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student-2052868__340-300x198Our employment attorneys represent New Jersey public sector employees in disputes with their governmental employers.  One area in which we frequently see disputes is the failure to give a “Rice Notice” to employees whose employment may be affected by an action by their governmental employers.

New Jersey employees, including non-tenured employees, have the right to advanced notice whenever a governing body, such as a town council or a board of education, is going to discuss the employee’s employment.  This notice is called a “Rice Notice” after the case of Rice vs. Union County Regional Board of Education, which upheld the right.  Normally, under New Jersey’s Open Public Meetings Act, personnel actions must be discussed in closed session unless all the affected employees request in writing that the discussion be held in the open during the public session of the meeting.  The Rice Notice gives the employee the notice they need  to actually exercise that right.

In the recent case of Kean Federation of Teachers vs. Morell, the Appellate Division of the Superior Court of New Jersey had the opportunity to take a fresh look at the requirements for a Rice Notice.  In that case the Court was faced with a situation where the Board of Trustees of Kean University delegated the task of evaluating recommendations by the University President for the retention or dismissal of faculty members.  The subcommittee evaluated the University President’s recommendations and made its own recommendations to the Full Board.  The full Board of Trustees then voted on those recommendations without discussion.  The Board argued that because it did not actually discuss any employment matters, but just voted without discussion,a Rice Notice was not necessary.

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As the holiday season creeps up on us, it’s good that we have the chance to reflect on what we are thankful for. Here at McLaughlin & Nardi we have much to be thankful for this year.

First, we are thankful for you who give us the opportunity to help people for a living. This is a gift which for which we are profoundly grateful.

Second, we are grateful for the people who help us do that. This includes all of the people who work here. There are those whom you see, such as our attorneys and paralegals, but there are many who you don’t see, including those who do the administrative, research and support work which allows the rest of us to be your advocates and counselors. They are more than just coworkers; they are family.

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office-1319849__180The Corporation Business Tax (“CBT”) is a New Jersey State tax imposed on corporations for the privilege of doing business in the State.   Nearly every state has instituted a similar type of tax on businesses, sometimes including taxes referred to as franchise taxes or privilege taxes.  This tax is income-based and is measured by the net income which may be allocated to  New Jersey.  CBTs go towards general State use, with 4 percent of the CBT revenue dedicated to environmental projects and activities.

The following entities are exempt from CBT: corporations created under the limited-dividend housing corporation law, nonprofit cemetery corporations, nonprofit corporations without capital stock, federal corporations exempt from state taxes, certain agricultural cooperative associations, non-stock mutual housing corporations, canal and railroad corporations, water and sewer corporations, insurance companies subject to premiums tax, and certain municipal electric corporations.

A corporation may be either a “C” Corporation or a“S” Corporation.  Generally, a corporation chooses its election of classification when it is being formed.  A “C” corporation is subject to what is commonly referred to as “double taxation” because a C corporation’s revenue is taxed first as company revenue and then again when the shareholders are taxed for the revenue.  However, there are also certain tax advantages including being able to deduct certain business expenses.  On the other hand a “S” corporation is only taxed at the individual level, commonly referred to as a “pass-through” tax entity.  The owners of the company are the only ones taxed for profit of the company.  “S” corporation owners may be able to deduct corporate losses on personal tax returns.   There are also a myriad of considerations in addition to tax factors which should be considered before making the determination as to what type of company to form.

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frankfort-105591_960_720The Supreme Court of the United States has recently issued an opinion holding that, even perceived speech or associations (as opposed to just actual speech or associations) are protected by the Civil Rights Act.

A police officer, Jeffrey Heffernan, working in Paterson, New Jersey filed suit seeking redress for his demotion after he had been seen speaking to staff members for a candidate running for mayor and holding a yard sign supporting that candidate.  The candidate was running against the incumbent mayor who had appointed Heffernan’s superiors.  Heffernan was specifically demoted due to his “overt involvement” in the candidate’s campaign.

Unbeknownst to Heffernan’s superiors, Heffernan did not actually support the candidate, but was merely picking up the sign for his ill mother.

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capitol-22546__180Lawsuits can settle immediately after a complaint is filed or several years into the litigation process on the eve of trial, or even during the course of a trial.  Most cases will settle before a final resolution is determined by a judge or jury.  Settlements generally offer a more favorable resolution than trial for several reasons: (1) both parties avoid the risk of loss at trial, (2) both parties avoid the considerable costs, time, and efforts involved in further litigation and trial, and (3) both parties avoid protracted appeals.

Both parties in a suit seeking monetary damages should consider tax implications in agreeing upon a settlement.  This is true for defendants (the party who is being sued) and plaintiffs (the party who filed the lawsuit) since the defendant may need to make tax deductions prior to disbursement to the plaintiff and/or a plaintiff may need to include some types of settlement proceeds as taxable income.  Further, a defendant may need to issue a 1099 to the plaintiff along with the disbursement of settlement funds.   These determinations are highly fact-sensitive and every party should consult their own CPA or other tax professional who would be most familiar with each parties’ particular situation.

Generally, settlement money received for a personal physical injury is not taxable.  (There are exceptions, but this is the general rule.)  However, it is important to take into consideration that the settlement amounts may be subject to reimbursement to Medicaid/Medicare or medical insurance.  Indeed, the Social Security Act requires that Medicare payments be reimbursed by a subsequent lawsuit recovery, such as a settlement or award.

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The New Jersey Achieving a Better Life Experience (ABLE) Act became law on January 11, 2016, it becomes effective on October of 2016.  While due to its limitations it does not replace the special needs trust, it will be a cost effective way to assist individuals with disabilities.

Under the new Act the New Jersey’s Department of the Treasury and the New Jersey’s Department of  Human Services must establish the ABLE Program pursuant to federal law. Under the program, individuals who became disabled before they attained the age 26 and who are also able to meet the disability requirements for Social Security disability benefits are permitted to establish an ABLE account, and they themselves can be the beneficiary of that account. The purpose of an ABLE account is to enable people with disabilities and their families to save and pay for disability-related expenses.

An ABLE account is not subject to state income tax, and it will not be considered to determine the beneficiary’s eligibility for need-based public benefit programs or to determine the level of any benefit provided under such a program.  However, a disabled individual can only have one ABLE account established for their benefit.

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Virtually every business in New Jersey is regulated in some way, shape, or form. Accounting firms are regulated by the Department of Law & Public Safety and regulations require accounting firms to have certified public accountants. Home improvement contractors are often required to be registered with the Department of Labor and Department of Treasury. Health clubs are required to register and issue a security bond with the Department of Law and Public Safety. Restaurants are regulated by local health departments. However, businesses which involve the transportation, storage, or disposal of solid waste are some of the most regulated and highly scrutinized businesses in the State of New Jersey.

Solid waste haulers or transporters are regulated by the New Jersey Department of Environmental Protection (“NJDEP”), Division of Solid Waste Management and/or the Division of Solid & Hazardous Waste Management.

However, first, for tax and liability purposes, a business will generally form a company or business entity (such as a corporation or limited liability company). In doing this, the company will likely file for a Certificate of Formation and a request a FEIN (or Federal Employer Identification Number).

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McLaughlin & Nardi’s New Jersey construction attorneys recently completed a construction arbitration in the American Arbitration Association.  After hearing the evidence, the arbitrator awarded our clients $289,918.  Maurice McLaughlin was the lead trial attorney.  He was assisted throughout by Pauline Young and Robert Chewning, who second chaired the hearings.

Background

The case involved Essex County homeowners who had contracted for extensive renovations to their kitchen.  The total cost of the kitchen renovations was $152,725.  The homeowners paid $126,362.50.  However, the contractor never completed the job.

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frameup.jpgIn New Jersey home improvement contractors are heavily regulated by the Consumer Fraud Act (the “CFA”). The CFA and administrative regulations require strict compliance which cannot be ignored. Failure to follow these requirements can result in the home improvement contract to be found invalid and a homeowner’s a ascertainable lose can result in the home improvement contractor paying triple that amount and attorneys fees to the home owner.

However, recently the New Jersey Appellate Division held that a home improvement contractor can recover the value of the services rendered even if the contract violated the CFA.

In Gemini a dispute arose between a homeowner and his contractor with regards to home improvement renovations. The homeowner hired a contractor and an architect, who was his friend, to perform renovations on the home. The architect was the intermediary between the homeowner and the contractor. The architect made all the decisions for the homeowner and worked directly with the home improvement contractor.

The contractor initially began the work for the homeowner pursuant to a written contract. After the work began, however, the homeowner sought various changes which the contractor orally agreed to perform and, subsequently, would forward his bills to the architect. A subsequent contract for the additional work was never prepared.
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stock-photo-20868697-commercial-real-estate.jpgWhat does an employer’s use of criminal history information in hiring decisions have to do with employment discrimination? The U.S. Equal Employment Opportunity Commission (EEOC) has determined that an employer’s use of an individual’s criminal history in making employment decisions could violate the prohibition against employment discrimination.

The situation has attracted attention from lawsuits involving an automobile manufacturer and a discount retailer who are alleged to have inappropriately used criminal background checks to deny employment to workers, resulting in discriminatory treatment. The lawsuits were brought under Title VII of the Civil Rights Act of 1964. Title VII is enforced by the EEOC and prohibits employment discrimination based on race, color, religion, sex and national origin.

The EEOC issued updated employment guidance to address findings that the application of criminal background checks for employment decisions results in a disparate impact based on race and national origin. African Americans and Hispanics are incarcerated at rates disproportionate to their numbers in the general population, indicating an increased potential for disparate impact, but employers can show in an EEOC investigation that their particular employment policy or practice does not cause a disparate impact on the protected group.

Courts look to the following types of evidence to determine whether an employer was motivated by race, national origin, or other protected characteristics when using criminal records in a selection decision:

  • statements that are derogatory concerning the charging party’s protected group;
  • evidence that the employer requested criminal history information more often for individuals certain racial or ethnic backgrounds or did not give equal opportunity to explain criminal history to all groups;
  • treating a charging party differently from others not in the same protected group;
  • results of matched-pair testing that show different treatment because of a protected status; and
  • results of statistical analysis of applicant data, workforce data, or third party criminal background history data.

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