Employment Law Alert
March 28, 2013
Employers must Use New I-9 Forms
On March 8, 2013, the United States Citizenship and Immigration Service (“USCIS”) unveiled a new Form I-9, Employment Eligibility Verification. While the USCIS suggests all employers begin using the new form immediately, employers are permitted to continue using the old Form I-9 (Rev. 8/7/09Y and 2/2/09N) until May 7, 2013. However, employers must use the new form to verify employment eligibility for all new hires beginning May 7, 2013.
Recent Amendment to Maryland
Workplace Fraud Act Provides Safety for Work-Providers
In 2012, the Maryland legislature amended the Workplace Fraud Act (WFA) of 2009, an act that provides harsh penalties to landscaping and construction businesses who misclassify employees as independent contractors. The WFA creates a presumption that any person paid by a business to complete work is an employee. A business who classifies a worker as an independent contractor has the burden of rebutting this presumption. Traditionally, the Maryland Department of Labor, Licensing, and Regulation (DLLR) used a flexible and rather subjective test to determine whether the worker was an independent contractor. To make its determination, the DLLR looked to a number of factors, including whether the worker was free from control and direction, whether the worker was customarily engaged in an independent business of the same nature as the work provided, and whether the work was outside of the usual course of business of the work-provider or performed outside of any place of business of the work-provider. However, due to the subjective nature of this test, many businesses did not have a firm basis to classify workers as independent contractors, and risked penalties for misclassification.
In response to the complaints of businesses, the legislature amended the WFA. The Amendment creates a safe harbor that allows businesses to definitively rebut the WFA’s presumption that workers are employees, rather than independent contractors. Pursuant to the Amendment, businesses can definitively rebut this presumption by producing:
- A written contract between the business and the contractor, which includes:
- the description of the nature of the work to be performed;
- the method of compensation by the business to the contractor; and
- an acknowledgement by the contractor of its obligation to maintain unemployment and worker’s compensation insurance, as well as pay payroll taxes;
- A signed affidavit by the contractor stating that they are available to work for other business entities in addition to the business in question;
- A certificate of good standing for the contractor from the Maryland State Department of Assessment and Taxation;
- Proof of all occupational licenses held by the contractor for all state and local authorities; and
- Proof that proper notice was given from the business to the contractor regarding the implications of the classification
Businesses should keep in mind that the WFA and this safe harbor apply only to businesses in the construction and landscaping industries. However, producing this evidence in connection with contractors in other fields may be persuasive to the Division of Unemployment Insurance. This is because traditionally the Department of Unemployment Insurance has relied on the same criteria for the purposes of enforcing the WFA, the Unemployment Insurance Law, and the Workers’ Compensation Law.
H1B Visa Season is Upon Us
Employers may begin requesting H-1B visas on April 1, 2013 for fiscal year 2014. The FY2014 H-1B visa cap is set at 85,000. Once the cap is reached, the U.S. Citizenship and Customs Services will stop accepting applications. The cap is typically reached well before the start of the fiscal year. For example, this year’s cap (FY2013) was reached in June 2012. Therefore, to maximize their access to the supply of new H-1Bs, employers with workers who require H-1B visas should file applications as early as possible. Employers planning to seek H-1B visas for their workforce should begin planning now, and should consult with their legal counsel as soon as possible.
New Tax Credit for Virginia Business
A new tax credit in Virginia provides tax relief to employers who allow employees to telework. The Virginia Telework Expenses Tax Credit provides a tax credit of up to $1,200 per employee, and up to $50,000 per business, for eligible telework expenses incurred during the taxable year. Businesses are only eligible for the credit if they are subject to income tax in Virginia, and have at least one employee teleworking a minimum of one day per week. Eligible telework expenses include expenses paid or incurred to purchase computers, computer-related hardware and software, modems, data processing equipment, telecommunications equipment, high-speed Internet connectivity equipment, computer security software and devices, and all related delivery, installation, and maintenance fees. The aggregate amount of the tax credit is capped at an annual limit of $1 million for all businesses in Virginia. In the event that applications for the credit exceed $1 million, the credits will be reduced on a pro rata basis.
New FMLA Forms and Poster Now Available
The Department of Labor (“DOL”) recently updated its Family and Medical Leave Act (“FMLA”) poster and forms. DOL’s new poster can be found here, and DOL’s new forms can be found here. The poster should be displayed in a conspicuous place. Employers should review their FMLA policies and practices to ensure compliance with the FMLA regulations, and utilize the new poster and forms.
The contents of this Alert are for informational purposes only, and do not constitute legal advice. If you have any questions about this Alert, please contact a member of the Shulman Rogers Employment and Labor Law Group or the Shulman Rogers attorney with whom you regularly work.