Legal jargon may blur union tax status

Tax law is for the brave. Wading through the often contradictory information cloaking the tax status of unionizing graduate students, even seasoned veterans tread carefully. "I want to make it clear that I'm not saying [either side] is right or wrong," the Philadelphia City Council's chief staff attorney Stan Shapiro said last night, noting that there's often "some bit of labor law you can point to" hiding in the bowels of the city's tax codes. As administrators and graduate students more used to Chaucer and Freud than wage tax laws attempt to evaluate the potential tax status of a unionized graduate student unit, misunderstandings have abounded. "It's a threat," Graduate Employees Together-University of Pennsylvania spokesperson Joanna Kempner said, responding to pamphlets issued by the Office of the Provost informing graduate students that, under current law, the rate graduate students now pay in city wage tax could double. "By choosing to become 'employees with paychecks' rather than 'students with stipends,' graduate students could become liable for the full amount of Philadelphia wage tax that every other worker in the city pays, including unionized graduate students at Temple University," the flyer said. "We already are employees," Kempner responded. "It's... a false claim on the part of the University that [collective bargaining rights] would somehow change our legal status." Co-president of Temple University Graduate Students Association Jon Rothermel maintained that unionized Temple graduate students still pay the same rate they did before. "The tax status actually hasn't changed for us," Rothermel said. "There hasn't been any change in status" on a federal, state or city level. GET-UP has argued that the only way for the tax burden on graduate employees to increase would be "for the legislation to change or for the University to revoke our status as students," and the group has filed an unfair labor practices complaint against Penn under the National Labor Relations Act. GET-UP claims the informational flyer is in fact an attempt to intimidate voters in the upcoming union election. "We occupy dual status" as students and employees, Kempner noted. "If our work contributes to our education, we partake in these tax waivers." Social Security and Medicare taxes, known as FICA taxes, are also a source of concern. Though students are exempted from paying these federal dues by an act of Congress, some fear that, should graduate students be classified as employees, they would have to pay FICA taxes as well. "If someone is reclassified as an employee, their income is subject to... FICA taxes," Internal Revenue Service official Bill Cressman said. Deputy Provost Peter Conn stressed that the flyer, which was "checked and triple-checked and quadruple-checked" prior to being issued, only offered information about the Philadelphia wage tax. "We're not talking about federal tax exposure, we're not talking about state taxes," he said. "The city treats Penn stipends as educational grants for graduate students." "If our students were to be redefined as employees rather than as students, they could become liable for the full amount of the wage tax," he added. As students under current law, Penn's graduate students pay only half of the city's wage tax. "Temple's unionized [teaching assistants] pay 100 percent of the city wage tax in the city," Conn said. "Students don't vote for collective bargaining agreements -- employees vote for collective bargaining agreements," Conn noted. "It would be that they have chosen to reclassify" themselves. But Shapiro, with over 22 years of city government experience behind him, said that he is not familiar with the laws that Penn administrators are citing. "It's not obvious to me that because they become workers, no part of what they receive from the administration can't still be considered tuition aid," Shapiro said. "The University... could presumably find a way to reclassify" graduate students, Shapiro continued. "If they're suggesting they have to reclassify [them], I'm not aware of any such rule.... They ought to be asked to supply documentation of that claim."

Penn votes: The union debate

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