In a memorandum dated May 9 and publicly released on Friday, the Office of Chief Counsel of the U.S. Internal Revenue Service has determined that payments made under fixed-indemnity health plans must be treated as wages subject to federal income and payroll tax withholding if the employees have no unreimbursed medical expenses related to the payments. The memorandum supports the ASA view of the tax issues, as presented in a May 19 ASA Staffing Law Conference session and related ASA Issue Paper. Visit americanstaffing.net for a summary of the IRS memorandum prepared by ASA benefits counsel Alden Bianchi of McDermott Will & Emery LLP and ASA senior counsel Ed Lenz.

In August 2022, the California secretary of state announced the California Fair Pay and Employer Accountability Act will be voted upon by California residents as a ballot proposition in November 2024. The act seeks to repeal California’s Private Attorneys General Act, which allows employees to file lawsuits against employers on behalf of themselves, other employees, and the state of California for labor code violations, potentially creating huge settlements for trial lawyers and minimal payouts for aggrieved employees.

If passed, the Fair Pay and Employer Accountability Act would put California employees’ claims back in the hands of the state, rather than in the control of trial lawyers. The act would also eliminate the stacking of penalties and direct 100% of penalty payments back to any aggrieved employees.

Stop the Shakedowns, a coalition of California-based employer groups and trade associations, is leading the charge to repeal PAGA. According to its website, the coalition engages in public education, legislation, and court cases to achieve PAGA reform.

Currently, Stop the Shakedowns is seeking monetary contributions for its continued and sustained advocacy efforts. Interested employers may visit the coalition’s website and click the “Donate” button to make a contribution.