The U.S. Supreme Court has upheld a Treasury Department rule that considers medical residents as full-time employees subject to Federal Insurance Contributions Act (FICA) payroll taxes. In Mayo Foundation v. U.S. (09-837), (pdf) the Court was asked to consider whether the stipends provided to medical residents that perform medical and patient care services for 40 or more hours per week as part of an accredited graduate medical education program are subject to FICA, commonly referred to as “Social Security” taxes, which are imposed on both employers and employees based upon wages paid. Among the many statutory exceptions to this tax requirement is the “student” exception, which exempts “service performed in the employment of. . . a school, college, or university . . . if such service is performed by a student who is enrolled and regularly attending classes at such school, college, or university.” A Treasury Department amended regulation interpreting this student exemption was issued in 2004.  Continue reading this entry at Littler's Washington DC Employment Law Update.