Labor Employment Law Blog

The IRS released Notice 2005-94 suspending employer reporting and wage withholding requirements for deferred compensation under IRC Section 409A for calendar year 2005. The Notice does not affect FICA or other employer withholding and reporting obligations. Future IRS guidance may require employers to furnish corrected information returns and payee statements reporting any previously unreported amounts taxable under Section 409A. The IRS anticipates issuing guidance on the employer's reporting and withholding requirements in the first half of 2006.

In the recent decision of Cicairos v. Summit Logistics, Inc., C048133 (October 27, 2005), the California Court of Appeal discussed a lawsuit brought by five truck drivers for various Labor Code violations, including an alleged failure by the employer to provide valid pay stubs each pay period. Although the decision did not necessarily set forth any new legal rules, it certainly highlights the employer's obligation to carefully follow California's pay stub law: Labor Code section 226.

In Steinhebel v. Los Angeles Times Communications, a California Court of Appeal recently held that an employer may legally charge back advanced commissions in the event agreed upon conditions are not satisfied.

Recently, the United States Court of Federal Claims determined that a company providing payroll services and worker placements was not the workers' employer. Cencast Services L.P., et al. v. United States, No. 02-1916 (Fed. Cl. 2004). Accordingly, the company was not entitled to aggregate the workers' wages for the purpose of calculating FICA and unemployment taxes. The court's decision may impact companies that provide payroll or placement services as well as companies that utilize the services of individuals whose payroll withholding is handled by another entity.