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New Form W-4 Does Not Apply to All State Tax Withholding – Are You Using the Right Forms?

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January 1, 2020

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In December 2019, the IRS issued a new Form W-4 to reflect the elimination of withholding allowances because individuals can no longer claim personal or dependency exemptions. While this was intended to allow for more accurate federal tax withholding calculations, it raises the question of what employers should do with respect to state tax withholding requirements.

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Ninth Circuit: DOL’s 80/20 Tip Credit Rule is Invalid

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September 6, 2017

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The Department of Labor (“DOL”) permits employers to give a tip credit to tipped employees who spend no more than 20% of their time performing non-tipped duties. In Marsh v. J. Alexander’s, LLC, the Ninth Circuit noted that this rule is only found in the Field Operations Handbook used by the DOL as guidance for investigations by field officers, rather than in a statute or regulation; as a result, the court stated it was not valid.

Ninth Circuit: Prior Salary History may be used to Justify Wage Differentials Between Men and Women

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ID, MT, NV, OR and WA Employees

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April 27, 2017

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Last week, the Ninth Circuit ruled on Rizo v. Yovino, a wage inequality claim brought under the federal Equal Pay Act.  In reviewing this case, the Ninth Circuit affirmed a previous case, Kouba v. Allstate Insurance Co., and confirmed that prior salary history may be considered a “factor other than sex” for the purpose of justifying a wage differential.

Ninth Circuit: Wage Rates Used for Overtime Hours Cannot Be Lower Than Those Used for Non-Overtime Hours

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March 21, 2017

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In Brunozzi v. Cable Communications, Inc., the Ninth Circuit stated that wage rates cannot be decreased in weeks when overtime is worked, as compared to weeks when no overtime is worked. There, two cable technicians were paid a piece rate per cable system installed, plus a contractually-based production bonus each pay period as part of their regular wages.  When the employer calculated overtime, it reduced the production bonus by the amount of overtime paid for piece rate work, which meant that employees received lower wage rates than when they did not work overtime.

Ninth Circuit: Car Dealership Service Advisors Not Exempt from FLSA

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All Employers with AK, AZ, CA, GU, HI,
ID, MT, NV, OR, WA Employees

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January 9, 2017

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We previously reported on Navarro v. Encino Motorcars, LLC, wherein a group of service advisors at an auto dealership alleged that they did not receive owed overtime compensation. At that time, the Ninth Circuit decided to defer to the U.S. Department of Labor’s interpretation of the Fair Labor Standards Act (“FLSA”); the U.S. Supreme Court reversed this decision and remanded the case to the Ninth Circuit to determine how the FLSA statutes apply to auto dealership service advisors.

Ninth Circuit: Disclosures for Background Checks Cannot Contain a Liability Waiver

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All Employers with AK, AZ, CA, GU, HI,
ID, MT, NV, OR, WA Employees

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January 20, 2017

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On January 20, 2017, in Syed v. M-I, LLC, the Ninth Circuit Court of Appeals stated that the disclosure required by the Fair Credit Reporting Act (“FRCA”) cannot also contain a liability waiver for conducting the background check in the same document.  Rather, only the disclosure notice and background authorization can be contained within the same document.  Having other language in the disclosure notice violates background check rules under the FRCA.

Ninth Circuit: Mandatory Class Action Waivers in Arbitration Agreements Are “Illegal”

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 Employers with Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, Oregon and Washington Employees

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August 22, 2016

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The Ninth Circuit has stated that use of mandatory class action waivers in arbitration agreements are prohibited, becoming the second federal circuit court to strike down such agreements.  In short, employers in the states covered by the Ninth Circuit cannot require employees to sign an agreement giving up their right to class action/collective claims as a condition of employment.

Ninth Circuit States Employers Must Include Cash-in-Lieu of Benefits Payments in Overtime Calculation

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All Employers with Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington Employees

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June 2, 2016

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Offering a flexible benefits plan is an oft-cited tool for organizations to improve employee satisfaction, recruitment, and retention.  However, employers should be very careful when designing benefits plans that permit cash-in-lieu of payments, as the City of San Gabriel discovered in a recent case.

Ninth Circuit States Federal Rounding Regulation Does Not Require Employees to Gain or Break Even

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All Alaska, Arizona, California, Hawaii, Idaho,
Montana, Nevada, Oregon, and Washington Employers

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May 2, 2016

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The Ninth Circuit Court of Appeals stated in Corbin v. Time Warner Entertainment Advance/Newhouse Partnership (“TWEAN”) that the federal rounding regulation for timekeeping, versus actual time worked, does not require employees to gain or break even over each pay period.  Rather, the regulation is intended to calculate wages such that they average out over the long term.  In Corbin, an employee argued that he had wrongfully been deducted minutes of compensable time as a result of the rounding system.

Ninth Circuit Rules No Tip Pooling Among Employees who are not Normally Tipped

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All Employers who Utilize Tip Pooling Arrangements in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington

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February 23, 2016

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Employers in service industries should take note of the recent decision in Oregon Restaurant & Lodging Assoc. v. Perez, where the Ninth Circuit Court of Appeals upheld a U.S. Department of Labor (DOL) regulation which states that employers cannot require tipped employees to share their tips with untipped employees.  Prior to the decision in the Oregon Restaurant case, there was an ongoing debate among District Courts in the Ninth Circuit regarding the enforceability of the DOL regulation, causing some employers to disregard the DOL regulation entirely.

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