Inside Jobs

Contact:Email

On October 26, 2022, the Securities and Exchange Commission (the “SEC”) adopted a long-awaited rule that will require listed companies to adopt and publicly file so-called “clawback” policies.  As we discuss in more detail in this alert, the rule requires listed companies to adopt clawback policies to recover, reasonably…

Continue Reading Executive Compensation Implications of SEC’s Final Rule on Clawback Policies

The recently enacted coronavirus economic relief package, the American Rescue Plan of 2021 (“ARPA”), contains the most significant changes in fifteen years to the funding rules of single employer pension plans.  These changes have largely has fallen under the radar of the national press – an outcome disappointing perhaps only to ERISA nerds.  The little press addressing the pension provisions of ARPA mostly has been focused on the financial relief the legislation provides to troubled multiemployer pension plans — which, as we discuss elsewhere, have major implications for employers that participate, or are considering whether to participate, in a multiemployer plan.

Nevertheless, the significant changes to the single-employer plan funding rules warrant the attention of any employer that sponsors a single-employer defined benefit plan.  While the new law may significantly reduce the amount of contributions to pension plans that are required by law, reducing contributions may have other consequences that employers may wish to weigh.Continue Reading To Fund or Not To Fund: Considerations for Employers Impacted by Recent Changes to Pension Plan Funding Rules

On January 12, 2021, the Employee Benefits Security Administration (“EBSA”) of the Department of Labor (“DOL”) announced new guidance on a range of issues related to missing participants:

  • In Missing Participants – Best Practices for Pension Plans, EBSA has provided examples of best practices that it has identified as being effective at minimizing and mitigating the problem of missing or nonresponsive participants.
  • This new guidance also includes Compliance Assistance Release No. 2021-01, which provides a roadmap of investigative processes and case-closing practices of EBSA investigators who conduct Terminated Vested Participants Project (“TVPP”) audits of defined benefit pension plans. One purpose of these audits is to assess whether defined benefit plans have taken appropriate steps to locate missing participants and beneficiaries.
  • EBSA also issued Field Assistance Bulletin No. 2021-01, which announced the DOL’s temporary enforcement policy on a terminated defined contribution plans’ use of the Pension Benefit Guaranty Corporation’s expanded missing participants program.

This article focuses on the guidance for ongoing plans (and not Field Assistance Bulletin 2021-01 for terminated plans).Continue Reading Five New Ways That Plan Fiduciaries May Locate Missing Participants

Employers that have employees residing in California are now required by AB 1554 to provide notification in two different forms to employees about deadlines for withdrawing funds from flexible spending accounts (“FSAs”).  One of the forms of notification may be electronic.  Examples of permissible notification forms include: e-mail, telephone, text message, mail, or in-person.  The notice requirement purports to apply to all FSAs, including dependent care FSAs, health care FSAs, and adoption assistance FSAs.  Virtually all other aspects of implementing the law are left open to interpretation.
Continue Reading California’s New FSA Notice Requirement Leaves Employers Asking Questions

On May 27, 2020, the Department of Labor (“DOL” or “Department”) published a final rule providing an alternative safe harbor for furnishing ERISA pension plan disclosures electronically on a website or via email.  We previously blogged about the proposed rule here.  This post provides an overview of the final rule and highlights some key changes from the proposed rule.

As we previously noted, electronic disclosure has been permitted since 2002 under a safe harbor that allows plan administrators to electronically disclose ERISA documents to individuals who are “wired at work” or individuals who have affirmatively consented to electronic delivery.  This new safe harbor is an alternative to the 2002 safe harbor.  Plan administrators of pension plans may rely on either the new safe harbor, the 2002 safe harbor, both, or neither.  Significantly, however, the new safe harbor is limited to pension plans.  The 2002 safe harbor remains available for welfare plans.Continue Reading Electronic Disclosure Rule for Pension Plans Finalized

The Internal Revenue Service has issued guidance (Notice 2020-15) that allows sponsors of high deductible health plans (“HDHPs”) to reimburse up to the full cost of medical care services and items for testing and treatment of COVID-19 before plan participants meet the plan’s minimum statutory deductible.  Accordingly, participants…
Continue Reading IRS Clears the Way for High Deductible Plans to Waive Cost Sharing for Coronavirus Testing

Businesses are rapidly developing strategies to continue functioning and protect their workforces in the face of the growing Coronavirus COVID-19 outbreak. For obvious reasons, businesses may want to deploy health screening, testing, and professional medical advice services—including telemedicine—to their employees and dependents. It is critical that employers’ health plans support…
Continue Reading COVID-19: Your Health Plans and Your Business Response

On July 10, 2019, the Sixth Circuit considered vexing questions of statutory interpretation in an ERISA case.  A dispute over whether a transaction bonus plan was an ERISA employee pension benefit plan hinged on the meaning of two terms common in federal statutes: “results in” and “extending to.”  While the meaning of the statute was plain to the entire panel, Judges Stranch and Thapar quarreled over the evidence that a court might rightly consider when interpreting a statute—in this case, ERISA.  Judge Thapar argues that “[c]ourts should consider adding [corpus linguistics] to their tool belts.”
Continue Reading Corpus Linguistics and ERISA Litigation

Recently enacted California Assembly Bill 5 (“AB-5”) is a game changer for businesses that use independent contractors in California — and a warning shot for employers nationwide.  Subject to exemptions for certain occupations and professions, AB-5 imposes a strict “ABC” test that appears to put a thumb on the scale of classifying workers as employees rather than independent contractors.

The ABC test was adopted last year by the California Supreme Court in its Dynamex decision to determine classification of workers for purposes of the state’s Industrial Welfare Commission Wage Orders.  For 20 years before Dynamex, worker classification was governed by the more relaxed “Borello” multi-factor test, which focuses on the hirer’s right to control an individual’s work and other secondary factors.  AB-5 now makes the ABC test the default standard for determining worker classification — not just under the Wage Orders, but also for all California Labor Code, unemployment insurance, and workers’ compensation claims.

As a result of the passage of AB-5, companies that hire consultants or contractors based in California should take a hard look at those relationships and determine whether they need to reclassify any such individuals as employees.  For other companies, this legislation should be monitored as the potential tip of an iceberg of a trend in many states, and potentially nationwide, toward imposing additional hurdles in classifying workers as independent contractors.Continue Reading Hiring Employees vs. Independent Contractors: Navigating Classification Issues in a Drastically Altered California Legislative Landscape