reasons should be given for a discharge. However, adopting this approach can lead to problems for the employer if a wrongful termination suit is filed as demonstrated in a recent case from Illinois. As an employer, you really only need to have one good reason to fire your employee. ... READ MORE


The NLRB–Mandated Employee Rights Poster Has Been Issued

On August 29, 2011, we notified newsletter subscribers as follows: ... READ MORE


Eric's "Holding The Bag" Exit Plan: The Ticking Time Bombs In His Buy-Sell Agreement

Eric and his partner Joe had a very profitable 25 year run with their industrial supply company, although the past couple years had been difficult. They had just adopted some well-considered strategic innovations to the “customer channel” and “revenue stream” components of their business model which they felt were keys to sustaining their competitive advantages. Both were hoping to sell the company in 10 years or so and enjoy a comfortable retirement. ... READ MORE


Digital Immortality: Estate Planning For Digital Assets And Online Financial Accounts

Dave and Sue had a modest estate, one well below the $10 million value they could pass to their children free of federal estate tax under current law. They had a comprehensive estate plan in effect to ensure proper management of their property if they became incapacitated, and to address the disposition of their property upon their deaths. Even though they didn’t need to worry about estate taxes, they periodically reviewed their estate plans with their attorney and amended their plans as necessary to ensure that their property would be distributed as they intended. The periodic reviews gave them comfort that the clarity of their written plans would minimize disagreements and stress for their children when Dave and Sue passed. ... READ MORE


Estate Planning For Nebraska Pet Owners

Unless you live the life of a pharaoh, you may not plan to have your pets buried with you when you die. As you may suspect, courts usually will not enforce a “euthanasia order” for pets that stems from a Will, usually resulting in a pet being dropped off at the local humane society. So the question is: who will take care of your pets when you are gone? More importantly, what estate planning tools are available for pet owners to provide for their pets? What tax effects do these different tools have? This article will point out some leading estate planning tools for pet owners and their tax treatment under federal law and Nebraska state law. ... READ MORE


IRS Searches Real Estate Deeds To Collect Gift Tax

The easy flow of information between state, local and federal governments can be unsettling, especially because it typically leads to tax bills from one or the other. Now, there’s a new cause for concern: the IRS is reviewing local property transfers for gift tax compliance. ... READ MORE


NLRB Acting General Counsel Issues Memoranda of Importance to Unionized Employers

Lafe E. Solomon, the Acting General Counsel of the National Labor Relations Board (“NLRB”) has issued two memoranda that could greatly affect unionized employers. One expands the duty to supply information during collective bargaining, and the other deals with whether and under what circumstances the NLRB will defer an unfair labor practice charge to the grievance and arbitration provisions of a collective bargaining agreement. ... READ MORE


Title VII Covers Customers "Hitting On" Your Employees

Most employers are aware that they can be held liable for a supervisor’s or coworker’s harassment of an employee under Title VII of the Civil Rights Act. However, employers often fail to realize that under certain circumstances, they can also be liable for harassment committed by their clients, customers or vendors. ... READ MORE


Bogus Job References and Funeral Excuses Are Available On-line!

Although fraud on a resume has always been a problem, Internet companies are now going one step further and brazenly offering to provide false job references from nonexistent companies, false landlord references and even fake funeral excuses. . .for a price. ... READ MORE


MASTERS SERIES FOLLOW UP: Is Your Employees' Facebook Trash Talk "Concerted, Protected Activity"? NLRB's Recent Advice Gives Employers Some Clues

At our recent Masters Series seminar entitled “When Facebook Gets In Your Face: What Can You Do About Employee Use (Or Misuse) Of Social Media?”, we discussed some of the well-publicized, recent complaints issued by the NLRB targeting employers’ discipline of employees for inappropriate use of Facebook, Twitter, and other forms of social media. In that first highly publicized case, a complaint was filed accusing a company of firing an employee for criticizing her boss on Facebook. The case was ultimately settled and the company agreed to revise its Internet policy to allow employees to discuss wages, hours and working conditions with coworkers outside of the workplace, and refrain from disciplining or firing employees for engaging in those discussions. ... READ MORE


Mandatory Hiring Goals for Vietnam Vets?: Proposed Amendments to Affirmative Action Rules

The Office of Federal Contract Compliance Programs (OFCCP) recently proposed new rules by which federal contractors would be held to specific measurements with respect to their hiring of Vietnam-era military veterans. The new rules propose that contractors would have to use veteran hiring “benchmarks” in each affirmative action year plan. ... READ MORE


Dave's "Mulligan" Exit Plan: May I Please Have A Do-Over?

Dave’s assistant plant manager didn’t have a lot of good news to report to Dave’s wife, Jennie. The explosions which had rocked Dave’s chemical plant in New Elm City, and the resulting chemical fires, had killed Dave, the plant manager and two plant inspectors. They had also seriously injured a dozen other employees and forced the evacuation of residents within a 5-mile radius of the plant, many of whom were checking into local hospitals with complaints of lung irritation. ... READ MORE


NLRB Issues a Final Rule Requiring Employers to Post a Notice of Employee Rights to Form and Join Unions

On August 25, the National Labor Relations Board (“NLRB”) issued a 194-page Final Rule which will cause all private-sector employers who are subject to the National Labor Relations Act (“Act”) (which includes almost all private employers) to post a notice of employee rights including the rights to form or join a union. This notice must be posted where other workplace notices are typically posted. Where personnel rules are typically placed on an internet or intranet site, such posting will be required on those sites as well. The rule will become effective and require such posting as of November 14, 2011. ... READ MORE


Charlie's Exit Plan Legacy: "Let My Spouse Deal With It"

With a Master Brewer qualification from the Institute of Brewing and Distilling in London and an MBA from Notre Dame, Charlie had no problem working his way quickly up the chain of command at one of the country’s leading brewing companies. He was set to become the next CEO at age 45 when the Board unexpectedly passed him over. Unfazed, he set out on his own, combining his brewmaster skills, his business acumen, and his life savings to start his own microbrewery business. In twenty years he had grown Silver Bay Brewing Company to six highly successful locations in major cities throughout the country. ... READ MORE


Two Leaders With Conflicting Objectives and Agendas: Working With Art To Fix His "Exit Plan"

We weren’t surprised by our meeting with Art. We had seen it many times before. Art had founded and built a very successful retail business. He had operations across the region which were consistently producing significant year-to-year profitable net cash flow. Pete, his second-in-command, had been working with him for the past twenty years. Art had decided recently that he was ready to transition from the company, and he wanted to get this done soon. ... READ MORE


Green Marketing – FTC Guidance

In recent years, businesses have increasingly used “green” claims to market their products and services. ... READ MORE


Department of Revenue Enacts Reg. 1-107 Regarding Manufacturing Equipment

After proposing and withdrawing the regulation on several occasions, the Department of Revenue has formally enacted its Reg. 1-107, which governs the manufacturing machinery and equipment exemption for Nebraska sales/use tax. We believe that this regulation makes a number of substantive, taxpayer adverse changes to the rules for claiming the exemption, including: ... READ MORE


Bob's Business Model Countdown: Understanding How "Transferable Value" Impacts Your "Exit Plan"

Bob had come to us with high expectations as to the price he thought his company would sell for as he approached his expected retirement date. He was certain of this because he had seen other “similar” companies sell in the past for a 1.2X multiple of gross revenue. He figured his company would easily sell for the same. ... READ MORE


Key 2011 Nebraska Tax Law Changes

Barring a special session, the 2011 Nebraska Legislature has adjourned for the year. Significant 2011 Nebraska tax changes include the Governor’s proposed economic development proposals, revisions required to maintain Nebraska’s standing in the Streamlined Sales Tax Project, and certain key administrative changes. A review of certain key changes are as follows: ... READ MORE


Estate Planning: Not A "Do-It-Yourself" Project

Last month’s Tax Planning Newsletter outlined the 10 primary non-tax reasons why everyone needs to take the topic of estate planning seriously. This month’s article focuses on the need for proper advice and counsel in order to create a proper estate plan. Hopefully after reading this article, you will see why estate planning is not a “do-it-yourself” project. ... READ MORE


2011 Nebraska Energy Plan

The Nebraska Energy Office has recently released the 2011 Nebraska Energy Plan. According to the Energy Office, over the last decade Nebraska’s total expenditures on energy have more than doubled reaching $9.1 billion in 2008.  Energy Office Director Ginger Willson emphasizes:  “Effective management of the costs within our control is a key to maintaining a competitive advantage when it comes to regional energy prices.” ... READ MORE


Employers Should Reconsider Arbitration Agreements

A recent decision of the United States Supreme Court should encourage employers to consider including arbitration provisions in employment agreements. So, too, should those businesses who might want to avoid class action litigation by customers. The Supreme Court decision is entitled AT&T Mobility v. Conception. The lawsuit concerned the sale of a cellular telephone in the State of California. AT&T advertised for a “free phone” with the purchase of service. The Conceptions purchased that service, then sued when AT&T charged sales tax on the “free” phone. AT&T’s contract provided for arbitration of disputes with the customer. The highlights of the arbitration provisions of the agreement were as follows: ... READ MORE


Masters Series Follow Up: Tips for Your Social Media Policy

Thanks to all of you who attended our recent Masters Series entitled “When Facebook Gets In Your Face: What Can You Do About Employee Use (Or Misuse) Of Social Media?” ... READ MORE


New I-9 Employer Handbook Issued

On January 12, 2011, the U.S. Citizenship Immigration Services released a new version of its M-274 “Handbook for Employers,” the official reference guide for employers on how to conduct the employment eligibility process in completing the Form I-9. It contains instructions for dealing with various documents and situations, as well as useful photographs of different documents which can be used to complete Form I-9. This handbook replaces the previous handbook which took effect in April, 2009. ... READ MORE


So Who Can You Trust? Certainly Not A "Cat's-Paw Supervisor"

Can an employer be found to have acted discriminatorily if there is no allegation that a supervisor or manager acted with discriminatory intent? “Yes” – according to a recent U.S. Supreme Court decision. So, here’s the deal. ... READ MORE


Social Security Administration Announces the Resumption of the "No-Match Letter" Program

“No-Match” letters have always been a source of concern for employers…and they’re back! ... READ MORE


The NLRB Slaps Employers…Again

Can an employer discipline an employee who secretly tape-records a meeting, or fire non-union employees who have walked off the job in the middle of a time-sensitive project? In the context of two separate recent decisions, the NLRB answered “no.” ... READ MORE


Investigating Complaints, Theft, or Hotline Tips: Would You Know What to Do?

Almost every company will, at some point, have to conduct an internal investigation. Whether the trigger is an internal complaint of employee theft, hotline tip about discrimination, or government inquiry into regulatory compliance, internal investigations are inevitable in today’s world. Internal investigations, however, are not as straightforward as they may seem. Rather, they are full of twists and turns, and one step in the wrong direction may lead the unprepared down an unintended path. If you had to conduct an internal investigation, would you know what to do? ... READ MORE


Social Media Privacy: In Court, It May Not Be Your Choice

Let’s face it: in today’s world, social networking is everywhere. Whether via Facebook, MySpace, or Twitter, we are all attempting to stay connected with friends, family, or even co-workers. Many of these sites offer “privacy settings” allowing us to keep some of this information private by limiting access to only those authorized. But, be advised: if you are ever involved in a lawsuit, this “private” information may not be quite as private as you may think. ... READ MORE


To Agree Or Not To Agree: Should Your Business Contract Include An Arbitration Clause?

ar•bi•tra•tion – noun:  a method of dispute resolution involving one or more neutral third parties ... READ MORE


Estate Planning Is For Everyone: 10 Non-Tax Reasons To Plan

With the newly-enacted federal estate tax laws, which allow married couples to pass up to $10,000,000 in value to their heirs free of the federal estate tax ($5,000,000 for single individuals), many people have the misconception that they do not need to do any estate planning. However, apart from tax planning, the main reasons for estate planning exist now as much as ever. This article will discuss 10 non-tax reasons to implement an estate plan. ... READ MORE


Nebraska Legislature Enacts Due Date Change For Sales And Use Tax Returns

Under LB 210, passed recently by the Nebraska Legislature and signed by Governor Dave Heineman, the due date for Nebraska sales and use tax returns will change from the 25th of the month to the 20th of the month. This change will take effect: ... READ MORE


You Can Never Ask an Employee's Immigration Status…Except When You Can

Every H.R. professional knows that one of the “never ask” questions is “Are you an illegal immigrant?” There is one narrow exception to that rule, which came from the Second Circuit Court of Appeals in NLRB v. Domsey Trading Corp. The Court held that during litigation, employers may cross-examine employees about their immigration status to determine the employee’s backpay eligibility under the National Labor Relations Act. ... READ MORE


NLRB Facebook Complaint: Update

In November 2010, we issued a Labor and Employment Alert, regarding a “Facebook complaint” issued by the National Labor Relations Board (NLRB) against a company for: maintaining an unlawfully restrictive policy concerning employee blogs, and social media postings; and unlawfully terminating an employee because of her name-calling posts about the company and her supervisor on her Facebook page. ... READ MORE


It's Not What You Know…Retaliation By Association Under Title VII

Although Title VII’s anti-retaliation protections normally apply to employees who have engaged in a protected activity, a recent U.S. Supreme Court case has expanded those protections to include employees with a “relationship” to someone who has engaged in a protected activity. The United States Supreme Court has expanded the number of employees who can bring claims of retaliation under Title VII of the Civil Rights Act of 1964 to include employees with a “relationship” with someone who has engaged in protected activity. In Thompson v. North American Stainless, Eric Thompson and Miriam Regalado were both employees of North American Stainless (NAS), and they were engaged to be married. In February 2003, Regalado filed a charge of sex discrimination against NAS. Three weeks later, NAS fired Thompson, Regalado’s betrothed. ... READ MORE


Three Things You Need To Know About Wage Deductions In Nebraska

The simple act of making wage deductions can create many problems for unwary companies. For example, suppose a company is confronted with any of the following scenarios: ... READ MORE


Beware Of Fine Print – It Is There For A Reason

Every year we review hundreds of contracts. Every year we litigate numerous cases involving contracts we did not review. ... READ MORE


Applying Lessons From The Boardroom To The Courtroom: Managing Your Lawsuit Like A Business Project

As a business executive, you dread time-consuming and costly lawsuits.  There is good news: By managing a lawsuit like a business project, you can get control of the lawsuit and reduce costs.  Here are five tips that will help you: ... READ MORE


Cover Your Notes! Keeping Meeting Notes Confidential May Depend On Who Sent The Invitation

A business owner calls a meeting to discuss the tax consequences of a particular business transaction.  The business owner asks the business’s attorney to attend the meeting and to provide some guidance at the meeting.  The business owner also asks that the business’s outside accountant attend the meeting.  Several years later, the IRS seeks to review the outside accountant’s notes from the initial meeting to determine whether the business properly reported the transaction.  Is this protected under the attorney-client privilege? ... READ MORE


U.S. Supreme Court Case Impacts Medical Residents and Reduces Taxpayers' Ability to Challenge I.R.S. Regulations

On January 11, 2011, the U.S. Supreme Court issued its opinion in Mayo Foundation for Education and Research, et al. v. U.S. dealing with the question of whether Treasury regulations regarding a FICA tax exception for compensation paid to medical residents were valid. The Court unanimously upheld the Treasury regulations. ... READ MORE


Lifetime Gifts – Time To Take Another Look: Increase In The Lifetime Gift Tax Exemption To $5 Million For 2011 And 2012 Transfers May Provide Estate Planning Opportunities

One hundred years ago, the average U.S. life expectancy at birth was a mere 52.6 years. During this time, many children could expect to inherit from their parents in their late 20s or early 30s. Fifty years later, by 1961, life expectancy at birth had risen to 70.2 years and  by 1986 it was 74.7. In 2007, for individuals who had already reached age 65, life expectancy stretched to 83.6 years, and for those reaching 70 years, males were expected to live until age 83.7, while females were expected to live until age 86.0. These additional 30 years in life expectancy work to significantly delay children’s inheritance. ... READ MORE


Working Under The Influence: No Protection Under FMLA Or ADA

With the Family Medical Leave Act and the Americans with Disabilities Act looming in the background, appropriate handling of an alcoholic employee who is potentially under the influence in the workplace presents a major concern. In a recent federal court decision, an employee was terminated, then claimed protection under the FMLA and the ADA. The employer’s response was upheld by the Court. ... READ MORE


FMLA Leave – Does Believing Make It So?

Can a company be required to provide FMLA leave to an employee, even if they are not really eligible? Maybe. The normal analysis in a Family and Medical Leave Act case involves issues such as whether the employee suffered from a “serious health condition,” and gave the employer specific knowledge of their need for FMLA leave. However, under another prong of the FMLA, an employee may be entitled to leave, even if he or she did not suffer from a serious health condition: if there was a request for FMLA leave, if the employer represented that the request was approved, and if the employee reasonably relied upon the employer’s representation to his or her detriment. ... READ MORE


Post Workers' Rights? The NLRB Proposes New Rule

Non-union employers may be required to post a notice in the workplace telling employees they have a right to organize and join a union under a recently proposed rule. The National Labor Relations Board (NLRB), in a rare exercise of its rule-making authority, issued a proposed rule requiring employers to notify employees of their rights under the National Labor Relations Act (NLRA). The NLRA applies to most private-sector workplaces, although employers of airline, railroad, and agricultural workers are not covered. In addition, the proposed rule does not apply to federal or state governments or political subdivisions. ... READ MORE


Do Google Searches Violate the "Genetic Information Nondiscrimination Act"?

Are hiring managers who conduct Google and Social Media searches on employees and applicants violating GINA? That and other scenarios are the subject of recently issued regulations. On November 9, 2010, the Equal Employment Opportunity Commission (EEOC) issued final regulations that interpret and implement the nondiscrimination requirements of the Genetic Information Nondiscrimination Act (GINA). Title II of GINA prohibits using genetic information as a basis for employment decisions, restricts acquisition of genetic information by employers and limits disclosure of employee genetic information. ... READ MORE


Investigating Sexual Harassment Complaints: Promptness Pays

A company’s prompt response to a sexual harassment complaint is critical to its ability to defend itself. In a recent opinion, the United States Court of Appeals for the Eighth Circuit discussed, at some length, the importance of prompt investigations of claims of sexual harassment, and how they can help insulate an employer from potential liability. ... READ MORE


Unions Win More Elections Conducted by NLRB – No Surprise In This Economy

The National Labor Relations Board has issued its report on election outcomes April 2010 to September 2010. During that period, there were 308 elections involving AFL-CIO affiliated unions. The unions won 69.2% or 213 of those elections. Unions unaffiliated with the AFL-CIO (Teamsters, UFCW, SEIU, etc.) were involved in 475 elections and won 304 or 64%. It is notable that the percentage of elections won by the unions is markedly higher than in previous years. ... READ MORE


Hit the Gas to Get the Breaks: 2010 Tax Relief Act and Small Business Jobs Act of 2010 Provide Limited Time Business Planning Opportunities

Congress spent a great deal of time and effort in 2010 dealing with tax legislation, including the 2010 Tax Relief Act (the “Relief Act”) and the Small Business Jobs Act of 2010 (the “Jobs Act”).  Viewed individually, as well as in the aggregate, the Relief Act and the Jobs Act present significant planning opportunities for business owners.  Most of the provisions of the Relief Act and the Job Act have immediate impact, but many of the provisions are valid only for a limited time. ... READ MORE


The Food Chain Develops Additional Links: The Food Safety Modernization Act Grants the FDA Expanded Authority and Increases Regulation of Food Business

On December 19, 2010, Congress passed the Food Safety Modernization Act (the “FSMA”) which grants the Food and Drug Administration (the “FDA”) broadened authority to regulate and oversee the growing, production, transportation and distribution of food products.   The FSMA was prompted by a number of food contamination cases over the past decade (i.e. beef, peanuts, spinach and cookie dough) and is widely considered to be the first major item of federal legislation addressing food safety since 1938. ... READ MORE


Compensation Control: Dodd-Frank Wall Street Reform Act Presents Significant Business Planning Issues

In response to the recent Wall Street meltdown, and various abuses perceived to be caused by compensation systems that encourage undue risk taking, Congress enacted the Dodd-Frank Wall Street Reform Act (the “Dodd-Frank Act”) in July of 2010.  The Dodd-Frank Act is considered the most significant legislation in the area of compensation controls on public companies and financial institutions since Sarbanes-Oxley in 2002.   At its core, the Dodd-Frank Act requires expanded reporting obligations for public companies and financial institutions to allow activist stockholders to respond appropriately.  The Dodd-Frank Act becomes fully effective in 2011 and the planning required for public companies, financial institutions, and their advisors will be significant. ... READ MORE


Price Floors Without Risk Ceilings: Resale Price Maintenance (RPM) Issues Rev Up the Action for Antitrust Authorities

Between 1911 and 2007 there was a clear federal rule stating that minimum resale price maintenance agreements (i.e. agreements between manufacturers and resellers not to discount a product below an established price floor) were per se illegal. As a result of this per se federal rule against minimum resale price maintenance, many manufacturers instead adopted suggested resale pricing policies pursuant to which the manufacturers would announce suggested prices and indicate that they would not deal with resellers that ignored the suggested prices.  Suggested resale pricing policies did not violate the per se rule against minimum resale price maintenance because the policies were found to be merely “suggestions” and not actual “agreements”. ... READ MORE


Do Google Searches and Friend Requests on Employees and Applicants Violate the Law? Final Regulations for Genetic Information Nondiscrimination Act Pose New Compliance Issues for Employers

On November 9, 2010, the Equal Employment Opportunity Commission (EEOC) issued final regulations regarding the nondiscrimination requirements of the Genetic Information Nondiscrimination Act (GINA). Title II of GINA prohibits using genetic information as a basis for employment decisions, restricts acquisition of genetic information by employers and limits disclosure of employee genetic information.  While not every acquisition of genetic information violates GINA, the final rule makes it clear that Title II of GINA does restrict requesting, requiring or purchasing genetic information. ... READ MORE


Antitrust Update: Federal Trade Commission Announces Revised Reporting Thresholds for Hart-Scott-Rodino Filings

Earlier this week the Federal Trade Commission announced the annual adjustment to the dollar thresholds for pre-acquisition filings required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “Act”).  The revised thresholds will become effective on February 24, 2011, and all transactions closing on or after February 24, 2011 will be subject to the revised thresholds. ... READ MORE


2010 Tax Relief Act: Key Income Tax Changes

Just in time for the new year, Congress has passed, and President Obama has signed, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (“Act”). This sweeping tax package includes an extension of the “Bush tax cuts” for two years, estate tax relief, alternative minimum tax relief, and a cut in employee-paid payroll taxes and self-employment tax in 2011. Key elements of the Act include: ... READ MORE


2010 Tax Relief Act: Key Estate, Gift and Generation Skipping Transfer Tax Changes

In addition to income taxes, the Act also impacts estate, gift and generation skipping transfer (“GST”) taxes for 2010, 2011 and 2012. As under the law prior to 2010, estate, gift and generation skipping transfer taxes will return as they existed in 2001 beginning on January 1, 2013, unless Congress passes further legislation prior to 2013. Thus, the new Act has limited applicability. ... READ MORE


Nebraska Supreme Court Decision in Case Presented by McGrath North Provides Critical Insight to Financial Institutions

McGrath North announced a favorable decision on behalf of its client, the Federal Deposit Insurance Corporation, in an important case in the Nebraska Supreme Court. The decision, issued Friday, October 29, 2010, provides a ruling on, among other things, the significant question of when a party must take action to protect its interest in collateral.  According to the Nebraska Supreme Court, the answer appears to be quickly. ... READ MORE


Employee Terminated For Facebook Postings To Have Her "Day In Court"

The National Labor Relations Board (NLRB) recently issued a Complaint against a company accused both of maintaining an unlawfully restrictive policy concerning employees blogs and social media postings and unlawfully terminating an employee because of her derogatory postings about the company and her supervisor on her Facebook page. ... READ MORE


Financing Statement Demands Total Accuracy Of Debtor Name

Interpreting Nebraska law, the United States Bankruptcy Appellate Panel of the Eighth Circuit held in In re EDM Corporation (431 B.R. 459) that a financing statement failed to sufficiently provide the name of a debtor, where the name listed on the financing statement consisted of the debtor’s organizational name coupled with the debtor’s trade name.  As a result of the insufficient name, the financing statement was not validly perfected, and the secured party at issue lost its first position lien on the underlying assets. ... READ MORE


Recent Tax Court Case Should Remind Closely Held C Corporations to Review Owner/Officer Compensation

As the 2010 calendar year draws to a close, closely held C corporations may be examining year-end bonuses to officer-owners. With the I.R.S.’ recent increased focus on payroll matters (including worker classification and fringe benefits), bonuses to officer-owners are likely to be scrutinized by the I.R.S. for deductibility. A recent case from the United States Tax Court provides a current example of the factors that will be considered when the I.R.S. examines owner-officer compensation. ... READ MORE


Department Of Revenue's Proposed Reg. 1-107 Is Again Withdrawn

Long time readers of the Newsletter will recall that we have been monitoring the Department of Revenue’s proposed Reg. 1-107 for some time. This regulation would govern Nebraska’s Manufacturing Machinery and Equipment Exemption. ... READ MORE


Our Top Ten 2010 Year-End Tax Planning Ideas: Cross Uncle Sam Off Your Christmas List

As 2010 draws to a close, the thoughts of many shift to turkeys, eggnog, holiday shopping and bowl games. But for the attorneys in the McGrath North Tax Group, our thoughts shift to year end tax planning ideas and looking for ways to help our clients reduce their 2010 taxes. ... READ MORE


Multijurisdictional Practice Under Rule 5.5: Ambiguity With A Little Guidance ?

“Neurosis is the inability to tolerate ambiguity.”  Sigmund Freud ... READ MORE


Employer's Inconsistent Position Statement Leads to Discrimination Liability

Normally, the first step in defending a discrimination claim brought by an employee consists of drafting and submitting a position statement to the investigating agency. A recent Eighth Circuit Court of Appeals decision illustrates the importance of properly investigating and preparing a position statement at the very outset of the discrimination action, and the downside of not doing so. ... READ MORE


I-9 FORMS: New Rules Issued for Use of Puerto Rico Birth Certificates

Due to concerns about the security of birth certificates issued in Puerto Rico, beginning on July 1, 2010, the Vital Statistics Office of the Commonwealth of Puerto Rico began issuing new certified copies of birth certificates to U.S. citizens born there. As of October 31, 2010, all certified copies of Puerto Rico birth certificates issued prior to July 1, 2010 will become invalid. The new law does not impact the U.S. citizenship status of persons born in Puerto Rico. ... READ MORE


NLRB Will Seek Federal Injunctions on Certain Employee Terminations

On September 30, 2010, the National Labor Relations Board (NLRB) announced a new initiative to more quickly respond to charges filed when employees are discharged during a union organizing campaign. The new initiative requires the NLRB’s regional offices to investigate charges involving discharges during union organizing campaigns and to submit a report within 7 days of their findings to the General Counsel. All cases found to have merit by the NLRB regional directors will be immediately referred to the General Council’s office for expedited review and determination on whether to seek a federal injunction under Section 10(j) of the NLRA that would force the offending employer to offer reinstatement to the terminated employees while the unfair labor practice case proceeds through litigation. With the new initiative, the NLRB has also begun posting on its website the names and status of all cases in which the NLRB has authorized the Acting General Counsel to seek a Section 10(j) injunction. Although the announced initiative does not change the standard for what the NLRB must establish in order to convince a district court that a Section 10(j) injunction is warranted, the NLRB’s more aggressive approach does create potentially serious ramifications for any employer alleged to have illegally terminated employees during an organizing drive. It is important to point out that it is not necessary to establish that the terminations are in fact unlawful in order to obtain an injunction that would result in a court order requiring the employer to reinstate the employees. Rather, the NLRB need only establish a reasonable likelihood that the terminations could be unlawful. As a result, employers could be compelled to reinstate terminated employees whose terminations are ultimately found justifiable, perhaps years later. Because these cases arise during union organizing campaigns, unions may be able to use  the threat of injunction as part of their organizing propaganda. ... READ MORE


Why You Need a Job Description Under the ADA

Employers often ignore the importance of having job descriptions. A well-written and effective job description can be a vital piece of evidence when claims or lawsuits are filed against employers. If the case involves employee performance, medical issues, disabilities or accommodations, the job description is often one of the first exhibits offered on behalf of the employer. ... READ MORE


NLRB Finds Confidentiality Provision Unlawful

An employee of a temporary employment service signed an employment agreement containing a confidentiality provision stating that the terms of employment, including compensation, were confidential and that the disclosure of those terms “to other parties” may constitute grounds for dismissal. The temporary employee subsequently complained to his “assigned” employer about delays in compensation and expense reimbursement, which disclosures resulted in his termination by the temporary employment agency. ... READ MORE


Tax Incentives and Revenue Raisers in the Small Business Jobs Act of 2010

On September 27, the “Small Business Jobs Act of 2010” (the “Jobs Act”) was signed into law by President Obama. No further tax legislation is expected from Congress until after the Fall election, if at all. Hence, action on the expiration of the Bush-era tax cuts, important corporate tax credits and relief from the Alternative Minimum Tax remain in flux. Importantly, estate tax rates will go up and the estate tax exemption (technically called the “applicable exclusion amount”) will go down dramatically if Congress fails to act during the lame duck session. Congressional deadlock during the lame duck session is a distinct possibility. ... READ MORE


Iowa Supreme Court Adds Another Exception To The "At-Will" Termination Rule

In most states, the general rule is that employees are employed “at-will.” That is, they can be terminated for good reason, bad reason, or no reason at all unless the reason for the termination is unlawful. It is well established that employees are protected because of certain inherent characteristics such as their race, national origin, religion, disability, etc. They are also protected with respect to certain voluntary activities such as engaging in union activity, filing a workers compensation claim, unemployment compensation claim, or protesting a practice by the employer that is unlawful. ... READ MORE


Fitness-For-Duty Exams for Current Employees

When an employer receives notice of medical restrictions from an employee’s doctor, the employer will often need to consider the employee’s potential rights under the Family Medical and Leave Act (“FMLA”) and the Americans with Disabilities Act (“ADA”). The employer must decide whether the employee can continue to work and whether accommodations should be provided. The employee may also be entitled to leave under company policy or under the FMLA or the ADA if they are not able to continue or return to work. If the restrictions are long-term and there is an issue as to whether the employee can perform the essential functions of his or her job, a fitness-for-duty examination is one option the employer should consider. ... READ MORE


DHS Clarifies I-9 Completion Issues

The Department of Homeland Security (“DHS”) recently issued a clarification of the rules on when the Form I-9 can be completed, and on the electronic storage of those forms. ... READ MORE


Break Time for Nursing Mothers

Section 4207 of the Patient Protection and Affordable Care Act (also known as “Healthcare Reform”) amended the federal wage and hour law to provide that employers with more than 50 total employees would be required to provide certain amenities for nursing mothers, unless the employer can demonstrate that such arrangements would impose an undue hardship. ... READ MORE


USCIS Implements H-1B and L-1 Fee Increase

On August 13, 2010, President Obama signed into law Public Law 111-230, effective immediately, which contains provisions to increase certain H-1B and L-1 petition fees. Specifically, the law requires the submission of an additional fee of $2,000 for certain H-1B petitions and $2,250 for certain L-1A and L-1B petitions postmarked on or after August 14, 2010. The additional fees only apply to petitioners who employ 50 or more employees in the United States who also have more than 50 percent of its employees in the United States in H-1B or L (including L-1A, L-1B and L-2) nonimmigrant status. The 50 percent figure is based upon the total number of  U.S. employees in H-1B and L status, combined. Petitioners meeting these criteria must submit the fee with an H-1B or L-1 petition filed: ... READ MORE


OSHA's Directive Targeting Severe Violators

The Occupational Safety and Health Administration (OSHA) has adopted a Severe Violator Enforcement Program (SVEP) effective as of June 18, 2010. ... READ MORE


Dodd – Frank Reform Act Changes Regulation of U.S. Investment Advisers

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Reform Act”) which implements changes in the way U.S. investment advisers are regulated. Among the most significant changes, the Reform Act requires that investment advisers to hedge funds, private equity funds, real estate funds and certain other private funds with assets under management (“AUM”) of $150 million or more: ... READ MORE


2010 Nebraska Legislative Tax Changes

The following is a summary of key changes to Nebraska’s tax laws passed by the Nebraska Legislature in its 2010 session: ... READ MORE


A Hidden Form 1099 Filing Requirement Within The Health Care Reform Act Will Likely Have a Significant Impact On Businesses

Because of the speed in which the recent Health Care Reform Act was passed, and the enormous scope of the bill, practitioners are only now learning about some of the significant tax changes enacted by the Act. One change which is now receiving publicity, while not having a direct tax cost, will significantly raise the cost of tax compliance for both small and large businesses. ... READ MORE


Obama Administration and I.R.S. Crackdown on Worker Classification – Businesses Should Review Current Arrangements

Earlier this year, the Obama Administration indicated  it would make a concerted policy effort to focus on companies that misclassify employees as independent contractors. In addition, the IRS has announced plans to audit 6,000 companies for employment tax compliance over the next three years. Due to the ambiguous legal framework within which worker relationships are defined for federal tax purposes, and the increasing importance of revenue collection by the IRS in the face of a mounting federal deficit, businesses that do not have clearly delineated worker arrangements may find themselves facing a large assessment. ... READ MORE


Update: New IRS Rules On Tax Reporting Of Uncertain Positions

Under the recent Ann. 2010-30, the IRS released a draft schedule (Schedule UTP) (and related instructions) which would be used by larger corporate taxpayers to report their uncertain tax positions beginning with the 2010 tax year. Within that announcement, the IRS stated that the following taxpayers with both: (a) assets of $10 million or more; and (b) uncertain tax positions, will be required to file the new Schedule UTP if the taxpayer, or a related party, issued audited tax statements: ... READ MORE


SEC Adopts Final Proxy Access Rules

The Securities and Exchange Commission on August 25 adopted final proxy access rules on a three-two vote. The SEC believes the new rules “will benefit shareholders by improving corporate suffrage, the disclosure provided in connection with corporate proxy solicitations, and communication between shareholders in the proxy process.” The adopted release runs 451 pages, and includes 41 pages of Paperwork Reduction Act information and 60 pages of cost benefit analysis. The new rules become effective 60 days after publication in the Federal Register. Consequently, the rules will impact public companies with shareholder meetings scheduled for April 2011 or later. ... READ MORE


Dodd-Frank Act Includes Significant Corporate Governance and Compensation Provisions

The Dodd-Frank Wall Street Reform and Consumer Protection Act became law today upon the President’s signature.  The legislation includes a number of significant corporate governance and executive compensation provisions that apply to all public companies.  The provisions require the SEC to adopt rules implementing the new legislation.  The SEC has indicated a desire to have the rules in place for the 2011 proxy season. ... READ MORE


The Vacation Home Succession Plan – How to Keep Your Vacation Home In the Family Without Tearing the Family Apart

For Jack and Jane, their lake cabin in Minnesota had been the ideal family retreat.  Their three children, Bob, Betty and Bill, had learned to fish and water ski during their summer vacations and how to snow ski during their winter breaks.  Their cabin had also been ideal for weekend get-a-ways, with the family also frequently hosting their childrens’ friends and making over three decades of memories. ... READ MORE


Increased IRS Oversight Of Tax Return Preparers Is Coming

This January, the IRS released its six-month study entitled the “IRS Return Preparer Review.”  The IRS found that, in 2007 and 2008, over 80% of all federal tax returns were prepared by either a paid preparer or with the assistance of software.  However, the IRS could not determine the total number of preparers because any person may now prepare a federal tax return for a fee.  The IRS study outlines higher standards to boost confidence in the tax system, increase service and protections for taxpayers, and produce better compliance with tax laws.  The following is a summary of the areas addressed in the study’s recommendations: ... READ MORE


The Impact Of Health Care Reform On LLC Owners, Partners, And S Corporation Shareholders

It is safe to say that most Americans are aware of the recently enacted Health Care and Education Reconciliation Act of 2010.  Because of the speed in which the Act was passed, and because of the wide-ranging scope of the Act (which spanned approximately 2400 pages), the full effects of the Act are still being discovered.  A full summary of the Act is well beyond the scope of this article (and this newsletter), but one often overlooked tax provision is worth highlighting for passive owners of S corporations, LLCs and partnerships. ... READ MORE


IRS Announcement 2010-9: The IRS Now Wants Business Taxpayers To Highlight All Uncertain Tax Positions On Their Returns

On January 26, 2010, the Internal Revenue Service released its Announcement 2010-9, in which it announced its intention to require many business taxpayers to disclose their “uncertain tax positions” directly on their federal income tax returns. This new requirement would apply to business taxpayers with total assets above $10M and who are subject to FASB Interpretation No. 48 (“FIN 48”). Such taxpayers would be required to file a schedule, along with their income tax return, which would provide a concise description of each uncertain tax position for which that taxpayer, or its related entities, recorded a reserve on its financial statements. The taxpayer would also have to disclose the maximum amount of potential federal income tax liability attributable to its position. Furthermore, the taxpayer would be required to disclose any tax position for which a reserve was not recorded because either a) the taxpayer expects to litigate the position or b) the taxpayer determines that the IRS has a general administrative practice not to examine that position. ... READ MORE


Senate Financial Reform Bill Includes Corporate Governance And Compensation Provisions

The Senate on May 20 passed the Restoring American Financial Stability Act of 2010.  The legislation includes a number of significant corporate governance and executive compensation-related provisions that would apply to all public companies, although the SEC would have the authority to exempt companies from any of the requirements based on size, market capitalization or other criteria. ... READ MORE


Iowa Law Alert: Lender's Security Interest Held Inferior To Later Perfected Feed Supplier Lien

Lenders engaged in agricultural lending to Iowa livestock producers need to be aware of a recent unpublished decision of the Iowa District Court for Sioux County, Doon Elevator Company v. American State Bank, Case No. LACV022572 (the “Doon Decision”).  The Doon Decision involved the efforts of an elevator that supplied feed to a hog producer to prime a lender’s prior perfected security interest in the producer’s hogs and their proceeds.  The Iowa District Court ruled in favor of the feed supplier despite the fact that the feed supplier had not complied with the notice requirements in I.C.A. §570A.2(3).  As noted below, although Doon is unpublished, and its reasoning is questionable, it nevertheless has the potential to seriously impact lenders who finance Iowa livestock producers. ... READ MORE


TITLE II of GINA: What it Means for Private Employers

The Genetic Information Nondiscrimination Act (“GINA”) went into effect on November 21, 2009. GINA was enacted to address a specific Legislative concern that the advancement of genetic science would lead to employment and insurance discrimination based on an individual’s potential to contract a certain disease as reflected in genetic markers. Title II of the Act applies to private and state and local government employers with 15 or more employees, and amends Title VII to prohibit employment discrimination based on genetic information in actions such as hiring, promotion, pay, and fringe benefits. Specifically, Title II of GINA limits an employer’s use of genetic information in three ways: ... READ MORE


Employer Wins Age Discrimination Suit Even Though it Doesn't Follow its Own Employee Handbook

Although a bit unusual, a recent decision arising out of the United States Court of Appeals for the Sixth Circuit shed some interesting light in a workforce reduction age discrimination case. ... READ MORE


An Employee's Request To Move His Office To A Remote Location Not A "Reasonable" Request

A recent decision by the Eleventh Circuit Court of Appeals focused on the burden of an employee who seeks reasonable accommodation from his employer under the Americans with Disabilities Act (“ADA”). The plaintiff in McKane v. UBS Financial Services, Inc., had engaged in verbal abuse of his co-workers, including an instance which occurred inside his office after he summoned a fellow employee there. He was terminated as a result of his conduct. He then sued his employer based on his employer’s failure to accommodate him by relocating his office to a remote location. ... READ MORE


Female Employee Can Proceed With Sex Bias Claim Based On Sex Stereotypes

The normal method of proof in a claim of discrimination on the basis of sex is evidence which shows that members of the opposite sex who engaged in similar conduct or were similarly situated received more preferential treatment. A recent Eighth Circuit Court of Appeals case illustrated a different method of analysis for certain claims which did not depend upon comparison with male employees, but rather on comparison with sexual stereotypes directed at women. ... READ MORE


Court Finds Non-Disabled Employee May Bring an ADA Claim Based on an Improper Medical Inquiry

Under the American with Disabilities Act (ADA), an employer generally may not make a pre-employment medical inquiry to an applicant. The Eleventh Circuit Court of Appeals, however, recently considered the issue of whether an employee who is not disabled may bring a lawsuit against an employer based on an improper medical inquiry. The Court concluded that such a lawsuit was permissible. ... READ MORE


Handling Harassment Complaints in a Manner that is "More Than Reasonable"

A recent case from the Seventh Circuit Court of Appeals illustrates the correct way an employer should respond to a sexual harassment complaint.  In Roby v. CWI, Inc., the Seventh Circuit dismissed the harassment claims and concluded that the employer “made more than reasonable attempts” to correct the harassing behavior once it was reported. ... READ MORE


Pre-Employment Medical Exams and the ADA

The previous article in this newsletter concerned an employer that potentially exceeded the restrictions of the Americans with Disabilities Act by asking impermissible questions about an applicant’s medical condition before extending a job offer. The purpose of this article is to provide a brief overview of those restrictions. ... READ MORE


Employers Should Review Their Criminal History Use During Pre-Screening Of Applicants

The current state of the economy has left many companies and businesses inundated with an overwhelming number of job applicants. In an effort to narrow the applicant pool, many employers have turned to the use of background checks, such as criminal history and credit reports, to screen potential candidates. It has long been the U.S. Equal Opportunity Commission’s (“EEOC”) position that an employer who uses a “blanket” policy of not hiring any applicant who has a history of arrest or convictions violates Title VII of the Civil Rights Act because such a policy disproportionately excludes members of certain racial and ethnic groups, unless the employer can demonstrate a business need for use of this criteria. ... READ MORE


ALERT: What The Repeal Of The Federal Estate Tax Means To You (Besides Lower Taxes)

Under tax legislation enacted in 2001, the federal estate tax was to be repealed for one year, 2010, and automatically reinstated January 1, 2011, with only a $1.0 million federal estate tax exemption allowed for a deceased individual. It was anticipated by nearly all informed observers that Congress would pass legislation by 2009 to address the one year repeal. Although the House passed a bill last December, the Senate did not. Hence, for the time being, there is no federal estate tax. Although Democratic leaders in Congress have stated that the estate tax will be reinstated retroactively, based on Congressional inaction over the last eight years, this may be problematic. ... READ MORE


Post Payment Review of Physician Medicare Payments: RAC "Bounty" Audits In Nebraska

Over the years, the Centers for Medicare and Medicaid Services (CMS) have implemented numerous initiatives to identify improper Medicare payments made to healthcare providers. The goal of these initiatives has been to reduce payment error by identifying and addressing billing errors concerning coverage and coding made by healthcare providers. Buoyed by the success of one such initiative, the recovery audit contractors (RAC) demonstration program conducted from 2005 to 2008, which featured bounty-hunter contingency fees for each of the RACs, CMS has now expanded the RAC “bounty” audit program nationwide.  Healthcare providers in Nebraska, including physicians, must now prepare for RAC audits in which the auditor (the RAC) is entitled to a contingency fee in excess of 9 percent of the identified improper Medicare payments. ... READ MORE


Avoiding Taxes on the Sale of Your Business or Investment Property through a Tax Deferred Exchange

Efforts to jump-start the economy over the past several years have resulted in dramatic increases in the first year depreciation available to taxpayers. With 50% bonus depreciation for the 2008 and 2009 tax years, a taxpayer may deduct as much as 60% of the purchase price of many types of new depreciable property in the year the property is placed in service. However, what the tax man giveth, the tax man taketh away. When property is sold for more than its depreciated value (adjusted basis), the gain may be recaptured and be subjected to tax at ordinary income rates. ... READ MORE


Nebraska Supreme Court Confirms Tax On Charges For Equipment Cleaning When Incurred Under The Same Contract As Building Cleaning

On October 23, the Nebraska Supreme Court issued a ruling in Swift & Co. v. Nebr. Dep’t of Revenue.  In the case, Swift & Co. operated meat processing plants in Nebraska. Swift contracted with one company (under one contract) to provide both the specialized cleaning of its meat processing equipment, as required by health authorities, as well as its building cleaning. ... READ MORE


Department of Revenue Issues Guidelines For E-Verify Compliance To Nebraska Incentive Recipients

As we had highlighted in the May/June 2009 Newsletter, during the last legislative session, the Nebraska Legislature passed a law which requires participants in Nebraska incentive programs to utilize E-Verify, the federal electronic verification program that ensures all new employees are legally able to work in the United States. Nebraska tax incentives will not be granted until the applicant can prove that it has electronically verified the work eligibility status of all newly hired employees employed in Nebraska. ... READ MORE


President Obama Signs Military Spouses Residency Relief Act

On November 11, President Obama signed into law the Military Spouses Residency Relief Act. Under the Act, when a service member leaves his or her home State in accord with military or naval orders, the service member’s spouse may retain residency in his or her home State for voting, income tax, and personal property tax purposes, after relocating from that State to accompany the service member. ... READ MORE


HIPAA Business Associate Agreement Updates: The February 17, 2010, Deadline Is Approaching

As a result of the Health Information Technology for Economic and Clinical Health Act (“HITECH”), which was included as Title XIII of the Federal economic stimulus package, the American Recovery and Reinvestment Act of 2009, health related businesses are now subject to much greater regulation of their information privacy and security practices.  HITECH is generally considered to represent the most expansive modification to the Federal privacy and security rules for health-related businesses since the 1996 enactment of HIPAA. ... READ MORE


New EPA Guidelines for Stormwater Discharges from Construction Sites

Construction activities, such as clearing, excavating, and grading, significantly disturb the land.  The disturbed soil, if not properly managed, can easily be washed off construction sites during storms.  Pollutants discharged from construction sites, which includes sediment, turbidity, and nutrients, can adversely affect water quality and water resources. ... READ MORE


Dollar Thresholds for Hart-Scott-Rodino Filings Decrease for the First Time

For the first time, the dollar thresholds for pre-acquisition filings required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “Act”) will decrease.  This unprecedented decrease will take effect in mid to late February (thirty (30) days following publication in the Federal Register).  The applicable dollar thresholds have been adjusted on an annual basis since 2000 based on changes in the gross national product. ... READ MORE


TAX ALERT: House Passes Permanent Estate Tax Bill

On December 3rd, the U.S. House of Representatives passed H.R. 4154 which would make permanent the federal estate tax rules currently in place in 2009 – a $3.5 million exemption and a forty-five percent (45%) tax rate for estates which exceed the exemption.  Under the House’s bill, the estate tax rate and exemption would not change from year to year as under the current law. ... READ MORE


The Foundation of Ethics and Professionalism: The Preamble to the Iowa Rules of Professional Conduct

When day to day questions arise concerning ethical issues, the specific ethics rules in the Iowa Rules of Professional Conduct are often consulted to obtain an answer.  However, we should not lose sight of the guiding principles found in the Preamble to the Iowa Rules of Professional Conduct.  The Preamble sets out the concepts that serve as the foundation upon which our professional conduct should be based. ... READ MORE


Minimizing Taxes In Designing The Sale Of A Business

When Sam came to see us, he was very excited about the opportunity to sell his business to a private equity group named PEG. However, Sam was stunned by the initial tax projections we provided him shortly after he engaged us. At the price he was hoping to receive, he was looking at a double federal tax on the sale (i.e., a tax upon his “C” corporation as well as a tax when the proceeds were distributed to him). He was also looking at a double state tax, since he lived in Nebraska which taxes both the sale and distribution of the sale proceeds. Sam wanted to know what his options were. ... READ MORE


Federal Bill Would Impose Stricter Requirements On Who May Be Classified As An Independent Contractor

Rep. Jim McDermot of Washington recently introduced H.R. 3408, which would impose more stringent requirements on companies who wish to classify workers as an independent contractors rather than employees.  The classification of workers as independent contractors has been an accepted and long-standing business model for many financial broker dealers and other industries. ... READ MORE


Husband and Wife Unincorporated Businesses Should Consider a Special Tax Election

A married couple can own a business together in a variety of ways, including through a corporation, a partnership, or a limited liability company (LLC). However, some married couples may engage in business, without the use of a state law entity, through the use of jointly owned assets. In this case, the business should be classified as a partnership for income tax purposes. ... READ MORE


No-Match Letter Immigration Requirements To Be Rescinded

The Department of Homeland Security (“DHS”) has announced its intent to modify its regulations by rescinding the amendments it had proposed relating to procedures that employers would be required to follow up on the receipt of a no-match letter sent by the Social Security Administration. Such letters are used to inform employers that certain employees’ social security numbers did not match their names. In practical terms, those procedures would have resulted in the termination of employees whose work authorization status could not be verified within the 93-day period following receipt of the no-match letter. ... READ MORE


The E-Verify Program Is Now Mandatory For Certain Government Contractors

The E-Verify program, which has been in existence for many years and is used to verify the employment authorization of new employees, is now a required part of the employment system for certain federal government contractors. As of Tuesday, September 8, 2009, the regulations implementing that policy went into effect. However, as noted below, that does not mean that covered government contractors are required to immediately sign up for or start using  E-Verify. ... READ MORE


The Tax Implications of The House's Proposed Health Care Plan

In the early morning hours of July 17, the House Ways and Means Committee passed H.R. 3200: “America’s Affordable Health Choices Act of 2009.”  While we expect that this plan will be amended many times, we wanted to update you on the tax effects of this leading reform plan as currently written: ... READ MORE


Mandatory Use of E-Verify By Government Contractors Further Delayed

As previously noted, the requirement that all contractors with certain government contracts sign on to and apply a modified version of the E-Verify system to verify the employment authorization of their employees, also called the “Basic Pilot” program, had been postponed until June 30, 2009. It has just been announced that the applicability of that requirement has been further extended to September 8, 2009. Accordingly, no solicitations for government contracts or subcontractors issued prior to September 8, 2009, will contain the contract clauses that the E-Verify rule would require. That rule, if put in effect, would apply to both federal contractors and subcontractors. ... READ MORE


Eighth Circuit Redefines "Interactive" Process and Its Relation to Termination

The trend in the federal courts is to require that an “interactive process” be invoked when issues arise related to accommodation under the American with Disabilities Act. In Peyton v. Fred’s Stores of Arkansas, the Eighth Circuit Court of Appeals reviewed the interactive process (which simply means a back and forth discussion) in the context of an employee who had limitations on her ability to perform the duties of her job. ... READ MORE


Liberating Your C Corporation From the Chains of Double Taxation

Back in the days when the C corporation (“C corp”) was really the only entity in town, many individuals formed closely-held C corps to hold their real estate or business assets.  Now, many years later, the C corp’s assets have often substantially appreciated in value. In more recent years, individuals may have formed closely-held C corps to hold appreciated assets as a result of faulty advice or for other reasons. ... READ MORE


Eighth Circuit Affirms That Retaliation Requires Injury or Harm to the Employee

When an employee complains about discrimination or harassment in the workplace, the employer must be mindful of retaliation claims.  Under Title VII and state discrimination laws, the alleged victim of discrimination or harassment may claim that they engaged in a protected activity and any future discipline or adverse action taken against them constitutes retaliation.  It is not an uncommon tactic for an employee to make a discrimination complaint after receiving a final notice or other discipline from the employer.  By submitting the complaint, the employee (or his or her attorney) may be trying to deter the employer from imposing future discipline based on a concern that the employer’s actions may be construed as retaliation. ... READ MORE


DHS Announces Plans to Rescind No-Match Rule

The Department of Homeland Security (DHS) recently announced that it will propose a regulation that would rescind the controversial No-Match Letter Rule that was originally issued in 2007, but was blocked by a court order and has never been in effect.  That rule established procedures that employers would, for all practical purposes, be required to follow if they received a Social Security Administration No-Match Letter or notices from the Department of Homeland Security that called into question worker eligibility information provided.  Accordingly, it appears, for the time being, that the No-Match Rule movement is dead.  While the potential new regulation would appear to remove a potential substantial burden from the shoulders of employers across the country, it also removes the possibility of utilizing the no-match rule as a “safe haven” where employees were terminated, pursuant to the provisions of the rule. ... READ MORE


Court Allows Sales Tax Exemptions On Parts Assembled Into Manufacturing Machinery and Equipment

In the recent case Concrete Industries, Inc. v. Nebraska Department of Revenue, the Nebraska Supreme Court considered whether the purchase of parts which were assembled into manufacturing machinery and equipment were exempt from Nebraska sales and use tax under the manufacturing machinery and equipment exemption.  The Department of Revenue had previously ruled that such parts were not exempt (Rev. Rul. 1-05-1 and 1-06-6).  ... READ MORE


Court Allows Alleged Male Sexual Harasser to Sue His Employer Based on Sexual Stereotypes

Employment actions may be found to be unlawful if they are based on “sexual stereotyping.” The most common example of “sexual stereotyping” is when an employer takes inappropriate action against a female employee because she was not acting the way the employer thought women should act. For example, in the landmark Price Waterhouse v. Hopkins decision, the U.S. Supreme Court found that an employer had engaged in sex stereotyping by taking an action against a female the employer thought was too aggressive and not feminine enough. Other cases have held such comments as a woman’s inability to combine work and motherhood constitute sex stereotyping that provides evidence of discriminatory intent. ... READ MORE


Helpful Remedies for Trade Creditors When Customers File for Bankruptcy

Trade creditors often find themselves, especially in hard economic times, in the familiar scenario where struggling customers purchase goods on credit approaching or exceeding their credit limits—in some cases making rosy predictions to creditors about the customers’ prospects for success—only to file for bankruptcy, stiff unsecured creditors for goods purchased in the days leading up to the bankruptcy filing, and use the goods purchased to support the customer’s operations in bankruptcy. Prior to 2005, trade creditors were generally rewarded for their willingness to work with debtors in these situations with general unsecured claims for unpaid shipments, unless their claims were reclamation claims entitled to administrative-expense status. In most cases, this resulted in creditors receiving distributions on their claims in tiny bankruptcy dollars, i.e., distributions worth a fraction of the value of the goods shipped. In 2005, Congress, in connection with its enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), sought to remedy this situation to some degree by adopting two provisions that significantly alter the relationship between debtors and trade creditors. ... READ MORE


Secured Lender v. Construction Lien Claimants: McGrath North Helps Bank Prevail in Priority Battle with Construction Lien Claimants

It is the nightmare of every loan officer: Waking up one day to find that another lienholder claims priority based on an alleged mistake the loan officer made in recording lien documents. The nightmare became real in the recent case of Borrenpohl v. DaBeers Properties, LLC, 276 Neb. 426 (2008), where construction lien claimants asserted priority over the bank’s trust deed, based on the fact that a notice of commencement, which had been delivered to the register of deeds in the same envelope as the bank’s trust deed, was file-stamped before the trust deed. The bank, however, with the assistance of McGrath North, persuaded the Nebraska Supreme Court that its lien should prevail. ... READ MORE


Planning Items and Strategies to Consider During Uncertain and Difficult Economic Times

Turn on the evening news or open any newspaper and all you hear about is the poor state of the economy. While difficult times are never easy to face, the economic downturn, when combined with recent tax law changes and  potential, adverse tax proposals by the new President, encourage taking consideration of estate and income tax planning opportunities and strategies, sooner than later. ... READ MORE


The Obama Administration's Key Tax Proposals

On May 11, the Obama Administration released its Fiscal Year 2010 Revenue Proposals (Greenbook), describing the tax law changes the Administration will propose. In addition to allowing the highest ordinary income tax rates to return to pre-Bush levels, and the highest capital gains tax rate to go to 20%, the Administration’s proposals include: ... READ MORE


Nebraska Legislature Amends Wind Energy Tax And Property Rules

Nebraska’s Rural Community-Based Energy Development Act provides incentives for owners of qualified wind energy generation projects within Nebraska.  The Act is intended to encourage and incent the development of wind energy within Nebraska.  Under the Act, the purchase of personal property for use in a community-based energy development (C-BED) project is exempt from sales and use tax if 33% of the gross power purchase agreements payments are made to qualified owners (generally Nebraska residents and companies). ... READ MORE


2009 Changes To Nebraska Statutory Tax Law

In the 2009 legislative session, the Nebraska Legislature made a number of notable changes to Nebraska’s tax rules. Key changes include the following: ... READ MORE


SEC Proposes Expanded Proxy Access

The Securities and Exchange Commission approved on May 20, by a 3-2 vote, proposed rules expanding stockholder proxy access rights.  The proposals have a 60-day comment period and the SEC expects to have final rules in place for the 2010 proxy season.  The new federal rules, if adopted, would trump recent Delaware legislation relating to stockholder proxy access. ... READ MORE


Protecting Employee Creations

(402) 341-3070 ... READ MORE


SPECIAL ALERT: Employee Free Choice Act Introduced

On March 10, 2009, the Employee Free Choice Act (“EFCA”) was introduced in both houses of Congress. The bill is supported by President Obama, who has stated that he will sign it when it reaches his desk. ... READ MORE


Hey, DOL! Not so Fast on Those Opinion Letters, Part I

During the final days of the Bush Administration, the United States Department of Labor Wage and Hour Division (“DOL”), issued 40 opinion letters, more than it had issued in the prior two years. After taking office, the Obama Administration put a hold on 20 of those opinions. Although all letters are still listed on the Department of Labor’s website, there is a notation as to those opinion letters which have have been withdrawn “for further consideration”. In this article I’ll discuss several opinion letters which were not withdrawn. This article deals with mandatory exempt status for salaried employees. ... READ MORE


Nebraska Department Of Revenue Issues New Regulations

On February 22, following the Governor’s approval, the Department of Revenue formally enacted a new set of tax regulations. Most of the new regulations deal with sales and use taxes, although a few deal with corporate income tax, individual income tax, and other Nebraska taxes. In a previous article which appeared when these regulations were first proposed, we highlighted Regulation 1-107, which dealt with the sales tax exemption for manufacturing machinery and equipment. Prior to the initial hearing on the regulations, the Department withdrew Reg. 1-107, so it is not included in the enacted regulations. ... READ MORE


Traditional And Roth IRA Distributions: What Is Taxable And What Isn't?

Because so many individuals have a substantial percentage of their net worth invested in IRAs (either traditional or Roth), it is important to understand the tax consequences and rules regarding IRA distributions. ... READ MORE


Transition Growth And Exit Planning In Uncertain Economic Times

Over the course of 25 years, Josh had built a great niche manufacturing business, and he was now ready to take his chips off the table. His business was producing consistently strong cash flow at a level that is normally very attractive to most private equity group buyers. Yet he and his M&A intermediary found that no one would touch his business. When he came in to visit about this, it became clear he had made many of the mistakes business owners and their advisors commonly overlook. And he was running out of time for a course correction. ... READ MORE


Court Upholds Termination Of Employee Who Claims Company Misled Him About FMLA Leave

Leave under the Family and Medical Leave Act (FMLA) generally requires that an employee have a “serious health condition”, as defined in the regulations. However, there is a situation in which the employee may be entitled to FMLA leave, regardless of whether they actually had a serious health condition. This occurs when the employer misleads an employee into thinking that they were entitled to FMLA leave, and the employee acts accordingly. ... READ MORE


Court Upholds OSHA Citation Against A General Contractor For Safety Violations By A Subcontractor

The issue of when OSHA can fine a general contractor for safety violations committed by a subcontractor on the general’s jobsite has been the source of continuing disputes between OSHA and the construction contracting community. The current OSHA manual and its multi-employer worksite policy contains four citation policies which would provide for fines directed at the exposing employer, the correcting employer, the creating employer, and the controlling employer. However, when such policies have been applied, contractors have generally taken the position that OSHA should not enforce a duty against a general contactor except where the safety violation exposes the general’s own employees in some manner or form. ... READ MORE


SEC 2009 Proposals to Affect Public Company Governance

Securities and Exchange Commission Chairman Mary Shapiro set out governance-related portions of the agency’s 2009 regulatory agenda in an April 6 speech.  The agenda includes proposals for new regulations which would have significant impact on public companies.  Key elements of the SEC’s rulemaking agenda are set forth below. ... READ MORE


ALERT: Senate Finance Chief Introduces Legislation To Freeze 2009 Estate Tax Rules, Reunify Estate And Gift Tax Exemptions, And Make Permanent Many Income Tax Changes Introduced In The Stimulus Bill

Senator Max Baucus recently introduced legislation that would make certain income tax cuts permanent for taxpayers who are in the 28% or lower tax brackets. These cuts include the recently increased child tax credit, marriage penalty relief, and lower middle-income tax rates. The measures were originally passed as part of tax legislation in 2001 and 2003, but are set to expire in 2010. Baucus’ legislation also addresses important estate and gift tax changes, including the preservation of federal estate taxes for persons dying in 2010. ... READ MORE


Iowa Climate Change Developments

Background ... READ MORE


International Sales Contracts: Common Myths And Misconceptions, Part V

It seems that U.S. parties tend to misunderstand, or simply fail to consider, the legal implications of entering into international sales transactions.  We have sometimes seen this evidenced by parties using the same form of purchase order (or sales confirmation) for both domestic and offshore dealings, without realizing the differences that might exist between the two types of transactions.  Following is the last installment in a multi-part series that is intended to set the facts straight on several myths, misconceptions and potential traps involving international sales. ... READ MORE


2009 Nebraska Energy Plan

In 1991 Nebraska developed its first energy plan.  This plan is now being updated.  Through the input of many in the latter part of last year, the Nebraska Energy Office has developed the 2009 Nebraska Energy Plan (“Plan”). ... READ MORE


Greenhouse Gas Emissions – Ready to Report?

Background. ... READ MORE


International Sales Contracts: Common Myths And Misconceptions, Part III

It seems that U.S. parties tend to misunderstand, or simply fail to consider, the legal implications of entering into international sales transactions. We have sometimes seen this evidenced by parties using the same form of purchase order (or sales confirmation) for both domestic and offshore dealings, without realizing the differences that might exist between the two types of transactions. Following is the third installment in a multi-part series that is intended to set the facts straight on several myths, misconceptions and potential traps involving international sales. ... READ MORE


One Benefit To Today's Bear Market: A Roth IRA Conversion In 2010 May Reduce The Taxes Due On Your IRA Assets

While the severe market declines in the last year have reduced the balances of traditional IRAs, the declines have not had an immediate tax effect.  The reason is that losses, as well as gains, are not recognized within a traditional IRA. Given the continued bear markets, however, there are certain tax strategies pre-retirement age investors owning traditional IRAs should consider. ... READ MORE


The IRS May Still Subpoena A Corporation's Tax Accrual Workpapers, But Two Recent Court Decisions May Restrict That Power

Tax accrual workpapers are generally prepared by a company’s outside accountants (or attorneys) during the company’s financial audit. The workpapers generally include a listing of tax positions which, in the opinion of the producing accountant or attorney, involve areas of legal uncertainty and therefore may be challenged by the IRS or other agencies. Within the workpapers, the company’s accountant or legal counsel will express their judgments regarding the company’s chances of prevailing on those issues. The workpapers further note the amounts which the company has reserved on its financial statements to reflect the possibility that the company may not prevail in such litigation. ... READ MORE


Practitioners Beware: The IRS Intends To Give Your Personal Tax Returns Special Scrutiny

The IRS has recently announced that all accountants, attorneys, enrolled agents and others who file IRS Form 2848 to act as a Power of Attorney on behalf of their clients will automatically undergo a tax check by the IRS. ... READ MORE


Extra Points: Tax Items Of Note

IRS Announces Cost Of Living Adjustments For 2009.  The IRS announced the following cost of living adjustments to its inflation adjusted tax levels: ... READ MORE


International Sales Contracts: Common Myths And Misconceptions, Part IV

It seems that U.S. parties tend to misunderstand, or simply fail to consider, the legal implications of entering into international sales transactions. We have sometimes seen this evidenced by parties using the same form of purchase order (or sales confirmation) for both domestic and offshore dealings, without realizing the differences that might exist between the two types of transactions. Following is the fourth installment in a multi-part series that is intended to set the facts straight on several myths, misconceptions and potential traps involving international sales. ... READ MORE


TAX ALERT: The Federal Economic Stimulus Bill Makes Numerous Key Changes To The Federal Tax Code

If you own a radio, television, or computer, you probably already know that Congress has recently passed, and President Obama has signed, the American Recovery and Investment Act of 2009 (“Act”). The Act is intended to stimulate the U.S. economy, by making numerous tax code changes and by dramatically increasing government spending. While you may not see any of the spending, it is likely that the tax code changes will impact your or your clients’ financial position. Key tax code changes include: ... READ MORE


Don't Forget About The ADA When Terminating Employee On Leave

Managing a medical leave of absence can be difficult for employers. For employers subject to the Family and Medical Leave Act (“FMLA”), it is well understood that an employee is entitled to 12 weeks of leave if he or she suffers from a serious health condition. Many employers believe that they can simply discharge an employee who cannot return to work after 12 weeks. However, complying with the FMLA is not always enough. An employer must also consider its legal obligation under the Americans with Disabilities Act (“ADA”). ... READ MORE


Employee On FMLA Must Still Call In To Report Absences

Intermittent leave under the Family and Medical Leave Act (“FMLA”) is often difficult to manage for employers. The problem arises when a physician certifies that an employee is suffering from a serious health condition and will need “intermittent” leave whenever the condition arises. In other words, the employee has a free pass to miss work whenever he or she contacts the Company and advises that a “serious health condition” is flaring up again. The employer may be required to cover the individual’s work shift on a moment’s notice which can cause conflicts and discord in the workplace. In a recent case from the Eighth Circuit, one employer successfully terminated an employee for failing to properly follow the Company’s call in procedures regarding her FMLA absences. ... READ MORE


OSHA Publishes Final Rule on Personal Protective Equipment (PPE)

For some time, OSHA has been considering updating its rules on personal protective equipment (PPE). The final rule has now been published and it requires employers to provide personal protective equipment to every covered employee. In addition, each covered employee must receive training on the use of PPE. Each failure to provide PPE, or meet the training requirements, constitutes a separate violation. That is to say, an employer can be cited and fined separately for each employee who fails to receive PPE or PPE training. ... READ MORE


Supreme Court Decides Burden of Proof in RIF Cases

Unfortunately, far too many employers are having to become familiar with practices and procedures surrounding a reduction in force (RIF). A recent Supreme Court holding in Meacham v. Knolls Atomic Power Laboratory examined issues surrounding the burdens of proof in a RIF case and, more specifically, whether an employer who asserts that employment decisions were based upon “reasonable factors other than age” bears the burden of proving the defense or whether a plaintiff has the burden of proving the factors used were invalid. ... READ MORE


Thinking Of A Reduction In Workforce? Be Sure To Pay Attention To The Details

Well, it’s official. The National Bureau of Economic Research says the U.S. has been in a recession since December 2007. While that may come as no surprise to anyone, the fact that we are in a recession may cause and has caused many employers to dust off their reduction in force policies and practices. ... READ MORE


International Sales Contracts: Common Myths And Misconceptions, Part I

It seems that U.S. parties tend to misunderstand, or simply fail to consider, the legal implications of entering into international sales transactions.  We have sometimes seen this evidenced by parties using the same form of purchase order (or sales confirmation) for both domestic and offshore dealings, without realizing the differences that might exist between the two types of transactions.  Following is the first installment in a multi-part series that is intended to set the facts straight on several myths, misconceptions and potential traps involving international sales. ... READ MORE


Effective February 2009 – Revised Thresholds for Hart-Scott-Rodino Filings

Effective in mid to late February of 2009 (the exact date is yet to be determined), the dollar thresholds for pre-acquisition filings required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “Act”) will increase.  Pursuant to the Act, parties to certain merger or acquisition transactions are generally required to submit pre-acquisition filings to the Federal Trade Commission and Department of Justice, and are further required to comply with the Act’s applicable waiting periods (typically 30 days), prior to consummating the transaction if: ... READ MORE


International Sales Contracts: Common Myths And Misconceptions, Part II

It seems that U.S. parties tend to misunderstand, or simply fail to consider, the legal implications of entering into international sales transactions.  We have sometimes seen this evidenced by parties using the same form of purchase order (or sales confirmation) for both domestic and offshore dealings, without realizing the differences that might exist between the two types of transactions.  Following is the second installment in a multi-part series that is intended to set the facts straight on several myths, misconceptions and potential traps involving international sales. ... READ MORE


Alert: Tax Changes Within the Emergency Economic Stabilization Act

Most people are aware that Congress, in October, passed the Emergency Economic Stabilization Act of 2008. The Act was primarily intended to solve the credit crunch in the financial markets. However, the Act also is one of the largest tax bills in recent years, making nearly 300 changes to the Internal Revenue Code. The majority of these changes will impact taxpayers in 2008 and 2009, so taxpayers should be aware of these changes while doing their 2008 and 2009 tax planning. ... READ MORE


Grain Contracts And Bankruptcy

The volatility of commodity prices is not news to those in the industry, but the recent unprecedented swing in prices has resulted in numerous bankruptcies, and increased the financial risks to parties associated with grain contracts.  The extent of the bankruptcy risk will depend on the terms of your contract, the financial condition of the debtor, and the actions that you take both before and after a bankruptcy filing. ... READ MORE


Year-End Charitable Gift Planning

As calendar year 2008 draws to a close, taxpayers are reminded to consider year-end tax planning strategies to minimize their overall income tax liability.  If you expect your income to be higher in 2008 than in 2009, or if you anticipate being in the same or higher tax bracket in 2008, then you may want to consider accelerating deductions, such as the itemized deduction for charitable contributions, into calendar year 2008.  One of the deductions that is also allowable for alternative minimum tax purposes is the itemized deduction for charitable contributions. ... READ MORE


McGrath North Is Pleased To Announce That Thomas J. Kelley Has joined The Tax Group

The McGrath North Tax Group is pleased to welcome Thomas J. (Tom) Kelley to the Tax Group. Tom’s practice focuses primarily on three areas: (1) estate planning, probate, estate and trust administration and federal and state tax issues; (2) government regulatory matters with an emphasis on health care clients; and (3) general business and corporate work. For his health care clients, Tom has provided counsel with respect to licensure issues, Medicare/Medicaid billing issues, HIPAA Privacy Rule and Security Rule compliance issues and compliance with the Stark and Anti-Kickback Laws. In connection with his government regulatory practice, Tom also has significant experience counseling clients in the areas of managing and producing electronically stored information. ... READ MORE


Federal Tax Update: New Rules for Employment Tax Payments by Single Member LLCs

(402) 341-3070 ... READ MORE


2008 Year End Tax Planning Tips

The following strategies may reduce your 2008 tax liability: ... READ MORE


Extensive Tax Law Changes Under The Obama Administration Are On The Horizon, So You Should Consider Planning Now

On November 4, 2008, Barack Obama was elected the next President of the United States.  Obama proposed several significant changes to the tax code during his campaign, but many changes were not discussed publicly with specificity. As a result, there is a great deal of uncertainty about Obama’s proposals. This article summarizes President-Elect Obama’s tax proposals, as well as some pertinent planning tips in light of these proposals. ... READ MORE


Market Meltdown: Securities Reporting Impact

The recent equity market meltdown, coupled with the tightening of credit in the debt markets, has significant implications for the periodic reporting requirements of public companies.  Such companies must quarterly prepare management discussion and analysis reports, which require a description of any trends that could have a material impact on the results of operations, liquidity or capital resources.  In light of recent events, public companies should give consideration to updating any general overview sections to address recent events and related trends.  In addition, the following sections of typical public company reports should be carefully reviewed. ... READ MORE


Match Up of the Heavyweights: LLC Versus S Corporation

In our tax practice, the most frequently used entities for our family or closely-held business clients are limited liability companies (“LLCs”) and S corporations (“S Corps”).  Both of these entities are similar in many areas and generally provide limited liability protection to their owners from the entities’ creditors.  However, because these entities also differ in many ways, one entity is often a  better choice for your business. ... READ MORE


Nebraska Tax Update: The Department of Revenue Institutes A New Contractor Database And Issues A Ruling On Sales Of Digital Media

LB 1001: To Avoid 5% Withholding, All Contractors Must Register For A New Database.  During the last legislative session, the legislature passed LB 1001, which requires the Department of Revenue to develop and maintain a database for contractors who perform construction services in Nebraska. To accomplish this, all contractors must file a Nebraska Revenue Contractor Database and Election, Form 16, with the Department of Revenue after August 1, 2008 (forms filed prior to August 1 were not accepted). ... READ MORE


New Amendments to ADA Passed By Congress

On September 17, 2008 the ADA Amendments Act of 2008 passed with so little opposition that it was approved by a voice vote.  The Act increases employees’ protections under the Americans With Disabilities Act. In the findings and statement of purposes that preceded the bill, Congress noted its belief that certain Supreme Court holdings had impermissibly narrowed the broad scope of protection intended by the ADA, thus stripping many individuals of protection Congress had intended to confer. ... READ MORE


Recent Court Cases Demonstrate The Need To Keep Proper Records For Charitable And Mileage Rate Deductions

Two recent court decisions highlight the need for taxpayers to be aware of the documents that are required to substantiate their charitable deductions or standard mileage rate deductions and to keep those records. ... READ MORE


USDL Opines On Outside Sales Employee Exemption

Recently the United States Department of Labor, Wage and Hour Division, issued an Opinion Letter of interest to any employer who employs sales persons. The Opinion Letter provides some insight on how USDL views the outside sales employee exemption contained in Section 13(a)(1) of the Fair Labor Standards Act, and the overtime statute. ... READ MORE


8th Circuit Court of Appeals Reverses RICO Judgment Against Community Bank

While business failures are no stranger to any economy or era, there is every reason to believe that the number of such failures will increase in the months and years ahead with the downturn in the economy expected to continue.  Left in the dust of such collapses are creditors scrambling for any viable option of recovering what is owed to them.  Creditors that are unable to obtain a full recovery against their debtor may seek to pursue a claim against the debtor’s bank or other lender under federal legislation initially intended for organized crime, the Racketeer Influenced and Corrupt Organizations Act (“RICO”). ... READ MORE


FTC Closes the Door On Prerecorded Message Telemarketing

The Federal Trade Commission (FTC) recently announced amendments to the Telemarketing Sales Rule (TSR) provisions regarding prerecorded message telemarketing.  See 73 FR 51163 – 51204 (August 29, 2008).  While the amendments do not affect a consumer’s ability to continue to receive calls that deliver purely “informational” prerecorded messages (for example, notifying consumers that their flight has been cancelled, that they have a service appointment, or similar messages), the amendments do: (1) expressly bar telemarketing calls that deliver prerecorded messages, unless a consumer previously has agreed to accept such calls from the seller; and (2) modify the TSR’s method of calculating the maximum permissible rate of “call abandonment.” ... READ MORE


NLRB Issues Guideline On Unfair Labor Practice Charges Involving Political Advocacy

You may recall that in 2006, there were nationwide demonstrations to protest pending legislative proposals imposing greater restrictions and penalties on immigrant employees and their employers. Several employees who participated in those demonstrations and were disciplined led to the filing of Unfair Labor Practice Charges with the National Labor Relations Board (“Board” or “NLRB”). The employees claimed that they were engaged in “protected concerted activity.” Under Section 7 of the National Labor Relations Act (“Act”), an employer may not discipline employees engaged in protected concerted activity. Such activity is generally defined as two employees, or one employee on behalf of him or herself and others, seeking some change in wages, hours, or other “terms and conditions of employment.” Although the Act is most often thought of as involving employers and unions, an employee’s right to engage in protected concerted activity exists, even if no union is on the scene. ... READ MORE


No-Match Rule Has Not Taken Effect

In August 2007, the Department of Homeland Security published a final rule on “Safe-Harbor Procedures for Employers Who Receive a No-Match Letter.” That rule provided instructions for employers who received letters from the Social Security Administration informing them that social security numbers for certain employees which had been submitted did not match their names. In October 2007, a federal district court issued a preliminary injunction prohibiting the implementation of that rule. That preliminary injunction remains in effect.  As a result of the injunction, the Social Security Administration did not send no-match letters to employers in 2007 and may not send such letters in 2008. A hearing on the preliminary injunction was held on August 1, 2008. However, in March 2008, a supplemental proposed rule was issued with the purpose of remedying the defects which led to the issuance of the preliminary injunction. ... READ MORE


Telling Employees They Can't Discuss Compensation Violates NLRA

Windstream Corporation developed “Working with Integrity” guidelines, which it sent by e-mail to all its employees and posted on its Intranet site. Under a section entitled “Customer-Employee Privacy,” Windstream distributed the following policy statement: ... READ MORE


Special Legislation Alert: 2008 Federal Tax Changes

Three bills which make important changes to the federal tax code have been enacted since June 17:  1) the Housing Assistance Tax Act of 2008 on July 30, 2008 (the “2008 Housing Act”); 2) the Heartland, Habitat, Harvest and Horticulture Act of 2008 (the “2008 Farm Act”) on June 18, 2008 (over President Bush’s veto); and 3) the Heroes Earnings Assistance and Relief Act of 2008 (the “2008 Heroes Act”) on June 17, 2008. This special alert will highlight some of the key tax provisions of these bills. ... READ MORE


High Court Opens Door for Retaliation Claims Under § 1981

In a recent decision, the U.S. Supreme Court confirmed that another avenue exists for employees to pursue retaliation claims. Most federal laws precluding discrimination, including Title VII of the Civil Rights Act, contain provisions that expressly prohibit employers from retaliating against individuals who complain about discrimination. 42 U.S.C. § 1981 (Section 1981) prohibits race discrimination in the making and enforcement of contracts, including employment contracts. However, it does not specifically prohibit retaliation. In CBOCS West, Inc. v. Humphries, the U.S. Supreme Court recently concluded that retaliation discrimination is prohibited by Section 1981. ... READ MORE


Department Proposes Limitations On The Manufacturing Machinery And Equipment Exemption

The Nebraska Department of Revenue has recently issued proposed changes to its Nebraska regulations.  Many of the proposed changes update the regulations to reflect recent statutory changes.  However, some of the proposed changes reflect new substantive rules. ... READ MORE


Nebraska's Franchise Tax On Financial Institutions



Nebraska Tax – Audit Authority, Recordkeeping Responsibility, And Confidentiality



Nebraska Supreme Court Rules That Expensed Items Are Not "Qualified Property" for LB 775 Purposes

On May 2, the Nebraska Supreme Court issued a decision in the case of Goodyear Tire & Rubber Co. v. State.  At issue in the case was whether Goodyear could receive a “direct refund” under LB 775 of sales and use taxes paid on parts used to repair equipment, if the equipment was placed in service prior to Goodyear’s LB 775 application date.  Goodyear generally expensed (and did not capitalize and depreciate) the repair parts at issue. ... READ MORE


A Qualified Personal Residence Trust Can Remove the Value of Your Home From Your Taxable Estate

You’ve worked long and hard to accumulate a decent nest egg.  You’ve even acquired a second residence to use as a vacation home for your family.  Now your estate planning counsel informs you that you will have a taxable estate and suggests a gifting program to distribute your wealth to the next generation.   You would like to keep the vacation home in the family, and pass it on to your children, but you’re not quite ready to give it away. ... READ MORE


The Nuts And Bolts Of Nebraska's Inheritance Tax

When a person dies a resident of Nebraska or with property located in Nebraska, the Nebraska county inheritance tax will likely apply to the decedent’s property. To determine the applicability and amount of the Nebraska tax, the practitioner’s first step is to determine the relationship of the recipient to the decedent. This dictates the applicable exemption levels and tax rate. Moreover, the practitioner must determine the value of the decedent’s property and whether the nature of the decedent’s property exempts any portion from tax. Finally, within one year of the decedent’s death, an inheritance tax return must be completed, an inheritance tax proceeding must be instituted in the appropriate county court, and the tax must be paid. ... READ MORE


Supreme Court Upholds Kentucky Law Exempting Only In-State Bonds From Income Tax

On May 19, in the case of Kentucky v. Davis, the U.S. Supreme Court  upheld a Kentucky law which both exempted from state income tax the interest earned on municipal bonds issued by Kentucky cities, and imposed state income tax on interest earned on bonds issued by cities in other states. ... READ MORE


The Top Ten Estate And Business Planning Mistakes

The failure to plan, or the existence of an inadequate plan, can have disastrous consequences. Your assets may not pass according to your wishes; your business may not be prepared for your transition and may fail. You may need health care decisions made on your behalf, but no one is authorized to make those decisions. A significant portion of your assets may be lost to unnecessary estate taxes. ... READ MORE


Practice Group Combinations: A Pre-Merger Checklist

In today’s climate, many area practice groups have considered whether joining forces with another practice group may allow the combined group to provide increased patient care, more efficient patient call coverage and a more profitable combined practice for the affected practitioners.  The checklist set out below provides practice groups contemplating a merged practice with an overview of the pre-merger considerations that should be weighed before moving forward with such a combination. ... READ MORE


EPA'S Audit Policy – Incentives For New Owners



Federal Minimum Wage Has Increased to $6.55

The federal minimum wage was increased to $6.55 per hour on July 24, 2008. The 70-cent raise from 5.85 per hour is the second stage of a two-year, three-phase increase of the wage, which began in July 2007. ... READ MORE


Property Assessment In A Soft Real Estate Market

After years of escalating property values, property values in many areas are either soft or in actual decline.  Property owners who once faced consistent increases in real estate valuations for property tax purposes (associated with the prior strong market) now hope that these valuations will automatically adjust lower.  Unfortunately, the valuation systems employed by many counties are not set up to adjust values downward as readily as those systems adjusted values upward in prior years. ... READ MORE


IRAs, 401(k)s and Other Retirement Assets Require Special Planning to Minimize Unnecessary Income Tax After Death

Retirement benefits constitute a substantial part of many individuals’ wealth.  IRAs and qualified plans such as 401(k)s (hereinafter referred to as “retirement assets” or “retirement benefits”) are extremely popular financial tools to assist individuals when planning for retirement.  However, these tools are subject to complex tax rules.  As a result, careful planning is imperative to ensure that a person’s retirement assets pass to the appropriate individuals or charities in a tax efficient manner.  This objective is accomplished only with the establishment of an estate plan that effectively passes the retirement assets as the owner desires, maximizes the use of the estate tax credit and provides post-death planning opportunities to take full advantage of the ability to defer income tax.  In addition, the governing document for the retirement assets should be reviewed to determine whether the retirement assets are subject to the default distribution rules set forth in the tax code (as discussed below) or, for example, a lump sum pay out. ... READ MORE


Nebraska Legislature Passes New Super Advantage Incentives

In the last legislative session, the Nebraska Legislature passed an update to the Nebraska Advantage program which provides for enhanced incentives (“Super Advantage”) for companies which create either 75 new high-paying jobs and make a $10 million capital investment or create at least 50 new jobs and make a $100 million capital investment in Nebraska. ... READ MORE


Nebraska Tax Update: The Department Restricts The Manufacturing Machinery Exemption And Nebraska Revises Its Withholding Tax Rules

•     Department Of Revenue Restricts Eligibility For The Manufacturing Machinery Exemption For Companies With Multiple Lines Of Business. ... READ MORE


Steve Bogue Inducted as a Fellow of the College of Labor and Employment Lawyers

McGrath North is pleased to announce the induction of Steve Bogue as a Fellow of The College of Labor and Employment Lawyers. ... READ MORE


DHS Reissues its "No-Match Letter" Regulations

The Department of Homeland Security (DHS) previously issued regulations addressing “no-match letters” i.e. when an employees’ social security number does not match the employee’s name.  The letters are issued on a yearly basis by the Social Security Administration (SSA). ... READ MORE


Developments in the NLRB's Office of the General Counsel

Ronald Meisburg is General Counsel of the National Labor Relations Board (NLRB). The General Counsel’s office prosecutes unfair labor practice charges against employers and unions. His decision on when to issue a charge can be very significant and may help shape the NLRB’s decision making. ... READ MORE


Court Finds That FMLA Does Not Require Full Payment for a "Light Duty" Assignment

The issue of employee compensation when moved to another job while on Family and Medical Leave (FMLA) has always been confusing. It is clear, under the FMLA, that an employer cannot force an employee to return from leave to work on a “light duty” job if the employee will not be performing their own job. A recent Seventh Circuit Court of Appeals decision provides some guidance as to the employer’s options when an employee does decide to accept a light duty position. ... READ MORE


Developments and Practice Pointers in Nebraska Tax Audits and Appeals

The Nebraska Department of Revenue has recently taken a number of internal and legislative actions to revise and to step up its audits and enforcement of Nebraska taxes.  In addition, for a variety of reasons, we have seen an increase over the past few years in the number of taxpayers who have received deficiency notices from the Department.  In light of these actions, we believe it is worthwhile to review the process for appealing Department assessments and to highlight common pitfalls to avoid during the refund claim and appeal processes. ... READ MORE


Federal Tax Update: New Charitable Substantiation Rules Are In Effect For Your 2007 Tax Return

The Pension Protection Act of 2006 (the “Act”) created new substantiation requirements that taxpayers must meet to deduct charitable expenses.  Because these requirements became effective for years beginning after August 17, 2006, most individual taxpayers must comply with these charitable substantiation requirements for the first time when filing their 2007 tax return.  This article highlights the most significant new requirements, which will likely impact your 2007 tax return preparation: ... READ MORE


Nebraska Tax Law Alert: Failure to Follow Nebraska's New Withholding Rules Could Lead to Significant Penalties

Under LB 223, which became effective on January 1, 2008, the Nebraska Legislature imposed a new Nebraska withholding tax requirement for employers who employ “twenty-five or more employees at any one time during the year.”  Without substantiating documentation for a lower withholding percentage (discussed below), these employers must now withhold from their employees’ paychecks either: a) 3% of the employees’ gross wages, less tax qualified deductions; or b) at least 50% of the normal withholding amount for a single person with one withholding allowance or a married person with two allowances, as calculated on a table written by the Nebraska Department of Revenue. ... READ MORE


The IRS's New Filing Requirements for Company Owned Life Insurance

Owners of closely held businesses are generally familiar with the benefits of company owned life insurance.  Small business owners often use life insurance to reimburse the business for the financial loss caused by the death of a key employee, or to repay outstanding debt when a business owner unexpectedly dies.  In addition, small businesses utilizing buy-sell agreements, which provide that an owner’s shares will be redeemed by the company for a cash payment upon the owner’s death, commonly use life insurance to make the cash payment.  However, many small business owners do not realize that they must now report to the IRS all life insurance policies which are owned by the business and which insure the lives of its employees. ... READ MORE


President Bush Signs Economic Stimulus Act of 2008

The Economic Stimulus Act of 2008 (“Act”) makes the following significant changes to the federal tax code: 1) eligible individuals will receive tax rebate checks; 2) the Section 179 expense limit is increased to $250,000; and 3) businesses may receive a 50% bonus first-year depreciation deduction for assets purchased in 2008. ... READ MORE


Winning the Battle of ESI Discovery Costs Without Losing the War – Proposed Federal Rule of Evidence 502: Time to Get the ESI House in Order

On September 26, 2007, the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States (Judicial Conference) submitted proposed Rule of Evidence 5021, Attorney-Client Privilege and Work Product: Limitations on Waiver, to Congress.2   In submitting proposed Rule 502, the Judicial Conference acknowledged that the current law on waiver of privilege and work product is responsible in large part for the rising costs of discovery, especially discovery of electronically stored information (ESI).  The Judicial Conference noted that in complex litigation, lawyers spend significant time and effort preserving privilege and work product because if a protected document is produced, there is a risk that a court will find a subject matter waiver that will apply not only to the instant document and case but to other documents and cases as well. ... READ MORE


What You Should Know About Grats: A Low-Risk Strategy to Give Growing Assets to Your Children Without Federal Gift Tax

A grantor retained annuity trust, better known as a “GRAT”, is a powerful tool to transfer wealth, free of gift tax.  For individuals who are fully utilizing (1) their annual exclusions, (2) the tuition and medical expense exclusion, and (3) their lifetime gift tax exemption equivalent, GRATs remain a popular strategy to transfer wealth by persons who  have significant exposure to federal estate tax, even after utilizing these exclusions and exemption.  Under the current, extremely low interest rate environment, GRATs present a very attractive opportunity for these people to shift future growth to their children while paying little or no federal gift tax on the transaction. ... READ MORE


Federal Tax Update: Congress Makes Several Late Changes That May Impact Your 2007 Income Tax Liability

In December 2007, Congress passed several changes to the tax code which impact the 2007 tax year.  All changes were signed into law by the President.  Key Acts passed by Congress include: 1) the Tax Increase Prevention Act of 2007; 2) the Mortgage Forgiveness Debt Relief Act of 2007; and 3) the Tax Technical Corrections Act of 2007.  Highlights of these Acts include: ... READ MORE


Green Construction

What is “Green Construction”? ... READ MORE


Supreme Court Rejects Third Party Securities Liability

The United States Supreme Court on January 15, 2008 rejected claims to recover damages against secondary actors whose conduct played no immediate role in an investor’s decision to trade in a company’s securities.  The decision in Stoneridge Investment Partners LLC held that the implied right of action under Section 10(b) of the Securities Exchange Act of 1934 does not reach non-issuer third parties since the investors did not rely upon their statements or representations. ... READ MORE


Use of "No Match" Letters Temporarily Suspended

As noted in previous Newsletter articles, a “no match letter” is one which is issued, usually by the Social Security Administration (SSA), to employers to inform them that a worker’s name and the social security number reported for them do not match. Obviously, there could be a variety of reasons for such a discrepancy. In certain cases, the “no match” could result from the fact that the worker in question is not legally authorized to work in the United States. New regulations issued by the Department of Homeland Security (DHS) would have, in effect, required employers to terminate all employees identified in “no match” letters who could not successfully resolve the discrepancy within a period of approximately 90 days after the employer’s receipt of the no match letter. However, a preliminary injunction against those regulations has been issued by the U.S. District Court for the Northern District of California and remains in effect. ... READ MORE


SEC Lessens Resale Restrictions on Privately-Placed Stock

The SEC on November 15 adopted rules designed to decrease the cost of capital for public and private issuers by providing lessened resale restrictions on investors who acquire restricted securities. ... READ MORE


10 Exit Plans That Don't Work

We are in the midst of the largest business owner transition in history.  Over 8.0 million businesses are expected to be transferred in the next 10 to 15 years.  The Federal Reserve estimates that the transfer of U.S. business equity will increase from about $1 trillion in 2006 to over $3 trillion in 2009 to $4.6 trillion in 2014. ... READ MORE


I.R.S. Announces Cost of Living Adjustments for 2008

The IRS finally broke the $100,000 barrier.  In 2008, Social Security taxes will be computed on a taxpayer’s first $102,000 of income. ... READ MORE


2007 Year End Planning Tips

The following strategies may reduce your 2007 tax liability: ... READ MORE


Chemical Facility Anti-Terrorism Standards

Overview ... READ MORE


Team Leader Not A "Supervisor" for Harrassment Liability

An employer is strictly liable in racial or sexual harassment cases when the harasser is a supervisor, and the employee has been subjected to a tangible employment action. In coworker harassment cases, the employee must show that the employer “knew or should have known” of the harassment and failed to take prompt and effective action. Therefore, liability in such cases often depends upon whether the harasser is a “supervisor” under Title VII and/or state law. ... READ MORE


Court Rejects Disability Claim Because of Lack of Evidence and Relationship to Requested Accommodation

The Seventh Circuit Court of Appeals recently provided a useful review of the evolving law analyzing the existence of an employee’s “disability,” and the relationship of that disability to the workplace and potential workplace accommodations. ... READ MORE


Greenhouse Gas Emissions – Recent Developments

Greenhouse gas emissions continue to be a subject of public interest and debate. Elected officials, legislators and regulators, at both federal and state levels, are considering actions to reduce and control Greenhouse gases. Some actions that are being considered would be mandatory, others would be voluntary. The following discusses two recent initiatives. ... READ MORE


McGrath North Attorneys Recognized in "Best Lawyers in America"

McGrath North is pleased to announce that 19 of the firm’s lawyers have been recognized in the 2008 Edition of The Best Lawyers in America.  The lawyers recognized for this honor are: ... READ MORE


Nebraska's Unclaimed Property Laws – Understanding Your Obligations

An often overlooked due date on the calendar of many professionals and businesses is November 1, the due date for “unclaimed property” reporting.  Many people simply do not understand what constitutes “unclaimed property” or how to deal with it.  The purpose of this article is to give you a high level understanding of Nebraska’s unclaimed property laws. ... READ MORE


When Does Discipline Become Retaliation?

Employers must always be mindful of retaliation whenever an employee complains about discrimination in the workplace. Once the discrimination allegation has been made, the employee can assert that he or she has engaged in a protected activity. Any future discipline or adverse action against the employee may be construed as retaliation. Many times discrimination complaints are submitted after the employee has received a final warning or has otherwise been subjected to the company’s disciplinary procedure. By making the complaint, the employee (or his or her attorney) may be trying to deter the employer from imposing further discipline. ... READ MORE


Make the Call

Physicians shouldn’t hesitate to contact their attorney when they find themselves being investigated by the Nebraska Department of Health and Human Services. ... READ MORE


Federal Tax Update: Other Highlights of the Small Business and Work Opportunity Tax Act of 2007

In addition to the enhanced tax preparer penalties discussed in the lead article of this issue, the Small Business and Work Opportunity Tax Act of 2007 (“Act”) also included the following provisions: ... READ MORE


Summary of the U.S. Embargo Against Cuba

McGrath North ... READ MORE


Tenth Circuit Holds Suggesting an Employee Take an FMLA Leave Does Not Mean the Employer Regards That Employee as Disabled

Barbara Berry worked for T-Mobile as a Customer Care Team Manager in Colorado.  In 2003, she had been identified as a “key employee,” however, later that year, her performance was criticized.  Specifically, T-Mobile told Berry that she was not utilizing proper coaching methods, holding her team members accountable, nor did she interact well with other managers.  However, she made some improvements, as her manager said things were fine, and suggested that her job was not in jeopardy.  Unfortunately, just two weeks later, T-Mobile felt her performance had deteriorated, and she was reminded of a need for improvement. ... READ MORE


New EEOC Guidance on Caregiver Discrimination

In May of this year, the EEOC issued enforcement guidance entitled “Unlawful Disparate Treatment of Workers with Caregiving Responsibilities.”  In recent years, there has been a significant increase in the number of “caregiver” discrimination cases.  Caregiver discrimination, also known as “family responsibilities discrimination,” is a term used to describe claims asserted against employers based upon an employer’s assumption about family responsibilities.  Although no law currently exists to prohibit discrimination against caregivers, differential treatment of employees with caregiving responsibilities may violate Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (“ADA”), the Family and Medical Leave Act (“FMLA”), as well as state discrimination laws. ... READ MORE


Nebraska Tax Law Alert: Changes to Property, Sales & Income Taxes



Estate Planning Focus: Changes to the Nebraska Death Taxes



Employer Need Not Hold Position Open for Disabled Employee on Workers' Comp Leave

James McPherson began working for O’Reilly Auto Parts in 1986 in a sales position.  By 1990 he had been promoted to Territory Assistant Sales Manager.  Eleven years later, in September 2001, McPherson injured his back on the job and filed a workers’ compensation claim.  Although he attempted to continue to work for a period of time, he was placed on a medical leave of absence in January of 2002.  He subsequently had back surgery, and was not released to return to work until July. ... READ MORE


Primer on Garnishment Under Nebraska Law

Employers occasionally receive writs of garnishment from their employees’ creditors, who seek to garnish wages earned by the employees. Knowing the basic elements of garnishment procedure can aid employers in avoiding some of the hassles and even significant liability that can result from garnishment proceedings. ... READ MORE


Courts Clash on Whether a Release Agreement Can Waive Past FMLA Claims

More and more employers are recognizing the wisdom of obtaining a full and complete release of potential employment-related claims when severance is paid to a departing employee.  Typical of such release agreements is one which lists the claims waived under certain named laws, such as the Family and Medical Leave Act (FMLA).  However, a recent federal court decision has resulted in a conflict of the law on the issue of whether past FMLA claims can be waived in release agreements.  The importance of this is that an employee, under that new holding, could obtain a substantial severance from the company, and even though the signed release agreement said that he or she had waived their FMLA claims, could initiate a lawsuit, using the severance pay to finance it. ... READ MORE


Customs Looking to Increase C-TPAT Benefits

U.S. Customs and Border Protection (“CBP”) recently announced that it is developing procedures to provide an added benefit for trusted importers in the Customs-Trade Partnership Against Terrorism (“C-TPAT”) program.  This announcement was made at the 2007 Supply Chain Security Training session held in New Orleans on April 4. ... READ MORE


Nebraska Tax Law Alert: LB 775 Agreements Have Bite

In Farmland Foods v. Dep’t of Revenue, a case released on March 23, the Nebraska Supreme Court considered whether Farmland Foods was entitled to an LB 775 credit refund of Farmland’s Nebraska sales tax. ... READ MORE


My Property is Not Worth That Much! Nebraska's Property Assessment and Protest Process

May – it is the month when new (and presumably higher) real estate valuations usually arrive from the County Assessor’s office.  If you receive a notice of valuation change or are otherwise wondering what you can do about the assessment of your property, this article is for you. ... READ MORE


Inattention to Detail: Lasting Implications in a Bankruptcy Proceeding

When it comes to bankruptcy, the difference between a secured claim and an unsecured claim can be the difference between a satisfied creditor (as satisfied as a creditor can be after being dragged into a bankruptcy proceeding) and a disgruntled creditor.  It may come as no surprise that a secured claim is generally protected in a bankruptcy proceeding while the distributions for an unsecured claim may total pennies on the dollar.  Under 11 U.S.C. § 544, a trustee may generally avoid a creditor’s unperfected security interest and thus transform a secured claim into an unsecured claim.  Importantly then, a creditor must take all steps to ensure proper perfection under the local laws of the appropriate jurisdiction.  Moreover, as emphasized by two recent decisions explained, perfection of an interest may ultimately hinge on the creditor’s proficiency in satisfying the technical aspects of perfection.  This article explores two recent cases that remind creditors that attention to detail may ultimately dictate whether a creditor’s interest is avoided under § 544, and thus, whether such creditor receives protected treatment or pennies on the dollar when a debtor files for bankruptcy. ... READ MORE


Secured Lender v. Artisan's Lienholder: Who Wins When Artisan Involuntarily Loses Possession?

Article 9 security interests sometimes come into conflict with liens created by statutes that were enacted long before the Uniform Commercial Code was conceived, and while much effort has been made to harmonize the UCC with such statutory liens, ambiguities remain. An illustration of this problem arose in the recent case of Bellamy’s, Inc. v. Genoa Nat’l Bank (In re Borden), 2007 WL 703153 (8th Cir. BAP 2007), which involved a priority dispute between a secured lender and a repair shop that claimed an artisan’s lien under Neb. Rev. Stat. § 52-201 on certain equipment owned by a debtor. ... READ MORE


Immigration: 2007 H-1B Cap Reached on First Day of Filing

The new allocation of H-1B slots is made available on October 1 of each calendar year, since that date is the first day of the Government’s fiscal year. Since petitions for that status may be filed no sooner than six months prior to October 1, the filings for this year’s H-1B filings took place on April 2, the first working day after the start of the six-month period. There had been speculation that the 65,000 H-1B slots would be oversubscribed and that as many as 80,000 petitions might be filed on April 2. In point of fact, apparently more than 133,000 were filed, although the exact number will not be known for several weeks. As a result of that, there will be a “lottery” to determine which of the H-1B petitions will even be processed. There are rumors of congressional action to provide for processing of all the petitions filed as of April 2, but there has been no substantive action at this time. ... READ MORE


The Eighth Circuit Strikes Down Initiative 300

Terrence Schumacher is a Colorado resident who owns Nebraska farmland in five counties.  Neither he nor his relatives live, work on, or manage the farmland.  Mr. Schumacher wanted to transfer his farmland to a limited liability entity for estate planning purposes and to reduce his exposure to a potential lawsuit. ... READ MORE


Roadmap to Securities Law Compliance for Private Companies

I suspect there is a sense of comfort for many attorneys who do not represent publicly-traded companies, investment advisers, broker-dealers and other participants in our securities markets that they will never be confronted with securities law issues in their practices.  However, while this message is not new, this is a friendly reminder that securities law issues arise in the most basic business transactions.  Consider the following examples: ... READ MORE


The New SEC Compensation Reporting Rules

The SEC on August 11 issued the final rules for amendments to the disclosure requirements for executive and director compensation.  The adopting release is 436 pages in length.  The new rules are intended to make proxy statements easier to understand (“plain english”) with a clearer picture of executive compensation.  This memorandum summarizes the key elements of the new rules, highlighting changes from current reporting requirements. ... READ MORE


Charitable Giving Incentives

The Pension Protection Act of 2006 contains provisions designed to encourage charitable donations, including the following: ... READ MORE


Prepare for E-Discovery in Four Easy Steps

Just when you thought there couldn’t possibly be another news story, magazine article, or educational conference focused on electronic discovery, the topic flashes in the headlines again.  Why is it that legal professionals just can’t seem to get enough information about this subject?  There are a number of good reasons why electronic discovery continues to make news, and why the demand for e-discovery education is still on the rise.  The case law is developing at a steady clip.  Courts around the country are considering – some implementing – local rules aimed at changing the way attorneys manage the electronic portion of discovery in any case.  On April 12, 2006 the proposed amendments to the Federal Rules of Civil Procedure that address the discovery of electronically stored information were approved without comment by the United States Supreme Court.  The new rules and amendments have been transmitted to Congress and will take effect on December 1, 2006, unless Congress enacts legislation to reject, modify, or defer the amendments.1 ... READ MORE


Representative Aviation Projects

Jim’s aviation experience gives him a unique perspective in advising aircraft owners and operators on all aspects of aviation law. ... READ MORE