Compliance Stuff

  The IRS is making good on its promise to step up enforcement on large partnerships that issue more than 100 annual K-1s and have more than $100 million in assets. As noted in this Latham Client Alert, the IRS’s renewed focus on large partnerships is a response to the explosive growth in the number, size, and complexity of these entities. Please see full publication for more information. Source(s): JD Supra , received on July 18, 2024

 In Soltero v. Precise Distribution, Inc., Case No. CIVSB2203669 (May 18, 2024), the California Court of Appeal held that a non-signatory employer cannot compel arbitration in reliance on an arbitration agreement between a temporary helper and a staffing provider in the absence of certain conditions. The court rejected the two most common bases for third-party enforcement: (1) equitable estoppel and (2) third-party beneficiary. In reaching its holding, the court ruled that a non-signatory employer cannot compel arbitration where: (1) the plaintiff’s claims against the non-signatory defendant are not based on the terms of the contract containing the arbitration agreement, (2) the staffing provider is not a party to the lawsuit, or (3) the non-signatory is not explicitly identified as a beneficiary in the agreement. Background Facts Real Time, a temporary staffing agency, placed the plaintiff, Nelida Soltero, on assignment with Precise Distribution from October 2017 through January ...

  On July 15, 2024, Governor Newsom signed   Assembly Bill (AB) 1870 , which mandates that employers include information in their notices about an injured employee’s right to consult with a licensed attorney for advice about workers’ compensation law and that attorneys’ fees may be paid as part of the injured worker’s award.    In California, employers have specific obligations to ensure their employees are well-informed about their rights and benefits under the workers’ compensation system. Employers must post a workers’ compensation informational poster in a conspicuous location frequented by employees. Employers are required to provide new employees with  a workers’ compensation pamphlet that outlines their rights and benefits . This must be done either at the time of hiring or by the end of the employee’s first pay period. If an employee is injured, the employer must provide a Workers’ Compensation Claim Form (DWC 1) and a Notice of Potential Eligibility wi...

Due diligence may not be glamorous, but it is the bedrock of a successful deal. Put simply, due diligence is the process of meticulously examining every nook and cranny of a target company’s operations, finances, and legal standing to ensure that a merger or acquisition is a smart business move. In this article, we will consider the importance of due diligence and the due diligence steps that acquiring companies should undertake before closing a deal. What is the purpose of due diligence? At its core, d ue diligence is about risk mitigation and informed decision-making . It is the process through which a potential acquirer evaluates a target company’s assets, liabilities, and overall business health. The primary goal is to understand the potential risks associated with a transaction. It involves examining legal, financial, operational, and other relevant aspects to uncover any issues that could impact a deal’s outcome. Due diligence also helps organizations verify the accuracy of inf...

 The Federal Trade Commission’s (FTC) ban on noncompetition covenants (“noncompetes”) could significantly impact the design and administration of employee benefits and executive compensation arrangements. Quick Hits The FTC’s ban on noncompetition covenants has potential implications for several aspects of employee benefits and executive compensation plans and arrangements, such as Code Section 457(f) plans, restricted stock, severance arrangements, golden parachute payments, and garden leave. The rule takes effect on September 4, 2024 , but a federal district court in Texas recently granted a preliminary injunction staying the enforcement of the final rule as to the parties in the case. The court’s decision, pending a final ruling on the merits by August 30, 2024, has signaled that the FTC’s noncompete rule will not survive judicial scrutiny. Although the U.S. District Court for the Northern District of Texas recently granted a preliminary injunction staying enforcement of the ru...

  “Millions for defense, but not one cent for tribute.” That slogan became a rallying cry for Federalists during  the XYZ Affair in 1798 . Way back then, France and England were at war. What a surprise. The fledgling United States did not want to choose sides in a war between the reigning heavyweight champs of the world, so it negotiated a neutrality pact with England. Part of the deal permitted British war ships to raid American merchant vessels with goods bound for France, as long as England paid for the goods it seized. I kid you not. That was part of the deal. The French were a wee bit miffed about that arrangement and began to raid American merchant vessels. Hoping to keep the peace, President John Adams sent a diplomatic team to France to negotiate a resolution. The French government refused to meet with the American envoys until certain conditions were met. Among them was a demand that America pay a bribe of $250,000 to the French Foreign Minister.  Sacré bleu! Whe...

  California’s Governor signed   Assembly Bill (AB) 2299   on July 15, 2024, which requires the state’s Labor Commissioner to develop a model list of employee rights and responsibilities under existing whistleblower laws. Employers will be required to post this notice beginning January 1, 2025 . The notice must be written in a font larger than 14 point and contain the telephone number of the whistleblower hotline. Under existing California law, employers are required to post certain workplace notices, including a list of employees’ rights and protections under whistleblower laws. However, the current law does not require employers to post a  specific  notice drafted by the Labor Commissioner outlining employee rights and responsibilities under whistleblower laws. The Labor Commissioner previously issued  a sample notice  pursuant to the current law which includes the disclaimer that the Labor Commissioner does not guarantee its posting by employers ful...

With the Federal Trade Commission’s Final Rule that would ban noncompetes nationwide set to go into effect on September 4, 2024 , assuming pending litigation doesn’t cause any delays, employers should begin planning now to address any potential compliance concerns. Legal and human resources teams will need to consider the impact of the Final Rule on current noncompete agreements, requirements for providing notice to impacted employees under the rule, and strategies for implementing pending and future agreements if the rule is upheld. Please see full publication here for more information. Source(s): JD Supra , received on July 18, 2024; McDermott Will & Emery , accessed on July 18, 2024.

  Unemployment Insurance, Paid Leave and WA Cares: Q2 reports and payment are due July 31 Learn more on the  Unemployment taxes page at esd.wa.gov . For Paid Leave and WA Cares, learn more and download the CSV template and instructions at  paidleave.wa.gov/reporting . You can submit one combined report for Paid Leave and WA Cares. But be sure to submit two payments: one for each program. Be aware of a known technology issue with future-dated Paid Leave payments.  See the alert on the Paid Leave website .  Unemployment Insurance: Act before Sept. 30 to protect your tax rate If you have a balance, get a deferred payment contract Avoid a delinquent tax rate for 2024! By Sept. 30: File all your tax reports. Pay your current and past-due unemployment taxes, penalties and interest in full. Consider a deferred payment contract if you cannot pay Are you unable to pay your balance owed? You can protect your tax rate by getting a deferred payment contract. Email our Colle...

  On June 28, 2024, Pennsylvania Governor Josh Shapiro signed an amendment to Pennsylvania’s Breach of Personal Information Notification Act into law. The amended law, which includes significant changes to the Keystone State’s data breach notification law, goes into effect on September 26, 2024 . Below, we discuss the major changes set forth in the amended law. Modification to the Definition of “Personal Information” Pennsylvania law previously defined “personal information” as an individual’s first name or first initial with last name in combination with one or more of the following: Social Security number Driver’s license or identification card number Account number or credit or debit card number, in combination with a linked security or access code or the password of an individual’s financial account The amended law brings the following data elements within the definition of “personal information” as well: Medical information in the possession of a state agency or state agency...

 State Attorney General follows through on threat.  Last summer, shortly after the U.S. Supreme Court’s decision in Students for Fair Admissions v. President & Fellows of Harvard and Students for Fair Admissions v. University of North Carolina, thirteen “red state” Attorneys General warned the nation’s Fortune 100 companies that they should stop “reverse” discriminating against individuals on the basis of race or face the consequences. In their letter, the state AGs stated, “Sadly, racial discrimination in employment and contracting is all too common among Fortune 100 companies and other large businesses. In an inversion of the odious discriminatory practices of the distant past, t oday’s major companies adopt explicitly race-based initiatives which are similarly illegal . These discriminatory practices include, among other things, explicit racial quotas and preferences in hiring, recruiting, retention, promotion, and advancement. . . .  The warning letter c onclud...