© 2022 American Payroll Institute, Inc. Federal Court Says Federal Railroad Unemployment Insurance Act Preempts California Paid Sick Leave Law A panel of federal 9th Circuit court judges determined the federal Railroad Unemployment Insurance Act (RUIA) preempts California paid sick leave (PSL) requirements in the Healthy Workplaces, Healthy Families Act. This is just the latest in an ongoing series of federal court battles over whether state PSL laws cover certain types of employees who have been traditionally covered by federal transportation laws. Southwest Airlines has brought a similar lawsuit against Colorado over its PSL requirements in the Healthy Families and Workplaces Act [Amtrak v. Su, Dkt. No. 21-15816 (9th Cir., 7-26-22)]. The RUIA is a federal law that provides the exclusive source of unemployment and sickness benefits to railroad employees. RUIA also contains an express preemption provision disallowing railroad employees from having any right to “sickness benefits under a sickness law of any [s]tate” (45 USC §363(b)). California In 2014, California enacted the Healthy Workplaces, Healthy Families Act, which requires employers to provide employees with PSL that they may use for specified purposes. The question in this case is whether RUIA preempts this California law for railroad employees. The court decided that it does. The opinion says that the railroad industry has long been subject to extensive and often exclusive federal regulation because of its interstate nature. The RUIA provides unemployment and sickness benefits to railroad employees, and its preemption provision precludes railroad employees from having any right to “sickness benefits under a sickness law of any [s]tate.” Looking to the plain meaning of the statutory text, the panel concluded that the preemption provision broadly refers to compensation or other assistance provided to employees in connection with physical or mental well-being. The panel concluded that the RUIA’s statutory framework and stated purposes confirm the breadth of its preemptive effect. Because of this, the panel held that, as applied to railroad employees, the California Act falls within RUIA’s preemption clause because, properly considered in light of RUIA’s plain text and structure, the California Act is a “sickness law” that provides “sickness benefits.” The decision only applies to railroad employees covered under the RUIA. Colorado The Colorado Department of Labor and Employment’s Division of Labor Standards and Statistics (DLSS) issued a citation to Southwest Airlines for violations of state PSL requirements and ordered the company to pay $1.3 million in fines. An appeal is pending. According to the DLSS, violations included: failure to provide COVID-19-related leave for employees with a COVID-19 diagnosis, COVID-19 symptoms, a need for COVID-19 testing, or a need to care for others, such as family with COVID-19, or children whose school or daycare was closed due to COVID-19 failure to provide PSL for preventative medical care, or for care of a sick child penalizing employees for taking PSL they legally had a right to take including for COVID-19 vaccination, but also for non-COVID needs and failure to provide employees with notice of their right to PSL. The company has sued the DLSS in federal court, arguing that federal laws, including the Airline Deregulation Act (49 USC §41713) and the Railway Labor Act (45 USC §§151 et seq.) preempt the state PSL requirements [Southwest Airlines v. Moss, Case No. 1:22-cv-01342 (D.C. Colo., filed 5-27-22)]. State Withholding Tax Relief for Employers Affected By Recent Natural Disasters State tax agencies are offering withholding tax relief to employers affected by recent natural disasters, including storms, flooding, and wildfires. States following the federal relief offered by the Internal Revenue Service (IRS) may use those extended due dates for state withholding tax returns and/or payments (with their own modifications). Kentucky. The Kentucky Department of Revenue (DOR) will honor the IRS tax relief for employers located in any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for assistance due to flooding. Employers that have a business in Breathitt, Clay, Floyd, Johnson, Knott, Leslie, Letcher, Magoffin, Martin, Owsley, Perry, Pike, and Wolfe counties qualify for relief. Payroll withholding filings and payments due between July 26 and November 15, 2022, are eligible for an extension until November 15, 2022, to file returns and make payments to the DOR. Late filing and payment penalties will be waived, but not the interest. Employers should label the top margin of the tax forms in large red letters with the words “Kentucky Flood Relief” [DOR, News, Tax Relief Announced for Taxpayers in Counties Designated by FEMA as Qualifying for Individual Assistance Due to Flooding]. August 22, 2022 Volume 24 Issue 16
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