The IRS recently issued guidance providing safe harbor 401(k) plan sponsors with increased flexibility to make mid-year plan changes. Notice 2016-16 sets forth new rules for when and how safe harbor plan sponsors may amend their plans to make mid-year changes, a process which traditionally has been subject to significant restrictions.
On April 29, 2015, the Securities and Exchange Commission (SEC), by a three-to-two vote, proposed new rules that would prescribe new mandatory pay-versus-performance disclosure. The proposed rule would include specific information showing the relationship between executive compensation ‘‘actually paid’’ and financial performance of the registrant.
Click to read the full article from Pension & Benefits Daily.
Review our full presentation SEC Proposal on New Pay versus Performance Disclosure Rules here.
The Internal Revenue Service recently updated Publication 969. This publication is used by individuals for preparing tax returns when they participate in HSAs, HRAs, health FSAs, Archer MSAs and Medicare Advantage MSAs.
Compliance with the Affordable Care Act (ACA) has resulted in increased health benefit costs for many employers. A recent court decision demonstrates that while programs to reduce the number of full-time employees may lower health care costs in the short run, they also may lead to ERISA class action litigation. In Marin v. Dave and Buster’s, a federal district judge in the Southern District of New York denied a motion to dismiss a class action lawsuit claiming that the Dave and Buster’s amusement chain violated ERISA by cutting employee hours to avoid providing health care benefits to a class of employees.
The Higher Labour Court in Düsseldorf ruled on October 14, 2015, that even after the statutory one-month objection period in Section 613a(6) of the German Civil Code has expired, employees may object to the transfer of their employment based on an incomplete or inaccurate mandatory notification letter if it was reasonable for them to assume that they would have long-term employment with the acquiring entity (case number: 1 Sa 733/15).
Legal Background
If a business or part of a business transfers to another owner through a legal transaction, the new owner automatically assumes all rights and duties under the employment relationships existing at the time of transfer and thereby becomes the new employer (in accordance with Transfer of Undertakings (Protection of Employment) Regulations 2006, or “TUPE”). The previous employer, the new employer or both must inform employees affected by a transfer in writing prior to the transfer about the planned date of transfer; the reason for the transfer; the legal, economic and social consequences for employees; and the employees’ right of objection.
Employees may object in writing to the transfer of employment within one month after being notified of the transfer. A misleading, incomplete or incorrect notification does not trigger this objection period. In the case of a misleading, incomplete or incorrect notification, employees have an unlimited objection period. Complete and comprehensive notification provides employees with sufficient knowledge to decide whether to continue employment with the old or new employer (i.e., whether to object to the transfer of employment).
When employees object, their employment does not transfer to the acquiring entity, but remains with the previous employer. If the previous employer does not have any job openings, or if the business has been completely closed, the objecting employees will most likely face a dismissal for operational reasons.
Decision of the Higher Labour Court in Düsseldorf
In the present case, the plaintiff worked for a catering company in a concert hall. On September 12, 2014, she was informed that her employment was transferred to the acquiring entity and would continue unchanged. In addition, she was informed about her right to object, pursuant to Section 613a(6) of the German Civil Code. The plaintiff did not object within the one-month period and continued working for the acquiring entity. In spring 2015, the acquiring entity terminated her employment. The acquiring entity had taken over a temporary lease from the former employer, which subsequently expired. Consequently, the acquiring entity shut down the business. It was only after this shut-down that the plaintiff objected to the transfer of her employment to the acquiring entity. As a consequence, her former employer terminated her employment contract. The court considered whether the plaintiff could still object efficiently to the transfer of employment, in order to determine whether employment still existed with the former employer and, as a consequence, whether the former employer could terminate such employment. In the court’s opinion, the plaintiff effectively objected to the transfer of her employment because she was informed about an “unchanged continuation of [...]
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In its first major guidance of 2016, the U.S. Department of Labor has issued a definition of joint-employer status under the Fair Labor Standards Act that is even broader than the definition of joint-employer status issued by the National Labor Relations Board last summer. Coupled with its 2015 guidance on the misclassification of independent contractors, the DOL has greatly expanded the definition both of who is an employee and who is an employer.
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