The Internal Revenue Service (IRS) recently issued updated audit guidelines for its agents regarding the substantiation requirements for hardship withdrawals from 401(k) and 403(b) plans. This guidance is welcome news for plan sponsors who rely on third party administrators to process participants’ requests for hardship withdrawals, as it relaxes previous IRS guidance which (1) required plan sponsors to obtain and store copies of the actual source documents (e.g., medical bills, cancelled checks, etc.) that established a participant’s request for a hardship withdrawal and (2) did not permit participant self-certification of hardship withdrawal requests.

Continue Reading The IRS Provides Updated Guidance on Hardship Distributions

Employers who pay employees commissions should evaluate their compensation schemes to ensure compliance with California law in light of the California Court of Appeals’ recent ruling in Vaquero, et al. v. Stoneledge Furniture, LLC.  In Vaquero, the court of appeals held that employers who pay employees on a commission basis must pay employees a separate minimum wage for rest periods.  Paying employees purely on draw and commission is no longer sufficient, even if the average wage equals, or is in excess of, the statutorily required minimum wage.

Continue Reading Employees Paid on a Commission Basis Must Be Paid a Separate Minimum Wage for Rest Periods

Earlier this month, the Department of Labor (DOL) proposed a 60-day delay of the April 10, 2017 effective date of its (much debated) fiduciary rule.  The fiduciary rule – a vestige of the Obama Administration – was thought to be bound for the chopping block once President Trump took office.  However, the proposed rule has only thus far been delayed, concerning many in the industry that:  (1) there may be a gap period during which the fiduciary rule becomes law before a delay is published, or (2) the DOL could decide to simply leave the fiduciary rule in place.

Continue Reading DOL Announces Temporary No Enforcement Policy of Fiduciary Rule

Under a new proposed H.R. bill, employers may be able to strongly encourage employees to participate in genetic testing.  H.R. 1313, entitled the Preserving Employee Wellness Programs Act, was recently approved by a House of Representatives committee and would allow employers to ask about family medical history and request genetic information as part of a wellness program.

Continue Reading New House Bill Would Open Door for Genetic Testing in Wellness Programs

On March 6, 2017, Republicans in the House of Representatives unveiled two bills that aim to repeal and replace the 2010 Patient Protection and Affordable Care Act (ACA). The bills, collectively called the American Health Care Act, were introduced by the Ways and Means and Energy and Commerce committees, and both committees have since passed the legislation.

The much-anticipated Republican ACA replacement would dismantle many of the healthcare reforms put in place over the past seven years, including the individual mandate and Medicaid expansion.

Continue Reading Key Provisions of the American Health Care Act

In an article published by InvestmentNews, Bass, Berry & Sims attorney Doug Dahl provided insight on the Department of Labor’s (DOL) decision to remove its FAQs document regarding the fiduciary rule from its website. The FAQs provided numerous questions for investors to pursue with their advisers based on the requirements of the DOL fiduciary rule, which raises investment-advice standards in retirement accounts. Doug stated that it is “‘hard to know’ exactly what the FAQ removal means, but said that removing this sort of ‘informal guidance’ doesn’t have to go through a stringent regulatory process similar to a sought-after delay in the fiduciary rule.”

The full article, “DOL Removes Consumer FAQs on Fiduciary Rule from its Website,” was published by InvestmentNews on March 3, 2017, and is available online.

In an article published by the Society for Human Resource Management (SHRM), Bass, Berry & Sims attorney Bob Horton provided insight on what responsibilities franchisors have for ensuring that franchisees comply with employment laws. Bob suggests that “simply providing training to franchisees regarding employment law should not transform, by itself, a franchisor into an employer. During the course of employment law training, supervisors will often ask for advice regarding specific situations that come to mind during the training. Responding to such inquiries during the course of training should certainly be avoided as those conversations could be used as evidence of indicia of control by the franchisor.”

The full article, “Franchisors Shouldn’t Micromanage Franchisees’ Compliance Training,” was published by SHRM online on February 21, 2017, and is available online.

California Legislature introduced and passed a law phasing in state-wide minimum wage increases that will ultimately reach $15.00 per hour by 2022 for large employers and by 2023 for small employers.  Specifically, for employers with more than 25 employees, the hourly minimum wage will increase according to the following schedule:

Continue Reading California Minimum Wage Increases

California employers are required to provide written wage statements to employees generally identifying the total hours worked during each period.  The Labor Code provides an exception to this requirement for those employees who are paid solely on salary and who are exempt from overtime.  However, because not all salaried, exempt employees are paid solely on a salary basis (e.g., receiving commissions or stock options), California employers were uncertain whether they were still required to disclose total hours worked for those workers.  To address this issue, the legislature amended the Code to expand the exception.  According to the revised language, employers no longer need to provide written wage statements disclosing total hours worked for the following employees:

Continue Reading Employers Not Required to Track “Hours Worked” on Itemized Wage Statements for Exempt Employees

After amending its Equal Pay Act to address gender-related wage differentials effective January 1, 2016, the California legislature enacted nearly identical language to also preclude wage differentials based on race or ethnicity, effective January 1, 2017.  Specifically, the bill amends the Labor Code to prohibit employers from paying any of their employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions.

As with gender, if there is a wage differential, the employer bears the burden of demonstrating that the wage differential is based on one or more of the following factors:

Continue Reading California Again Updates Equal Pay Act