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Legal Landscape 2013: Straight talk for staffing firms (part 1)

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With President Obama’s recent re-election – staffing firms must focus on important national and local legislative and legal affairs that are likely to affect our industry throughout 2013. Now, more than ever, it is crucial that our members remain vigilant about their legal obligations and take an active part in shaping pending legislation and regulations.

Ask Haley guest-bloggers Joel A. Klarreich, Esq., and Jason B. Klimpl, Esq., attorneys with the New York City law firm of Tannenbaum Helpern Syracuse & Hirschtritt LLP, explain four legal challenges and their implications for staffing firms in a two-part post:

The Patient Protection and Affordable Care Act

President Obama’s signature domestic legislative achievement, the Patient Protection and Affordable Care Act (“ACA”), survived multiple hurdles in 2012 – namely a Supreme Court decision and the President’s own re-election. Now, staffing firms and other employers must fully prepare for implementation of the law.

For instance, starting in 2014 employers with 50 or more “full-time equivalent” employees will be required to offer certain affordable minimum essential health coverage or face various tax penalties. Moreover, even smaller employers will be subject to many newly-enacted regulations, such as:

  • upcoming rules prohibiting discrimination in favor of highly compensated employees when offering health coverage (which may affect whether and how staffing employers offer “two-tiered” health plans);
  • a rule effective in March 2013 requiring employers to provide employees with notice of the new state-based insurance exchanges and the availability of premium assistance;
  • rules requiring that all employers (but currently only large employers until further notice) state on the Forms W-2 issued in January 2013 the cost of employer-provided health coverage;
  • and various other notice requirements.

2013 goals for staffing employers:

  • Study the requirements and prepare for the full implementation of the healthcare reform law.
  • Work with industry partners to develop resources necessary for planning and compliance.

Increased Scrutiny of Independent Contractor Classifications

The United States Department of Labor recently reiterated that scrutinizing the classification of workers as “independent contractors” will remain a high-level agency priority. For instance, the DOL is expected to continue partnering with federal and state agencies to combat and share information concerning the improper classification of workers.

Moreover, President Obama’s re-election may result in the resurfacing of the proposed federal Independent Contractor Misclassification Act, which he championed from his days as a U.S. Senator. Accordingly, staffing employers (including firms that place “corp-to-corp” personnel) must continue to be wary of the heightened risks of misclassification.

2013 goals for staffing employers:

  • Audit 1099 independent contractors and consultants to ensure proper classifications.
  • Team with industry leaders and partners to understand and mitigate the risks of improper classifications.

Joel A. Klarreich, Esq., General Counsel of the New York Staffing Association, is a partner at the New York City law firm of Tannenbaum Helpern Syracuse & Hirschtritt LLP, where he chairs the Corporate, Staffing Industry and Franchise Departments.


Jason B. Klimpl, Esq., an associate at the firm, is the Associate General Counsel of the New York Staffing Association. This article is general in nature and is not intended to be a substitute for legal or tax advice or a legal opinion rendered in response to a specific set of facts. This article may be considered attorney advertising in some jurisdictions.


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