Category: Uncategorized

Senate Takes on Business Tax Reform; Treasury to Have “Intense Comment Period” for Inversion Regulations

Legislative Activity

Senate to Consider Business Tax Reform Proposals

Following multiple hearings on tax reform thus far this year in the House Ways and Means Committee, this week the Senate Finance Committee will hold a hearing on business tax reform. During the hearing, the difference between Republican and Democrat approaches to taxing corporate income, including what the top rate on corporations should be, will be on full display. In advance of the hearing, the Joint Committee on Taxation (JCT) has released an overview of various proposals for business tax reform, including: (1) the President’s framework; (2) reforms that both maintain and change the structure of the current business tax regime; and (3) proposals to shift to a consumption-based regime. As part of the Committee’s efforts on business tax reform, Senator Orrin Hatch (R-UT) last week reaffirmed his commitment to move forward with his “corporate integration” proposal by the end of June, noting that he is still awaiting a score from JCT before proceeding. For his part, Senate Finance Committee Ranking Member Ron Wyden (D-OR) this week is expected to introduce a proposal that would modify current corporate depreciation schedules – something former Senate Finance Committee Chairman Max Baucus (D-MT) also did during his time in the Senate.

As for tax reform efforts in the House, Ways and Means Committee Chairman Kevin Brady (R-TX) has announced his plans to release a comprehensive tax reform “blueprint” by June of this year as part of Speaker Paul Ryan’s (R-WI) Tax Reform Task Force efforts, while Representative Charles Boustany (R-LA) is expected to continue with his efforts on international tax reform – though whether we will see any action this year on his plan remains to be seen.

Notably, as both House and Senate tax-writers debate the best path forward for tax reform, Republicans lawmakers are pushing for the adoption of Representative Bob Goodlatte’s (R-VA) plan (H.R. 29, Tax Code Termination Act) that would repeal the Internal Revenue Code by 2019 and require Congress to approve a new system of taxation by July of that year. While the future of this legislation is uncertain – and no Senate counterpart exists – there are presently more than 130 co-sponsors in the House.

This Week’s Hearings:

  • Tuesday, April 26: The Senate Finance Committee will hold a hearing titled “Navigating Business Tax Reform.”

Regulatory Activity

Treasury Open to “Intense Comment Period” on Inversion Regulations

Following intense scrutiny and pushback from industry, last week Treasury Deputy Assistant Secretary Bob Stack acknowledged that Treasury “may have missed things” in its latest rulemaking targeting  inversions and the ability of multinational corporations to engage in so-called “earnings-stripping” practices. This acknowledgement comes at the same time that 18 former Treasury officials sent a strongly-worded letter to Treasury Secretary Jack Lew urging his Department to focus on reforming the tax Code, not on inversions as a standalone issue.

In looking ahead, Mr. Stack has promised that Treasury “will have an intense comment period, [and] be listening to taxpayers.” He also suggested that Treasury “want[s] to do things that are both right from a policy point of view and also minimize burdens on companies…[but] [t]he answer to inversions is not to join the race to the bottom so that we have ultimately a zero tax rate.” Notably, Internal Revenue Service (IRS) Commissioner John Koskinen has indicated that the IRS does not intend to put out any “significant” regulations past Labor Day, which creates a rather tight timeframe for Treasury to digest the responses to its proposed regulations and still finalize the regulations this year.

Separately, partly spurred by fallout from the “Panama Papers” fiasco, the Treasury Department has announced that it also soon plans to finalize rules proposed in 2014 that would require the beneficial owners of single-member LLCs to identify themselves to the IRS. According to Treasury Secretary Lew, this, along with widespread implementation of the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) Project and its proposal to require country-by-country reporting of certain tax information by large multinational corporations will help combat tax evasion.

Article By Brandon C. Roman & Stephanie L. Shaker of Squire Patton Boggs (US) LLP
© Copyright 2016 Squire Patton Boggs (US) LLP

The Challenge of Developing Marketing Initiatives in Law Firms

In many ways, law firms can be tough environments to begin marketing initiatives.  The National Law Review had the opportunity to follow-up with the panelists at the Designing a Wholly Integrated Marketing and Business Development Model Panel at this year’s Marketing Partner Forum conference.  Ian Turvill, Chief Marketing Officer at Freeborn & Peters LLP, Beth Cuzzone, Director of Business Development at Goulston & Storrs and David Burkhardt, Client Service Director at Wyrick Robbins Yates & Ponton LLP were gracious enough to share their thoughts on how to integrate marketing strategies into law firm life.

First of all, in many ways, marketing in law firms is tough because firms are naturally critical of new initiatives and leadership tends to be filled with “professional skeptics” who are quick to point out why something won’t work.  So to be successful, one must be strategic.  Turvill says, “It is difficult to get leadership on board with a strategy, and it will take time for strategies to show results.  So the answer is to take these facts explicitly into account.  I am a big believer in starting small, demonstrating that a particular approach is likely to bear fruit.”  Burkhardt says, “It’s important to monitor and improve client satisfaction and to ensure that our clients are aware of all the services available to them.” Cuzzone offers two golden rules: “the marketing initiatives [should] align with the firm’s strategic direction, culture and values.  The burden is on the marketing professionals to marry the implementation of the strategy with their firm’s people, personalities and budget.”

That means playing to people’s strengths.  Many marketing professionals at law firms have the same complaint: getting attorneys to work on marketing goals can be a difficult ask.  One example of this is content generation for content marketing: getting attorneys to write can be a challenge.  Turvill reminds us that “Recognize first that writing or generating content may not be the right approach for all attorneys.  As someone said to me, ‘you shouldn’t try and teach a pig how to sing opera; the pig will get angry and you’ll simply get muddy.’”  Turvill points out that there are many ways to create content, and “it is not necessary for attorneys to be the laboring oar on content generation.”  External consultants can be helpful, and finding ways for attorneys to have public obligations for writing give them a greater sense of  commitment.  Turvill says, “once the content is generated, then we repurpose that in as many ways possible.”  Cuzzone agrees, saying, “Once an attorney produces one piece of content – members of our department are good at repurposing it in several mediums. We turn a litigation win into a case study . .  . We turn a simple blog post into an executive briefing powerpoint to be given to clients or an article into a checklist, and so on.”  Cuzzone adds that it is very important to have strong writers on your team.

Once you have content, a social media strategy is crucial for getting it out and seen.  However, a good social media strategy is a bit more in-depth. Cuzzone says it’s all about creating a “unique social media personality by posting items that reflect our culture, people and clients … we don’t just post links to our newsletters and press releases. We also started interacting with clients on social media.”  Turvill agrees that social media should be thought-out and deliberate, involving the basic principles of marketing.  Social media channels should be segmented, so various practice groups have their own channels and the content should be tailored with client needs in mind.  Turvill also suggests that content should be differentiated–so there is information available through your social media feeds that is unique to you.  All of social media should be targeted, so that you know who your audience is broken down in terms of their position, industry and interest.

Turvill and Cuzzone agree that in terms of success, it’s important for law firms to know who they are and where they’ve been.  Turvill says, “The single most important technology is a database of a firm’s experience that can be easily searched and then used to generate a listing of representative matters  in response to a request from a client.”  Being able to quickly reference previous work done, and its subject matter is an important tool to have, as Turvill points out, “Outside of references, a client will judge a firm’s appropriateness for a matter based largely on whether they’ve done something like this previously.”  Cuzzone agrees, saying, “much consideration needs to be given internally before developing an external strategy.”

In his role as Client Services Director at Wyrick Robbins, David Burkhardt sees the importance of “listening opportunities.”  Burkhardt sees his job to provide, “intentional and sustained client advocacy.  Client service reviews, interviews and satisfaction surveys are a natural way to engage our clients in conversation.”  These are the opportunities for firms to learn about their performance and how their client’s perceive their service, perhaps using different metrics than law firms are familiar with.  Burkhardt says, “Law firms still have a ways to go to truly make their clients’ voices heard.  Yes, you won the case or closed the deal, but that is not always the ultimate sign of client success.”  Burkhardt points out that things like how your firm communicates with clients can have a big impact on how the client views the transaction. Similarly,something as minor as asking clients if they prefer an email to a phone call–can make a big difference.

As these steps are put in place, in order to demonstrate the success that might otherwise be difficult to measure, it’s important to create a measurement system that can show the growth or change.  Cuzzone says, “Since implementation has a high failure rate in law firm marketing, benchmarks are essential to show progress along the process.”  Being able to demonstrate success, with numbers and data, can go a long way to convincing skeptical law firm leadership that marketing initiatives contributed to the bottom line.

Successful marketing within law firms requires strategy, self-awareness, and a solid understanding of what your clients, and potential clients, want.  Strategically playing to the strengths of your firm for marketing purposes, re-purposing content, having a social media plan, and making sure yardsticks are in place to monitor progress are all important steps in being successful.

Article By Eilene Spear
Copyright ©2016 National Law Forum, LLC

Ohio Following National Trend in Clarifying Permissible Telemedicine Activities

On April 15, 2016, the State Medical Board of Ohio (Ohio Board) released proposed rules outlining the requirements for practitioners to prescribe or cause a prescription drug to be provided to a person who is at a location remote from the practitioner and for whom the practitioner has never conducted a physical examination. The proposed rules were a result of Ohio Revised Code Section 4731.74, enacted March 23, 2016, which tasked the Ohio Board with developing clear standards for practitioners who treat patients through telemedicine platforms. The proposed rules will replace Ohio Administrative Code Rule 4731-11-09.

Ohio defines “the practice of telemedicine” as “the practice of medicine in this state through the use of any communication, including oral, written, or electronic communication, by a physician located outside of this state.”i While this definition only references physicians, the Ohio Board has indicated that the proposed rule will also be applicable to podiatrists and physician assistants who have prescriptive authority. Any practitioner who treats a patient located in Ohio through telemedicine must be licensed by the Ohio Board or possessing a limited Ohio telemedicine certificate issued by the Ohio Board.

With regard to non-controlled substances, the proposed rules will authorize a practitioner to establish a practitioner-patient relationship by the use of appropriate technology in a manner consistent with the minimal standard of care for in-person treatment by a practitioner. This encompasses a medical evaluation and the collection of relevant clinical history as needed to establish a diagnosis, identify any underlying conditions, and identify any contraindications to the treatment recommended or provided. This information must be documented in the patient’s medical record along with confirmation of the patient’s identity, the patient’s physical location, and the patient’s informed consent for treatment through remote examination.

In accordance with the proposed rules, controlled substances may only be prescribed by a practitioner who has met the steps outlined above for authorizing non-controlled substances and one of the following situations exists:

  • The person is an “active patient” of a health care provider who is a colleague of the practitioner and the controlled substances are provided through an on call or cross coverage arrangement between the health care providers. Note that “active patient” means that within the previous 24 months, the practitioner conducted at least one in-person medical evaluation.

  • The person has been admitted as an inpatient or resident of an institutional facility such as a hospital, nursing home, or psychiatric facility.

  • The practitioner is appropriately engaged in the practice of telemedicine as defined in 21 C.F.R. 1300.04.

The Ohio Board’s proposed rules follow similar recent developments from other state licensing agencies, including Indiana, West Virginia and Washington State. The Ohio Board is accepting comments regarding the intended regulations through Thursday, May 12, 2016. For more information on the proposed rules and/or submitting comments about the rules, please contact a Dinsmore health care attorney.

Article By Daniel S. Zinsmaster & Jenna Moran ofDinsmore & Shohl LLP

© 2016 Dinsmore & Shohl LLP. All rights reserved.

1 Ohio Revised Code Section 4731.296.

Fourth Circuit Appeals Court Rules in Favor of Transgender Student

Schools across the country have found themselves at the forefront of the societal debate on the appropriate manner in which to address issues surrounding accommodation of transgendered persons. Conflicting regulatory rulings, contemplated state legislation, and in the case of North Carolina, state prohibitions on accommodation have led to a patchwork of inconsistencies and doubt in relation to a school district’s legal duties.

On Tuesday, April 19, the United States Court of Appeals for the Fourth Circuit ruled in favor of a transgender student, Gavin, who was born female and wished to use the boys’ restroom at his rural Virginia high school. The ruling, G.G. v Gloucester County Sch. Bd., No. 15-2056 (4th Cir., Apr. 19, 2016), is significant, as it marks the first time that a federal appellate court has ruled that Title IX extends to protect the rights of transgender students to use the bathroom that corresponds with the student’s gender identity.

Gavin had previously been granted approval by administration to use the boys’ restroom and did so for a short period of time until the school board adopted a policy prohibiting him from using the bathroom of the gender with which he identifies. Instead, according to board policy, Gavin was required to use the restroom of his biological gender or a separate, unisex restroom. Gavin filed a lawsuit claiming that the school board impermissibly discriminated against him in violation of Title IX and the Equal Protection Clause.

In reaching its decision, the Fourth Circuit Court of Appeals analyzed the Department of Education (“DOE”) regulations implementing Title IX. Those regulations permit schools to provide “separate toilet, locker room, and shower facilities on the basis of sex,” so long as the facilities are comparable. The question the Court faced in light of this regulatory guidance was how to apply the “separate but equal” mandate to transgender individuals.

The DOE argued that the regulation should be interpreted to mean that schools generally must treat transgender students consistent with their gender identity; the Gloucester school board argued for an interpretation that defined students consistent with their biological sex. The Court recognized that the plain language of the regulation clearly permits schools to provide separate toilet, locker room, and shower facilities for its male and female students. By implication, the regulation also permits schools to exclude males from the female facilities, and vice versa. Although the regulation is silent as to how a school should determine whether a transgender individual is a male or female for the purpose of access to sex-segregated restrooms, the Court concluded it is susceptible to two interpretations – determining maleness or femaleness is either a matter exclusively of biology, or it is a matter of gender identity.

The Court agreed that public restrooms, locker rooms, and showers historically have been separate on the basis of sex, and that individuals have a legitimate and important interest in bodily privacy. Nonetheless, the Court stated that these safety concerns or privacy interests should be addressed by the DOE or Congress, and not the Court. Thus, the Court held that it was required to afford deference to the DOE’s interpretation. In so doing, the Court held that an individual’s sex should be determined by reference to the student’s gender identity, i.e., consistent with DOE interpretation.

The Fourth Circuit only addressed the student’s claims with respect to Title IX and whether Title IX extends to gender identity. The case has been remanded back to the district court to decide whether the school board violated Title IX and the Equal Protection clause of the 14th Amendment. However, the Fourth Circuit’s ruling only has precedential value in that circuit (encompassing Maryland, Virginia, West Virginia, North Carolina, and South Carolina), which means those states are now required to follow the DOE’s interpretation of Title IX – that schools generally must treat transgender students consistent with their gender identity.

What Does This Mean for Your District?

Although not binding in the Seventh Circuit, which encompasses Wisconsin, the Fourth Circuit’s decision is instructive as to how Wisconsin school districts should address restroom, locker room, and shower concerns under Title IX. Additionally, the DOE has been aggressive in its efforts to ensure that transgender students can use bathrooms in public schools that correspond with their gender identities. In November 2015, the DOE Office of Civil Rights (“OCR”) issued a letter of findings to a Chicago-area school district demanding that the school district give unfettered locker room access to a transgender student for the facilities of the gender in which the student identified. The OCR gave the school district only 30 days to resolve the matter or risk forfeiting Title IX funding. The school district reached a settlement with OCR prior to having its federal funding rescinded.

School districts should begin the process (if they have not done so already) of developing policies to set the parameters and processes the district will follow when a transgender student seeks guidance and clarity. A district should further ensure that its non-discrimination policy is comprehensive in scope as to all protected classes of students. District policies should address how the district will ascertain the student’s gender identity; what proof, if any, a district will require; the manner in which a student should be addressed and allowed to change his/her name; student dress codes; student records; physical education class; school-sponsored and WIAA-sanctioned sports; and of course, restroom, locker room, and shower facilities.

If your district has a prior policy in place regarding transgender students and gender identity, your district should consider revising the policy to ensure it does not run afoul of Title IX. Ultimately, school districts should be prepared to respond to a request from a student seeking direction as to school processes and procedures. Now is the time to prepare for the inevitable and ensure the district has laid the framework to quickly and fairly respond.

Article By Christine V. Hamiel of von Briesen & Roper, S.C.

©2016 von Briesen & Roper, s.c

San Francisco Becomes First U.S. City To Require Employer-Funded Paid Parental Leave

Mother Bottle Baby.jpgThis month, the San Francisco Board of Supervisors unanimously approved an ordinance that provides six weeks of parental leave for bonding with a new child at 100% of the employee’s rate of pay (subject to certain caps).  The ordinance which will take effect beginning January 1, 2017, will make San Francisco the first U.S. city to require employer-paid parental leave.

The new ordinance will go above and beyond the California state mandate, which currently provides covered employees six weeks of paid family leave at 55% of their pay for baby bonding or to care for a sick family member.  That paid leave is funded by the employee who is taking the leave, through regular payroll contributions to the California State Disability Insurance (“SDI”) program.  The new ordinance requires covered San Francisco employers to pay the remaining 45% of a covered employee’s wages during the six weeks of paid parental leave.

The law’s effective dates are staggered as follows:

Effective Date

Size of Employer

January 1, 2017

50 or more employees regardless of the employees’ location.

July 1, 2017

35 or more employees regardless of the employees’ location.

January 1, 2018

20 or more employees regardless of the employees’ location.

Covered Employers

In determining the size of a covered employer, the ordinance looks at the size of an employer’s total workforce, regardless of the actual location of the employees.  Accordingly, an employer may be subject to the ordinance even if it does not employ 50 (or 20) employees within the city of San Francisco.

The City and other governmental entities are not covered employers under the ordinance.

Covered Employees

Employees (including part-time and temporary employees) are eligible for the fully paid leave if they meet all of the following criteria:

  • Are employed for at least 180 days prior to the start of the leave;

  • Work at least 8 hours per week in San Francisco;

  • Work at least 40% of their weekly hours in San Francisco; and

  • Are eligible for California Paid Family Leave for baby bonding.

Notably, employee eligibility is based on the number of hours the employee works in San Francisco, regardless of his or her residence and regardless of the employer’s work location.

Union employees are not covered if (1) their collective bargaining agreement expressly waives the requirements under the ordinance in clear and unambiguous terms, or (2) the collective bargaining agreement was entered into before the ordinance’s effective date.

How Much Do Employers Need to Pay?

The new ordinance requires covered employers to pay 45% of the employee’s weekly gross wages, up to a maximum of $924 per week, for six weeks.  This cap is based on the California Paid Family Leave program’s 55% wage replacement provision, which is capped at $1,129 per week.  Between the two programs, covered employees should receive 100% wage replacement for a six-week parental leave, up to a total of $2,053/week.

What if the Employee Works for Multiple Employers?

If the covered employee works for more than one employer, the 45% supplemental compensation amount is apportioned between or among the covered employers based on the percentage of the employee’s total weekly wages received from each employer.  For example, if the employee earns $800 per week from Employer A and $200 per week from Employer B for a combined total of $1,000, Employer A pays 80% of the supplemental compensation and Employer B pays 20% of the supplemental compensation.

Can the Employer Require the Use of Vacation?

An employer can require employees to use up to two weeks of unused, accrued vacation to help meet the employer’s obligation under the ordinance.  This vacation time can be counted toward the six-week paid parental leave period.

Anti-Discrimination/Retaliation Provision

Employers may not interfere with, discriminate, or retaliate against employees for exercising their rights under the ordinance.  Terminating a covered employee within 90 days of their request or application for California Paid Family Leave, or taking adverse action against an employee within 90 days of their filing a complaint based on the new ordinance, will raise a rebuttable presumption that such action was taken to avoid the employer’s obligations under the law.

Notice and Posting

Employers will be required to post in a conspicuous place, at any workplace where a covered employee works, a notice informing employees of their rights under the ordinance.  The notice must be in English, Spanish, Chinese, and any other language spoken by at least 5% of the employees at the workplace or job site.

Employer Records

Employers must retain for three years records documenting the supplemental compensation paid to its employees, and make the records available to San Francisco’s Office of Labor Standards Enforcement (“OLSE”) upon request.  Failure to do so will raise a rebuttable presumption that the employer has violated the ordinance.

Damages and Penalties for Violations

The ordinance provides for remedies through the OLSE and through the courts.  The OLSE or “a person or entity acting on behalf of the public as provided for under applicable state law” may bring a civil action in court for alleged violations of the ordinance.

If the OLSE (after an administrative hearing) or court determines that the employer has violated the ordinance, the employer may be required to pay:

  • the total supplemental compensation withheld,

  • penalties to the employee of $250 or three times the amount of supplemental compensation withheld (whichever is greater),

  • penalties of $50 per day to each employee whose rights were deemed violated (e.g., in the instance of a failure to post a notice, this may be several employees per workday),

  • interest, and

  • in the event of a lawsuit, the plaintiff’s attorneys’ fees and costs.

Courts may also provide injunctive relief.  In addition, the OLSE may require the employer to pay the City penalties of $50 per day per “employee or person as to whom the violation occurred or continued.”

Takeaways

Paid leave is an area gaining increasing attention from state and local governments.  San Francisco’s new law comes on the heels of New York state’s enactment of a new paid family leave law and California’s Assembly Bill No. 908 which, beginning in 2018, will raise California’s current family leave pay rate from 55% to 60% or 70% depending on the employee’s wage rate.  The U.S. Department of Labor has also set requirements for federal contractors to provide their employees with paid sick leave.

While San Francisco has gone farther than any other jurisdiction in what it requires employers to provide to new parents, employers should expect similar legislation in more jurisdictions across the U.S. in the years to come.

Employers with employees who work in San Francisco are highly encouraged to review the new ordinance carefully and to consult with an employment attorney to begin exploring what steps they may need to take now to ensure they are able to comply with the law upon its enactment.

We will continue to monitor the increasing and various city, state, and federal laws surrounding paid leave and provide additional analysis and guidance on compliance.

Article By Anna M. Stancu of Sheppard, Mullin, Richter & Hampton LLP
Copyright © 2016, Sheppard Mullin Richter & Hampton LLP.

Department of State Releases May 2016 Visa Bulletin

The US Department of State (DOS) has released its May 2016 Visa Bulletin. The Visa Bulletin sets out per-country priority date cutoffs that regulate immigrant visa availability and the flow of adjustment of status and consular immigrant visa application filings and approvals. A new geographic sector encompassing El Salvador, Guatemala, and Honduras has been added to the employment-based (EB) charts.  A new geographic sector that includes El Salvador, Guatemala, and Honduras has been added.

What Does the May 2016 Visa Bulletin Say?

The May 2016 Visa Bulletin includes both a Dates for Filing Visa Applications and Application Final Action Dates chart. The former indicates when intending immigrants may file their applications for adjustment of status or immigrant visa, and the latter indicates when an adjustment of status application or immigrant visa application may be approved and permanent residence granted.

If the US Citizenship and Immigration Services (USCIS) determines that there are more immigrant visas available for a fiscal year than there are known applicants for such visas, it will state on its website that applicants may use the Dates for Filing Visa Applications chart. Otherwise, applicants should use the Application Final Action Dates chart to determine when they may file their adjustment of status applications. For May 2016, USCIS announced that EB applicants must use the Application Final Action Dates chart.

Application Final Action Dates

To be eligible to file an EB adjustment application in May 2016, foreign nationals must have a priority date that is earlier than the date listed below for their preference category and country (changes from last month’s Visa Bulletin dates are shown in yellow):

EB

All Charge-
ability
Areas Except
Those Listed

China
(mainland
born)

El Salvador,
Guatemala,
and Honduras

India

Mexico

Philippines

1st

C

C

C

C

C

C

2nd

C

01SEP12

C

22NOV08
(was 08NOV08)

C

C

3rd

15FEB16

15AUG13

15FEB16

01SEP04
(was 08AUG04)

15FEB16

08AUG08
(was 01May08)

Other Workers

15FEB16

22APR07
(was 01MAR07)

15FEB16

01SEP04
(was 08AUG04)

15FEB16

08AUG08
(was 01May08)

4th

C

C

01JAN10

C

C

C

Certain Religious Workers

C

C

01JAN10

C

C

C

5th
Nonregional
Center
(C5 and T5)

C

08FEB14
(was 01FEB14)

C

C

C

C

5th
Regional
Center
(I5 and R5)

C

08FEB14
(was 01FEB14)

C

C

C

C

How This Affects You

Most countries saw a relatively minor advancement in priority cutoff dates, generally three weeks at most. The largest changes in the Application Final Action Dates chart are in the EB-3 and Other Workers Philippines category, which advanced by three and a half months to August 8, 2008.

The Third Preference final action date for EB-3 China has been “held” for the month of May, with no change in priority date cutoff. The DOS indicated that continued heavy demand for numbers will require a retrogression of this date for June to hold number use within the FY2016 annual limit. It is extremely likely that the India and Mexico Employment Fourth Preference categories will also become oversubscribed at some point during the summer months.

The addition of the El Salvador, Guatemala, and Honduras category is a result of extremely high demand in the E4 and SR categories for applicants from these areas. A determination about whether these countries will remain subject to E4 and SR final application dates under the FY2017 annual numerical limitation will be made in early September. Read the entire May 2016 Visa Bulletin.

Article By Eleanor Pelta & Eric S. Bord

Copyright © 2016 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

How a Supreme Court Vacancy Actually Works and Its Implications Part 1 of 2

Justice Scalia’s unexpected passing has created political upheaval, judicial uncertainty, and a procedural anomaly for the Supreme Court.  The entire nation is receiving a crash course in Civil Procedure as the Court responds to the vacancy created by Scalia. Barring any massive changes in the political situation, it seems this vacancy is one we’re all going to live with for a while.  It seems prudent, then, to analyze and talk to Supreme Court litigation experts about expectations of this extended vacancy, how it might impact the Court, the cases before the Court, and the country.

There is every indication that Scalia’s vacancy will have a big impact on some major issues.  Boris Bershteyn of  Skadden Arps,1  says, “Indeed, some of the most anticipated cases of this Term—including those involving Texas’s regulation of abortion clinics and the Obama Administration’s immigration initiatives—have been or will be heard after Justice Scalia’s death. “With that in mind, Tejinder Singh of Goldstein & Russell, P.C.,2 says, “Until a replacement Justice is confirmed, cases will either be decided by an eight-member Court or rescheduled for hearing later, depending on what the Court decides would be best for that particular case. There is no rule that the Court has to follow; it can do what it wants.”

What Happens to Cases Currently Before the Court that had Scalia’s Involvement Prior to his Death?

Scalia’s death affects any case where the court had not issued an opinion before he died. As Andy Pincus of Mayer Brown3 says, “Justice Scalia’s death impacts every undecided case on which he sat – because the Court will now have to decide the case without Justice Scalia’s participation.  If he had responsibility for drafting a majority opinion or dissent, another Justice must take over that role.  If his vote was critical to the decision in the case, the Court will have to reconsider the matter and figure out how to decide it – or divide 4-4.”  This will have a greater impact as time goes on.  Any votes Scalia had cast in cases where the opinion had not been issued do not count. Wilmer Hale Appellate Partner Daniel Volchok4 says, “At the time of Justice Scalia’s death, the Court had decided more cases from the October sitting than from any of the later sittings, so in that sense the impact on the later sittings is greater.”

What Happens to Cases During the Vacancy, Where the Court Issues a Ruling but is Divided Evenly?

In the instance where the court is divided evenly, and they agree there is no narrow interpretation they can all agree with, they can ask the case be reargued, or they can issue a short order stating that “the judgment under review is affirmed by an equally divided Court.” This is known as a per curiam opinion, and it is usually issued under the court’s name, instead of a majority and a minority opinion. This split effectively holds up the decision of the lower court, and it does not establish any sort of precedent.  According to Volchok, “Whichever option the Justices take for any particular case, they can do so on their own timetable; they do not have to choose immediately after a 4-4 vote.”

Another option, according to Volchok is “The Court has in the past ordered that cases be re-argued following the appointment of a new Justice.  That occurred, for example, when Justice Samuel Alito succeeded Justice Sandra Day O’Connor.  There’s no reason that couldn’t happen again here.” Less likely, is that a case is just held in limbo after the Court has decided to hear it.  Volchok thinks, “It seems more likely that the Court would simply decide those cases—by a 4-4 tie if necessary—and then take the same issues up again in different cases once the vacancy was filled.”

Some evidence suggests that the court might be taking steps to avoid 4-4 ties.   In Zubik v Burwell, the challenge to the contraceptive mandate in the Affordable Care Act, the court took the somewhat unconventional step of asking for supplemental briefs detailing possible compromises to the case.  Bershteyn says, “the Court’s recent, highly unusual order in Zubik v. Burwell . . . heard during the March sitting—may well be an effort to resolve the case in a way that avoids a 4-4 tie.”

Looking ahead, the case selection might be impacted by the vacancy, especially the longer the vacancy persists.  According to Singh, “the Court itself may become more reticent to take on issues that it believes are likely to end in 4-4 ties. So it may eschew cases raising some of the more controversial constitutional issues until it has a ninth Justice.”

How Does Scalia’s Vacancy Impact Certiorari?

Another area that will be impacted by the vacancy on the court is how the court grants certiorari, or decides which cases to hear.  Every year, the court is asked to hear around 7,000 cases.  And every year, the court hears between 75-80 of those cases.  Four justices must vote “yes” to grant certiorari for a case, and it is very difficult to get a case in front of the court.  Now, there is some speculation that it will become herculean to put a case before the Supreme Court.  Volchok says, “four votes are required for a petition to be granted, and now those four votes must now be found among eight Justices rather than nine.  So just as a statistical matter it will be more challenging for any party seeking Supreme Court review.”  Pincus agrees, saying, “it could well be more difficult to obtain four votes to grant certiorari, because there is one fewer Justice to vote on that issue.”

How will Scalia’s Absence Impact the Decision to Seek Appeal?

Other factors complicate the picture further.  Scalia was often among the majority when cases were decided 5 to 4, and this record could impact some litigants desire to seek a hearing by the court. Singh hypothesizes, “any litigant who has a case where they were relying on Justice Scalia as the fifth vote may now be reluctant to try to take the case up, because winning may now be impossible.”   Additionally, possibly, the decision making process of the court might change when it comes to granting certiorari.  Volchok says, “this is highly speculative, but some or all of the Justices will be less willing to vote to grant a petition if they think there is a good chance the Court will ultimately divide 4-4.  To the extent that phenomenon does exist, it is another reason that securing Supreme Court review in the coming months will be even more difficult than usual.”

Additional Supreme Court Procedural Questions and their Implications will be Addressed in Part Two – Next Week.

Article By Eilene Spear, Jennifer Schaller, Nicole Cudiamat Minnis

Copyright ©2016 National Law Forum, LLC

1 Boris Bershteyn is a litigation partner in Skadden, Arps, Slate, Meagher & Flom LLP’s New York office and practices before the Supreme Court of the United States and other appellate courts. He has also held various government positions including: Acting Administrator, Office of Information and Regulatory Affairs; General Counsel, White House Office of Management and Budget; Special Assistant to the President and Associate White House Counsel and Deputy General Counsel, White House Office of Management and Budget.

2 Tejinder Singh is a Lecturer on Law at Harvard Law School’s Supreme Court Litigation Clinic and a partner at Goldstein & Russell, P.C. in Washington D.C. Mr. Singh has represented various parties and amici before the Supreme Court and lower courts.  In 2014, Tejinder argued and won the Supreme Court case Lane v. Franks, establishing that the First Amendment protects the subpoenaed testimony of public employees. 

3 Andrew J. Pincus is a litigation partner at Mayer Brown LLP’s Washington D.C. office.   Mr. Pincus has argued 25 cases before the Supreme Court of the United States.  He has also authored more than 250 appellate briefs.  Andrew is also a former Assistant to the to the Solicitor General in the United States Department of Justice and co-founded and serves as co-director of the Yale Law School’s Supreme Court Advocacy Clinic.

4 Daniel Volchok is a partner in Wilmer Cutler Pickering Hale and Dorr LLP’s Litigation/Controversy Department, and a member of the Appellate and Supreme Court Litigation Practice Group located in Washington D.C. Mr. Volchok has filed numerous merits and amicus briefs in the US Supreme Court as well as in state and federal appellate courts, and has also participated in successful efforts to obtain or oppose certiorari.

Hotels and Hospitality in Cuba: OFAC and Obama Paving the Way

cuba_800_11429With more flights, relaxing regulations, a historic presidential trip to Cuba, and news of hospitality services expanding into Cuba, the pathway into Cuba for hotels and hospitality companies seems smooth.  But businesses should look out for the potential hurdles and compliance risks.  Don’t fret – we can help you welcome your guests.

Reserve Your Room: Regulatory Background. Since President Obama announced the intent to improve our country’s relationship with Cuba and its people a year and a half ago, several revisions to the sanctions regime have focused on easing restrictions related to travel between the two nations.  In February 2016, Cuba and the United States agreed to reestablish commercial air travel between the two countries.  According to media reports, this agreement means the potential for 110 daily round-trip flights in and out of Cuba, including 20 daily flights to Havana.

Soon after the agreement was announced, major U.S. airlines submitted applications to fly commercial flights to Cuba.  Though tourist travel is still prohibited, twelve fairly broad categories of travel are authorized, including family visits, travel for government work, journalism, professional research, humanitarian work and educational activities, and “people-to-people” educational travel.

In mid-March of this year, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) again revised the Cuban Asset Control Regulations (CACR), permitting more travel-related transactions.  According to OFAC, the steps “expand opportunities for economic engagement between the Cuban people and the American business community.”  The agency announced the changes in preparation for President Obama’s historic trip to Cuba.

  • People-to-people educational travel. Previously, the general authorization for educational travel required that trips took place under the sponsorship of an organization and required that a representative from the organization accompany the travelers. The regulations no longer require booking through an authorized organization when going to Cuba under the people-to-people educational travel general license. This means that U.S. persons can freely travel to Cuba to engage in educational exchange activities that enhance contact with the Cuban people, support civil society in Cuba, or promote Cubans’ independence from their government, as long as they keep records of the travel transactions and full-time schedule of activities.

  • Financial Transactions. The regulations enable U.S. banks to process U.S. dollars and travelers’ checks from Cuban banks, to conduct U-turn transactions in which Cubans have an interest, and to allow Cuban nationals to open bank accounts to receive payments in the U.S.

  • Business Presence. In addition, the regulations allow certain carrier and travel services providers to maintain a business presence in Cuba under a general license.  This means that travel-service providers are authorized to establish and maintain subsidiaries, branches, offices, joint ventures, franchises, and other business relationships with any Cuban national, and enter into all necessary agreements or arrangements with such entity or individual.

These changes encourage much more travel between Cuba and the United States, ease restrictions that affect the ability to operate hotels and hospitality services in Cuba, and demonstrate a policy shift in favor of facilitating business, particularly in the travel sector, in Cuba.

Checking In: President Obama’s Historic Visit.  In late March 2016, President Obama visited Cuba as the first sitting U.S. president to visit Cuba since Calvin Coolidge visited in 1928.  Not only was President Obama’s visit a diplomatic feat as he quoted Cuban independence poet Jose Marti’s line: “Cultivo una rosa blanca” (“Cultivate a white rose”) in a live address on Cuban television, but it was also a marked invitation for more American business involvement in the island nation.  Notably, Marriott CEO Arne Sorenson accompanied President Obama on his visit.  According to media reports, Marriott is pursuing business opportunities to run or develop hotels on the island, and to provide training and opportunities for Cuban nationals to supply hotel needs.

Enjoy Your Stay: A Suite of Opportunities.  As a result of the steady changes in the travel regulations, many hotels and hospitality companies are eager to take advantage of the opportunities that await in Cuba.  Even before the most recent updates announced this year, Airbnb announced its presence in Cuba to provide bookings for U.S. travelers in the authorized travel categories.  More recently, the company announced it has received permission from OFAC to open its doors to non-U.S. travelers as well.  Starwood has reportedly signed three deals to open properties in Havana, apparently being the first hospitality company to obtain specific authorization from OFAC to operate hotels in Cuba.  We think this signals OFAC’s willingness to use its licensing authority favorably for hotel and hospitality companies looking to develop in Cuba.

Earlier this month, a trade fair in Havana hosted a hall full of companies in the construction industry eager to get in on the ground floor of real estate and hotel projects that seem to be on the horizon.  U.S. travel to Cuba reportedly increased between 77 percent in 2015, and this upward trend is expected to continue as a result of the recent regulatory changes.  As the travel restrictions ease, travel-related businesses may gain greater latitude to develop the infrastructure to support such travelers and provide economic benefits to the Cuban people.

Check All Your Belongings: Compliance Challenges to Consider

  • Working under General Licenses. Though there is a general license authorizing certain travel services, providing lodging services is still prohibited unless specifically licensed by OFAC. Tourist travel is still prohibited by statute. Businesses that wish to operate under the general licenses must put together procedures that comply with these restrictions.

  • Getting Authorization. In order to effectively negotiate and finalize agreements with Cuban counterparties for the provision of services outside the general licenses, U.S. companies must receive authorization from OFAC.  This makes doing business difficult because putting in the resources and time to apply and receive authorization may not make business sense unless companies have concrete opportunities.  OFAC is currently inundated with applications and Cuba questions.  Hotel and hospitality companies looking to expand in Cuba should plan as early as possible and be prepared for the license application process and approval to take several months.

  • Restrictions on Property and Development. The inability to own property outright under Cuban law is an obstacle for many hotel companies that seek to invest in facilities that will maintain and build their brands.  It is a challenge to find an existing property to develop or property on which to build. It can be an even greater challenge to import the materials needed to develop and maintain the property.  Even if a company acquires authorization to build and develop a hotel, there will be a plethora of suppliers who may also need to seek authorization.  S. businesses must plan accordingly when seeking authority to develop properties.

  • Dealing with the Cuban Government. S. businesses will have to learn quickly about negotiating with the Cuban government and getting government approvals because most potential counterparties are state-owned, and each step in the development process will likely include government involvement. This also raises corruption risks (Don’t forget the FCPA!) as companies wine and dine potential counterparties and work toward getting permits.

  • Employee Base. For foreign companies seeking to establish a brand in the market, restrictions on hiring may pose extreme challenges.  Employment in Cuba is not left to market dynamics. Hiring Cuban employees involves working with the Cuban government and hiring the personnel designated by the government.  Generally the employer is required to pay the Cuban government directly, and the government pays the employees.  Complying with such Cuban laws may fly directly in the face of a company’s business model and may compound the U.S. law compliance challenges.

  • Cuban Law. Having counsel who understand the Cuban legal landscape and regulatory challenges will be crucial for U.S. companies.  Structuring deals in Cuba that comply with Cuban law can be tricky.  The legal infrastructure in Cuba for foreign investment is not well developed, so U.S. companies will face a steep learning curve to successfully finalize and implement deals in Cuba.  Moreover, Cuban lawyers have very different ethical obligations than U.S. clients may be used to (including a virtual complete lack of attorney-client privilege).

Even with the host of challenges, exploring the Cuban market presents an intriguing opportunity for hotel and hospitality companies.  With the right compliance strategy and the right team, U.S. businesses could enjoy their stay in Cuba for years to come.

Article By Fatema K. Merchant & Lisa C. Mays of Sheppard, Mullin, Richter & Hampton LLP

© 2016, Sheppard Mullin Richter & Hampton LLP.

San Francisco Mandates Solar Power on New Buildings

The City of San Francisco announced today that it will now mandate solar photovoltaic or solar water panels on all new residential and commercial buildings of 10 floors or less. The City’s renewable energy ordinance makes San Francisco the first major city in the country to require solar panels on new construction.

Will San Francisco’s action spur Cal/OSHA to take a renewed look at workplace safety in the solar industry?  Indeed, as solar installations increase rapidly throughout the country, perhaps Federal OSHA will dust off its Green Job Hazards guidance in light of what appears to be a continued movement toward renewable energy sources and the inevitable increase in workplace hazards that occurs when industries rapidly expand.

Article By Matthew Linton of Holland & Hart LLP
Copyright Holland & Hart LLP 1995-2016.

Wave of Recent and Transformative Pro-Employee Measures in New York

New York State and New York City lawmakers have taken several actions recently to expand employee rights and benefits. New York State has passed a 2016-2017 budget (“Budget”) that will significantly impact New York employers by creating a law governing paid family leave and enacting a statewide plan to incrementally increase the minimum wage resulting in a $15 minimum wage rate for some employers. Mayor Bill de Blasio also recently signed several bills amending the New York City Human Rights Law (“NYCHRL”), including 3 amendments that will strengthen existing employee protections.

Paid Family Leave

The New York State Budget enacts a paid family leave policy for New York employees (the “Paid Family Leave Law”) that will provide wage replacement to employees taking time o for covered reasons. Beginning January 1, 2018, employees who have worked for at least 6 months will be eligible for 8 weeks of paid leave benefits for the purpose of (1) caring for a family member with a serious health condition, (2) caring for a new child during the first 12 months after the child’s birth or after the first 12 months after placement of the child for adoption or foster care with the employee, or (3) addressing certain exigencies when a family member, including a spouse, domestic partner, child or parent, is called to active military service. Leave will be paid at a rate of 50% of the individual’s average weekly wage, not to exceed 50% of the state average weekly wage.

The length of leave benefits and amount of bene ts paid to eligible employees will increase incrementally. Once fully implemented on January 1, 2021, the Paid Family Leave Law will provide employees with up to 12 weeks of paid family leave to be paid at a rate of 67% of the individual’s average weekly wage, not to exceed 67% of the state average weekly wage.

Until New York passed the Paid Family Leave Law, only 3 states o ered any paid family leave: California, New Jersey and Rhode Island. While New York State lauds its Paid Family Leave Law as the “longest and most comprehensive in the nation,” this week San Francisco’s city supervisors voted to require employers with more than 20 employees to give workers six weeks of fully paid leave – a measure that is even more expansive than California’s current leave law that provides benefits for 55% of an employee’s average weekly wage. If signed into law, San Francisco’s paid leave law may be considered the most far-reaching in the nation.

But how does New York’s Paid Family Leave Law stack up against paid family leave insurance benefits o ered by its neighbor across the Hudson?

New York New Jersey
Employers Covered All Employers All Employers
Employees Eligible All employees who have worked for at least 6 months in NY All employees who have worked 20 calendar weeks
Reasons for Leave
  • care for newborn/newly adopted/foster child
  • care for family member with serious health condition
  • address exigencies associated with certain family members on active military service
  • care for newborn/adopted child
  • care for family members with serious health condition
Length of Benefits 12 weeks, once fully implemented 6 weeks during any 12 month period, with a different rate for intermittent leave
Amount of Benefits 67% of average weekly wage, not to exceed 67% of the state average weekly wage, once fully implemented 2/3 of employee’s average weekly wage, up to $524 per week maximum, with a different rate for intermittent leave
Job and Benefits Protection Requires reinstatement to the position held immediately prior to taking leave, or to a comparable position with comparable benefits. No job protection

Minimum Wage

New York’s Budget incorporates minimum wage increases throughout the State, which will increase the wage significantly from the current $9 per hour rate. The increases will be implemented in incremental phases and will vary by location within New York State and by the size of the employer’s business. By the end of 2018, many New York City businesses will be required to pay employees $15 per hour, which is the swiftest and most significant increase set forth in the Budget. However, New York City employers with 10 or fewer employees will experience smaller increases over a longer period leading to a $15 minimum wage rate at the end of 2019. Employers in other counties around New York City will reach the $15 per hour minimum wage rate by the end of 2021. Other areas in New York State will experience lesser increases, reaching a $12.50 minimum wage rate by the end of 2020 with further increases to be determined. New York is the second state to institute a $15 minimum wage rate, preceded by California which also recently implemented a phased-in increase to its minimum wage rates that will begin next year.

The Budget incorporates a “safety valve” provision, which provides that starting in 2019 the State Director of the Division of Budget will annually assess the impact of the minimum wage increases to determine whether it is necessary for the State to temporarily suspend the scheduled increases. Based on the Director’s recommendation and report, the Commission of Labor will determine whether or not to suspend or delay further increases to the minimum wage rate.

NYCHRL

The recent amendments to the NYCHRL, which already had some of the broadest employee protections in the country, further strengthen employee protections in New York City. Speci cally, the NYCHRL has been amended to benefit employees by:

  • codifying three judicial decisions, including by expressly stating that the statute must be interpreted liberally to accomplish “uniquely broad and remedial purposes” regardless of whether similar civil and human rights provisions under federal or state law have been similarly construed and that any and all exceptions and exemptions found in the statute must “be construed narrowly in order to maximize deterrence of discriminatory conduct.”

  • permitting a claimant to recover attorneys’ fees, expert fees and other costs in an administrative proceeding before the New York City Commission on Human Rights; and

  • repealing several provisions that were previously interpreted to limit protections related to sexual orientation.

Each of these amendments is effective immediately.

Tips for Employers

New York employers should review their policies regarding leave and ensure any necessary updates are made in advance of the Paid Family Leave Law’s January 1, 2018 implementation date. Similarly, the varied and incremental increases to the minimum wage rate throughout New York State will require New York employers to closely monitor their payroll practices to ensure that they properly implement minimum wage requirements. The employment-related amendments to the NYCHRL do not create a rmative requirements on employers. However, employers should bear in mind that New York City’s ever expanding NYCHRL creates unique challenges for employers seeking to defend claims. We will continue to update you as courts interpret these new measures, and if and when regulations are issued to address more nuanced concerns about the new legislation.

Article By David I. Rosen, Galit Kierkut, Charles H. Kaplan & Grace A. Byrd of Sills Cummis & Gross P.C.

© Copyright 2016 Sills Cummis & Gross P.C.