Compliance Stuff

 As an employer, staying compliant with 401(k) participant disclosure rules isn't just a regulatory obligation—it's essential to keeping your employees informed about their plan’s benefits and safeguarding your company from potential penalties. Imagine facing IRS sanctions or even plan disqualification simply because of missed deadlines or overlooked details in your 401(k) disclosures. The good news? These consequences are easy to avoid with the right knowledge and support. The Employee Retirement Income Security Act (ERISA) mandates specific participant disclosure requirements for 401(k) plans to ensure participants have the information they need to make informed decisions about their account. These requirements can seem daunting to employers given the number of mandatory disclosures – not to mention their various deadlines. In truth, they can be straightforward to manage with the right knowledge and support. Here is a summary of the various participant disclosures that could...

 Biden-Harris administration announces proposed rule to protect indoor, outdoor workers from extreme heat WASHINGTON – The U.S. Department of Labor has r eleased a proposed rule with the goal of protecting millions of workers from the significant health risks of extreme heat . If finalized, the proposed rule would help protect approximately 36 million workers in indoor and outdoor work settings and substantially reduce heat injuries, illnesses and deaths in the workplace.  Heat is the leading cause of weather-related deaths in the U.S. Excessive workplace heat can lead to heat stroke and even death. While heat hazards impact workers in many industries, workers of color have a higher likelihood of working in jobs with hazardous heat exposure.   “Every worker should come home safe and healthy at the end of the day, which is why the Biden-Harris administration is taking this significant step to protect workers from the dangers posed by extreme heat,” said Acting Secretary of...

 Employers, take warning! A federal judge in Illinois refused this week to dismiss a class action lawsuit brought under the Americans with Disabilities Act based on a "voluntary" wellness program. "DID YOU SAY 'CLASS ACTION? UGH, I DON'T FEEL SO GOOD . . .'" Employers s hould review their wellness programs and determine whether any monetary incentives for participation are so sweet that employees may feel they have no choice but to participate . If so, then the program may not be "voluntary," and any requests for medical information in connection with the program could run afoul of the ADA. ADA review In addition to prohibiting discrimination based on disabilities and requiring reasonable accommodations, the ADA has some significant provisions relating to employees' medical information. Those provisions apply to all employees, not just employees with disabilities. Here is the quick and dirty: An employer cannot request medical information f...

 The Rhode Island General Assembly was active during the 2024 legislative session, passing several bills that impact employers and their business practices. Here is a summary of the new laws Rhode Island employers may need to know about. Quick Hits Workers in Rhode Island will receive up to seven weeks of paid time off to bond with a new child or care for a sick family member in 2025. That number will increase to eight weeks in 2026. Domestic workers are now eligible for minimum wage and overtime protections. Independent contractors must file an annual notice of designation under the workers’ compensation law for every entity that retains them. New bills regulate and arbitration agreements and restrictive covenants with nurses. Temporary Caregiver Insurance Leave Currently, Rhode Island’s Temporary Caregiver Insurance (TCI) law a llows employees to take up to six weeks of job-protected leave and receive partial wage replacement from the Rhode Island Department of Labor and Training...

On the second-to-last day of its term, the US Supreme Court issued its decisions in Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Dep’t of Commerce. These decisions overruled Chevron USA. v. National Resource Defense Council, the 40-year-old precedent that established the “Chevron” doctrine, which gave federal agencies a certain amount of deference to interpret statutes they administer. The Chevron doctrine provides that when a statute is ambiguous — that is, when it is unclear whether US Congress has spoken directly to the precise issue at hand — courts must defer to the interpretation of the relevant agency as long as the agency interpretation of the statute is reasonable. Since 1984, the Chevron doctrine has played a foundational role in administrative law and placed federal agencies as the primary interpreters of the statutes they administered. In recent years, many scholars and policy advocates have questioned whether the Supreme Court should, or would, overrule Ch...

Crisis planning is not everyone’s idea of a good time, but an ounce of prevention is worth it when you are faced with a crisis. Here are 10 things to think about as you prepare for a possible crisis: Where is your organization vulnerable? Talk to employees, managers, and executives to learn what keeps them up at night . Then, plan what to do if those events happen. Who are your stakeholders? Who will be looking for a response from your company? It will depend on the crisis, but d on’t forget employees, customers, vendors, and investors, as well as stockholders . Select your crisis team . Again, some members will depend on the type of crisis, like a data breach, product recall, or a sexual harassment claim. Who are your outside experts? Are your conversations protected by attorney-client privilege? Do you want them to be? Choose the right spokesperson . This person should have media training, be comfortable accepting criticism, express compassion, and stay calm under questioning. It ...

Does the Federal Trade Commission’s (FTC) ban on non-compete clauses apply to non-solicitation clauses? It depends. The FTC ban on non-compete clauses can apply to non-solicitation agreements . However, only those that are so broad that they function as a non-compete clause by preventing the worker from or penalizing them for seeking or accepting other work or starting their own business. First, How Does the FTC Define “Non-Compete Clause”? A non-compete clause under the FTC’s “non-compete clause final rule” is defined as “a term or condition of employment that either ‘prohibits’ a worker from, ‘penalizes’ a worker for, or ‘functions to prevent’ a worker from: seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition; or operating a business in the United States after the conclusion of the employment that includes the term or condition.” In using the phrase “functions t...

 A new Minnesota law taking effect on July 1, 2024, will ban the use of non-solicitation agreements by staffing agencies and other service providers to prevent their customers, or the companies that contract for the staffing agency’s services, from soliciting or hiring the staffing agency’s employees who provide the contracted temporary services. Quick Hits Minnesota’s new ban on the use of non-solicitation agreements by service providers or staffing agencies takes effect on July 1, 2024. The law will prohibit service providers from restricting in any way its employees from being solicited or hired by user companies. The law will render such provisions void and enforceable. The new law, which was contained in Minnesota’s Labor and Industry Policy Omnibus bill signed by Governor Tim Walz on May 17, 2024, will prohibit any contractual provisions that restrict or restrain service providers’ user companies from directly or indirectly soliciting or hiring the service providers’ employee...

 Conflicting orders on motions to dismiss from two California courts foreshadow issues for a new theory of ERISA liability. Employers have faced a recent wave of novel ERISA class actions that challenge the reallocation of defined contribution plan forfeitures.  Such plans often include provisions requiring participants to work for the employer for a defined period before their right to any employer contributions in their account vests. When a participant terminates employment before vesting, their unvested, forfeited employer contributions are swept into the plan’s forfeiture account . The recent lawsuits challenge an employer’s decision to use this account to make later employer contributions rather than defray administrative fees otherwise payable by the participants. Plaintiffs allege that this decision violates ERISA’s fiduciary duties as well as anti-inurement and prohibited transaction rules. In Perez-Cruet v. Qualcomm Inc., a district court in the Southern District of...

 On June 28, 2024, the U.S. District Court for the Eastern District of Texas issued a limited injunction of the U.S. Department of Labor’s new regulations increasing the minimum salary that certain executive, administrative, and professional (EAP) employees must be paid to qualify for the so-called “white-collar” exemption under the Fair Labor Standards Act (FLSA). The injunction is limited, however, to the State of Texas in its capacity as an employer of state employees—businesses in Texas (and throughout the country) are not currently shielded from the scheduled increases by the court’s injunction, although other challenges to the rule, including one with a request for nationwide injunctive relief, remain pending. The first phase of the increase is scheduled to go into effect on July 1, 2024, with a second increase kicking in on January 1, 2025. Background The FLSA generally requires an employer to pay an employee time-and-a-half (“overtime”) if the employee works more than 40 h...

Over the past few years, one of the universally celebrated success stories in the bankruptcy and restructuring world has been Subchapter V of the Bankruptcy Code. Created by the Small Business Reorganization Act of 2019 (the “SBRA”), Subchapter V provides a streamlined and (reasonably) economical pathway for the restructuring of a distressed but viable business. Assuming that the outstanding debts fall within a congressionally specified threshold, Subchapter V dramatically simplifies the pathway to a confirmed Chapter 11 plan. Debtors in a Subchapter V case need not file a disclosure statement, enjoy a more lenient plan confirmation process, and can make payments outside of the absolute priority rule. In short, a Subchapter V debtor can get to plan confirmation—the ultimate end point of a successful reorganization—in a quicker, simpler and cheaper manner than a typical Chapter 11 debtor. [1]   Given these benefits, we might have reasonably expected Congress to expand the availabili...

The Supreme Court just upended the legal world by significantly reducing the power of federal regulators and placing more authority in the hands of judges – a move that will have a major impact on workplace regulations for years to come. In today’s ruling, SCOTUS overturned the decades-old Chevron doctrine which required courts to defer to a federal agency’s position on the law when a statute is open to interpretation. As we predicted earlier this year, the Court tossed out that standard in favor of judicial interpretation, enabling courts to strike down agency rules much more easily and giving employers a powerful tool to fight back against regulatory overreach. Here’s what you need to know about today’s momentous ruling and what it means for employers. What Happened? In two separate cases, commercial fishing groups claimed that a federal agency exceeded its power by forcing their fishing vessels to pay the salaries of observers on board. After lower federal courts upheld the agency r...