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Supreme Ct. Limits Employer Wage/Hour Good Faith Defense Rule

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Laurance Iloff lived and worked in an unincorporated area of Humboldt County known as Bridgeville, on property owned by Bridgeville Properties, Inc. and managed by Cynthia LaPaille.

Iloff’s employers rented out the property, which includes small houses, cabins, and other structures. For several years, Iloff performed maintenance on Bridgeville’s structures, grounds, and water system, and LaPaille provided him instructions, directions, and approvals in relation to this work. Under an informal arrangement, Iloff’s employers allowed him to live rent-free in one of the houses but did not provide him any other benefits or compensation for his services.

After his employers terminated this arrangement, Iloff filed claims against them with the Labor Commissioner, initiating a process for adjudicating wage claims informally known as “the Berman process.” The employers argued that Iloff was an independent contractor, but the Labor Commissioner determined that he was an employee and as such, was entitled to unpaid wages, liquidated damages, penalties, and interest.

The employers appealed, seeking de novo review of the Labor Commissioner’s ruling in the superior court. In response, Iloff — now represented by an attorney from the Labor Commissioner’s office — filed a notice of claims. In this notice, Iloff reasserted the wage claims he had raised before the Labor Commissioner and added new claims, including a claim for penalties under the Paid Sick Leave law.

Following a bench trial, the superior court found that Iloff was an employee. Applying the framework set out in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903, the court reasoned that Iloff was properly classified as an employee, rather than an independent contractor, because he was not “free from [the employers’] control and direction” and he performed work that was within the “usual course” of their business. (Id. at p. 964.) The court ruled that Iloff was entitled to unpaid wages, penalties, and interest.

On the two issues addressed by the California Supreme Court in this case, the superior court ruled in favor of the employers. First, the court ruled that Iloff was not entitled to liquidated damages because his employers had acted in “good faith” in not paying him and had “reasonable grounds for believing” they were complying with the law governing minimum wages. (§ 1194.2, subd. (b).) The court based this ruling on its findings that the employers and Iloff intended and expected Iloff to perform his services in exchange for free rent and that neither he nor the employers understood or believed, at any time before his termination, that he would be paid wages or treated as an employee. Second, the court rejected Iloff’s claim for penalties under the Paid Sick Leave law, concluding that the statute did not authorize Iloff to seek those penalties in the context of the employers’ Berman appeal. (§§ 246, subd. (i), 248.5, subds. (a) & (b).)

Iloff appealed, and the Court of Appeal affirmed in part and reversed in part, affirming the trial court’s judgment in the employers’ favor on the liquidated damages and Paid Sick Leave law issues. (Seviour-Iloff v. LaPaille (2022) 80 Cal.App.5th 427, 447–451 (Seviour-Iloff).) The Supreme Court granted review to address these two issues.

This case addresses two issues concerning the rights of California workers whose employers fail to pay them the minimum wage or provide them paid sick leave benefits. The first issue relates to the good faith defense to the default rule that employees who prove minimum wage violations are entitled to liquidated damages. (Labor Code, § 1194.2.) The Supreme Court held that to establish the good faith defense, an employer must show that it made a reasonable attempt to determine the requirements of the law governing minimum wages; proof that the employer was ignorant of the law is insufficient.

The second issue relates to the process for raising claims under the Healthy Workplaces, Healthy Families Act of 2014 (§ 245 et seq.; the “Paid Sick Leave law”). Specifically, we must determine whether a court may consider a Paid Sick Leave law claim that an employee raises in the context of their employer’s appeal to the superior court of a Labor Commissioner ruling. (§ 98.2, subd. (a).) We hold that a court may do so.

The Court of Appeal reached the opposite conclusion on both issues, thus the Supreme Court reversed in the published case of Iloff v. LaPaille – S275848 (August 2025).

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Psychiatric Group Agrees To Pay $2.75M for Fraudulent Claims

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American Psychiatric Centers, Inc., doing business under the name Comprehensive Psychiatric Services (CPS), has agreed to pay $2.75 million to resolve allegations that CPS violated the False Claims Act by submitting false claims to government healthcare payors for certain psychotherapy services.

CPS, which is headquartered in Walnut Creek, Calif., provides behavioral medicine services for individuals and families in the State of California. Since at least 2015, CPS and its healthcare providers have submitted claims to government payors using Current Procedural Terminology codes 90833 and 90836, which are “add-on” codes to be used when psychotherapy services are performed in conjunction with an evaluation and management visit, and which require specific documentation.

The settlement announced today resolves the government’s allegations that, from Jan. 1, 2015, through Dec. 31, 2022, CPS submitted fraudulent claims using these add-on codes in instances where its healthcare providers either had not provided the services described by those codes or had failed to sufficiently document that such services had been provided.  CPS will pay $2,615,569.32 to the United States and $134,430.68 to the State of California.

Assistant U.S. Attorney Kelsey Helland handled this matter for the government, with the assistance of Garland He.  The investigation and settlement resulted from a coordinated effort by the U.S. Attorney’s Office for the Northern District of California, HHS-OIG, DCIS, VA OIG, OPM OIG, and the California Department of Justice, Division of Medi-Cal Fraud and Elder Abuse.

The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).

The claims resolved by the settlement are allegations only; there has been no determination of liability.

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August 18, 2025 – News Podcast

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Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: WCAB En Banc Concludes Electronic Testimony Must be Readily Permitted. Cal Supreme Court Improves Arbitration Rules for Employers. Federal Rule 702 Helps Monsanto Defend Roundup Cancer Case. Spine Device Company CEO Sentenced for False Statements to CMS. Kidnapping Charges Added to LAPD Officer Facing Insurance Fraud. L.A. Fire Captain Charged with Falsifying Disability Claim. OSHA Hosts Safe and Sound Week August 11-17. PET-enabled Dual-Energy CT is Major Step Forward in Imaging.

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Judge Approves Biggest – $2.8 B – Healthcare Settlement In History

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The Blue Cross Blue Shield Association (BCBSA) and its 33 member companies reached a $2.8 billion settlement in October 2024 to resolve a 12-year antitrust lawsuit filed by healthcare providers, including hospitals, physicians, and other professionals. Preliminary approval was granted on December 4, 2024, by Judge R. David Proctor, with final approval on August 19, 2025. The lawsuit, In re: Blue Cross Blue Shield Antitrust Litigation (MDL No. 2406), began in 2012 in the U.S. District Court for the Northern District of Alabama.

Providers alleged that BCBSA and its affiliates violated the Sherman Antitrust Act by engaging in anticompetitive practices, specifically by dividing the U.S. into exclusive “service areas” and agreeing not to compete in those regions, which suppressed competition, increased insurance costs, and reduced provider reimbursements. They also claimed price-fixing through the BlueCard program, which processes claims for out-of-network patients. BCBSA denied the allegations but agreed to the settlement to avoid further litigation costs and risks.

The settlement, the largest antitrust agreement in U.S. healthcare history, includes a $2.8 billion fund and operational reforms to enhance transparency and efficiency in the BlueCard program, such as faster claims processing, a cloud-based platform, and prompt payment guarantees. Eligible providers who treated Blue Plan patients from July 24, 2008, to October 4, 2024, could file claims until July 29, 2025, though nearly 6,500 providers opted out to pursue separate lawsuits.

A court document indicated that nearly 6,500 provider organizations chose to opt out of the settlement. These providers include a range of healthcare entities such as hospital systems, physician groups, clinics, and other healthcare facilities across the United States. Notable organizations that opted out include the University of Pennsylvania Health System, Geisinger, MedStar, CommonSpirit, Bon Secours Mercy Health, Temple University Health, and physician staffing firm TeamHealth.

Providers who opted out likely did so to preserve their right to pursue individual lawsuits against BCBS, believing they could achieve greater financial recovery or address specific grievances through separate legal action. The settlement required providers to release claims against BCBS for the same antitrust issues (e.g., market allocation and price-fixing through exclusive service areas and the BlueCard program). Opting out allows these providers to file their own claims, potentially seeking higher damages than what they would receive from the settlement’s $2.8 billion fund, where 92% is allocated to healthcare facilities and only 8% ($160 million after fees) to professionals like individual practitioners.

Many of the providers who opted out filed new lawsuits in federal courts in states like Pennsylvania, California, and Illinois. For example, a group led by Temple Health and Penn State Health filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania. These lawsuits echo the original allegations, claiming BCBS’s anticompetitive practices, such as colluding to limit competition and underpaying providers, violated antitrust laws. The plaintiffs argue that BCBS’s actions resulted in payments far lower than what they would have received in a competitive market. California providers who reportedly opted out include:

– – Providence St. Joseph Health: A large nonprofit health system with extensive operations in California (e.g., hospitals in Los Angeles, Orange County, and Northern California). They opted out to seek potentially larger recoveries, including treble damages under antitrust law.
– – The Regents of the University of California (UC Health): The governing body for the University of California’s health system, which operates major academic medical centers and hospitals across the state (e.g., UCLA Health, UCSF Health). They cited concerns over the settlement’s release of future claims and the potential for higher individual damages.
– – NorthBay Healthcare Corporation: A community-based health system headquartered in Fairfield, California, serving Solano County with hospitals and clinics. They opted out due to dissatisfaction with the settlement’s monetary allocation (e.g., only 8% for professionals after fees) and to preserve litigation rights.
– – CommonSpirit Health: While headquartered in Chicago, this system has a major presence in California through its Dignity Health division (operating dozens of hospitals statewide, including in Sacramento, San Francisco, and Southern California). They opted out for similar reasons, focusing on allegations of BCBS’s “take-it-or-leave-it” contracting and reimbursement penalties.

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Employer Healthcare Costs To Increase By 9% In 2026

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Business Group on Health is the leading non-profit organization representing employers’ perspectives on optimizing workforce strategy through innovative health, benefits and well-being solutions and on health policy issues. According to a new report it published this week, for the 2nd year in a row, health care costs sharply outpace projections, largely due to prescription drugs, chronic and complex conditions, persistent delivery system flaws.

Employers will need to act with greater urgency and willingness to be bold as they head into 2026 after a second year of actual health care costs sharply outpacing projections, according to Business Group on Health’s 2026 Employer Health Care Strategy Survey, released today in Washington, D.C.

Employers predict that health care cost trend increases for 2026 will come in at a median of 9%, offset to 7.6% with plan design changes. These somber forecasts come as more employees use GLP-1s for obesity, receive cancer diagnoses and use mental health services, the survey showed. On a compounded basis, costs in 2026 are likely to be 62% higher than 2017 levels.

“In this challenging environment, employers remain firmly committed to an ongoing investment in employee health and well-being,” said Ellen Kelsay, president and CEO of Business Group on Health. “Yet they will need to make bold and strategic moves to contain costs, sometimes disrupting health care models along the way.”

Kelsay added, “For instance, we will see them rigorously evaluating benefit offerings, vendor performance and patient outcomes. We will also see more employers exploring non-traditional health plan and pharmacy benefit manager (PBM) models. And as employers urge workforces to use health plan resources and navigation tools to find high-value care, we’ll see more people using primary care and getting recommended screenings and immunizations.”

Employer respondents said other interrelated priorities for the coming year were affordability for both their businesses and workforces; a greater reliance on utilization management and weight management programs in concert with GLP-1s to ensure optimal outcomes in obesity treatment; and assessment of mental health access and appropriateness of care.

The Business Group on Health survey gathered data on key topics related to employer-sponsored health care for the coming year. A total of 121 employers across varied industries, who together cover 11.6 million people, completed the survey between June and July 2025.

Expensive obesity medications play a significant role in overall health care cost increases, and they will continue to be a challenge. Fully 79% of employers have seen an uptick in the use of GLP-1s, while an additional 15% anticipate seeing such an increase in the future. In addition, the percent of employers covering GLP-1s for conditions other than diabetes will stagnate as employers try to stabilize their health care costs, while more of those that cover these medications for weight loss will require utilization management, prescriptions from specific providers, participation in a weight management program and higher expectations from vendor partners to deliver sustainable, cost-effective financial models for this class of medications.

A systemic overhaul of the pharmacy supply chain is essential to address pharmaceutical costs for both employers and employees. While most employers use plan design approaches and other strategies offered by their PBMs, pharmacy cost pressures also have resulted from rising prices, a robust pipeline of expensive therapies and cost-shifting from proposed changes to Medicare and Medicaid. In 2024, nearly a quarter of all employer health care spend (24%) went to pharmacy expenses. Further, employers see no relief on the horizon, with a forecast of an 11% to 12% increase in pharmacy costs heading into 2026. This cannot be remedied by plan design changes, and employers need to explore PBM models that champion transparency and rely less on rebates.

Cancer is the top condition driving employer health care costs for the fourth year in a row, made worse by a growing prevalence of cancer diagnoses and the escalating costs of treatment. Accordingly, employers will have a greater focus on cancer prevention and screening coverage, including alternatives to colonoscopies, expanding coverage of breast cancer screenings and removing age restrictions on preventive care coverage. Employers also recognize that access to high-value treatments is essential, with about half offering a cancer COE in 2026, and another 23% considering doing so by 2028.

Most employers have seen an increase in the use in mental health services, making it an emerging cost driver. As employers continue to seek ways to expand access to mental health services, they want to ensure that offerings are high-quality and appropriate. Fully 73% of employers reported an increase in mental health and substance use disorder services, while another 17% anticipate a future increase.

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August 11, 2025 – News Podcast

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Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Insurance Commissioner Files Legal Action Against FAIR Plan. Dismissal of Chamber of Commerce Medicare Challenge Affirmed. Court Approves Settlement of San Diego Prisoner ADA Claims. Outside Salesperson is “Exempt Employee” From Sick Pay Law. Glendale Woman Sentenced to 9 Years for $10.6M Hospice Fraud. Employer Faces Murder Charges for Illegal Cannabis Lab Explosion. Kaiser Patient Portal Deployment Study Shows Good Outcomes. National Hospital to Pay $2.9M for Unlawful Nurse Training Repayment.

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6th DCA Extends WCAB Equitable Jurisdiction Beyond 60 Days

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Lance Miraco filed Application for Adjudication of Claim against the City of Salinas and Corvel Corporation alleging cumulative injury arising from his employment as a police officer with the City. The City and its claims administrator, Corvel, filed an answer denying the allegations of the application. The matter proceeded to trial before the WCJ.

After trial, the WCJ issued her written findings, award, and order (findings and order), finding that Miraco “sustained injury arising out of and in the course of employment during the period from January 1994 through December 31, 2013, to his low back, right leg, and sustained gastritis, gastroesophageal reflux disease, insomnia and hypertensive cardiac disease.”

Applying Labor Code § 5412, the WCJ found the date of injury for Miraco’s hypertensive cardiac disease was June 14, 2013, while the date of injury for his orthopedic injuries and related conditions (including gastritis, reflux, and insomnia) was December 16, 2020.

The findings and order explained that based on the date of injury, Miraco’s workers’ compensation claim for hypertensive cardiac disease, filed on December 24, 2020, “is barred and is not compensable, as beyond the statutory limitation imposed by [section] 5405.”3 Based on these findings, the WCJ awarded future medical treatment for Miraco’s “injuries to his low back, right leg, gastritis, gastroesophageal reflux disease, and insomnia” but not for his cardiac disease.

On October 16, 2023, Miraco timely submitted a petition for reconsideration of the findings and order. The petition for reconsideration challenged the WCJ’s finding that the claim for hypertensive cardiac disease was time barred. The City and Corvel answered the petition for reconsideration within 10 days. On Nov ember 7, 2023, the WCJ served on the parties a report and recommendation on the petition for reconsideration.

Under former Labor Code § 5909, based on Miraco’s filing of the petition for reconsideration on October 16, 2023, the Board had until December 15, 2023, to “act[] upon” the petition before it was “deemed to have been denied.

The Board did not issue its decision until March 12, 2024, when it granted the petition for reconsideration. In deeming its March 12 order timely, the Board invoked the judicially created exception to the 60-day deadline articulated in Shipley v. Workers’ Comp. Appeals Bd. (1992) 7 Cal.App.4th 1104 (Shipley) for petitions that are not received by the Board due to procedural irregularity.

On the merits, the Board granted the petition for reconsideration and substituted its findings for that of the WCJ. It set the date of injury for Miraco’s injuries, including hypertensive cardiac disease, as December 11, 2020, and determined that compensation for those injuries was not time- barred.

The City and Corvel filed a petition for writ of review to challenge the lawfulness of the Board’s order granting the petition for reconsideration after the expiration of the 60-day statutory deadline delineated by former § 5909.

The Court of Appeal ruled that former § 5909 did not preclude the application of equitable tolling, and the facts warrant its use here. It therefore affirmed the order and opinion of the appeals board in the published case of City of Salinas v Workers’ Comp. Appeals Bd. –H052062 (August 2025).

During the briefing period for this writ proceeding, the Legislature amended § 5909, effective July 2, 2024. In addition, the California Supreme Court granted review of similar issues in Mayor v. Workers’ Comp. Appeals Bd. (2024) 104 Cal.App.5th 713 (Mayor), review granted December 11, 2024, S287261.

The question presented here on appeal is whether the Board may apply equitable tolling to act upon a petition for reconsideration after expiration of the 60-day timeline set forth in former section 5909, and, if so, whether the facts of this case warrant the application of tolling principles.

It was noted that the Court of Appeal in Zurich American Ins. Co. v. Workers’ Comp. Appeals Bd. (2023) 97 Cal.App.5th 1213 (Zurich) disagreed with Shipley.

It went on to say “neither Zurich nor Mayor decided whether the Board’s failure to act on a petition for reconsideration within 60 days meant only that it acted in excess of its jurisdiction, or whether it lost fundamental jurisdiction to consider the petition. Instead, both decisions recognized that, even if the expiration of the 60-day deadline did not affect the Board’s fundamental jurisdiction, the circumstances of those cases did not support the application of equitable tolling. (Zurich, supra, 97 Cal.App.5th at p. 1236, fn. 17; Mayor, supra, 104 Cal.App.5th at pp. 1310–1311, review granted.)”

And it went on to say “We discern no express prohibition in the statutory language of former section 5909 that would preclude, as a matter of law, the application of traditional equitable doctrines like tolling.”

“Our conclusion that the appeals board retains the authority to exercise equitable powers where appropriate, and in the absence of legislative direction to the contrary, is consistent with the judicial powers vested in it.”

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5th Circuit Affirms the SpaceX NLRB Constitutional Based Injunction

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Space Exploration Technologies Corporation v. National Labor Relations Board is a significant case involving constitutional challenges to the structure of the National Labor Relations Board (NLRB). On August 19, 2025, a panel of the United States Court of Appeals for the Fifth Circuit issued a ruling in the consolidated cases of Space Exploration Technologies Corporation (SpaceX) v. National Labor Relations Board (NLRB), along with related appeals involving Energy Transfer, L.P., La Grange Acquisition, L.P., and Aunt Bertha (doing business as Findhelp).

The court affirmed preliminary injunctions granted by three federal district courts in Texas, halting NLRB administrative proceedings against these employers on unfair labor practice charges. The decision, authored by Circuit Judge Don R. Willett and joined by Judges Jacques L. Wiener Jr. (concurring in part and dissenting in part) and Stuart Kyle Duncan, found that key aspects of the NLRB’s structure are likely unconstitutional under Article II of the U.S. Constitution and separation-of-powers principles.

The case stemmed from unfair labor practice complaints filed by the NLRB against the employers. SpaceX, for instance, was accused of unlawfully firing employees who had circulated an open letter criticizing CEO Elon Musk. Rather than defending the charges before the NLRB, the employers sued in federal district court, arguing that the agency’s structure violates the Constitution by insulating its Board members and administrative law judges (ALJs) from presidential removal.

The district courts issued preliminary injunctions blocking the NLRB hearings, prompting the NLRB to appeal. The Fifth Circuit consolidated the appeals and addressed whether the district courts had jurisdiction and whether the injunctions were proper.

The court held that NLRB ALJs are “inferior officers” under the Appointments Clause, exercising significant authority (e.g., issuing subpoenas, ruling on evidence, and rendering decisions that can become final without Board review). They are shielded by two layers of for-cause removal protections: ALJs can only be removed “for good cause” by the Merit Systems Protection Board (MSPB), whose members are themselves removable only for cause by the President.

Drawing on precedents like Free Enterprise Fund v. Public Company Accounting Oversight Board (2010) and Jarkesy v. SEC (5th Cir. 2022), the court found this dual insulation unconstitutional, as it unduly restricts the President’s Article II authority to oversee executive officers.

The National Labor Relations Act allows the President to remove Board members only for “neglect of duty or malfeasance in office.” The court ruled this restriction likely unconstitutional, distinguishing it from the 1935 Supreme Court case Humphrey’s Executor v. United States, which upheld similar protections for the Federal Trade Commission (FTC) as a “quasi-legislative” body.

The NLRB, the court reasoned, exercises substantial executive power (e.g., investigating and prosecuting labor violations) without the FTC’s statutory requirements for bipartisan composition or non-partisan operations. Quote: “Both the Supreme Court and this circuit have declined to extend Humphrey’s Executor to agencies that are not a ‘mirror image’ of the FTC.”

The court rejected the NLRB’s claim that the Norris-LaGuardia Act barred the injunctions, finding the disputes did not arise from a “labor dispute.” It also applied the Thunder Basin factors to confirm district court jurisdiction, noting the claims were collateral to the NLRB’s expertise and that precluding review would deny meaningful judicial oversight. “These disputes do not implicate wages, hours, working conditions, or even union representation. They have nothing to do with employee boycotts, union organization, or labor strikes.”

The Fifth Circuit affirmed the district courts’ injunctions, preventing the NLRB from proceeding with its cases against the employers pending full resolution of the constitutional challenges. This ruling represents a significant setback for the NLRB, potentially affecting its ability to enforce labor laws nationwide if upheld or expanded. It aligns with recent Supreme Court trends curtailing administrative agency power (e.g., in SEC v. Jarkesy, 2024) and could invite further challenges to other agencies. The decision has drawn commentary on X, with legal analysts noting its broad implications for labor rights and agency structures.

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New Employer Burdens for OBBBA Tips/Overtime Pay Taxation

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One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, as Public Law 119-21, among other provisions, introduces two key provisions of immediate concern to employers, “No Tax on Tips” (Sec. 70201) and “No Tax on Overtime” (Sec. 70202) – effective for tax years 2025 through 2028.

The IRS has released FS-2025-03 with interim guidance on the changes, but more detailed guidance is expected in the coming months.

Employers face new administrative and reporting burdens to support employees claiming these deductions. Failure to comply could result in penalties for inaccurate information returns or withholding errors. By acting promptly, employers can minimize disruptions and avoid penalties (e.g., up to $270 per inaccurate W-2). The following are just some of the concerns and solutions voiced by the business community and their advisors so far, since passage of OBBBA.

Employers, particularly in industries like hospitality, retail, construction, and manufacturing, should prepare for increased administrative complexity. The provisions are retroactive to January 1, 2025, but the IRS has promised transition relief for 2025 to ease the burden.

The IRS will publish a list of qualifying tipped occupations by October 2, 2025. Review this to confirm employee eligibility. Expect updated withholding tables, forms (e.g., potential new boxes on W-2 for tips/occupation or overtime), and publications (e.g., Pub. 15 for withholding). The IRS has indicated further guidance on reporting and anti-abuse rules is forthcoming. For 2025, use a “reasonable method” (to be specified by the IRS) to approximate and separately account for tips and overtime if full tracking isn’t feasible.

Integrate software updates to track and report tips (including occupation) and qualified overtime separately. This may require new fields in payroll systems for FLSA overtime premiums. Review employee classifications under FLSA to ensure accurate overtime qualification – misclassification could lead to disputes or audits. Adjust for the expanded FICA tip credit if in beauty services; calculate and claim it on Form 8846 to offset payroll taxes.

Employers must now separately report the total amount of cash tips (including charged tips and tip-sharing arrangements) and the recipient’s occupation on information returns (e.g., Form W-2 for employees or Form 1099 for non-employees) filed with the IRS or Social Security Administration (SSA). This must also be included on statements furnished to workers. Only “qualified tips” (voluntary payments from customers, not mandatory service charges or negotiated fees) in occupations customarily receiving tips qualify.

The law extends the existing FICA tip credit (under IRC Section 45B) to beauty service establishments (e.g., barbering, hair care, nail care, esthetics, and spa treatments), previously limited to food and beverage industries. This allows eligible employers to claim a credit for their share of Social Security taxes paid on employee cash tips.

Employers should maintain detailed records of tips to prevent reclassification abuse (e.g., labeling wages as tips). The IRS may issue regulations to address potential misuse.

Note that these provisions do not affect state taxes or overtime laws (e.g., California’s daily overtime rules), so maintain separate compliance with unique state tax and payroll laws. The provisions expire after 2028, so plan for potential reversions in reporting and withholding.

Also note that these tips and suggestions are taken from various information sources across the country, and may or may not accurately reflect the new employer obligations as they interpreted by the accounting and tax law industry. This report is not provided as a substitute for legal or accounting advice. It should only be considered as topics of interest that need further inquiry by employers should they have concern about any one of these tips.

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Stanford Announces New AI Tool That Boosts Routine Ultrasound

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Prostate biopsies are usually performed under ultrasound guidance and involve collecting 12 to 16 samples. However, these biopsy samples provide only limited glimpses into a much larger and more complex landscape. The scattered samples provide limited insight, leading to a miss rate of up to 52 percent of clinically significant cancers.

Effective prostate cancer treatment relies on early detection of cancer before it has spread outside the prostate. To help improve the success rate of finding prostate cancers during routine biopsy, Mirabela Rusu, PhD, Assistant Professor, Stanford Medicine Department of Radiology (IBIIS division), developed an artificial intelligence tool called ProCUSNet that analyzes the ultrasound images already acquired during the biopsy procedure.

The ProCUSNet model was trained on over 2,200 prostate cancer patients, using 3D volumes reconstructed from 2D B-mode images captured during routine transrectal ultrasound procedures. Unlike previous research that required raw or investigational imaging, this approach focused on real-world data already available in clinical settings.

The current version takes approximately 10 seconds to analyze a 3D ultrasound volume and was developed using data from a specific ultrasound system. Broader validation across different devices and practice settings will be necessary. Future studies will also explore faster integration, prospective clinical trials, and adaptation to other ultrasound modalities.

Dr. Rusu said “What makes ProCUSNet unique is its ability to localize areas of cancer on standard ultrasound images using deep learning. We’re not asking clinicians to change how they perform biopsies. Instead, we’re enhancing the value of the data they already collect with a tool that’s fast and practical for use in the real world.”

The findings, recently published in European Urology Oncology, show that ProCUSNet can help clinicians detect high-grade prostate cancers. The algorithm was able to detect 82% of clinically significant cancers and identify 44% more lesions than human readers interpreting the same ultrasound images.

The researchers also showed that ProCUSNet was also able to detect cancers missed by standard systematic biopsy. Among patients who went on to have surgery, nearly 30% had high-grade tumors that were not captured through conventional sampling. ProCUSNet successfully flagged many of these otherwise undetected lesions.

The potential clinical impact of this approach is substantial. As the majority of prostate biopsies worldwide continue to rely solely on conventional ultrasound, tools such as ProCUSNet may offer a practical means to improve diagnostic precision and consistency.

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