Category Archives: Government

Tax Day For Independent Contractors: More Paperwork, More Taxes

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

The issue of whether Uber drivers and other so-called “Gig Economy” workers are employees or independent contractors is a hot topic among lawyers and policy makers. But last week independent contractors in the Gig Economy and beyond had a more mundane but no less serious dilemma:

Filing their taxes

Independent contractors are required to pay their full FICA and Medicare taxes. These higher taxes can be offset by more liberal deductions but that assumes a contractor has more expenses to deduct.

Deductions also require paperwork.  Filing your taxes as an IRS Form 1099 independent contractor is more complicated than filing your taxes as an IRS W-2 employee.

Independent contractor status can be helpful for someone who wants to be an entrepreneur. But for those who just want to support themselves and family, involuntary independent contractor status can mean higher taxes, more paperwork and more risk of trouble with the IRS and state revenue agencies.  Future tax days could be even more stressful if more workers are forced into independent contractor status in order to support themselves and families.

Opioids And Doctor Choice

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Chicago Mayor Rahm Emmanuel said in 2008 that “You never let a serious crisis go to waste.” In the context of opioids and workers compensation this could mean reforms to workers compensation systems beyond drug formularies If solving the opioid crisis means limiting the number of doctors who can prescribe opioids, then there will be fewer doctors who will treat workers compensation cases.

Additional licensure and certifications aren’t unheard of in the world of occupational health. In 2016, the Federal Motor Carrier Safety Administration implemented a new rule that only doctors on their registry can perform DOT Physical Examinations for truckers and other professional drivers. This reduced the number of doctors who can perform those examinations. 

When I testified on LB 408, a bill that would have implemented drug formularies for opioids under the Nebraska Workers’ Compensation Act, some doctors were testifying that there was little training in regards to prescribing opioids. Though an opioid prescription registry like the DOT examination registry wasn’t proposed, you could certainly see it proposed as a solution to the opioid problem.

By limiting the numbers of doctor who handle workers’ compensation claims through additional licensing requirements, injured employees will have fewer choices for medical treatment and are more likely to have their employer control their care.

Evidence shows that the workers compensation system has made some contribution to the opioid crisis. According to a 2015 report by the Bureau of Labor Statistics over 3.5 million employees were injured at work. Half of those injuries required the employee to miss sometime from work. A study of employees in 25 states done by the Workers Compensation Research Institute revealed that 55 to 85 percent of employees who missed at least one week of work were prescribed at least one opioid prescription.

When I testified on LB 408 the consensus among the doctors testifying on the legislation was that injured workers were more vulnerable to narcotic addiction than other patients who are prescribed narcotic pain medication. Scientific studies give some credence to these conclusions. Workers compensation claims can cause economic insecurity. According to an article in Scientific America, Addiction rates for opioids are 3.4 times higher for those with incomes under $20,000 per year than they are for employees making more than 50,000 per year.

But that article also shared studies that state that pain pill prescriptions are not driving the opioid epidemic. Patients with pre-existing addiction issues are more likely to become addicted to opioids and 75 percent of those who develop opioids start taking opioids in a non-prescribed manner. Furthermore, only 12 to 13 percent of ER patients who are treated for opioid overdoses are chronic pain patients.

Workers’ Compensation is traditionally an area of the law that is controlled by the states. Regulation of drugs is generally an area reserved for the federal government. Any laws imposing additional hurdles or requirements upon doctors who prescribe opioid drugs may have to come from the federal government.

New York’s Newest Budget Shortchanges Injured Workers

Today’s post comes from guest author Catherine Stanton, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

A couple of weeks ago Governor Cuomo signed the New York State Budget that contained some potentially detrimental provisions for injured workers. Big business interests are taking their victory laps as they continue with their campaign to dismantle the Workers’ Compensation system by further reducing benefits to injured workers.  See this for what it is- a relentless attack on the working men and women of this state.

If you believe that the majority of those on Workers’ Compensation are frauds, faking an injury, or taking advantage of taxpayers, then you are probably content with the changes in the law. That also probably means you were swayed by the alternative facts that the Business Council was promulgating, including the proposition that Workers’ Compensation benefits are to blame for the high cost of doing business in New York and that many injured workers are not deserving of the benefits they receive.   

My colleague Len Jernigan from North Carolina issues an annual report of the top 10 Workers’ Compensation fraud cases. In 2016, those top 10 fraud claims were against employers – not workers – and totaled more than $400 million! Much of the fraud involved misclassification of employees in order to circumvent payroll taxes and Workers’ Compensation insurance. In fact, very few workers would voluntarily subject themselves to a system that has become so bloated by bureaucracy and is more concerned about precluding medical treatment because a form is not filled out correctly or penalizing counsel for being too overzealous by submitting numerous requests for their client’s day in court. 

Injured workers do not have much political clout. They do not get rich off of Workers’ Compensation benefits. Their weekly benefits can be reduced if they are considered partially disabled without regard to their socio economic status, their educational level or whether or not they are still being treated for their injuries.   Many of them who were union workers now are no longer able to pay union dues; some cannot pay for medical insurance for themselves or their families as Workers’ Compensation insurance only covers the injured worker for the injuries sustained on the job.

Workers’ Memorial Day takes place annually on April 28.  It is a day to remember those who have suffered and died on the job. Each year there are symposiums, panel discussions, acknowledgements, and speeches paying tribute to the men and women who have lost their lives at work. Many of our politicians will issue statements or attend rallies to stand in solidarity with workers’ groups. We will hear how their deaths should not be in vain and how we must make our workplaces safer. We will be saddened to hear the list of names of those who went off to work never to return.

Many of the politicians giving these speeches are the same politicians who voted to reduce benefits to injured workers in order to appease big business interests. It is difficult to comprehend the hypocrisy involved, but we are told this is politics as usual. While it may be too late regarding the further limitation for lost wages, there is still an opportunity to let the Governor know that any further reduction for permanent injuries to limbs is just not acceptable. While honoring those who died on the job is laudable, properly compensating those who have suffered permanent injuries is equally important and ensures that we value both the dead and the living.

Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717.

Trump Lifts His Middle Finger to Injured Workers

Today’s post comes from guest author Thomas Domer, from The Domer Law Firm.

It didn’t take long for Trump to deceive injured workers.  Despite campaign promises to help “middle class” workers,  Trump signed legislation relaxing the reporting requirements for employers when workers get hurt or ill due to their jobs.  Trump and the Republicans rolled back a rule issued by former President Barack Obama.  By ending the rule, Trump and Republicans effectively shortened the amount of time employers in dangerous industries have to keep accurate records of worker injuries – from five years to just six months.  The Republican-controlled Congress used a little-known legislative tool known as the Congressional Review Act to repeal the Obama regulation last month.  Democrats were incensed.  By signing the bill, Trump can legally prevent the Occupational Safety and Health Administration (OSHA) from requiring a similar rule in the future.

Labor leaders and workplace safety experts warn that the rollback of the OSHA recordkeeping rule will allow unscrupulous companies to cheat on their injury data and conceal ongoing hazards from OSHA regulators.  That concealment could make it harder for OSHA to identify recurring problems at certain employers and industries.  Debbie Berkowitz, a former OSHA policy adviser and advisor to the Workers’ Injury Law and Advocacy Group (WILG), now with the National Employment Law Project, indicated “This will give license to employers to keep fraudulent records and to willfully violate the law with impunity.” 

It was only a matter of time before Trump showed his disdain for injured workers and his true allegiance to business.

Dirty Tricks Lead To Reduced Benefits In Cuomo’s New Budget

Today’s post comes from guest author Catherine Stanton, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

Governor Cuomo signed a new budget this week. While many extolled his progressive agenda that included free college tuition for the middle class, renewing the millionaire’s tax, and giving a tax break on dues for union members, he also quietly and without much fanfare in the news media, struck a huge blow to injured workers. 

Unfortunately for those members of our society who no longer are able to work as a result of an injury, or sustained a life altering injury while on the job, their benefits became part of a horse-trade in Albany much to their detriment. Governor Cuomo, anxious to get his big publicity items in the budget in case he seeks higher office, seems to have used Workers’ Compensation as a bargaining chip. 

The Business Council circulated fake facts blaming injured workers’ benefits for the high cost of doing business in the state, when in reality employer costs nationwide for Workers’ Compensation are at their lowest levels in 35 years.  Locally, Workers’ Compensation costs in New York have declined dramatically as well; compensation is only a small portion of employer costs and is extremely profitable for insurers. The Business Council seems to have a number of members with strong ties to the insurance industry, which makes their position even further suspect.

In 2007, the Council was successful in lobbying to obtain caps on indemnity benefits and has now continued its assault so that the prior limit on weekly benefits will be further reduced. When caps were first put into place, they did not go into effect until judges determined that injured workers had reached maximum medical improvement and that their conditions could be classified as permanent. This new provision automatically starts the cap after 2½ years, regardless of a person’s abilities or condition, or whether or not he will ever be able to work again or find work that meets medical restrictions. It is up to the injured worker to show that he has not reached maximum medical treatment that the carrier can refute.  

The Business Council has continued its attack by alleging that permanent loss-of-use awards were unfair to the employer. They argue that the prior guidelines were outdated and did not take into consideration new advances in medicine. Again, fake facts! The guidelines are based on range of motion and loss of function after all modalities are exhausted, including new advances in medicine available. As a result, the new law directs the Board to “consult” with a group stacked with pro business and insurance interests, but no representatives of injured workers to “review” the current guidelines with the ultimate goal of reducing benefits. The fact that workers who have permanent life-altering injuries to their arms, legs, hands, feet, fingers, and toes have absolutely no say is extremely distressing.

When does this eroding away of Workers’ Compensation benefits end? Two years ago, ProPublica published a series of articles entitled “The Demolition of Workers’ Comp”.  They documented the cutbacks made in many states with disastrous consequences. Their report noted that since 2003, 33 states passed Workers’ Compensation laws that reduce benefits or make it more difficult to obtain benefits. New York is part of that list, having enacted laws not once, but twice, since then.

Many believe that reducing benefits to injured workers will force them back to work. Studies have shown that this is another myth perpetuated by the falsehood that injured workers are frauds. What happens in reality is that many injured workers are unable to work and are forced into poverty or have to collect alternate benefits. Social Security Disability benefits, which are paid by the American taxpayers, are generally offset by Workers’ Compensation benefits. Without Workers’ Compensation payable by the insurance carrier, the burden on the taxpayer is larger. Rather than the Workers’ Compensation insurance carrier paying for medical treatment, it is put through Medicare. This is known as cost shifting and it affects all of us, as we are the ones who end up paying – and paying dearly.

 

Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717.

Drug Formularies, Part 2: Pharmacy Benefit Managers and Drug Prices

Mylan CEO Heather Bresch testified before the House Oversight Committee about her company’s increase in the price of life-saving EpiPens by more than 500 percent since 2007.

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

This fall, most Americans were outraged at revelations that the price of life-saving EpiPens had increased by 600 percent since 2007. The anger over the drastic price increase for EpiPens focused attention on the role that pharmacy benefit managers play in the increase of drug prices. Pharmacy benefit managers administer drug formularies, so the use of drug formularies should also be questioned on prescription price control in addition to the question of whether drug formularies shift costs to more expensive treatment.

Pharmacy benefit managers have been praised for helping negotiate drug discounts. However, pharmacy benefit managers have been criticized on the same grounds because their profitability depends in large part on being able to pocket a percentage of the discount that they negotiate. This is a lucrative business. Express Scripts is described by Wall Street-types as a “pure play” pharmacy benefit manager. In the last quarter, Express Scripts made $722.9 million in profit, a 9 percent year-over-year increase.

In addition to being criticized for benefiting from the increase in pharmacy costs, pharmacy benefit managers have also been criticized for having conflicts of interest. Pharmacy benefit managers run drug formularies. However, since pharmacy benefit managers negotiate discounts with specific drug firms, pharmacy benefit managers have an incentive to put those drugs on drug formularies. These types of arrangements have drawn the attention of Preet Bharara, the high-profile United States attorney for the Southern District of New York. In 2015, Bharara settled a charge against Express Scripts for $45 million. The settlement came after an Express Scripts unit participated in a kickback scheme involving Novartis under the False Claims Act and the Anti-Kickback Statute.

In fairness to pharmacy benefit managers, there may be other factors driving increased prescription prices. Recently, former Democratic presidential candidate and current U.S. Sen. Bernie Sanders wrote a letter to the Federal Trade Commission alleging collusion among pharmaceutical companies in regards to insulin prices. Insulin is a generic drug, and generic are cheaper than so-called brand-name drugs. However, the increase in insulin prices is far from the sole example of drastic increases in generic drugs.

In 2015, the National Council on Compensation Insurance (NCCI) released a report on prescription drug prices in workers’ compensation. On page 36 of this report, NCCI pointed out that four of the 10 drugs most responsible for the increase in drug prices were generics. In 2014, the price of generic Oxycodone-Acetaminophen rose 35 percent, Oxycodone’s price rose 60 percent, the price of generic muscle relaxer Baclofen rose 86 percent, and the price of generic Morphine Sulfate ER rose by 25 percent.

There is strong evidence that pharmacy benefit managers do little to control prescription drug prices. There is also strong evidence that pharmacy benefit managers benefit from increases in drug prices. If advocates of workers’ compensation reform want to expand the use of drug formularies, they need to explain to policy makers how the pluses of pharmacy benefit managers outweigh the myriad problems related to pharmacy benefit managers.

Gorsuch, Chevron and Workplace Law

Judge Gorsuch

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Employers and their attorneys are widely hailing President Trump’s nomination of 10th Circuit Court of Appeals Judge Neil Gorsuch to the U.S. Supreme Court. Part of the reason that management-side lawyers are praising Gorsuch is his position on Chevron deference. Gorsuch’s views on Chevron could affect how workplace laws are interpreted and how they apply to workers.

Chevron deference is a legal rule that a court will give the benefit of the doubt about the interpretation of the law to how the executive agency charged with enforcing that law understands the law. Gorsuch has criticized Chevron on separation of powers basis, stating that Chevron deference gives too much power to the executive branch at the expense of the legislative and judiciary branches. Recently, government agencies have been interpreting employment laws in a way that is more favorable toward employees. Recent rules issued by the Equal Employment Opportunity Commission regarding the Americans with Disabilities Act are a prime example.

Many workers who get hurt on the job are told that they must come back to work with no restrictions. Chevron deference could be a powerful legal tool for workers faced with such policies. The new EEOC regulations on the ADA outlaw 100-percent-healed policies or policies that require plaintiffs to return to work without restrictions. In the EEOC guidance on the issue, the EEOC cites Kaufman v. Peterson Health Care VII, LLC 769 F. 3d 958 (7th Cir. 2014) as an example of policies that they believe to be unlawful under ADAAA. This case represents a subtle but real shift from current 8th Circuit law as stated in Fjellestad v. Pizza Hut of America, 188 F. 3d 949, 951-952 (8th Cir. 1999) where the 8th Circuit joined other federal circuits that held that failure to engage in an interactive process in accommodating a disability was not per se discrimination, and that there was no duty to engage in the interactive process. The EEOC’s interpretations of the new regulations still require that a plaintiff be able to perform the essential functions of the job with or without reasonable accommodation.

But as indicated by Kaufman, courts may be less likely to dismiss cases before trial, or in legal terminology, to grant summary judgment, on the issue of whether a plaintiff could perform the essential functions of the job with or without accommodation if the defendant does not engage in an interactive process or summarily decides that an employee should not be allowed to return without restrictions.

The fact that there is a split between regional appellate courts, a so-called circuit split, over “100 percent healed” policies increases the chances that the U.S. Supreme Court will decide whether 100-percent-healed policies violate the ADA. Another issue where there is a circuit split that the U.S. Supreme Court will decide is the legality of mandatory arbitration clauses in employment agreements.

Many workers unwittingly give up their rights to have employment-law disputes heard in court when they agree to mandatory arbitration clauses as a term of employment. In D.R. Horton Inc., 357 N.L.B. No 184 (2012) the National Labor Relations Board ruled that mandatory arbitration clauses prohibited Fair Labor Standards Act collective action cases because they interfered with protected concerted activity under 29 U.S.C. §157 and 29 U.S.C. § 158. In Lewis v. Epic Systems, 823 F. 3d 1147, 1154 (7th Cir. 2016), the 7th Circuit struck down a mandatory arbitration clause partly based on giving Chevron deference to the NLRB’s decision in D.R. Horton. The 9th Circuit agreed with the 7th Circuit in Morris v. Ernst and Young, LLP, No 13-16599 (Aug. 22, 2016). Unfortunately for plaintiffs, the 8th Circuit disagreed with the D.R. Horton decision in Owen v. Bristol Care, 702 F. 3d 1050 (8th Cir. 2013).

If confirmed, Gorsuch would be unlikely to give much weight to the opinions of the EEOC or NLRB in interpreting employment laws. Chevron deference is an unpopular concept with pro-business conservatives. Recently, the GOP-controlled House of Representatives passed legislation that, if enacted, would abolish Chevron deference.

Conversely, Chevron deference is a popular concept with progressive employee and civil-rights advocates, as it allowed the Obama administration to expand employee protections in the face of a hostile Congress. But with the advent of the Trump administration and his immigration policies, progressives have a newfound appreciation for separation of powers.

Also, employee advocates probably will not like many of the new rules and regulations issued by Trump appointees such as Labor Secretary nominee Larry Puzder. A prospective abolition of Chevron could be helpful to challenging rules made by a Trump administration. An example from the last Republican administration is instructive. In 2007, the U.S. Supreme Court in Long Island Care at Home Ltd. v. Coke, 551 U.S. 158 (2007) gave Chevron deference to Bush administration rules to exclude home health aides from coverage under the FLSA. It was nine years later that the rule was overturned, giving Chevron deference to Obama administration rules regarding home health aides and the FLSA.

Why Immigration Policy Changes Will Probably Impact Workers Compensation

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

In theory, the changes to immigration policy proposed by President Trump shouldn’t impact workers compensation in Nebraska. Workers compensation laws are state laws and Nebraska, like most states, awards workers compensation benefits regardless of immigration status.

But theory is one things and reality is another.

Mike Elk of Payday Report recently ran an article detailing that workplace deaths among Latinos were the highest in 2015 than they had been since 2007. This spike was attributed in part to aggressive immigration enforcement by the Obama administration which immigrant advocates believed made workers afraid to speak out about working conditions over fear of deportation.

During the Obama administration tougher immigration policies were at least coupled with tougher and even innovative workplace safety enforcement by OSHA. In the Trump era, workplace safety enforcement is expected to be curtailed and new OSHA rules are poised to be rolled back.

Immigration and workers compensation is often thought of in the context of Mexicans and central Americans working in industries like meatpacking and construction. This is a misconception, the meatpacking industry in Nebraska and elsewhere employs an uncounted but significant number of Somali workers. Somalis are one of seven nationalities banned from entering the United States under President Trump’s order. Ironically Somalis were recruited heavily into meatpacking work after raids during the Bush administration lead to the deportation of Latino meatpacking workers. Somalis had refugee status so there were few questions about their immigration status or eligibility to work legally. Under the new executive order, their immigration status is less secure and they may be less likely to speak out about working conditions.

A smaller but growing number of Cubans are coming to Nebraska for meatpacking work as well. Like Somalis, Cubans are deemed to be refugees so their ability to work lawfully is not a question for employers. However in the waning days of Obama administration, President Obama ended automatic refugee status for Cubans in an effort to normalize relationship with the Castro regime. There was little public outcry over this order like there was for the so-called Muslim Ban. However because of an executive order, Cuban nationals working in Nebraska may be less inclined to speak out about working conditions or claim workers compensation benefits due to newfound uncertainty over their immigration status.