Compliance October 27, 2011

AT&T Settles Suit over Early Retirement Program

AT&T has agreed to cease discriminatory policies to settle an age discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), regarding employees who took an early retirement package.
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The EEOC had charged that AT&T, Inc. and a number of its subsidiaries discriminated against a class of retired AT&T workers by denying them the opportunity for reemployment solely because they retired under certain early retirement or enhanced severance programs. This practice violated the Age Discrimination in Employment Act (ADEA), the EEOC claimed.

According to the agency’s lawsuit, individuals who participated in the Voluntary Early Retirement Incentive Program (an AT&T Corp. program from 1998 to 1999, before its merger with SBC Communications from 2005 to 2007), the Enhanced Pension and Retirement Program (EPR – a pre-merger SBC program from 2000 to 2001), and the Change-in-Control Program (CIC – a pre-merger AT&T Corp. program conducted in connection with the merger) were restricted from being reemployed or engaged as contractors because they took one of these retirement packages.

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The EEOC filed suit in U.S. District Court for the Southern District of New York on August 20, 2009, after first trying to reach a pre-litigation settlement through its conciliation process. AT&T denied the allegations in the lawsuit, but agreed to change its policies related to the reemployment of retirees.

The consent decree settling the suit prohibits AT&T from maintaining any policy that excludes from reemployment employees who left AT&T under one of the early retirement plans. The decree also prohibits AT&T from requiring a different process for selecting retirees than any other former employees.

“Many former employees who took an early retirement package years ago still need work, and will now have an equal opportunity to apply for new jobs at AT&T,” said Anna M. Pohl, a trial attorney in the EEOC’s New York District Office.

Compliance October 27, 2011

House Votes to Repeal Withholding Tax for Government Contractors

The House of Representatives passed a bill to repeal a measure that would have required federal, state and local governments to withhold 3% of payments to government contractors, reports Bloomberg Businessweek. 
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The tax was enacted in the Tax Increase Prevention and Reconciliation Act of 2005 and was set to take effect on January 1, 2013.

The vote was passed by a wide margin (405-16) and will now be sent to the Senate. The U.S. Chamber of Commerce and other business groups have said the withholding requirement is too burdensome and that its repeal is one of the few areas of agreement between the President and congressional Republicans, reports Bloomberg.

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The Financial Services Institute (FSI) released a statement following the vote, applauding the House for passing the bill (H.R.674).   The institute says the 3% Withholding Tax would have had a negative impact on financial advisers that do business with local, state or federal government entities. FSI President and CEO, Dale E. Brown, released the following statement:

“Businesses that provide services to the government deserve to be paid in full and due upon receipt. They shouldn’t be forced to lose a percentage of their pay they could be investing throughout the year or using to hire additional employees. The withholding tax could create cash flow problems as well as draining capital that could be used for job creation and business expansion. On behalf of our members and their clients, FSI weighed in with multiple letters, and we’re pleased to do our part in this effort. This is further effort on FSI’s behalf to support our members’ small businesses and the best interests of their clients.”

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