Challenge to Treasury Department Regulations
In Mayo Found. for Med. Educ. & Rsrch. v. US, No. 09-837, an action asserting that certain Treasury Department regulations, which provided that the services of a full-time employee -- which included an employee normally scheduled to work 40 hours or more per week-- were not incident to and for the purpose of pursuing a course of study, and thus not exempt from the Federal Insurance Contributions Act, were invalid, the court affirmed the Eighth Circuit's order reversing judgment for plaintiff where the Treasury Department's full-time employee rule was a reasonable construction of 26 U.S.C. section 3121(b)(10).
As the court wrote: "Petitioners (hereinafter Mayo) offer residency programs to doctors who have graduated from medical school and seek additional instruction in a chosen specialty. Those programs train doctors primarily through hands-on experience. Although residents are required to take part in formal educational activities, these doctors generally spend the bulk of their time--typically 50 to 80 hours a week--caring for patients. Mayo pays its residents annual "stipends" of over $40,000 and also provides them with health insurance, malpractice insurance, and paid vacation time."
- Read the Supreme Court's Decision in Mayo Found. for Med. Educ. & Rsrch. v. US, No. 09-837