Employment Archives | Page 48 of 105 | EMPLOYEE BENEFITS BLOG

Cracking the Code: Taxing Developments in Benefit Compliance

by McDermott Will & Emery | Aug 21, 2015 | Employment, Fiduciary and Investment Issues, Retirement Plans

Generally, any type of organization can offer a defined benefit pension plan under Section 4019a) in the Internal Revenue Code of 1986, as amended (the “Code) or a Code Section 401(k) Plan. However, only employers described in Code Section 501(a) and educational organizations described in Code Section 170(b)(A)(iii) are permitted to sponsor Code Section 403(b) plans. Equally, Code Section 457 plans can only be sponsored by governmental and other organizations exempt from tax under the Code. Until roughly 2009, both Code Sections 403(b) plans and Code Section 457 plans had been basically ignored or overlooked by the Internal Revenue Service (“IRS”) and the Department of Labor (“DOL”). However, as these two plans have accumulated significant assets over the course of time (many occurring due to the consolidation of large plans in the healthcare sector through business combinations), the IRS and DOL have deemed it necessary to start taking a closer look. The audits of Code Section 403(b) plans and Code Section 457 plans has increased dramatically in the last few years to the point where the IRS has now issued its “top ten list” of issues which tax-exempt entities need to focus on when sponsoring these types of plans.

Read the full article from the Journal of Compensation and Benefits.

What Private Equity Funds Should Know About ERISA

by Joseph K. Urwitz | Aug 18, 2015 | Employment, Fiduciary and Investment Issues

Managers of private equity funds who are responsible for investing the assets of a fund that holds plan assets are likely to be considered a fiduciary under the Employee Retirement Income Security Act of 1974, as amended (ERISA). ERISA imposes numerous duties on fiduciaries, and those who fail to meet ERISA’s standards may be personally liable to restore plan losses, disgorge profits made through the use of plan assets, and pay additional statutory penalties imposed by the Department of Labor. The fiduciary may also face criminal penalties if found guilty of wilful failure. It is therefore vitally important that fiduciaries are fully aware of all their duties under ERISA.

Read the full article.

California Amends Its Healthy Workplaces, Healthy Families Law

by Chris C. Scheithauer and Michael T. Graham | Aug 14, 2015 | Employee Benefits, Employment, Executive Compensation, Health and Welfare Plans, Labor

As previously reported, California’s Healthy Workplaces, Healthy Families Act of 2014 (California’s Sick Leave Law) took full effect on July 1, 2015, although some provisions were effective as of January 1, 2015. The new law generally requires most employers to allow employees to accrue paid sick leave. This On the Subject discussed requirements employers must meet, including Assembly Bill 304, which amends California’s Sick Leave Law to make immediate changes.

Read the full article.

Affordable Care Act Reporting Penalties Significantly Increased

by McDermott Will & Emery | Aug 6, 2015 | Employment, Health and Welfare Plans

On June 29, 2015, President Barack Obama signed the Trade Preferences Extension Act (the Act) into law. In addition to containing several revenue offsets, the Act significantly increased penalties for incorrect information returns, including those required by the Affordable Care Act (ACA).

The Internal Revenue Service (IRS) may impose penalties for both failing to file and filing incorrect or incomplete information returns and/or payee statements after the due dates for such forms pursuant to Internal Revenue Code Section 6721 and 6722. These penalty provisions apply to a variety of information reporting requirements including Forms W-2 and 1099, and now more recently to Forms 1094-B, 1095-B, 1094-C, and 1095-C relating to compliance with the ACA.

Read the full article.

Independent Contractor and Exempt Employee Classification Review Should Include Joint-Employer Status

by McDermott Will & Schulte | Jul 30, 2015 | Employment, Labor

Recent independent-contractor misclassification guidelines, and proposed changes to the overtime rules by the U.S. Department of Labor, underscore that employers should be reviewing their independent-contractor classifications and wage and hour exempt-employee classifications. But even if an employer has correctly classified its own workforce, it still may be held responsible for a variety of employment liabilities if it is found to be a ‘joint employer’ with another company which has misclassified its workers. This On the Subject provides practical tips for avoiding joint-employer arrangements.

Read the full article.

WEBCAST: The Future of Benefits for Same-Sex Spouses and Partners

by McDermott Will & Emery | Jul 23, 2015 | Employee Benefits, Employment

Thursday, July 30, 2015
12:00 – 1:00 pm EDT

On June 26, 2015, the Supreme Court of the United States ruled in Obergefell v. Hodges that it is unconstitutional for a state to ban same-sex couples from exercising the fundamental right to marry. All states are now required to permit same-sex couples to marry and to recognize same-sex marriages validly entered into in other jurisdictions.

McDermott Will & Emery invites you to a live webcast to discuss the impact of this landmark decision on employee benefit plan sponsors and to address key considerations for employer-provided plans, including:

An up-to-date description of federal and state taxation of health and welfare benefits
A summary of steps employers must take in light of the Supreme Court’s decision
The future of employee benefits for unmarried same-sex and opposite-sex partners

Click here to view the event listing.

Privacy and Security Concerns for Employee Benefit Plans with Service Provider Relationships

by Anthony A. Bongiorno, Andrew Liazos and Amy C. Pimentel | Jul 21, 2015 | Benefit Controversies, Employment, Fiduciary and Investment Issues, Health and Welfare Plans, Labor, Privacy and Data Security, Retirement Plans

Recent cyber-attacks on health insurers have heightened awareness that sensitive participant and beneficiary information may not be adequately secure. There will undoubtedly be other attacks on databases maintained by service providers to employee benefit plans, which raises an important question for Employee Retirement Income Security Act of 1974 (ERISA) fiduciaries: what should be done now to protect participant and beneficiary information entrusted to service providers against future attacks and unauthorized disclosure? While the extent of a fiduciary’s responsibility to protect personal identifiable information of participants and beneficiaries is unclear, the fiduciary provisions of ERISA can be interpreted to impose a general duty to protect this information when it is part of a plan’s administration. In addition, plan fiduciaries also may have obligations under other federal and state laws governing data privacy and security that are not preempted by ERISA. This article addresses the nature of the problem, identifies the types of data breaches that can occur with employee benefit plans, provides an overview of relevant law that may apply, and sets forth practical steps that can be taken by plan fiduciaries with service providers to address privacy and security concerns.

Click here to read the full article from Benefits Law Journal.

Collective Redundancy Consultation: European Court Judgment is Good News for UK Employers

by Katie Clark and Paul McGrath | Jul 16, 2015 | Employment

Background

UK legislation provides that, when a UK employer proposes to make redundant 20 or more employees at one establishment within a period of 90 days or less, the employer is required to collectively consult representatives of those affected, prior to implementing that proposal. Failure to do so can lead to the employer being required to pay up to 90 days’ pay to each affected employee (a Protective Award).

In 2013, when considering the lawfulness of the collective redundancy process carried out by Woolworths in the throes of its closure, the UK Employment Appeal Tribunal caused havoc by deciding that the words “at one establishment” should be deleted from the legislation.

The deletion meant that, in order to avoid liability for a Protective Award, an employer proposing make 20 or more redundancies, anywhere in their UK business, within the relevant timeframe, needed to collectively consult about those proposals, no matter how geographically disparate and wholly unconnected the proposed dismissals might be.

Response

The Court of Appeal, thinking that this really could not be right, asked the European Court for a preliminary ruling on the issue.

The way the European system works is that an Advocate General (AG) first considers the question and then delivers his opinion. The European Court then uses the AG’s opinion to assist it in coming up with its Judgment. The European Court can disagree with the AG, but it usually follows the AG’s recommendation.

In this case, the AG decided that, in his opinion, the term “establishment” in UK legislation means the local employment unit to which the relevant workers are assigned to carry out their duties.

European Court Decision

On April 30, 2015, the European Court confirmed that the trigger for collective redundancy consultation is a situation where, within a 90 day period, an employer proposes to make 20 or more employees redundant at one establishment, as opposed to anywhere within its UK business, as had been suggested by the UK Employment Appeal Tribunal.

The court’s decision therefore narrows the instances in which employers will be required to collectively consult about proposed redundancies in the United Kingdom. The focus will now return to how many redundancies are proposed at each establishment within the UK business over the 90 day period. Whether or not a particular site or office qualifies as an establishment for collective redundancy purposes will be determined by the familiar tests used previously.

Effective Employee Suspension Agreements to Facilitate Compliance Investigations

by McDermott Will & Emery | Jul 10, 2015 | Employment

The proper handling of employees who are under investigation, is crucial to ensuring effective compliance investigations that minimize disruption to the organization. The first step often involves entering into a suspension agreement with employees whose conduct is being investigated.

Read the full article.

Supreme Court Rejects Latest Challenge to Affordable Care Act: What Are Employers’ Obligations Going Forward?

by Jacob Mattinson | Jun 30, 2015 | Benefit Controversies, Employee Benefits, Employment, Fiduciary and Investment Issues, Health and Welfare Plans

On June 25, 2015, the Supreme Court of the United States upheld one of the main pillars of the Affordable Care Act (ACA): the tax credits that allow millions of Americans to afford health care insurance on the public exchanges. In King v. Burwell, Chief Justice Roberts, writing for a 6–3 majority, held that middle- and low-income individuals who purchase health care insurance through a federally facilitated health care exchange are entitled to the same tax credits that are available to purchasers through state-run health care exchanges. The ruling puts to rest one of the remaining challenges to the general framework of the ACA. Accordingly, our On the Subject discusses how employers should continue to plan for compliance with the current and upcoming obligations required under the ACA.

Read the full article.

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