July 19, 2010  Nº 933 -  Vol. 8

"If we could sell our experiences for what they cost us, we'd all be millionaires."

Insider's view: see how local concerns shape up the global world. Read the daily press review in Migalhas International


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  • Top News

France's three-strikes law for internet piracy hasn't brought any penalties

Nearly three years ago Sarkozy proposed what was to have been the world's toughest crackdown on illegal file-sharing. After two years of political, judicial and regulatory setbacks, the legislation was approved last September, authorizing the suspension of Internet access to pirates who ignored two warnings to quit. Early this year, the government set up an agency to implement the law. Since then, not a single warning has been sent out; not a single broadband connection has been cut. iIn June, the agency said it was "technically and legally ready" to take action. The first warnings would be sent out "before long."  But it did not give a date, and news reports have shown growing unease about the legislation. Even some lawmakers in Sarkozy's party have expressed doubts. The cost of tracking pirated works, after officials of the new agency said they planned to pursue only the most prolific pirates, rather than all violators, runs up to more than €400,000, or $517,000, a year. "That's a lot, and we want to be sure that Hadopi (French acronym for the new agency) will deal with all the cases.”

Internet law - Federal Taxes: are you an Employee or a Contractor?

US employers are increasingly hiring personnel as contractors rather than employees.  Not to mention those who are hired as employees, but with reduced hours so they do not become full-time employees deserving full legal benefits. One of the main reasons for hiring contractors rather than employees is the saving of overhead.  Contractors are not paid social security, medical insurance, vacation, bonuses, etc.   European and Latin American labor laws are definitely more protective of workers than those of the United States. Although, it must be said, the United States labor laws have contributed to the substantial development of job sources. Job benefits are not the only difference between an employee and a contractor; federal taxes and deductions also vary depending on the labor relationship. 

This article provides an example of the elements considered to determine whether a person is an employee or a contractor.

The U.S. Tax Court rendered a "non-precedent" decision in the case of Maimon v. Comm'r, T.C. Summary Opinion 2009-53, when it held that a medical doctor was an employee rather than a contractor and, therefore, subject to 2 percent limit on deductions.  In Maimon, the plaintiff was a plastic surgeon who executed a shareholder's agreement and close corporation agreement with other 6 doctors to provide various medical services. The same day these agreements were celebrated, Maimon signed an employment agreement with the medical institution (hereafter MI). Maimon would receive an annual salary payable bi-weekly, vacation, and annual bonuses.  In addition to the employment duties, Maimon had to participate as an officer and member of the MI"s Board of Directors.  The MI hired and paid other employees, including receptionists who worked for the different doctors, bought medical equipment, leased the MI facilities, paid doctors' malpractice insurance, and paid telephones and administrative expenses. The MI paid Maimon's social security and made the appropriate deductions before disbursing payments to Maimon. In 2004, Maimon had a malpractice lawsuit settlement, and incurred several payments associated to this matter. Then, Maimon filed his tax return deducting these expenses in Schedule C, although he had filed taxes as an employee and showed his W-2.  The Internal Revenue Service (IRS) claimed that Maimon had to pay a deficiency in the 2004 tax return. Those deficiencies were associated to the deductions in Scheduled C of his tax return.  The IRS claimed Maimon was an employee and, as such, he was only allowed to deduct up to 2 percent of expenses incurred when rendering his services under the employment contract. Maimon challenged the IRS' position, and the case was referred to the Tax Court.

The Tax Court (TC) held that Maimon was an employee. The TC first clarified those individual performing services as employees may deduct expenses incurred while performing their services as miscellaneous itemized deductions on Schedule A, provided that itemized deductions exceed two percent of the taxpayer's adjusted gross income.  26 U.S.C.S. §§ 62(a)(2), 63(a), (d), 67(a) and (b), 162(a).  Independent contractors may deduct expenses incurred in the performance of services on Schedule C, and these deductions are not subject to the two-percent limitation imposed on miscellaneous itemized deductions. Then, the TC said that whether an individual is an employee or a contractor is a factual question to which common law principles apply.  Also, guidelines for determining the existence of an employment relationship, the court said, are found in regulations "26 C.F.R. § 31.3121(d)-1, 26 C.F.R. § 31.3306(i)-1, and 26 C.F.R. § 31.3401(c)-1, relating to FICA, FUTA, and income tax withholding, respectively, that adopt the common law definition of an employee." Relevant factors in evaluating whether a worker is a common law employee or an independent contractor include: "(1) The degree of control the principal exercised; (2) which party invests in work facilities the worker used; (3) the worker's opportunity for profit or loss; (4) whether the principal can discharge the worker; (5) whether the work is part of the principal's regular business; (6) the permanency of the relationship; and (7) the relationship the parties believed they were creating. All of the facts and circumstance of each case are considered, and no single factor is dispositive."

Therefore, after applying the above elements to the Maimon case, the court considered that Maimon was an employee rather than a contractor and, therefore, he was not entitled to Schedule C deductions. Instead, Maimon was subject to miscellaneous deductions with its respective limitation.

Before you open the door to the boardroom, peek through the keyhole!

Michael Page specializes in the placement of candidates in permanent, contract, temporary and interim positions within client companies around the world. Have a look at the new section of the Migalhas website and discover the professional development opportunities with large corporations, in legal and business fields, presented by Michael Page International. Click here to peep through the hole!


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MiMIC Journal

Chinese turn to religion to fill a spiritual vacuum

Alongside China's astonishing economic boom, an almost unnoticed religious boom has been taking place. The collapse of the communist ideology created a void that has left many Chinese looking for a value system.


Tell your friends and colleagues you've read it in Migalhas International


  • Brief News

US Department of Justice goes after Arizona laws

Arizona has made controversial news as of late with its new immigration laws, such as SB 1070 and other states are following suit. The US Department of Justice hopes their lawsuit will stem the tide of increasing state immigration laws and resolutions. Last year 333 state laws and resolutions were enacted which is substantially up from the 32 similar laws and resolutions enacted in 2006. The numbers are staggering according to the National Conference of State Legislators. In 2010 alone, more that 1,000 laws and resolutions were introduced. The common denominators in most of the individual state laws revolve around employment verification and driver’s license requirements. This is where the problem starts. State laws regarding DMV or Department of Motor Vehicle regulations and employment issues are different from state to state. Law makers introducing immigration laws that revolve around DMV and employment issues feel that these issues should remain within the realm state law since they are based on preexisting state statutes. However, critics of this new wave of immigration laws say that Arizona's SB 1070 is, in effect, a legal form of racial profiling. 

Law firms with 2 tiers of associates pay 2nd ranks up to 50% less

For years, a number of law firms have had two tiers of partners, often differentiating between equity and non-equity holders of the same job title. Now, in a new trend that is taking hold among some California law firms, there may be two ranks of associates. Paid as much as 50 percent less than their traditional partnership-track counterparts, those in the second tier are billed out to clients at perhaps 25 or 30 percent less, creating a financial incentive to staff matters with those in the lower ranks. "In other words, if a non-partnership track associate bills 1,800 hours, the firm makes a larger profit and the clients pay less money than if a traditional associate were to bill the same number of hours." By contrast with contract attorneys hired for temporary assignments, who may spend only limited time with--have have limited loyalty to--the firm's partners and traditional associates, second-tier associates are a more stable work force and may even see certain aspects of their jobs, such as reduced billable-hour quotas, as a plus. Meanwhile, because they are better-integrated into the firm, their work quality likely is higher, reducing hidden costs of contract attorneys, including but not limited to a significant error rate.  

UK minister: government will not support burqa ban 

UK Immigration Minister Damian Green indicated that Britain's coalition government would not seek or support a British law banning the wearing of the Islamic burqa or other face coverings in public. Green stated that banning the burqa would not be consistent with British society, where mutual respect for differences among cultures is important. Earlier this month, legislation was introduced in the House of Commons that would ban the wearing of the burqa or other face coverings in public. The Face Coverings (Regulation) Bill was introduced in order to regulate the covering of the face in public and, if passed, would prohibit the wearing of both the burqa and the niqab. Green stated that the bill was unlikely to pass and that the government had little interest in telling citizens what they are allowed to wear in public. 

Also, the Spanish opposition Popular Party (PP) announced that debate will begin over a Spanish burqa ban in the lower house of the parliament, the Congress of Deputies, on Tuesday. The plans for a Spanish burqa ban were first announced last month by Spanish Justice Minister Francisco Caamano and will be included in Spain's Religious Freedom Bill, which would also prohibit religious symbols, such as crucifixes, in state-owned buildings. The Spanish burqa ban appears to have strong support from both the ruling and opposition parties. The proposed Spanish burqa ban is expected to become law unless ruled unconstitutional by the Spanish Constitutional Court.

Insurer AIG agrees to massive $725m fraud payout

The US insurance giant AIG has agreed to pay $725m to settle a long-running fraud case against it. The settlement is likely to be one of the biggest in US history, following a class action lawsuit led by three Ohio pension funds. They alleged that AIG had engaged in stock price manipulation, anti-competitive behavior and accounting fraud between 1999 and 2005. That, they say, resulted in shareholders losing millions.

Moody's downgrades Ireland rating

Credit ratings agency Moody's downgrades the Irish Republic's sovereign bond rating.

Telefonica pulls out of Vivo bid

Spanish telecom firm Telefonica pulls out of its bid to buy a 7bn euros stake in Brazilian mobile company Vivo.

US judge overturns Dole Nicaragua banana ruling

A US judge has thrown out a $2.3m award won by six Nicaraguans against Dole Food Company, ruling that the firm was the victim of fraud. In 2007, a jury found in favor of the men who said they had been left sterile by exposure to pesticides while working on Dole banana plantations. But Judge Victoria Chaney said that fraud by the plaintiffs' lawyers had left Dole unable to defend itself. One lawyer had recruited bogus banana workers for the case, she said. The original trial centred around the use of pesticides - namely dibromochloropropane or DCBP, which was banned in the US but was used on Dole plantations in Central America in the 1970s. The initial verdict was hailed as a landmark decision that could possibly open the case for thousands of other workers to seek compensation. The latest ruling now casts doubt over these cases.

Cyberwarrior shortage threatens u.s. security

There may be no country on the planet more vulnerable to a massive cyberattack than the United States, where financial, transportation, telecommunications and even military operations are now deeply dependent on data networking. What's worse: U.S. security officials say the country's cyberdefenses are not up to the challenge. In part, it's due to a severe shortage of computer security specialists and engineers with the skills and knowledge necessary to do battle against would-be adversaries. The protection of U.S. computer systems essentially requires an army of cyberwarriors, but the recruitment of that force is suffering. "You can have vulnerabilities in the fundamentals of the technology, you can have vulnerabilities introduced based on how that technology is implemented, and you can have vulnerabilities introduced through the artificial applications that are built on that fundamental technology." "It takes a very skilled person to operate at that level, and we don't have enough of them."

Lawyers banned from criminal legal aid work after £221,000 is paid back

The Scottish Legal Aid Board (SLAB) announced that Iain Robertson, director of the Paisley law firm Robertson and Ross, had been removed from the register of solicitors who provide criminal legal assistance. Alistair Gibb, a former associate of the firm, has also been deregistered.  An investigation revealed non-compliance with SLAB's code of practice for criminal legal assistance, including overcharging the board for travel to various prisons. The pair will not face prosecution as the Crown Office, which investigated the case, said it would not be pursuing the case and the Law Society of Scotland has said that, because there has been no criminal conviction and no member of the public or organization has complained to the society about the solicitors' actions, it will not become involved.

New York governor signs law banning 'stop and frisk' database 

New York Governor David Paterson signed a bill Friday prohibiting the retention of personal information of individuals detained New York City police during a "stop and frisk" but ultimately not charged with a crime. The law was approved by the New York Assembly last month and will end the practice of police obtaining and keeping an electronic record of all individuals who are temporarily detained based on a police officer's reasonable suspicion. Opponents of the law, including New York City Mayor Michael Bloomberg, argue that the current database has been an important crime fighting tool for police officers in New York City, crediting the database with a significant decrease in crime. Paterson stated that the law was consistent with the state's Criminal Procedure Laws and with societal principles of justice. In 2009, New York City police officers obtained information from more than 500,000 individuals, primarily minorities, as a result "stop and frisk" detentions.

Russia lower house approves bill expanding secret police powers 

The Russian State Duma on Friday voted 354 to 96 to approve legislation that would allow the country's secret police, the Federal Security Service (FSB), to question citizens about their actions related to crimes that have not yet occurred. The KGB, predecessor to the FSB, had the authority to conduct similar preemptive questioning, which was often used to intimidate dissidents in the USSR. Under the proposed legislation, the FSB could, without evidence, question and warn citizens about the possible commission of future crimes, although the final bill falls short of punishing individuals who ignore the FSB warnings. Rights groups and members of the Russian legal community have condemned the law saying that it legalizes arbitrary detentions by the FSB and that it extends the scope of the FSB beyond its authority. Russian President Dmitry Medvedev has indicated that he supports the bill and has warned against international interference in Russian lawmaking. The bill must now be approved by the Russian Federation Council before Medvedev can sign it into law.

  • Weekly Magazine Review


The economy is back. The economy stinks. The Good and Bad Economy.  As each day brings signs of both revival and relapse, Obama is under pressure to throw more money at the problem. Voters want no part of that. How an economic recovery ran into a political storm.


The resurrection of Crist.

Business Week

Bill Gates, teachers’ pest. Bill Gates' School Crusade. The Microsoft founder's foundation is betting billions that a business approach can work wonders in the classroom.

The Economist

Shifting sands. For good or ill, change is coming to Egypt and Saudi Arabia soon.


Affaire Bettencourt: Bannier dit tout.

Der Spiegel

Ich bin dann mal off - Über die Kunst des Müßiggangs im digitalen Zeitalter.

  • Daily Press Review

Scores dead in India train crash
Al Jazeera, Doha, Qatar

Hague Says No BP Involvement in Lockerbie Release
Asharq Al-Awsat, Pan-Arab daily, London, England

New Zealand to open embassy in Abu Dhabi
Gulf News, Independent daily, Dubai, United Arab Emirates

MESS Report / Political tensions growing in Lebanon over Hariri tribunal
Haaretz, Liberal daily, Tel Aviv, Israel

US-IRAN: Mosque Blasts Denounced by Obama, Clinton
IPS Middle East, International cooperative of journalists, Rome, Italy

Report: Mubarak is terminally ill
JPost, Conservative, Jerusalem, Israel

One million jump in tourist arrivals in Dubai
Khaleej Times, English-language daily, Dubai, United Arab Emirates

Schooling compulsory till age 18 for UAE nationals
Middle East North African Network, Online financial portal, Amman, Jordan

50 Killed in India Train Crash
Nahamet, Online news portal, Beirut, Lebanon

Panel formed on Lebanon poll law
Saudi Gazette, English-language daily, Riyadh, Saudi Arabia

Mubarak meets Israeli, Palestinian leaders
The Daily Star, Independent daily, Beirut, Lebanon

Suicide bombers attack Iraq militia and kill over 40
Times of Oman, English-language daily, Muscat, Oman

Yemeni-European joint committee discuss reforms
Yemen Observer, Sana'a, Republic of Yemen

The OPEC Fund for International Development Scholarship
Yemen Times, (Independent weekly), Sana'a, Republic of Yemen

Cameron to launch 'big society'
BBC News, Centrist newscaster, London, England

Price's debut solo single flops
BreakingNews.ie, Online news portal, Cork, Ireland

Death penalty book author arrested
Daily Express, Conservative tabloid, London, England

Releasing Lockerbie bomber was a blunder, Cameron will tell Obama
Daily Mail, Conservative daily, London, England

Telefonica declines PT's request for Vivo offer extension
DMeurope, Online news portal, Amsterdam, Netherlands

USA: US alarmed over leaks detected near plugged Gulf oil well
France 24, Issy-les-Moulineaux, France

Stephanie Pratt and Lo Bosworth Go Sailor Chic!
Look Magazine, London, England

Severe weather warning issued for Cumbria
News & Star, Independent daily, Carlisle, England

Russian Conductor In Thai Court On Child Sex Charge
Radio Free Europe, Prague, Czech Republic

Teenager Killed On M23 After Wedding Row
Sky News, Independent newscaster, Middlesex, England

Alternative Medicine or Witchcraft?: Europeans Cast Critical Eye on Homeopathy
Spiegel International, Liberal newsmagazine, Hamburg, Germany

Treasury and MoD battle over Trident replacement
The Guardian, Liberal daily, London, England

Sabotage probe after Indian train crash kills 56
The Independent, London, England

LRC talks on refuse dispute
The Irish Times, Centrist daily, Dublin, Ireland

2,000 Defiantly Stage Rally in Black Sea Town
The Moscow Times, Independent daily, Moscow, Russia

Head's evil killer freed
The Sun, London, England

Eamonn Holmes threatens BBC with legal action after comedy show mocks his weight
The Telegraph, London, England

Gunman Raoul Moat sent shot ex girlfriend 'get well card'
The Telegraph, Conservative daily, London, England

Bull 1, Mexican matador: never again
Times Online, Conservative daily, London, England

Japanese ambassador on return visits to traditional Muslim schools
Antara News, News agency, Jakarta, Indonesia

Clinton aims to refine goals of Afghan war
China Post, English-language daily, Taipei, Taiwan

10th Seoul International Financial Forum Kicks Off
Chosun Ilbo, Conservative daily, Seoul, South Korea

Clinton opens Pakistan talks with new aid projects
Dawn, English-language daily, Karachi, Pakistan

Deputy Secretary of State James B. Steinberg Travel to Kazakhstan, Uzbekistan, and Kyrgyzstan, Mongolia, and Japan
Gazeta.kz, Official online newspaper, Kazakhstan

Facebook Wants User Stories for 500M Milestone
Hindustan Times, New Delhi, India

56 killed in Bengal train collision
India Express, News portal, Mumbai, India

1,000 more DU seats to open up
India Times, Conservative daily, New Delhi, India

Ahn wins Stanley Ladies in playoff
Japan Times, Independent centrist, Tokyo, Japan

Sand price review to ensure bumi companies face no hardship
Malaysian Star, Online news portal,  Selangor Darul Ehsan, Malaysia

Strong quakes rock Papua New Guinea
New Zealand Herald, Conservative daily, Auckland, New Zealand

Commander surrenders
Pajhwok Afghan News, (Independent news agency), Kabul, Afghanistan

Bolivia approves new autonomy law
People's Daily Online, English-language, Beijing, China

Ethnic Indian wins Malaysian golf tournament
Sify News, Chennai, India

Palin the Refudiator
Sydney Morning Herald, Centrist daily, Sydney, Australia

China's investment climate stable, says Premier Wen
Taiwan News, English-language daily, Taipei, Taiwan

Young volunteers return home to preserve mangroves
Taiwan Today, Government Information Office, Taipei, Taiwan

Pak team may replace Kaneria with Ajmal for Headingley Test against Australia
Thaindian News, Bangkok, Thailand

Reddy brothers will stay: Yeddyurappa
The Hindu, Left-leaning daily, Chennai, India

RCMP sift through tips in couple's disappearance
Canadian Broadcasting Centre, Toronto, Ontario

BA strengthens Caribbean links
Caribbean360, Online news portal, St. Michael, Barbados

Premier to take time off after meetings with FCCA, WestJet
Cayman Net News, Online news portal, George Town, Cayman Islands

Dominican Republic's most wanted couple arrested in Puerto Rico(Update)
Dominican Today, Independent daily, Santo Domingo, Dominican Republic

VENEZUELA-COLOMBIA: President Uribe Secures Legacy of Dispute for Successor
IPS Latin America, International cooperative of journalists, Rome, Italy

Gangster hunt - West Kingston thugs held in Manchester
Jamaica Gleaner, Independent daily, Kingston, Jamaica

Ancient tomb unearthed in northern Peru
Living in Peru, News portal, Lima, Peru

No room for despair in quest to beat AIDS
The Globe and Mail, Centrist daily, Toronto, Canada

Spain beats Netherlands 1-0 in World Cup final
Toronto Star, Toronto, Ontario

Subhas: Local govt debate will benefit T&T
Trinidad Guardian, Independent daily, Port-of-Spain, Trinidad

Sudan dissent 'brutally quelled'
BBC News, Centrist newscaster, London, England

ICC orders the release of Thomas Lubanga
CongoPlanet.com, Independent online news aggregator

Accra Academy wins Junior Achievement award
GhanaWeb, Online news portal, Amsterdam, Netherlands

50 killed in train crash
iafrica, Online news portal, Cape Town, South Africa

Malema's back!
Independent Online, News portal, Cape Town, South Africa

Somaliland Presidential guards kill a British driver
Jimma Times, Online news portal, Jimma, Ethiopia

Shilowa threatens court action
Mail & Guardian Online, Liberal, Johannesburg, South Africa

Boy questioned over friend's death
News24.com, Online news portal, Cape Town, South Africa

NLC gives FG two months to implement new minimum wage
Vanguard, Independent daily, Lagos, Nigeria


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