DOL Final Rule on Retaliation Complaints Under Taxpayer First Act

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APPLIES TO

All Employers

EFFECTIVE

March 13, 2023

  

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Quick Look

  • Employees are protected from retaliation if they report or assist the IRS regarding the underpayment of taxes or potential violations of tax law including fraud.

Discussion

The U.S. Department of Labor (DOL) issued a final rule adopting final procedures and time frames for employee retaliation complaints under the Taxpayer First Act (Act). The Act protects employees from retaliation if they report or assist the Internal Revenue Service (IRS) regarding the underpayment of taxes or potential violations of law relating to tax fraud. Assisting the IRS includes testifying, participating in, or otherwise assisting in any administrative or judicial action taken by the IRS relating to the underpayment of tax or other violation of internal revenue or tax fraud laws.

Examples of adverse actions which can be considered retaliation under the final rule include, but are not limited to firing or laying off, blacklisting, demoting, denying overtime or promotion, disciplining, denying benefits, failing to hire or rehire, intimidation, reassignment affecting promotion prospects, reducing pay or hours, and making threats. Employees have 180 days from when they are first notified of an adverse action to file a complaint with the Occupational Safety and Health Administration (OSHA) for an alleged violation of the Act. Retaliating against an employee in violation of the Act may result in steep penalties for employers. OSHA may require reinstatement, 200% of lost wages, restoration of benefits, and other possible relief. Employers and employees both have the option of requesting a full hearing before an administrative law judge of the DOL after OSHA issues a decision on the original complaint.

 

Action Items

  1. Review compliance with tax reporting and payment with legal counsel.
  2. Review adverse actions taken against employees engaging in protected activity with legal counsel.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase