In this issue: Employer Ordered to Pay Arbitration Award to Former Employee With No Withholding. An arbitration award ordered an employer to pay specified amounts to an employee for back pay and front pay. The employer paid the employee a portion of the award and withheld the rest for federal tax withholdings. Citing IRC §7421, the employer argued that the court could not order it to pay withheld taxes to an employee, but the court disagreed. Barker v. Halliburton Co. E-Verify Website and Employee Verification Procedures Redesigned. U.S. Customs and Immigration Services (USCIS) introduced a redesigned website for its E-Verify program on June 13. IRS Releases Form 8846 With New Instructions on HIRE Act Exemption From Employer Social Security Tax. Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Tips, has been re-released unchanged with a new instruction in light of the HIRE Act, which affects the restaurant FICA tax credit on unreported tips. IRS Agrees to Easier Way to Prepare Form 941 and Schedule B Under the HIRE Act. See "Inside Washington" for July. MWR Web-Based Reporting Option Now Available. The Bureau of Labor Statistics (BLS) is now offering employers a web-based option for reporting Multiple Worksite Report (MWR) data (i.e., BLS 3020). New IRS Audit Program on Unreported Tip Income. The IRS is beginning a new program using data from employees' Forms 4137, Social Security and Medicare Tax on Unreported Tip Income, to determine the employer's share of social security and Medicare taxes on unreported tips. Financial Reform Bill Spares Paycard Industry, for Now. See "Inside Washington" for July. Supreme Court Will Decide If Medical Residents Qualify for the FICA Student Exception. Mayo Foundation for Medical Education and Research v. U.S. Wage & Hour Roundup. Read about recently reported developments in several Fair Labor Standards Act enforcement actions. IRS Changes SSN Validation Procedure After Second 'B' Notice. The IRS has issued interim procedures that individual payees can use to obtain validation of social security numbers (SSNs) from the Social Security Administration to prevent or stop backup withholding following the receipt of a second "B" notice from a payer. Ann. 2010-41. DOL Announces Increased Penalties for Illegal Employment of Children. Following up on recently published updated child labor regulations applicable to nonagricultural work, the Department of Labor (DOL) has announced the implementation of stiffer penalties against employers that illegally employ child workers. Supreme Court Agrees to Review Case Involving Arizona E-Verify Law. Chamber of Commerce v. Candelaria. SPECIAL REPORT: Payroll Questions Answered by Federal Panel at APA Congress. Read answers to questions presented to the Internal Revenue Service, the Social Security Administration, the Office of Child Support Enforcement, U.S. Citizenship and Immigration Services, U.S. Immigrations and Customs Enforcement, and the Department of Labor. State and Local News.   • California – petition for U.S. Supreme Court review of case involving San Francisco Health Care Security Ordinance denied • Kansas – electronic filing of withholding tax returns mandated • Kentucky – UI taxable wage base increased • New York – guidance on personal income tax treatment of same-sex marriage issued • Vermont – employee misclassification penalties enacted; new hire reporting requirements revised; paycard use permitted • Washington – UI: penalties enacted for knowing failure to register; taxable wage base increased • Wisconsin – tax treatment of health care benefits for children under 27 explained

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