Key UK Employment Law Events in 2017 and Beyond

Current indications are that 2017 may be a fairly static year as regards to employment law.

Whilst it is anticipated the government will trigger Article 50 to start Brexit negotiations, these are likely to last for at least two years, and existing employment laws are unlikely to feel any ripple effect from leaving the European Union for some time.

In the meantime, the Prime Minister has asked for a review, expected to take around six months, on whether current employment laws are adequate to protect the rights of the growing numbers of atypical workers. It is unlikely though that any resulting changes will come into effect in 2017.

There are, however, a number of key developments that employers will definitely need to get to grips with, or at least prepare for, in 2017.

Read the full article here.

*Cindy LaMontagne (Trainee) contributed to this article.

Supreme Court Declines to Hear Appeal to a Michigan Tax on Health Insurance Plans

The Supreme Court of the United States has declined to hear the Self-Insurance Institute of America Inc.’s ERISA preemption challenge to a Michigan tax on health insurance plans.

As we previously reported last year, the Sixth Circuit, had decided, on remand from the Supreme Court, that the Michigan Health Insurance Claims Assessment Act (Act) was not preempted by ERISA. The Act imposes a 1 percent tax on all paid claims by insurers or third-party administrators (TPAs) for health services rendered in Michigan to Michigan residents. The case was brought by the Self-Insurance Institute of America (SIIA), a trade association representing the sponsors of self-insured health plans and their TPAs, alleging the Act was preempted by ERISA. The trial court dismissed the case, concluding that the law was not preempted by ERISA. The Sixth Circuit also held that the Act was not preempted. After granting certiorari, the Supreme Court vacated this judgment and remanded the case to the Sixth Circuit for further consideration in light of the Supreme Court’s decision in Gobeille v. Liberty Mut. Life Ins. Co., which invalidated a Vermont statute that required an ERISA plan to report health care information to an all-payer claims database, since the Vermont law interfered with nationally uniform plan administration. On remand, the Sixth Circuit reaffirmed its original decision, finding that nothing in Gobeille warranted overturning its decision. SIIA’s attempt to appeal this decision to the Supreme Court was declined on January 9, 2017.

Accelerating Deductions for Compensation and Benefits if Corporate Tax Rates Are Reduced

President-elect Trump proposes to reduce the maximum corporate income tax rate from 35 percent to 15 percent. While the effective date of any rate reduction is uncertain, it likely will not occur before 2018. Deductions claimed when tax rates are 35 percent are worth 20 percent more to the taxpayer than if the same deduction is claimed when rates are 15 percent. Thus, a deduction for a $10 million pension contribution is worth an additional $2 million if claimed in 2017 when the tax rate is 35 percent than if claimed in 2018 when the tax rate is 15 percent.

This article, Accelerating Deductions for Compensation and Benefits if Corporate Tax Rates Are Reduced, discusses how bonus accruals, welfare benefits and pension contributions that might be deducted in 2017 rather than 2018 without much, if any, in the way of additional costs or administrative burdens for the employer and no adverse tax consequences for the employees/participants. Accelerating the deductions for these amounts will result in considerable savings if rates are reduced.

Guidance on Ransomware Attacks under HIPAA and State Data Breach Notification Laws

The US Department of Health and Human Services has recently issued guidance under the Health Insurance Portability and Accountability Act on what covered entities and business associates can do to prevent and recover from ransomware attacks; however, other state data breach notification laws can also be triggered by a ransomware attack. The authors of this article explain the guidance and what to do if you are subject to a ransomware attack.

Read the full article here.

Understanding Equal Pay Laws and Avoiding and Defending Pay Equity Claims

The federal government’s focus on pay equity and pay data, and the passage of groundbreaking equal pay laws in a number of states, has been one of the biggest employment law developments of 2016. Litigation involving pay equity claims has also risen in the past year. Given the increased focus on pay equity from these multiple sources, employers are well-advised to examine their compensation policies and practices. Understanding and applying the varying tests for pay equity under federal and state statutes can pose a challenge, however.

To learn more, please join us for an in-depth webinar on Tuesday, January 24, 2017 at 12:00-1:00pm EST.

Protecting Against SEC Whistleblower Enforcement Actions: Employment and Severance Agreements

Large fines have recently been imposed against public companies due to using confidentiality provisions that violate whistleblower provisions under federal securities law. Many standard confidentiality clauses in employment agreements, severance agreements, release agreements, non-compete agreements and other employment related agreements will violate these whistleblower provisions. Recently, the Office of Compliance Inspections and Examinations at the US Securities and Exchange Commission announced that it is actively reviewing these agreements to determine if there are possible securities law violations.

This webinar will address the whistleblower provisions relevant to employment related agreements, the recent SEC enforcement actions, the compliance issues raised by typical confidentiality clauses and actions for employers to consider for existing and future employment related agreements.

On-demand presentation link available here.

MP4 downloadable link available here.

New ECHO Act Focuses on Integrating Telehealth Solutions into Healthcare Delivery

On December 14, 2016, President Obama signed the Expanding Capacity for Health Outcomes Act (S. 2873) (the ECHO Act). The ECHO Act seeks to expand the use of health care technology and programming to connect underserved communities and populations with critical health care services.

The ECHO Act builds upon the University of New Mexico’s world-renowned Project ECHO by encouraging the broader development and use of technology-enabled collaborative learning and care delivery models by connecting specialists with multiple other health care professionals through simultaneous interactive videoconferencing for the purpose of facilitating case-based learning, disseminating best practices and evaluating outcomes.

The ECHO Act requires the Secretary of the Department of Health and Human Services (HHS) to study technology-enabled collaborative learning and capacity building models, and the impact of those models on (1) certain health conditions (i.e., mental health and substance use disorders, chronic diseases, prenatal and maternal health, pediatric care, pain management, and palliative care), (2) health care workforce issues (e.g., specialty care shortages) and (3) public health programs.

Within two years of the enactment of the ECHO Act, the Secretary of HHS must submit a publically available report to Congress that:

  1. Analyzes the impact of technology-enabled collaborative learning and capacity building models, including, but not limited to, the impact on health care provider retention, quality of care, access to care and barriers faced by healthcare providers;
  2. Lists the technology-enabled collaborative learning and capacity building models funded by HHS over the past five years;
  3. Describes best practices used in adopting these models;
  4. Describes barriers to adoption of these models and recommends ways to reduce those barriers and opportunities to increase use of these models; and
  5. Issues recommendations regarding the role of technology-enabled collaborative learning and capacity building models in continuing medical education and lifelong learning, including the role of academic medical centers, provider organizations and community providers in such education and lifelong learning.

The recommendations made in HHS’s report may be used to integrate the Project ECHO model into health systems across the country.

DOL Significantly Increases Some Penalties for ERISA Violations

The US Department of Labor increased the penalties for specified violations of the Employee Income Retirement Security Act of 1974.  Most of the penalty increases involve reporting and disclosure failures related to benefit plans and will be effective for penalties assessed after August 1, 2016, if the violation occurred after November 1, 2015.

Read full article here.

Proposed Changes to 409A Regulations Provide Greater Clarity and Planning Alternatives

On June 22, 2016, the Internal Revenue Service (IRS) issued proposed regulations to modify and clarify existing regulations under Section 409A of the Internal Revenue Code. The proposed changes were in response to practitioner comments and the IRS’s experience with Section 409A after the issuance of the final regulations in 2007. Overall, the proposed modifications are favorable to taxpayers and provide some planning opportunities. Plan sponsors have more flexibility to exempt arrangements from Section 409A and vary payment schedules under special circumstances. The IRS also made certain technical corrections to the existing regulations and warned taxpayers about certain practices that it considers to currently violate Section 409A. This article reviews the proposed changes, discusses available planning opportunities offered to employers, and addresses issues raised by the proposed regulations.

Read the full article here.

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