New York Employment Lawyer Blog

A new whistleblower law, Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, has many corporations worried as it goes into effect August 12, 2011. The new rule increases whistleblower protection for individuals who provide original information about violations of federal securities regulations. The rule allows whistleblowers to collect up to 10-30% of penalties over a million dollars that the SEC fines their company, even if the whistleblower bypasses the company's internal reporting system. The SEC passed this new rule by a vote of 3 to 2. Many corporations, of course, were against this rule.

In order for an individual to receive an award, he or she must submit information which leads to a successful enforcement of an SEC action resulting in monetary sanctions against a company for more than $1 million. Depending on the information provided and various factors, a whistleblower award can range anywhere from 10% to 30% of the sanctions. If you have observed a federal securities violation or any other type of fraud being committed against the government, our firm can help you evaluate your information and bring it to the proper authority.

Pros & Cons Of Bypassing Corporate Controls

One of the hotly debated points of this new rule was that it allows employees who observe violations to directly report them to federal authorities without first exhausting their companies internal complaint mechanisms. Hal Garyn, vice president of North American Services with the Institute of Internal Auditors has stated that "you want to leave corporate governance as much as possible within the organization" and that "many internal whistleblower programs never make the news because they work effectively and quietly." Opponents of the new law have also asserted that the new law in fact encourages whistleblowers to bypass their company's internal reporting procedure which many corporations have implemented carefully and at great expense.

However, the push behind the new rule stems from the reasoning that whistleblowers do need more protection since they will most likely be retaliated against for complaining. In fact, they may be forced to report their allegations of wrongdoing to the very individuals who are committing the violations. The SEC wants and needs people to come forward and persist in their complaints even if there is corporate retaliation. Former Senator Chris Dodd, who co-authored the law, has stated that by having this type of protection, it will "minimize the kind of frauds that will occur from growing so large that by the time we discover them too many people have been hurt." In hindsight, maybe Bernard Madoff's Ponzi scheme could have been stopped or avoided early on if we had whistleblowers determined and persistent enough to follow through with their complaints.

Corporations Need to be on Alert

This new law is wake up call to companies who don't take their internal complaints seriously. Although many corporations have an internal reporting system which they have invested thousands of dollars in, complaints are either brushed to the side and not taken seriously or the complainant is retaliated against. Given the financial consequences to your company, it is imperative that you have an internal reporting system that your employees can trust. If an employee files an internal complaint of wrongdoing, promptly investigate the matter and determine if there is any merit to the employee's charges. Do not "blow off" the employee's complaints and retaliate against him or her. It is imperative that your employees trust your company's internal system so that you have an opportunity to correct any wrongs before the government steps in and hits you with millions in fines and penalties.

Recent Increase in Whistleblower Complaints Reported to SEC

The National Whistleblower Center conducted a study of cases filed under the False Claims Act between 2007 and 2010 and found that about 90% of employees who filed a qui tam case first reported their complaints internally. The SEC has recently reported that the number of frauds being reported has risen since the Dodd-Frank rule passed. Before the law, the SEC used to get about a "couple dozen" high quality tips a year but are now getting "one or two high quality tips a day." If you know of or have observed any fraudulent practices in your workplace, call our experienced Whistleblower Attorneys at Villanueva & Sanchala at (800) 893-9645 to learn how to report a fraud.

Continue reading "Businesses Beware: New SEC Rule Lets Whistleblower Report Violations Directly to SEC " »

UPDATE: Our Award-Winning Attorneys have defended business owners and homeowners and saved them over ONE MILLION DOLLARS in workers compensation fines, penalties and judgments. Call us now to learn how we can protect you too.

In order to raise money, New York has increased its enforcement efforts and issued tens of thousands of penalties, fines and judgments to small businesses and homeowners in New York City, Westchester County and throughout the State for failing to have workers' compensation insurance and/or disability insurance. Indeed, the New York State Workers' Compensation Board has filed judgments against 20,000 small business owners. Together these judgments, penalties and fines are devastating retail stores, mom and pop businesses and even established businesses. While it is fair to enforce the law, the penalty amounts are so excessive and not consistent with the law's intended purpose. For example, if a small business did not pay a five hundred dollar premium for its worker's compensation insurance policy, it could be fined over $72,000.00 for this seemingly minor technical violation. Celebrities are not immune as Al Franken, former Star of Saturday Night Live and current Minnesota Senator, was also served with a significant judgment. While there is an important policy reason for employers to carry worker's compensation insurance to protect employees and so that the costs are proportionately spread among all employers, these level of draconian penalties are causing employers to file for bankruptcy, close their shops, and fire all of their employees. In the end, employees are losing their jobs, small businesses are closing and being harassed by debt collectors to pay these exorbitant judgments.

Under the Law, employers are required to carry insurance for employees for work-related accidents, injuries or illness and some bases for penalties are noted below.

Failure to Secure Workers' Compensation Insurance Coverage (Section 52(5))

Failure to Secure Disability Benefits Coverage (Section 220);

Failure to Keep Required Employment Records (Section 131); and

Failure to Post Notice of Workers' Compensation Coverage (Section 51).

If a Company has more than one full-time or part-time employee, the Company is required to obtain a workers' compensation insurance policy. The following employers are exempt from coverage:

• The business is owned by one person and said person holds all corporate office titles

• The business is owned by two corporate officers and they hold all of the corporate office titles and are the only employees.

• All businesses with three or more shareholders or corporate officers must have workers' compensation insurance coverage and are not exempt.

In one of the hardest provisions for employers, if a well-intentioned family member (including a spouse or adult child) works for the business and even if the family member does not collect a salary, that family member is considered an employee by the Workers Compensation Board. The Board strongly scrutinizes small businesses that utilize independent contractors and may consider them employees depending on the circumstances. Simply calling an individual an independent contractor is not a sufficient basis for not carrying worker's compensation insurance coverage. Our New York Employment Law Attorneys have saved business over $1 Million dollars and can help defend you and your Company too. Call now (800) 893-9645 for a no-cost telephone consultation.

New York State Workers' Compensation Board
20 Park Street
Albany, New York 12207

New York State Workers' Compensation Board
100 Broadway
Bureau of Compliance
Albany, NY 12241
Bureau of Compliance: (866) 298-7830

Disclaimer: 

Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.

Our New Jersey Employment Law Attorneys lecture on legal do's and don'ts and many employers make the mistake of not following law when hiring minors during the summer. Every state has its own requirements regarding when and how an employee who is under 18 years old may work. If you have any specific questions about your company, you should contact one of our lawyers because below is general information.

Minors can work in limited circumstances. In general, minors are permitted to be paid at least the minimum wage for the hours they work with many exceptions. The U.S. Department of Labor also permits stipends to be paid to workers as part of a bona fide training program or as a part of a bona fide student intern program. It is illegal to circumvent wage & hour laws by compensating young employees in a non-monetary fashion and labeling them as volunteers.

All minors in the state of New Jersey are required to receive an employment certificate or "working papers" from their school district. It is one of those few states that require a minor until his/her to be the age of 18 years of age to secure an employment certificate for each employer, rather than a single permit for all employers as in New York or Connecticut. In order for a minor to get working papers, he/she must have an employment signed by the prospective employer that sets out the specific nature of the work, hours and pay.

A minor's age determines the type of work he or she may do:
1. Under age 11, minors may participate in theatrical productions.
2. At the age of 11, minors may do residential newspaper delivery.
3. At the age of 12, minors may do yard and farm work.
4. At the age of 14, minors may do the jobs listed above, as well as most standard office or clerical work, cashiering and sales, delivery other than with a motor vehicle, hospital and health agency jobs, restaurant work, professional assistants, and camp counseling. Minors of the age of 14 years may not work in jobs where it is required to use power machinery or are exposed to other hazardous conditions.
5. At the age of 16 years, minors may do the jobs listed above, plus some jobs involving machinery.

Minors are prohibited from working in construction or other dangerous occupations, with two exceptions:

1. Minors who are 14 through 17 years of age may volunteer to work for organizations engaged in the construction of affordable housing as determined by the State Commissioner of Labor. However, they may not come in contact with power-driven machinery, or work on any excavation, scaffolding, or roofing. They also cannot be exposed to hazardous substances. The nonprofit must secure liability insurance to compensate for all injuries and illnesses sustained by minors as a result of their participation in the construction.

2. Minors who are 12 through 17 years of age are permitted to work as volunteers at community operated noncommercial recycling centers but they cannot come in contact with hazardous machines or substances.

Under New Jersey state law, certain workplaces including nursing homes, professional offices, and libraries, are not required to pay minimum wage. However, jobs related to food service in any of these workplaces require minimum wage.

Disclaimer: 

Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.