City of Pittsburgh responds to UPMC claim that it has no employees

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On its website, in its annual report and in some tax filings, UPMC purports to have employees -- sometimes tens of thousands of them, the city of Pittsburgh's attorneys said in a court filing.

The amended complaint, filed Monday, comes in response to arguments made by a UPMC attorney last week that the medical conglomerate employs no one and therefore is not subject to payroll preparation taxes.

The city sued UPMC on March 20 to strip it of its purely public charity status, which affords many of its subsidiaries and properties exemptions from taxes, including property and payroll taxes. The case, originally filed in Allegheny County Common Pleas Court, was moved to federal court by UPMC and then returned back to Common Pleas Judge R. Stanton Wettick Jr.

Last week, Judge Wettick ended one of the case's first hearings after a UPMC attorney argued that it had no employees.

The judge said he could not move forward until the city addressed UPMC's claim that it employed no one. UPMC has 37 subsidiaries -- some of which are subject to payroll taxes. UPMC spokesman Paul Wood declined to identify which of those operate within the city and which pay taxes.

In an emailed statement, he wrote that if the city wants to challenge UPMC's exemption from payroll taxes, it has to challenge the individual subsidiaries that are exempt from the tax.

In its amended complaint, the city presented evidence that UPMC's parent organization has employees, citing language in IRS filings.

The city also argued that those working for subsidiaries are UPMC employees as well, pointing to UPMC's 2012 Annual Report and website, which tout the hospital system as one of the state's largest employers. Attorneys also pointed to a lawsuit in which UPMC claimed to "extend offers of employment."

"UPMC's public statements about its status as an employer are not mere shorthand for some other kind of relationship, but are reflective of a de facto employer-employee relationship between UPMC and every individual who works for the system," the filing said.

UPMC has 14 days to file a response.


Moriah Balingit: mbalingit@post-gazette.com, 412-263-2533 or on Twitter @MoriahBee. First Published October 28, 2013 6:42 PM

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