Supreme Court Issues Decisions on Employee Compensation: Defining Changing Clothes and Taxable Wages

Source: Harold M. Brody and Courtney M. Bowman, Employment Relations Today, Volume 41 Issue 2, Summer 2014
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This term, the Supreme Court decided two cases addressing different aspects of employee compensation. In Sandifer v. United States Steel Corp., the Court held that the time employees spend putting on and taking off protective gear for work is not necessarily compensable under the Fair Labor Standards Act. In United States v. Quality Stores, Inc., the court ruled that certain severance payments are taxable under the Federal Insurance Contributions Act. This article provides an overview of these two cases, both of which have important implications for employers.