January 5, 2018

Charity Begins at Home

Americans are some of the most generous givers on the face of the planet. They reach into their pockets and take out their checkbooks on behalf of others more often than any other industrialized nation. Nationally, charitable contributions make a thunderous plunk in the collection plate. In 2015, American corporations gave a total of $18.46 billion. Individuals followed suit, contributing to charity a total of $373.25 billion. Charitable Remainder Trust is one of the most popular ways Americans can donate to their favorite cause while doing well for themselves and their families.

HOW THE CHARITABLE REMAINDER TRUST WORKS

Whether you are a budding philanthropist looking for the best way to contribute to society, or an investor looking for strategies to maximize income and tax breaks, the Charitable Remainder trust offers a powerful solution to your needs. It combines current charitable income tax deductions and future estate tax deductions with the opportunity to avoid capital gains tax on a highly appreciated asset. It then goes one step further to provide you with a new source of income.

A Charitable Remainder Trust delivers best results when benefactors have a highly appreciated asset—such as real estate or stocks—that provides little or no income.

Owning such an asset is a double-edged sword. You can’t sell the asset without experiencing the costly bite of state and federal capital gains taxes. On the other hand, if the asset is still in your estate when you die, it will increase your estate taxes.

Of course, you could donate the asset directly to charity and gain an immediate charitable income tax deduction. In one fell swoop, you’d reduce the value of your estate—and thus future estate taxes—as well as avoid capital gains taxes. But you’d miss out on an opportunity to maximize your income.

The Charitable Remainder Trust neatly overcomes these problems.

When you create your Charitable Remainder Trust, you transfer your highly appreciated asset to your trust. The asset is usually sold, with the proceeds used to buy income-producing investments. Then, each year for the rest of your life, you’ll receive income from your Charitable Remainder Trust. When you die, your designated charity will receive whatever remains in your trust. Hence the name: Charitable Remainder Trust.

The incentives for using the Charitable Remainder Trust include:

  • An immediate charitable income tax deduction based upon the fair market value of the asset given away (reduced by your received interest—or future income and subject to normal percentage limitations applied to itemized deductions);
  • An opportunity to put the full value of your appreciated asset to work for you and avoid the costly impact of capital gains taxes;
  • A new source of income;
  • And a charitable estate tax deduction on the full fair market value of the asset you’ve donated to the charity when you die.

It may sound like the Charitable Remainder Trust is a complex legal tool. But just the opposite is the case. Working with your estate planning attorney, you can set one up in fairly short order.

After deciding which charity you want to support, you then decide who will serve as trustee. The trustee can be you, a bank or trust company, or anyone else of your choosing. The trustee will assist in the valuation of the asset you contribute and will follow your precise directions laid down in your trust documents.

Next, you decide who will receive income from your Charitable Remainder Trust and for how long. This isn’t optional; it’s mandatory. According to the IRS, at least one beneficiary other than the charity must receive income each year. So, determine if you will be the only beneficiary, or if your spouse or children will receive income after you die. Lastly, you decide how you want to receive your income, and how much you will receive each year.

GIVE AND YOU WILL RECEIVE

Your answers to these last questions will prove critical in determining exactly what type of Charitable Remainder Trust you choose. Which one will depend on your temperament as an investor?
For instance, conservative investors who want a predictable income year after year may prefer the Charitable Remainder Annuity Trust—or CRAT for short. You may make only one contribution to your CRAT, which will provide you a fixed annual income, regardless of the investment performance of your asset. Because your tax deductions and income are based on the value of the asset as of the day it was transferred to the trust, the CRAT is probably better suited to assets you suspect will lose value in the years ahead.

Regardless of the economic winds, your income is guaranteed. So, if your asset doesn’t earn enough to pay your annual income, the principal will be used to make up the difference. On the other hand, if the markets turn bullish and your asset outperforms your expectations, the surplus will be added to the principal.

With a CRAT, you will be paid an annual income equal to at least 5%, and no more than 50%, of the asset’s fair market value, determined on the day it was transferred to your trust. So, if you donated a stock portfolio valued at $250,000 on the day it was transferred to your Charitable Remainder Trust, your annual income would be a minimum of $12,500. There’s an upper limit to how much you can receive each year, but it isn’t as simply stated. It has to do with your lifespan (as well as the life spans of any other beneficiaries) and other factors. Your estate planning attorney will help you determine exactly how much your annual income from a CRAT may be each year.

The chief drawback of the CRAT is also its strength; it protects the donor against swings in the financial markets. In a stagnant or declining market, the donor comes out ahead. But in a strong market experiencing investment growth, it’s the charity that will ultimately benefit the most. That’s why donors who hold more bullish views on investing will prefer the Charitable Remainder Unitrust.

The Charitable Remainder Unitrust (CRUT) offers a couple of advantages over the CRAT. First, unlike the CRAT, you may make as many contributions as you like to your CRUT. And for the sake of determining annual income, it is the asset’s current fair market value—not its value on the date it was transferred to the trust—which is used in the calculations.

As for its income opportunities, the CRUT allows the benefactor to ride the financial markets and enjoy the investment performance of the trust assets. That means, of course, that in some years you may receive less, other years more. When lean years keep you from receiving your full due, a “make-up provision” can allow for additional income in future years to make up for the shortfall.

The CRUT requires that the donor receive a minimum income of 5% of the asset’s current fair market value, and not more than 50%. You can also opt to receive your chosen percentage or the trust’s net income, whichever is less.

Clearly, donors who want income from their charitable contribution and who don’t mind riding the winds of economic change will find plenty of appeal in the CRUT.

WHAT ABOUT YOUR HEIRS?

So far we’ve focused on the ample benefits that the Charitable Remainder Trust offers you. But what about your heirs? After all, you’ve given away a piece of their legacy in order to gain income and tax advantages for yourself today.
One frequently employed solution is the Irrevocable Life Insurance Trust. When used in concert with the Charitable Remainder Trust, it provides your heirs with an income-tax-free legacy equal to the full value of the asset you donate to charity. Here’s how it works.

After you establish your Irrevocable Life Insurance Trust, your trustee then purchases a life insurance policy on your life with your heirs as beneficiaries. Usually, the death benefit of this policy is equal to the value of the asset you’ve given away. The cost of the policy can be offset by income generated by your Charitable Remainder Trust or the charitable income tax deduction you receive. Upon your death, your heirs will receive an income-tax-free death benefit.

Why do it this way, rather than just owning the policy outright? Because the proceeds of a policy owned in your name at your death will be included in the value of your estate for estate tax purposes. Considering that estate taxes kick in at a 40% rate, life insurance policy could expose your estate to a sizable tax bite. (For more information, see the Academy report, The Irrevocable Life Insurance Trust.)

December 27, 2017

The Tax Cuts and Jobs Act: The New Provisions and How to Prepare Your Individual and Business Income Taxes

The Tax Cuts and Jobs Act was signed into law on December 22, 2017 by President Donald Trump. Changes to individual income taxes include lowered tax brackets, increased Alternative Minimum Tax thresholds and higher estate, gift and generation skipping tax exemptions. For businesses, changes include a reduced corporate tax rate and the repeal of the Corporate Alternative Minimum Tax.

Here is a summary of provisions, year-end planning opportunities and tips for how to start planning ahead for 2018 and beyond.

What the Tax Bill Means for Individuals

  • Tax Rates: The tax rates are lowered for all taxpayers. The brackets include a 10%, 12%, 22%, 24%, 32%, 35%, and 37% bracket. The 37% bracket for individuals is $500,000 and for married filing jointly will be $600,000.
  • Alternative Minimum Tax (AMT): The AMT remains but the thresholds at which it becomes applicable increase to $109,400 for married filers and $70,300 for single filers. Phase out exemption amounts are $1,000,000 for married taxpayers and $500,000 for single taxpayers.
  • Federal Estate, Gift and Generation Skipping Tax: The tax exemptions are increased to $10 million per person and will be adjusted for inflation. There is no mention of a total repeal of the estate, gift or generation skipping tax.
  • Child Tax Credit: The Child Tax Credit will be $2,000 per child under age 17 with $1,400 being a refundable amount. The credit phases out at $400,000, not subject to inflation. There is also a $500 nonrefundable credit for non-qualifying dependents.
  • Personal Exemption: The personal exemption is eliminated.
  • Standard Deduction: The standard deduction is doubled to $12,000 for single filers and $24,000 for married couples, adjusted for inflation.
  • Itemized Deductions: All miscellaneous itemized deductions subject to the 2% floor are eliminated. This includes tax preparation fees, investment interest, employee expenses (other than teacher’s expenses up to $500 – $250 per teacher).
  • Mortgage Interest: The mortgage interest deduction is limited for interest on loans over $750,000 acquired after December 15, 2017. The $1,000,000 limitation remains for debt acquired before December 15, 2017. The interest on home equity indebtedness is eliminated.
  • State, Income and Property Tax Deductions: State, local, and foreign income and property taxes deductions are limited to $10,000.
  • Medical Expenses: For tax years 2017 and 2018, the medical expense deduction floor is reduced to 7.5% of adjusted gross income.
  • Moving Expenses: Moving expense deductions are suspended.
  • Cash Contributions: The AGI limitation on cash contributions increases to 60%.
  • Tuition Expenses: Expenses up to $10,000 per year for tuition in connection with enrollment in elementary or secondary schools, whether they be public, private, or religious, can now be taken out of 529 accounts.
  • Net Operating Loss: The Net Operating Loss deduction is limited to 80% of the taxpayer’s taxable income for tax years beginning in 2018.

How the Bill Impacts Businesses

  • Tax Rate: The corporate tax rate is permanently reduced from 35% to 21%.
  • Corporate Alternative Minimum Tax (AMT): The AMT is repealed starting in 2018.
  • Business Income Deductions: Business taxpayers (other than C Corporations) are allowed a deduction of up to 20% qualified business income. This includes business income from a partnership, S corporation, and sole proprietorships. The provisions for this deduction are complicated and limited for many businesses.
  • Accounting Methods: Companies with average gross receipts of up to $25 million may now use the cash method of accounting.
  • Real Estate and Improvements: Deprecation recovery periods are accelerated on residential and non-residential real estate and improvements placed into service after December 31, 2017.
  • Paid Family Leave: The Act contains benefits for employers that provide paid family leave to its employees. Certain eligible employers can claim a business credit for 12.5% of the benefits paid to qualifying employees, provided the plan meets certain thresholds.
  • Entertainment: The deduction for business entertainment expenses has been eliminated.

Year-End Planning Opportunities

Before the end of the year, some individuals may still be able to take advantage of some last minute planning opportunities.

  • Pay your fourth quarter state estimated taxes before December 31, 2017. The Act specifically prohibits taking a deduction for 2018 taxes paid in 2017; therefore, there is no advantage to making payments in excess of your 2017 tax liability.
  • There is no such limitation on prepayment of 2018 real estate taxes. Consider prepaying your 2018 real estate taxes before December 31, 2017. If you pay your real estate taxes through your mortgage company make sure to call and let them know you already paid 2018.
  • Consider paying other outstanding items, such as your tax preparer invoices or employee business expenses.
  • Prepaying state taxes and expenses may not be a benefit to all taxpayers because of the alternative minimum tax.

Future Planning Opportunities

As more detail and regulations come out consider ongoing planning opportunities:

  • With the change in income tax rates and the increased estate tax exemptions, closely held business owners should assess whether their company’s current structure and ownership is best from both an income and estate planning perspective.
  • For business taxpayers allowed a deduction of up to 20% qualified business income, the provisions for this deduction are complicated and limited for many businesses. Business owners should consult with an attorney.

We will continue to monitor updates to the Tax Law and will provide a more detailed alert on the new business income tax provisions and future planning strategies for businesses.

December 6, 2017

U.S. Senate Passes the Tax Overhaul Bill: U.S. Senate Passes the Tax Overhaul Bill: What’s Next and How to Plan for 2018

In the early hours of December 2nd, the U.S. US Senate passed the tax overhaul bill in a vote of 51-49 mostly along party lines.

Tax Planning in December 2017

In planning for the final tax bill to become effective for 2018, there are many opportunities to delay recognition of income now that may be subject to lower tax rates and accelerate payment of expenses that will qualify for the itemized deduction. These include:

  • Self-employed individuals should send invoices typically received in December in January.
  • Homeowners with mortgages in excess of $500,000 should consider paying any January 2018 mortgage payments now because such a payment includes December interest.
  • Taxpayers whose real estate taxes are in excess of $10,000 should consider prepay real estate taxes due in the first quarter before the end of this year.
  • Individuals who make estimated tax payments should pay fourth quarter state income tax before the end of 2017 rather than in January when due.Individuals who make large donations to charity should make any 2018 donations in 2017.
  • If you are moving shortly, try to pay all of your moving-related expenses before the end of 2017.
  • For businesses, if you own any rental properties, consider placing these properties into an LLC or other pass-through entity.

What to Expect Next

The next steps will be the House and Senate reconciling these differences and another full vote by each. Some provisions of the Senate bill are permanent, such as the change to the corporate tax rate; however, many are set to expire as early as the end of 2025.

Proposed Changes to the Tax Structure: How the Senate and the House Bills Compare

Individual Taxes

  • Income Tax Brackets for Individuals: The Senate bill has seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 38.5%. The House includes only four: 12%, 25%, 35%, and 39.6%.  Personal Exemption: Both bills also eliminate the personal exemption.
  • Standard Deduction: The Senate bill increases it to $12,000 for individuals and the House increases it to $12,200.
  • Child Care Tax Credit: The Senate bill increases it to $2,000 per child (the second $1,000 will not be refundable) and provides a $500 credit for non- dependent children. The House bill increases it to $1600.
  • Itemized Deductions: Both bills allows for a property tax deduction up to $10,000. The Senate bill allows an interest deduction on mortgage debt up to $1,000,000, while the House version caps the loan limit at $500,000 for new mortgages. The Senate bill keeps the medical and dental expense deduction but temporarily lowers the 10% threshold to 7.5% for 2017 and 2018. The House bill eliminates it. The charitable donation deduction remains the same in both bills. The Senate bill eliminates some above the line deductions, such as moving expenses. However, it also increases the deduction for education expenses for teachers from $250 to $500. Both bills eliminate all other itemized deductions.
  • Alternative Minimum Tax (AMT): The Senate keeps the AMT with marginal increases to the threshold amounts, while the House eliminates it.
  • Estate, Gift and GST Tax: While the House bill repeals the estate tax, the Senate bill allows for an exemption amount up to $10,000,000 per person.
  • Estates and Trusts Income Tax Rate: The Senate increases the threshold at which Estates and Trusts reach the maximum tax rate from $7,500 to $12,500.
  • 529 Plan Expansion: The Senate bill allows up to $10,000 per year of federal savings accounts for educational purposes to be used for tuition at elementary and secondary schools and expenses for home-schooled students in addition to the post-secondary schools.
  • Sale of Principal Residence: The Senate bill increases the timing that the $250,000 ($500,000 for married couples) exclusion of gain on the sale of your principal residence can be applied to property used and owned to five out of the last eight years.

Business Taxes

  • Corporate Tax Rate: Both alter the corporate tax rate to 20%.
  • Pass-Through Business Income Tax Rate: The House bill drops the top income rate to 25% and 9% for businesses earning less than $75,000. The Senate bill includes a 23% income rate however the deduction would only be available to anyone in a service business earning less than $250,000 for an individual and $500,000 for a married couple. The new House proposal taxes pass through entities at a flat 25% and not at the property owner’s income bracket. In the Senate bill, landlords earning more than $700,000 annually would stay at a top rate of 38.5% unless the rental properties or a management company pays out significant w-2 wages. These provisions under both the House and Senate bills are not applicable to service professionals.
  • Multinational Corporations: US companies currently pay taxes on worldwide profits, no matter where such income is earned. The Senate proposal makes the US a territorial system, allowing companies to pay taxes on income earned only within the US. Both bills also include a repatriation tax ranging from 7 – 14% to encourage US businesses to bring assets back to the US.

Gibney is continuing to monitor these developments. For questions about the tax proposals or planning for 2018, please contact:

Gerald Dunworth
gdunworth@gibney.com

Meredith Mazzola
mmazzola@gibney.com

December 6, 2017

Supreme Court Permits Travel Ban Enforcement While Legal Challenges Continue

On December 4, 2017, the Supreme Court granted the Administration’s request to stay preliminary injunctions which had temporarily blocked the Administration’s travel ban from taking effect. With this decision, the Supreme Court allowed the travel ban to go into effect while legal challenges against it continue. The Supreme Court urged the lower appeals courts to render decisions quickly on the legality of the ban. In the interim, the Administration may fully enforce the ban.

The Administration’s travel ban, set forth in a Proclamation issued in September 2017, announced various restrictions on nonimmigrant and immigrant entry for certain foreign nationals who are citizens or nationals of eight countries: North Korea, Venezuela, Chad, Syria, Iran, Somalia, Libya, and Yemen. The Administration previously issued travel restrictions through Executive Orders in January and March for certain nationals of six Muslim-majority countries, which have been challenged in Federal Court. The new Proclamation removes Sudan from the list of previously targeted counties, and imposes new travel limits for nationals of North Korea, Venezuela, and Chad. Case-by-case waivers and exemptions may be granted if appropriate in very limited circumstances.

For more information on country specific restrictions, visit the Bureau of Consular Affairs site and the Department of Homeland Security FAQs. Please consult with immigration counsel for legal advice.

Gibney will continue to monitor events and how these new guidelines will be implemented at the border and at Consulates abroad. For additional information, please visit Gibney’s Immigration Advisory and FAQs. If you have any questions regarding this alert, please contact your designated Gibney representative, or email info@gibney.com.

November 10, 2017

The New Tax Proposals

The Senate issued its version of the tax proposal on Thursday, the same day that the House Ways and Means committee approved their version.

How Are They Similar?
The Senate and House proposals share many similarities. Both plans reduce the corporate income tax rate, eliminate most itemized deductions, eliminate personal exemptions and increase the child tax credit, repeal the alternative minimum tax, and provide full expensing of certain capital expenditures.

How Do the Plans Differ?
There are certain key items that differ between the proposals that will require further deliberations. Key differences are that the House plan allows itemized deductions for state and local taxes up to $10,000 while the Senate’s plan completely eliminates this deduction. The Senate’s plan has seven individual tax brackets from 10%-38.5% but the House consolidates these into just four. The House plan doubles the estate tax and eliminates it by 2023 while the Senate’s plan also doubles the estate tax but does not phase it out.

What’s Next
The Senate Finance Committee is scheduled to start considering the Senate’s tax plan on Monday. The House is scheduled to vote on its tax bill next week as well.

October 31, 2017

Increased H-1B Onsite Visits 

On October 20, 2017, the U.S. Department of Homeland Security’s (DHS) Office of Inspector General released a report outlining recommendations to improve the U.S. Citizenship & Immigration Services (USCIS) Administrative Site Visit and Verification Program and targeted site visits for H-1B non-immigrant workers.

What Employers and Foreign Nationals Can Expect 

The USCIS’s Fraud Detection and National Security (FDNS) Unit already conducts random inspections at worksites of non-immigrant employees. However, in line with the DHS’s new report along with the Administration’s prior notices on implementing enhanced vetting procedures, we anticipate that DHS will likely be conducting more frequent and more thorough onsite visits.

FDNS inspectors may arrive at H-1B employee offices without advance notice. Below are some practical tips to prepare for site visits:

  • If an FDNS inspector arrives at a worksite, an appropriate HR and Gibney contact should be notified immediately to confirm and provide any requested information.
  • An FDNS inspector should provide proper identification in order to verify credentials and for any follow-up communications, as needed.
  • An inspector may ask to speak directly to foreign national employees, management, and/or HR to verify H-1B petition details such as job title, job duties, educational background, working hours, salary/pay statements, and worksite locations. FDNS inspectors will check these answers against the petition on file; therefore, it is important that foreign national employees are thoroughly familiar with all aspects of the H-1B petition.
  • Remind employees, managers and HR to notify their Gibney contact in advance of any changes in job details such as duties or worksite location.
  • It is important that employers put in place protocols for lobby and security staff to follow in the event of a site visit.

Please contact immigration counsel if you have specific questions about the nature and scope of site visits and how to prepare.

For more information on the Administration’s prior announcements, please see Gibney’s alerts regarding the “Buy American, Hire American” Executive Order and enhanced vetting procedures.

Gibney will continue to closely monitor these developments. For more information on this alert, please contact your designated Gibney representative, or email info@gibney.com.

October 16, 2017

FY2019 Diversity Visa Lottery

What is the Diversity Visa Lottery?
The Diversity Immigrant Visa Program, which is administered by the U.S. Department of State, permits up to 50,000 diversity immigrant visas to be granted for fiscal year 2019 to persons from countries with low immigration rates to the United States. Foreign nationals are selected for eligibility to file an application for permanent residence under this program on the basis of a lottery.

When can I apply?
The U.S. Department of State will accept applications online for the FY2019 diversity lottery between 12 noon Eastern Daylight Time (EDT) (GMT-4) on Wednesday, October 18, 2017, and 12 noon Eastern Standard Time (EST) (GMT-5) on Wednesday, November 22, 2017. Applicants are encouraged to apply in the early part of the application period. Note: due to a technical issue, the Department of State has closed the previous diversity lottery entry period that began on October 3, 2017. Entries submitted during the previous October 3, 2017 and October 10, 2017 entry period are not valid and will not be accepted or considered for selection in the FY2019 lottery. Individuals who submitted an application during the previous October 3-10 entry period must submit a new entry in order to be considered for selection in the FY2019 diversity lottery.

Who is eligible?
In order to enter the diversity visa lottery, an individual must be a national of an eligible country and must meet minimum education/work requirements.

Nationality:
No visas may be awarded to foreign nationals of countries that have sent more than 50,000 immigrants to the U.S. over the period of the last five years. For the 2019 diversity lottery, nationals of the following countries are NOT eligible to apply: Bangladesh, Brazil, Canada, China (mainland born), Colombia, Dominican Republic, El Salvador, Haiti, India, Jamaica, Mexico, Nigeria, Pakistan, Peru, Philippines, South Korea, United Kingdom (except Northern Ireland) and its dependent territories, and Vietnam. Persons born in Hong Kong SAR, Macau SAR, and Taiwan are eligible. There were no changes in eligibility this year.

Nationality is defined by the location of a person’s birth. However, if a foreign national is ineligible to apply based on their country of birth, there are two alternate ways to qualify. First, a foreign national whose spouse was born in a country whose natives are eligible to apply may apply provided the spouse is eligible. Second, a foreign national who was born in a country whose natives are ineligible to apply is eligible to apply if neither of his/her parents were born in or legally resided in that country at the time of the foreign national’s birth.

Education/Work:
In addition to meeting the nationality requirement, in order to enter the diversity lottery, a foreign national must have either a high school education or its equivalent, or at least two years of work experience within the past five years in an occupation requiring at least two years training or experience to perform.

How do I Apply?
Diversity lottery submissions are only accepted electronically. The electronic applications are submitted via the U.S. Department of State’s Diversity Visa Lottery website. Applicants may only submit ONE lottery entry; individuals who attempt to submit more than one application will be disqualified from participating in the lottery. Note: entries submitted during October 3-10 are not valid and have been excluded from the system; therefore, they will not count as a duplicate entry.

A diversity application must be accompanied by digital photographs of the applicant, the applicant’s spouse (if applicable), and the applicant’s dependent children (if applicable) taken in accordance with specific requirements set forth in detail on the U.S. Department of State’s website. Note: each spouse may submit his/her own application if he/she otherwise qualifies. In completing the electronic entry form, the following data will be required: full name, date of birth, gender, city of birth, country of birth, country of eligibility for the program, photograph(s), mailing address, current country of residence, phone number (optional), email address, educational level, marital status, number of children, and information about spouse and children.

How does the Selection Process Work?
Winners of the lottery will be selected in a random computerized process. After entering the lottery, it is critical to safeguard the confirmation page as it contains information that is needed to check the status of the application. Starting May 15, 2018 (through at least September 30, 2019), applicants can check the status of their application using their confirmation number through the Entry Status Check section of the E-DV website. Lottery winners will not receive correspondence in the mail to confirm the selection of their application; the status of the application can only be checked through the E-DV website.

Selection in the lottery does not automatically confer lawful permanent resident status. In order to become a permanent resident of the U.S., a selected lottery winner’s (and their dependents) application(s) for permanent residence must be filed and approved by September 30, 2019. The permanent residence application may be filed either via adjustment of status (if the foreign national is in the U.S. in a valid nonimmigrant status) or via consular processing.

Finally, please note that more lottery “winners” are selected than there are immigrant visas available because some winners will not be eligible to become U.S. permanent residents of the U.S. Accordingly, some individuals who are selected to apply for diversity visas may ultimately be unable to become U.S. permanent residents if the available diversity immigrant visas are assigned prior to their permanent residence application being adjudicated.

Where Can I Get More Information?
Instructions regarding how to apply for the 2019 Diversity Visa Lottery may be obtained from the U.S. Department of State’s PDF instructions and U.S. Department of State’s website.

For more information or specific legal advice, please contact your designated Gibney representative or email info@gibney.com.

 

October 13, 2017

New York City Employers Should Prepare for Salary History Ban Taking Effect on October 31

New York City’s new ban on inquiries concerning salary history will take effect on October 31, 2017.  According to the law signed by Mayor de Blasio this spring, it will be considered an unlawful discriminatory practice for any employer to inquire about the salary history of a job applicant or to use the applicant’s prior salary and/or benefits as a benchmark to negotiate compensation.

Impact on Employers
This new law applies to all public and private employers in New York City regardless of size. It prohibits direct and indirect inquiries about past salary and employee benefits, whether from former employers, publicly available sources, or the applicant directly.  This is part of a recent trend that includes similar laws passed in Delaware, Massachusetts, Oregon, Philadelphia and San Francisco.

Background
The stated goal of the new law is to find more practical ways to ensure that women and people of color are paid at the same rate for the same work as their white male counterparts. The New York City council sponsors of the bill believe that banning inquiries on salary history will help to minimize the perpetuation of such pay differences when employees change jobs, and allow prospective employees greater leverage in salary negotiations.

Potential Violations
Violations could subject the employer to civil suit by the applicant seeking back pay, emotional distress, and compensatory damages.  The New York City Commission on Human Rights, the city agency charged with enforcing discrimination laws, also may bring an enforcement proceeding and may impose fines of up to $125,000 for inadvertent violations and up to $250,000 for willful violations.

What the New Law Does/Does Not Allow Employers to Do

  • Employers may not make any inquiry from any source about the salary, bonus, and benefits the applicant was earning at prior employment.
  • Employers may discuss their salary, bonus, and benefits expectations with the applicant and discuss the anticipated compensation range the applicant is seeking.
  • If the applicant volunteers past compensation information without any prompting from the employer, the employer may consider salary history in determining compensation for the applicant, and the employer may verify such applicant’s salary history.

How Employers Can Prepare
Employers hiring employees in New York City should:

  • Be careful to remove past compensation and benefit inquiries from job application forms and other hiring documents
  • Review interview “do’s” and “don’ts” with all those who will be conducting interviews on the employer’s behalf.  Since refraining from asking about prior salary is such a marked change from existing practice, training interviewers will be a key to ensure compliance and to avoid potentially hefty fines.
  • Carefully document all voluntary disclosures by applicants to avoid later claims that the employer pried the information from the applicant.
  • Because increased scrutiny of the application process may be expected in November, employers should take this time to review hiring documents and procedures for compliance with other discrimination laws, including laws limiting and/or prohibiting criminal background checks and credit checks, and those governing use of information concerning age, sexual orientation, marital status, and national origin in the hiring process.

For questions about the Salary History Ban and how best to prepare, contact:

Robert J. Tracy
Partner
Labor and Employment
(212) 705-9814
rtracy@gibney.com

October 3, 2017

USCIS Resumes Premium Processing for All H-1B Petitions

U.S. Citizenship and Immigration Services has resumed Premium Processing today for all H-1B petitions.

Premium Processing was previously suspended for all H-1B petitions starting April 3, 2017, and subsequently reinstated for H-1B petitions filed on behalf of physicians under the Conrad 30 waiver program, interested government waivers, and Fiscal Year 2018 cap-subject filings.

What Employers Can Expect
Employers can now request Premium Processing for new and pending H-1B petitions by Filing Form I-907 and submitting the $1,225 filing fee. USCIS must respond within a fifteen (15) calendar day period with either an adjudication or Request for Further Evidence, or will refund the fee.

Please visit the USCIS website for further details.

Gibney will continue to monitor these developments. For more information on this alert, please contact your designated Gibney representative, or email info@gibney.com.

September 28, 2017

DHS Seeks Public Comments on Expanded Data Collection Effective October 18, 2017

The Department of Homeland Security (DHS) published a notice in the Federal Register announcing plans to collect additional information and social media data on all immigrants.

The scope of data collection is potentially very broad, and affected groups include green card holders, naturalized citizens, and relatives and associates of any individuals subject to the Immigration and Nationality Act (INA).

DHS will modify a current DHS system of records that contains information regarding transactions involving an individual as he or she passes through the U.S. immigration process. These records will also be used to assist DHS with detecting violations of immigration and nationality laws; supporting the referral of such violations for prosecution or other appropriate enforcement action; supporting law enforcement efforts and inspection processes at the U.S. borders; and to carry out DHS enforcement, immigration, intelligence, and or other homeland security functions.

DHS is soliciting public comments by October 18, 2017, when key substantive provisions go into effect. For details, please see the Federal Register Notice.

Gibney will closely monitor this and provide updates. For more information, please contact your designated Gibney representative or email info@gibney.com.