Employment Archives - Page 42 of 104 - EMPLOYEE BENEFITS BLOG

IRS Regulations Provide That Certain Employees of Partnerships Now Have Self-Employment Status for Employee Benefit and Tax Purposes

by Jeffrey Holdvogt and Ruth Wimer | May 17, 2016 | Employment, Executive Compensation, Health and Welfare Plans

The IRS and US Department of Treasury have issued final and temporary regulations which address benefit and self-employment tax issues regarding partners in a partnership which is the sole owner of a second, wholly owned legal entity. The regulations are intended to clarify that where the partners are separately working for the second legal entity, such individuals may not be treated as employees, and must be treated as self-employed individuals for both self-employment and employee benefit plan purposes. As a result, the partners may not be provided the tax benefits provided employees with respect to benefit plans such as cafeteria plans, parking and transit benefits, health benefits and health insurance.

Read the full article.

View From McDermott: Conduct Regular Reviews to Ensure Compliance with FICA Tax Withholding Rules

by Joseph K. Urwitz and Ruth Wimer | Apr 28, 2016 | Employment, Retirement Plans

Sponsors of nonqualified deferred compensation plans should pay close attention to the special tax withholding rules under the Federal Insurance Contributions Act (FICA) to avoid paying interest and penalties, and potentially being sued by plan participants. FICA tax on nonqualified deferred compensation must be withheld when compensation vests, not later when actually paid out. Failure to withhold FICA tax at the time of vesting will cause the compensation plus any earnings to be subject to FICA tax later as it is distributed to the participant, potentially resulting in higher overall FICA taxes for both the employer and the participant. As shown by the case of Davidson v. Henkel, employees may even successfully sue the employer for causing them to receive lower benefits due to the higher tax burden created by a failure to follow the correct withholding rules.

This article explores the common FICA and Additional Medicare Tax withholding errors and the potential remedies that may be available to employers who fail to timely withhold FICA and/or Additional Medicare Tax on nonqualified deferred compensation.

Read the full article.

Two Adverse Decisions against Church Plans Reached at Appellate Court Level

by McDermott Will & Emery and Michael T. Graham | Apr 26, 2016 | Employment, Health and Welfare Plans, Labor, Retirement Plans

Since 2014, large church-controlled health systems that offer defined benefit pension plans have seen lawsuits filed as to whether such plans are eligible to qualify for the ERISA church-plan exemption, which governs those arrangements. When a retirement plan meets the ERISA church-plan exemption, it is exempt from the typical funding and vesting requirements of ERISA and the Internal Revenue Code as well as from the ERISA reporting and disclosure requirements. As the church-plan litigation moves to the appellate level, two adverse decisions are reached denying ERISA church-plan exemption to two health systems.

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The Department of Labor Issues Proposed Regulations Implementing Paid Sick Leave for Federal Contractors

by McDermott Will & Emery | Apr 21, 2016 | Employment, Health and Welfare Plans

The Department of Labor (DOL) recently announced its proposed regulations to implement Executive Order (EO) 13706, establishing paid sick leave for federal contractors. The proposed regulations describe the categories of contracts and employees covered by the EO, the rules and restrictions regarding the accrual and use of such paid sick leave, the obligations of contracting agencies, and the available remedies and enforcement procedures.

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Summary of Benefits and Coverage Templates Finalized

by Megan Mardy | Apr 19, 2016 | Employment, Health and Welfare Plans

On April 6, 2016, the US Department of Labor posted final versions of the updated summary of benefits and coverage (SBC) template and instructions, updated uniform glossary and other associated materials. In previous guidance, the US Departments of Treasury, Labor, and Health and Human Services provided that health plans and issuers who maintain an open enrollment period will be required to start using the new template and associated documents on the first day of the open enrollment period beginning on or after April 1, 2017, with respect to coverage for the plan year or policy year that begins on or after April 1, 2017. Health plans and issuers who do not use an open enrollment period should begin using these documents on the first day of the first plan year or policy year that begins on or after April 1, 2017.

Employers should begin preparations to ensure that the finalized documents are ready for distribution by the required implementation date. Health plans and issuers with calendar year plans and open enrollment periods must be ready to use the new documents during the 2017 open enrollment period for coverage that begins on January 1, 2018. Health plans and issuers with calendar year plans and no open enrollment period should be prepared to use the documents by January 1, 2018.

EEOC Files Lawsuits Against Employers for Sex Discrimination Under Title VII

by Brian Tiemann and Todd Solomon | Apr 12, 2016 | Employment, Health and Welfare Plans, Retirement Plans

For the first time, the U.S. Equal Employment Opportunity Commission (EEOC) is suing private employers on behalf of employees alleging sexual orientation discrimination. On March 1, 2016, the EEOC issued a press release announcing it has filed its first two sexual orientation lawsuits alleging violations of Title VII of the Civil Rights Act of 1964 (Title VII).

Read the full article.

UK Employment Alert: Increase in UK Employment Protection Awards and New Mandatory National Living Wage

by Katie Clark and Paul McGrath | Apr 6, 2016 | Employee Benefits, Employment

The compensation limits on Employment Tribunal awards and certain other amounts payable under UK employment legislation will be increased as of April 6, 2016.

Read the full UK Employment Alert.

Recent Government-Issued FAQs Clarify ACA Employer Mandate, Market Reforms

by McDermott Will & Emery | Apr 1, 2016 | Employee Benefits, Employment, Health and Welfare Plans

The Internal Revenue Service and U.S. Departments of Health and Human Services and Labor recently issued guidance on the Affordable Care Act employer mandate and market reforms. Notice 2015-87 contains 26 FAQs that clarify the application of market reforms to health reimbursement arrangements and employer payment plans and the affordability of employer-sponsored health coverage, among other topics.

Read the full article.

Special Executive Compensation Tax Issues in Corporate Transactions

by Andrew Liazos | Mar 24, 2016 | Employment, Executive Compensation

In the corporate transactions context, it is increasingly important to be familiar with the key tax considerations relating to mergers and acquisitions, and how to minimize tax risks in such transactions.

In the following presentation, Andrew Liazos, partner at McDermott Will & Emery, provides an overview of executive compensation tax issues to limit the effect of “golden parachute” taxes and avoid adverse deferred compensation tax results under Section 409A of the Internal Revenue Code.

View presentation slides.

Implementation Date for New Summary of Benefits and Coverage Template

by Megan Mardy | Mar 23, 2016 | Employment, Health and Welfare Plans

The U.S. Departments of Treasury, Labor, and Health and Human Services (the Departments) recently issued new guidance regarding the intended timeframe for the use of the new summary of benefits and coverage (SBC) template and instructions, an updated uniform glossary and other associated materials.

Background

The Affordable Care Act (ACA) generally requires group health plans and health insurance issuers offering group or individual health insurance coverage to provide an SBC to participants and beneficiaries. The Departments issued revised final regulations governing the SBC requirement on June 16, 2015, and published a proposed new SBC template on February 26, 2016. Comments on the proposed template and associated documents are due by March 28, 2016.

Read the full article.

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