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8-0, Mr. Rotenberg? It wasn't even close. As a former resident put it: "Make no mistake about this...this decision is not about hurting the residents...Basically, the U of M and most academic medical centers have been screwing residents and fellows out of their retirement benefits in order to save money." In rough terms, the FICA paid by residents is some figure like 7.5% and the university has to match it at about the same level. Eventually the residents - or their survivors - will get some or all of it back, INCLUDING the university's contributions. Simply put this is about the university trying to save money by not contributing to the resident's retirement fund. It would be nice if for ONCE Mr. Rotenberg could be honest about the U's motivation in this and not pretend that he is trying to save residents from FICA tax. How would you feel if you started a job and the boss told you: "Psstt, I've got a deal for you. We'll forget all about FICA - that way you won't have to pay and I won't have to pay. I'm tryin to save youse money!"
The 40 million refund they got before is not chump change. I bet if they weren't too cheap to spend some of that windfall on Lobbyists and re-election campaigns they would have won this time around. Another outrageous one is having divinity students pay tuition on classes that require you to donate your time to a homeless shelter,food shelf, ect. You borrow & pay the money so they don't lose out on tuition revenue, and then give your time away for free on top of it. Maybe the med schools need to take a page from their playbook.
Another reason "why" we need to simply get rid of this whole "employee" idea ...and pay EVERYONE as a 1099 INDEPENDENT CONTRACTOR. Compensate EVERYONE dollar for dollar to what was agreed to ...then let the WORKER figure out the details after.
The University and the State Social Security administrator were well aware that the SSA prohibited medical residents from being excluded from coverage by calling them students.
But in 1989 it was discovered by a former resident and reported to the IRS. Ever since the University has been trying to claim this was merely a difference in opinion of complex tax law. Baloney!
And now, after spending millions of taxpayers money on appeals and lawyer fees, the University of Minnesota lost in front of the nation.
Brilliant advice by some attorney.
Now the University and its 1,000 medical residents will pay close to $ 9 Million per year and in two decades will have sent over a quarter of billion dollars to the US Treasury.
Not bad for an institution which had evaded social security coverage of its residents from 1958 to 2004.
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