December 03, 2014

Retirement Update from the Internal Revenue Service

Retirement plan updates issued by the Internal Revenue Service
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Updated Model Notices

For Sponsors of 401(a), 403(a), 403(b) and governmental 457(b) plans to notify participants of rollover options for their distributions from Roth and non-Roth accounts, including the right to direct pre-tax and after-tax amounts to separate destinations(Notice 2014-74)

Retirement Plan Webinars

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  • Dec. 4 - Properly Defining Retirement Plan Compensation 
  • Dec. 11 - Retirement Plan Distributions: What Every Participant Should Know

Updated Publications 

Placing an employee on an involuntary leave pursuant to Civil Service Law §72.5

Placing an employee on an involuntary leave pursuant to Civil Service Law §72.5
OATH Index No. 2443/14

Following an investigation of several complaints of workplace violence involving an employee, Anonymous, the individual was referred to a psychiatrist for evaluation. The psychiatrist found that Anonymous presented a risk of danger in the workplace. The appointing authority placed Anonymous on involuntary leave pursuant to §72.5 of the Civil Service Law.

At the §72 disability hearing that followed, the appointing authority presented testimony from an investigator and both sides presented medical expert testimony.

OATH Administrative Law Judge Alessandra F. Zorgniotti found the opinion of  Anonymous’s expert to be “conclusory” as he did not explain how Anonymous’s culture would cause him to be paranoid and aggressive with others.

Judge Zorgniotti recommended that Anonymous remain on involuntary leave pursuant to §72.5, finding that the appointing authority had properly placed Anonymous on pre-hearing involuntary leave based upon documented instances of threats, hostility and anger to co-workers, and the evaluation of an independent psychiatrist.

With respect the placement of an employee involuntarily on leave pursuant to Civil Service Law §72.5, the appointing authority is authorized to immediately place an individual on such an involuntary leave of absence in the event the appointing authority determines that there is probable cause to believe that the continued presence of the employee on the job represents a potential danger to persons or property or would severely interfere with agency operations.

§72 leave is leave without pay. However, an employee placed on a §72.5 involuntary leave of absence is entitled to use all accumulated unused sick leave, vacation, overtime and other time allowances standing to his or her credit in order to remain on the payroll. If the employee declines to use his or her accumulated leave credits in order to remain on the payroll, or having elected to remain on the payroll, exhausts his or her accumulated leave credits, he or she is placed in leave without pay status.

§72.5, in pertinent part, provides that if, after the hearing, the employee is determined not to be physically or mentally unfit to perform the duties of his or her position, “he or she shall be restored to his or her position and shall have any leave credits or salary that he or she may have lost because of such involuntary leave of absence restored to him or her".

The decision is posted on the Internet at:

December 02, 2014

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli on December 2, 2014

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli on December 2, 2014
Click on texthighlighted in color  to access the full report

Village of Bainbridge – Financial Operations (Chenango County)
The board did not request adequate reports from the clerk-treasurer and was unable to make informed financial decisions. In addition, the clerk-treasurer’s records understated the total fund balance of the general, water and sewer funds by $114,572, $74,000 and $42,300. 

Village of Bellerose – Procurement and Cash Receipts (Nassau County)
Village officials do not require the use of requisitions and purchase orders when purchasing goods and services. The village did not seek competition when purchasing goods and services that are not subject to bidding and when selecting professional service providers. In addition, the board did not provide sufficient oversight of purchases made with village credit cards. 

Village of Brushton – Fiscal Oversight (Franklin County)
The clerk-treasurer did not perform monthly bank reconciliations or provide the board with complete and accurate monthly financial reports. In addition, the clerk-treasurer has not filed an annual financial report with the Office of the State Comptroller since the 2008-09 fiscal year. Also, the board did not annually audit the clerk-treasurer’s records and reports. 

Town of Day – Supervisor’s Records and Reports (Saratoga County)
Expenditures were accurately recorded in the accounting records, however, monthly reports contained inaccurate monthly cash balances. Additionally, revenues received in 2014 totaling more than $500,000 were not recorded in the accounting records or reported to the board. 

Limestone Volunteer Firemen, Inc. – Controls Over Financial Activities (Cattaraugus County)
The board did not develop and implement adequate internal controls over cash disbursement and receipt functions. Auditors found approximately $38,000 in unsupported disbursements that may not have been for appropriate company purposes, including approximately $3,800 paid to the treasurer and nearly $3,000 paid to the fire chief.

An employer is neither required to create a new light-duty position to accommodate a disability nor to assign an employee with more than a temporary disability to a light-duty program designed to accommodate a temporary disability

An employer is neither required to create a new light-duty position to accommodate a disability nor to assign an employee with more than a temporary disability to a light-duty program designed to accommodate a temporary disability*
Coles v New York State Div. of Human Rights, 2014 NY Slip Op 07788, Appellate Division, Fourth Department

Geraldine Colescommenced this proceeding pursuant to Executive Law §298 seeking to annul the determination of the Commissioner of the State Division of Human Rights [SDHR] that she failed to establish that her employer, the Erie County Sheriff's Office (ECSO), discriminated against her based on a disability.

Although initially the Division’s investigators found that Cole had alleged probable cause a Division Administrative Law Judge (ALJ) found that Coles did not establish that ECSO failed to provide her with reasonable accommodations for her disability.** The Commissioner of SDHR adopted the ALJ’s findings and recommendation and dismissed Coles complaint.  We now confirm the determination.

Confirming the Commissioner’s decision, the Appellate Division said that "[i]n reviewing the determination of SDHR's Commissioner, this Court may not substitute its judgment for that of the Commissioner . . . , and we must confirm the determination so long as it is based on substantial evidence."

ECSO did not dispute that Coles condition constituted a disability and Coles did not dispute that as a deputy sheriff assigned to the position of "inmate escort" at ECSO's correctional facility, her disability does not permit her to be assigned to duties involving direct inmate contact, i.e., duties that require uninterrupted vigilance and emergency response capability. Further, said the Appellate Division, Coles did not dispute the representation that she cannot perform the essential functions of an "inmate escort" without presenting a direct threat to her own safety and others in the workplace.

The accommodation Coles sought was for ECSO to assign her to a “light-duty position.”

The Appellate Division observed that “[i]t is well settled that an employer is neither required to create a new light-duty position to accommodate a disability … nor to assign an employee with more than a temporary disability to a position in a light-duty program designed to accommodate only temporary disabilities.

Noting that ECSO maintained a "light-duty" program,*** the court said that the purpose of that program is to assist employees with temporary disabilities by modifying work assignments and duties or arranging for a temporary transfer to a "Transitional Duty Assignment (TDA)" until the employee is medically released to resume his or her regular duties. Significantly, the Appellate Division said that “The fact that an employer has been lax in enforcing the temporary nature of its light-duty policy does not convert the policy into a permanent one,” explaining that the expressed intent of ECSO's policy “is not to create a permanent Transitional Duty Assignment, nor is [the policy] to be used in cases where an employee cannot perform the essential functions of a job with reasonable accommodation."

The Appellate Division concluded that there was no basis to disturb the Commissioner's determination that Coles’ disability was of a permanent nature and that ECSO had no permanent light-duty police assignments available. Thus, said the court, ECSO was not required under the Americans with Disabilities Act (42 USC §12101 et seq.) or the New York State Human Rights Law (Executive Law §296) to accommodate her disability by creating such a light duty position for her.

* See also County of Erie v New York State Div. of Human Rights, 2014 NY Slip Op 07829, Appellate Division, Fourth Department

** Executive Law §296(3)(b) requires employers to make reasonable accommodations to permit the employment of disabled employees, provided that the accommodations do not impose an undue hardship on the employer. A reasonable accommodation is defined as an action that permits an employee with a disability to perform the duties of his or her job position in a reasonable manner.

*** ECSO Policy # 03-01-07, Light Duty Assignments

The Doles decision is posted on the Internet at:

The County of Erie decision is posted on the Internet at:

December 01, 2014

The "Rule of Necessity" provides a limited exception to the requirement of an unbiased adjudicator by permitting a biased adjudicator to decide a case if, and only if, the dispute cannot otherwise be heard

The "Rule of Necessity" provides a limited exception to the requirement of an unbiased adjudicator by permitting a biased adjudicator to decide a case if, and only if, the dispute cannot otherwise be heard
Zlotnick v City of Saratoga Springs, 2014 NY Slip Op 08289, Appellate Division, Third Department

This CPLR Article 78 petition was transferred to the Appellate Division by the Supreme Court to review a determination made by John P. Franck, Commissioner of Accounts for the City of Saratoga Springs, terminating City of Saratoga Springs Real Property Clerk Mary M. Zlotnick’s employment.

Zlotnick, believing that an individual representing certain condominium owners was receiving preferential treatment from the City's Assistant Assessor, Anthony Popolizio without going through a formal grievance process initially expressed her concerns to the City's Deputy Commissioner of Accounts, Sharon Kellner-Chille, who, in turn, contacted Franck. The Commissioner met with Zlotnick and explained the difficulties that City had experienced with condominium assessments in the past and advised her that the representative* in question was participating in an informal — and entirely permissible — grievance process.

Zlotnick, however, was not persuaded by the Commissioner’s explanation and ultimately brought her suspicions regarding this procedure to, among others, the Saratoga County District Attorney and the Attorney General.

In June 2012 Franck preferred disciplinary charges against Zlotnick alleging that she had violated City policy by making personal use of the Internet during working hours, and suspended her for a period of one week without pay. A disciplinary hearing was held in August 2012 and the Hearing Officer found Zlotnick guilty of the charges and recommended a one-week suspension without pay, such penalty to be satisfied by the earlier imposed suspension without pay. Franck adopted the findings and recommendation of the hearing officer.

In the course of the hearing Zlotnick testified as to her ongoing concerns regarding the manner in which condominium assessments were being reduced. Upon reviewing a transcript of her testimony, Franck  again investigated Zlotnick's allegations and, in so doing, "looked at every [assessment] reduction from December 27, 2010 through mid August 2012 to [ascertain] if they were done properly."

Franck advised Zlotnick that additional disciplinary action would be taken against her. Subsequently Zlotnick was served with a notice of discipline setting forth five specifications of misconduct and, or, insubordination. She was suspended for 30 days without pay and after a lengthy hearing, the Hearing Officer issued a report sustaining three of the five preferred charges and recommended that Zlotnick be terminated from her employment. The Commissioner adopted the Hearing Officer's recommendation and terminated Zlotnick from her position. Zlotnick than appealed the Commissioner‘s action, contending, among other things, Franck, having investigated Zlotnick's initial allegations of preferential assessment treatment, concluded that such allegations were unfounded, preferred the resulting charges of misconduct and insubordination against her and testified at her disciplinary hearing in support of such charges — should have disqualified himself from reviewing the Hearing Officer's recommendation and rendering a final determination in this matter.

The Appellate Division found merit in these claims, noting that “whether disciplinary charges are pursued in the judicial or administrative realm, ‘[t]he participation of an independent, unbiased adjudicator in the resolution of disputes is an essential element of due process of law, guaranteed by the Federal and State Constitutions‘."

Citing Baker v Poughkeepsie City School District, 18 NY3d 714, the court said that “[a]lthough a particular individual's involvement or participation in the disciplinary process does not automatically compel his or her recusal, the case law makes clear that "individuals who are personally or extensively involved in the disciplinary process should disqualify themselves from reviewing the recommendations of a Hearing Officer and from acting on the charges." Thus, explained the court, when an officer institutes the disciplinary action and testifies at the hearing, he or she must disqualify himself or herself from reviewing the Hearing Officer's recommendations and rendering a final determination."

In an effort to nonetheless sustain the underlying determination, the Commissioner attempted to invoke the "Rule of Necessity." This rule provides a limited exception to the requirement of an unbiased adjudicator by permitting “a biased adjudicator to decide a case if and only if the dispute cannot otherwise be heard” and favors of delegating adjudicatory authority to others whenever possible.

Here, Franck contended, the only individual to whom he could have named to review the hearing officer’s determination was Deputy Commissioner Kellner-Chille and she had also provided extensive and detailed testimony in support of the charges against Zlotnick and thus the rule of necessity permitted the Commissioner to undertake that task here.

The Appellate Division disagreed. The court noted that in Gomez v Stout, 13 NY3d 182, the Court of Appeals interpreted Civil Service Law §7 (2) to "require that the power to discipline be delegated, if necessary, with the governmental department's chain of command….” here the parties debate whether, consistent with the provisions of the Saratoga City Charter, there is a body or officer to whom the Commissioner validly may delegate the power to review the report and recommendation issued by the Hearing Officer. Finding that the  Commissioner have failed to demonstrate — on this record — that no such body or officer exists, the Appellate Division said that it was unable to conclude that the rule of necessity may be properly invoked here.

The court remitted the matter to the City "for a de novo review of the present record and the Hearing Officer's recommendations by a qualified and impartial individual [or body]" to be designated by the Commissioner.“

In the course of this appeal Zlotnick raised an number of other issues that were considered by the court, including the following, that it may instructive to consider.

1. The underlying notice of discipline were so vague as to deprive Zlotnick of a fair hearing. The court, agreeing with the Hearing Officer, said that the notice of discipline and the subsequently furnished bill of particulars "could have been more illuminating" but the notice of discipline and the individual charges at issue "need only be reasonably specific, in light of all the relevant circumstances[,] to apprise [petitioner] of the charges and enable . . . her to adequately prepare a defense."

The Appellate Division concluded that “Viewing the notice of discipline, the corresponding bill of particulars and the materials supplied therewith against the backdrop of petitioner's prior disciplinary proceeding,” it was satisfied that Zlotnick was afforded adequate notice of the misconduct alleged with respect to the sustained specifications (set out in charges Nos. 1, 2 and 4) and thus this aspect of Zlotnick‘s due process claim must fail.

2. Zlotnick asserted that the Hearing Officer should have been disqualified for a myriad of reasons that generally fall under the heading of exhibiting bias or creating the appearance of impropriety.

The Appellate Division commented that "… hearing officers are presumed to be free from bias, an appearance of impropriety is insufficient to set aside an administrative determination.” The challenger must provide factual support for his or her claim of bias and prove that the outcome flowed from that bias. The court said that "[b]ased upon our review of the record as a whole, we do not find that [Zlotnick] made such a showing here.

3. Zlotnick argued that the Hearing Officer should have been disqualified due to an alleged affiliation between the Hearing Officer's spouse and respondents' counsel.

The court said that Zlotnick did not seek disqualification upon this ground at the administrative hearing and, hence, this issue is unpreserved for its review. The Appellate Division then noted that  the Commissioner averred that “he selected the Hearing Officer based upon a recommendation from a local attorney and that he did not discuss the Hearing Officer's designation with ‘any attorney or representative‘ of the law firm representing respondents in this matter prior to making such designation.”

4. Zlotnick argued that the Hearing Officer should have been disqualified based upon the fact that he presided over the first of her disciplinary hearings.

The Appellate Division rejected this argument, explaining that “absent record evidence that the Hearing Officer may have prejudged the matter under review, ‘an administrative decision maker is not deemed biased or disqualified merely on the basis that he or she reviewed a previous administrative determination and ruled against the same employee, or presided over a prior proceeding involving a similar defense or similar charges.’" To the extent that the record reflects that the Hearing Officer may have considered petitioner's overall employment record or the prior disciplinary proceeding in fashioning a penalty, the court said that it could discern no impropriety in this regard.

* The court, in a footnote, commented “the Commissioner conducted an initial investigation, spoke with [Assistant Assessor, Anthony] Popolizio and "satisfied" himself that "everything was being done above board." 

The decision is posted on the Internet at:


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Subsequent court and administrative rulings, or changes to laws, rules and regulations may have modified or clarified or vacated or reversed the decisions summarized here. Accordingly, these summaries should be Shepardized® or otherwise checked to make certain that the most recent information is being considered by the reader.
New York Public Personnel Law Blog Editor Harvey Randall served as Principal Attorney, New York State Department of Civil Service; Director of Personnel, SUNY Central Administration; Director of Research, Governor’s Office of Employee Relations; and Staff Judge Advocate General, New York Guard. Consistent with the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations, the material posted to this blog is presented with the understanding that neither the publisher nor NYPPL and, or, its staff and contributors are providing legal advice to the reader and in the event legal or other expert assistance is needed, the reader is urged to seek such advice from a knowledgeable professional.
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