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Managing Your Workforce During Market Volatility: Labor and Union Issues

Corporate transactions and investments involving union issues require concrete analysis of risk, contingencies and game plans. In a January 31, 2024, webinar, McDermott’s Labor and Employee Benefits Groups will focus on practical steps and strategies to successfully navigate and evaluate key considerations for transactions involving unionized businesses.

Discussion topics include:

  • Union notice and bargaining triggers
  • Successorship, neutrality and organizing issues
  • Multiemployer pension, withdrawal and other benefits considerations

Register for the webinar here.

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Global Labor and Employment Legal Update

Following a dynamic 2023 coupled with a continually evolving legal landscape, employers may feel that they are left with more questions than answers. During a recent webinar, McDermott’s employment team took a dive into the most pertinent legal updates of 2023 and shed light on uncertainties to prepare employers for the year ahead. The discussion covered new laws taking effect in 2024, explored key developments impacting the workforce and advised on what employers can expect heading into the new year.

Access webinar recording and key takeaways.

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Discerning Congressional Purpose from the Proposed MHPAEA Regulations Comment Letters

We continue our investigation of proposed regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA) issued by the US Departments of Labor, Health and Human Services and the Treasury (the Departments). Our previous MHPAEA content is available here.

The comment period for the proposed regulations closed on October 17, 2023, and one thing is clear: Stakeholders are divided not so much over particulars of the proposal but rather on the broad scope and reach of the rule. The is no doubt that the rule is intended to enact an overarching policy goal of the Biden administration. One need look no further than the administration’s July 25, 2023, fact sheet, which touts the administration’s “comprehensive national strategy to transform how mental health is understood, accessed, treated, and integrated in and out of health care settings.” Nor is there any doubt that the proposed rule is granular and prescriptive, as we previously explained.

While many of the comment letters address the particulars of the rule, certain high-profile comments ask whether it should be adopted at all. On one side are the providers (see the American Hospital Association’s comments, which offer a full-throated endorsement of the rule); on the other are the carriers (see AHIP’s comments, which claim the rule is vague and impossible to administer and calls for its withdrawal.)

If the final rule looks anything like the proposal, there will be a challenge, the particulars of which will likely include one central question: Is the final rule consistent with Congress’ intent in the matter? Dueling comments by the majority and minority members of the House of Representatives Committee on Education and the Workforce and (in the case of the minority) the Subcommittee on Health, Employment, Labor, and Pensions frame the question as follows:

Comment letter of Virginia Foxx, Chairwoman, Committee on Education and the Workforce

Citing MHPAEA’s legislative history, the majority claims that “Congress did not intend to include NQTLs [nonquantitative treatment limitations] when enacting the MHPAEA.” According to the comment letter, “the [MHPAEA] Committee report does not contain one mention of an NQTL.” (While the letter refers to the “Consolidated Appropriations Act, 2021 (CAA),” it does not attach any significance to that law’s requirement for plans and issuers to prepare and furnish on-demand reports detailing their NQTL compliance.) The majority also expresses its view that measuring and analyzing outcomes data is both impractical and exceeds the scope of the law. The majority is perplexed that the Departments believe they have the authority “to require plans to measure outcomes data stems from the statutory language.”

Comment letter of Bobby Scott, Ranking Member, Committee on Education and the Workforce, and Mark DeSaulnier, Ranking Member, Subcommittee on Health, Employment, Labor, and Pensions.

The minority’s comments welcome the proposed rules’ “emphasis on access to behavioral health care” and make the claim that the imposition of rules governing NQTLs is “entirely consistent with the statutory [...]

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Companies with 15 or More California-based Employees Must Start Disclosing Salary Ranges in All Job Postings

California companies with more than 15 California-based employees will have to disclose hourly or annual salary ranges for all job postings by January 1, 2023. According to this HR Brew article, McDermott Partner Michelle Strowhiro said she recommends HR professionals review job descriptions with business leaders and legal counsel (preferably, under legal privilege). The goal is to identify and resolve overlap between rules and adjust salary bands accordingly.

Access the article.

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The 411 on Employment Background Checks in Stock and Asset Transactions

Employment background checks help employers hire individuals with integrity whom they can trust, and who do not present a risk to the business, other employees, or the customers and clients that the business serves. Buyers in transactions may view target businesses that run background checks as lower risk for employee performance and retention issues. Background checks also constitute an important area for employment diligence in transactions because an employer or background check vendor’s failure to follow the hypertechnical disclosure and authorization requirements of the Fair Credit Reporting Act (FCRA) and other applicable state and local laws risks potentially material class action exposure and $1,000 penalties per violation. This article explores mitigation strategies that buyers may use in due diligence to identify and valuate potential FCRA exposure.

Read more here.

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Need a Do-Over? IRS Expands and Updates Qualified Plans Correction Guidance

The Internal Revenue Service (IRS) recently issued Revenue Procedure 2021-30, which provides an updated version of the Employee Plans Compliance Resolution System (EPCRS).

EPCRS is the IRS’s comprehensive program for plan sponsors to correct tax-qualified plan errors. This EPCRS update expands plan sponsors’ ability and methods to correct overpayments and to self-correct certain plan failures without filing a Voluntary Compliance Program (VCP) application, which can be costly and time-consuming. However, the IRS also eliminated the ability of plan sponsors to submit an anonymous VCP application, replacing anonymous VCP submissions with a pre-submission conference option.

Read more here.

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Labor and Employment Policy to Watch in 2021’s Second Half

As US Congressional Democrats continue their advocacy for a pro-worker agenda, multiple bills and rules could bring about sweeping changes to the civil rights and labor protections for millions of workers. These include:

  • The Equality Act
  • The Protecting Older Workers Against Discrimination Act
  • The Pregnant Workers Fairness Act
  • The Protecting the Right to Organize Act (PRO Act)
  • The US Department of Labor’s Overtime Rule

According to McDermott partner Ellen Bronchetti, the PRO Act, for example, would enshrine a strict ABC test into federal law that would analyze whether workers qualify as independent contractors.

“I think that because Biden has promised to strengthen worker protections and strengthen workers’ right to organize, I think employers need to keep a real close eye on this legislation or versions of the legislation or pieces that might get pulled out and put elsewhere,” Bronchetti said in an article published in Law360.

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New York State Department of Labor Publishes Standard for Prevention of Airborne Infectious Diseases

On July 6, 2021, the New York State Department of Labor (NYSDOL) published its Airborne Infectious Disease Exposure Prevention Standard (Standard), as required under the New York Health and Essential Rights (HERO) Act. Under the Standard, employers with worksites located in New York are required to either adopt the NYSDOL’s model exposure prevention plan or develop their own alternative prevention plan no later than August 5, 2021, and circulate their plan to employees no later than September 4, 2021.

According to McDermott’s Lindsay DitlowChristina S. Dumitrescu and Abigail M. Kagan, employers must adopt a prevention plan but are not required to implement the plan until the New York State Commissioner of Health (Commissioner) designates an airborne disease as a “highly contagious communicable disease that presents a serious risk of harm to the public health.” As of the date of this alert, the Commissioner has not issued any such designation so employers need not implement their plans just yet.

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Q&A: What Will the Future World of Work Look Like?

As governments around the world move to end lockdown restrictions, employers are examining how—and if—to bring their employees back to work. In this video, McDermott partner Carole A. Spink provides insight into the challenges facing both employers and employees.

“The issue here in the US is a pragmatic one,” Spink notes. “How do you do that and get buy-in from employees and return them in a reasonable way?”

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