Employment law in Ireland has been particularly dynamic in recent years. Covid and its aftermath transformed the workplace and created a more determined approach to employment regulation. In consequence we now have a raft of new legislation and associated workplace codes of practice. Continue Reading Recent Employment Law Developments in Ireland
Inside Jobs
Executive Compensation Implications of SEC’s Final Rule on Clawback Policies
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 PoliciesTo Fund or Not To Fund: Considerations for Employers Impacted by Recent Changes to Pension Plan Funding Rules
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
Five New Ways That Plan Fiduciaries May Locate Missing Participants
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
IRS Clears the Way for High Deductible Plans to Waive Cost Sharing for Coronavirus Testing
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
COVID-19: Your Health Plans and Your Business Response
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
Hiring Employees vs. Independent Contractors: Navigating Classification Issues in a Drastically Altered California Legislative Landscape
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
Beware Laws Intersecting Benefit Concierge Services
(This article was originally published in Law360 and has been modified for this blog.)
Employers commonly offer a wide array of employee benefit plans and programs. In addition to traditional staples, many employers today offer an employee assistance program, dependent care, accident insurance and even pet insurance. In an increasingly competitive labor market, offering a full spectrum of employee benefits is an important way to maintain a competitive advantage. While the type of programs offered have increased, employees may not always have sufficient knowledge to make use of them. In a 2017 survey, only 60 percent of employees thought their employers effectively educated them to select the benefits options that meet their needs. Underutilization means employers are not receiving the full benefit of their offerings.
That is why some employers are starting to use a navigator, or concierge service, to help employers realize a greater return on their investment in these programs by raising employees’ awareness of available benefits and promoting employees’ access and utilization of them. Benefit concierge services raise several unique legal issues in the areas of data privacy, Health Insurance Portability and Accountability Act privacy, the Employee Retirement Income Security Act, and technology, to name a few. With appropriate legal counsel and planning, many of these issues can be addressed. This article highlights some of the legal issues that may arise when providing a concierge service.Continue Reading Beware Laws Intersecting Benefit Concierge Services
Executive Order on Strengthening Retirement Security in America: Impact on Required Minimum Distributions from Defined Contribution Accounts
On the last day of August, the Trump administration signed an executive order proposing a number of changes which the administration says is intended to strengthen retirement security in America, specifically, by expanding access to multiple employer plans and reducing the costs and burdens associated with employee plan notices. However, tucked away at the end of this executive order is a proposal that, when implemented, could have a significant impact on plan participants — the revision of the required minimum distribution mortality and life expectancy tables. This post summarizes how this change could impact defined contribution plan participants.
Continue Reading Executive Order on Strengthening Retirement Security in America: Impact on Required Minimum Distributions from Defined Contribution Accounts
ERISA Litigation Surging – Focus on Fees
After a few years of decline, litigation involving 401(k) plans “has surged again recently,” according to a study published by the Center for Retirement Research at Boston College. This is likely not news to 401(k) sponsors and service providers, who are confronted with this reality on a near daily basis. However, the study is a fascinating read, in part because it chronicles many cases brought since 2006, but also because it discusses the consequences of all this litigation—both the good and the not-so-good.
Complaints filed by participants of 401(k) plans against their plan fiduciaries over the past ten years follow a pattern. Section 401(k) plan litigation exploded during the recession in 2008, with many allegations targeting funds holding employer stock whose value plummeted. The number of lawsuits peaked at 107 in 2008, and 2009 remains second on the list for number of 401(k) lawsuits filed over the past 12 years.
Section 401(k) litigation tapered off during the first few years of this decade, with the Supreme Court’s 2014 Dudenhoeffer v. Fifth Third Bancorp decision delivering a devastating blow to the so-called “stock drop” cases.[1]
Although the Court agreed with the Sixth Circuit that employer stock ownership plan (ESOP) fiduciaries are not entitled to a special “presumption of prudence,” its discussion of the difficulty such allegations faced in meeting the pleading standard led to many dismissals.
But starting around 2015, the study finds, 401(k) litigation began to surge again. The more recent cases focus on “excessive fees” paid either for actively managed investment funds or for record-keeping and other administrative services. There has been a corresponding shift in who is sued: record-keepers, third-party administrators, and other plan service providers are increasingly named as defendants, in addition to or instead of the employees or fiduciary committees of plan sponsors. The plaintiffs in many of these “excessive fees” cases probe the complicated—and sometimes opaque—fee structures between plan service providers such as record-keepers and investment advisors for what plaintiffs believe to be hidden kickbacks.Continue Reading ERISA Litigation Surging – Focus on Fees