Bass, Berry & Sims attorneys Doug Dahl and David Thornton authored an article for HR Professionals Magazine outlining the top 10 things every HR professional should know about the Department of Labor’s (DOL’s) new fiduciary rule. In the article, Doug and David answer the following 10 questions about the new rule:
Continue Reading Attorneys Offer Top 10 Guide Regarding DOL’s New Fiduciary Rule
Employee Benefits
San Diego Amends Recent Paid Sick Leave Law
On August 3, 2016, the mayor of San Diego signed a new Implementing Ordinance that will provide for several changes to the city’s new paid sick leave law. As noted in our previous post, the San Diego City Council had considered changing the law shortly after it was passed because the ordinance seemed to create conflicting obligations with the statewide mandate. For example, while the California Healthy Workplaces, Healthy Families Act of 2014 permits capping annual sick leave accrual and allows employers to avoid carrying over sick leave from one year to the next (under the practice of providing all required hours at the beginning of each calendar year, i.e., the “upfront method”), the San Diego Ordinance did not. The new amendments, however, address these issues and provide additional clarity for employers seeking to comply with both laws.
Continue Reading San Diego Amends Recent Paid Sick Leave Law
3 Overtime Pay Policy Repercussions
Bass, Berry & Sims attorney Tim Garrett provided insight on the Department of Labor’s (DOL) overtime pay policy, slated to take effect on December 1, 2016 (for additional background on the DOL policy, read the firm’s blog post, “DOL Announces New Salary Level in Overtime Regulations“). As Tim points out for the article, “‘I’m not saying overtime pay shouldn’t be increased, but this should be done in more responsible manner… The regulations currently don’t recognize some unintended consequences.’” According to Tim, these consequences may include the following:
Continue Reading 3 Overtime Pay Policy Repercussions
Reminder — Annual Deadline to Report and Pay PCORI Fee is Rapidly Approaching
By Doug Dahl on
Posted in Employee Benefits
The annual filing (and fee payment) for applicable self-insured health plans and specified health insurance policies used to fund the Patient-Centered Outcomes Research Institute (the PCORI fee) is due by August 1, 2016. Internal Revenue Service (IRS) Form 720, Quarterly Federal Excise Tax Return, on which the PCORI fee is required to be reported (in Part II, IRS No. 133), typically is due by July 31 of each year; however, because that date falls on a Sunday this year, the Form 720 deadline falls on August 1 this year.
The filing rules have not changed, although the applicable rate has increased to $2.17 per covered life.
For an insured plan, the filing obligation falls on the insurer. However, for an “applicable self-insured health plan,” the filing obligation lies with the plan sponsor. Applicable self-insured health plans include self-insured major medical coverage and health reimbursement arrangements (HRAs) for both employees and retirees, but do not include “excepted benefits” (e.g., most health flexible spending arrangements (health FSAs), standalone dental or vision plans, certain employee assistance programs (EAPs) that do not provide significant benefits in the nature medical care, etc.). The IRS provides a helpful chart to help identify the plans to which the PCORI fee applies.Continue Reading Reminder — Annual Deadline to Report and Pay PCORI Fee is Rapidly Approaching
Should Gay Employees Have to Put a Ring on It?
By David Thornton on
Posted in Employee Benefits
Bass, Berry & Sims attorney David Thornton offers guidance on the recent Supreme Court decision in Obergefell v. Hodges, and how public and private sector employers are struggling with its legal and financial implications. As David explains, “‘[t]hey’re worried that if they keep the same-sex partner benefits, there’s a pretty good argument that opposite-sex…
Workplace Impact From Same-Sex Marriage Ruling
By Tim K. Garrett on
Posted in Employee Benefits
Bass, Berry & Sims attorney Tim Garrett authored an article published in the National Law Journal providing guidance on the recent same-sex marriage ruling in Obergefell v. Hodges, and how the decision has caused many employers to reevaluate their benefit structures. Since the ruling, employers are faced with added pressure to provide retroactive coverage…
Recent developments create unexpected — and perhaps unintended — consequences
By Tim K. Garrett on
Posted in Employee Benefits
Bass, Berry & Sims attorney Tim Garrett analyzes the implications of the U.S. Supreme Court’s decision in Obergefell v. Hodges and its effect on workplace issues. In June 2015, the Supreme Court ruled that the right to marry is a fundamental right guaranteed under the U.S. Constitution, regardless of the gender of the intended spouse.…
U.S. Supreme Court Rejects Sixth Circuit’s Long-Standing Presumption Treating Healthcare Benefits as Vested for Life
By Bass, Berry & Sims on
Posted in Employee Benefits, Uncategorized
Employers in Michigan, Kentucky, Ohio and Tennessee may now have more freedom to alter, reduce or eliminate healthcare benefits provided to retired union workers. On January 26, 2015, the Supreme Court in M&G Polymers USA, LLC v. Tackett unanimously decided that the Sixth Circuit’s long-standing “Yard-Man” presumption violates traditional principles of contract law. 2015 U.S. LEXIS 759 (2015). Under Yard-Man, courts should presume that healthcare benefits provided to union employees are vested for the life of the retired employee unless the collective-bargaining agreement clearly states to the contrary. See United Auto Workers v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983). As Justice Clarence Thomas noted, however, such a presumption distorts any attempt to ascertain the actual intent of the parties. As a result, it effectively disregards ordinary contract principles and “plac[es] a thumb on the scale in favor of vested retiree benefits in all collective-bargaining agreements.” M&G Polymers, 2015 U.S. LEXIS, at *18.
Continue Reading U.S. Supreme Court Rejects Sixth Circuit’s Long-Standing Presumption Treating Healthcare Benefits as Vested for Life
California District Court Asked to Determine Retroactive Applicability of United States v. Windsor: Decision Could Impact Employers Who Relied on DOMA to Deny Same-Sex Benefits Claims
When the Supreme Court decided United States v. Windsor, 133 S. Ct. 2675 (2013), finding Section 3 of the Defense of Marriage Act (DOMA) unconstitutional for precluding recognition of same-sex marriage under federal law, the Court did not address the extent to which the decision would apply retroactively. More federal guidance may emerge, however, with Schuett v. FedEx, No. 15-cv-189 (N.D. Cal. 2015), the outcome of which could potentially impact numerous employers who relied on DOMA to deny employee or spousal benefits.
Continue Reading California District Court Asked to Determine Retroactive Applicability of United States v. Windsor: Decision Could Impact Employers Who Relied on DOMA to Deny Same-Sex Benefits Claims
Recent IRS Guidance Under Section 83 of the Internal Revenue Code Clarifies the Definition of a “Substantial Risk of Forfeiture”
By Curtis Fisher on
Posted in Employee Benefits
Under Section 83, of the Internal Revenue Code (the “Code”) restricted stock and other property that is transferred to a service provider (e.g., an employee or director) for services is taxable when the service provider’s rights in the property are no longer subject to a substantial risk of forfeiture. The Department of Treasury recently issued final regulations under Section 83 that clarify what events constitute a “substantial risk of forfeiture.” The final regulations provide that a substantial risk of forfeiture may be established only if a service provider’s rights in transferred property are either (i) conditioned on the performance, or refraining from performance (e.g., as a result of a non-competition agreement), of substantial services, or (ii) subject to a condition related to the purpose of the transfer (e.g., performance-based awards). In addition, to determine if a substantial risk of forfeiture exists, both the likelihood that a forfeiture event will occur and the likelihood that it actually will be enforced must be established by the underlying facts and circumstances.
Continue Reading Recent IRS Guidance Under Section 83 of the Internal Revenue Code Clarifies the Definition of a “Substantial Risk of Forfeiture”