Zev Eigen comments on the value of data in making decisions on compensation.

HR Dive

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On February 26, 2024, the California Supreme Court issued its opinion in Tricoast Builders, Inc. v. Fonnegra, No. S273368 (Cal. Feb. 26, 2024). For employers, the most important takeaway from this case is that the court held a litigant’s waiver of the right to a jury trial can be conclusive if a party seeking reversal of the waiver cannot demonstrate it caused prejudice to the party. The decision makes it more difficult for a party to convince a court to let it back out of a jury trial waiver in a civil case.

Background

After a recent Second Circuit decision curbed an ideological organization's ability to bring a case against a DEI program without proving someone had actually been harmed, Cindy-Ann L. Thomas said other courts will take note of the standing rationale.

Law360 Employment Authority

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Over the past few years, cities have started to implement workplace regulation, an area previously reserved to federal and state governments.  The hotel industry, which often is one of the primary drivers of a local economy, has been a particular focus.

While significant bills impacting Connecticut employers were signed into law, proposed employer mandates on pay transparency, paid sick leave, and predictive scheduling failed to gain the necessary votes for passage in 2023. Here are some of the year’s notable legislative developments.

What Passed . . .

Effective October 1, 2023, unless otherwise noted:

On August 8, 2023, the Governor of Puerto Rico signed into law Act No. 85-2023, effective immediately. The statute amends Puerto Rico’s Workers’ Compensation Act by further incentivizing safe workplaces.

Stephen T. Melnick discusses the Massachusetts Department of Industrial Accidents (DIA)’s revised workers’ compensation notice for employees, which Massachusetts employers will start using Sept. 16, 2024.

SHRM

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On January 8, 2021, the Pension Benefit Guaranty Corporation (PBGC) issued its final rule modifying the calculation of withdrawal liability by multiemployer pension plans.  This final rule amends the agency’s regulations on allocating unfunded vested benefits to withdrawing employers (29 C.F.R. § 4211) and notice, collection, and redetermination of withdrawal liability (29 C.F.R. § 4219).

House Education and Labor Chairman Bobby Scott (D-VA) recently introduced legislation that seeks to provide aid to multiemployer pension plans (MEPs) facing insolvency. Entitled the Emergency Pension Plan Relief Act (EPPRA), the bill would fund this aid directly from the U.S. Treasury.

Sarah Bryan Fask provides insight on multi-employer pension plans. 

DCReport

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On March 11, 2021, President Biden signed into law the $1.9 trillion American Rescue Plan Act of 2021, which includes the Butch Lewis Emergency Pension Plan Relief Act of 2021.  This law is designed to forestall the insolvency of approximately 100 multiemployer pension plans that were expected to run out of money necessary to pay vested benefits over the next 20 years.  Included among these funds is a particularly large fund that – absent congressional intervention – would have gone insolvent by 2025, leaving millions of retirees without their expected monthly pension. 

Sarah Bryan Fask shares her insight about the future of pension plans for unionized employees.

Bloomberg Law

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Sarah Bryan Fask explains how the special financial assistance will affect union-brokered pensions.

Bloomberg Law

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Sarah Bryan Fask talks about the federal government’s temporary rescue of more than 200 union-brokered pension plans.

Bloomberg Law

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On February 9, 2024, the U.S. Court of Appeals for the D.C. Circuit issued its decision in Trustees of IAM Nat'l Pension Fund v. M & K Emp. Sols., LLC, No. 22-7157 (D.C. Cir. Feb. 9, 2024), affirming the district court’s decision to vacate an arbitration award for the employer in a pension fund withdrawal liability case.  The D.C.

Ole Kristian Olsby and Nina Elisabeth Thjømøe explain Norway’s new Anti-discrimination Tribunal.

International Law Office (ILO)

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Racially offensive symbols, such as Confederate flags, displayed in the workplace can constitute evidence of a racially hostile work environment. In light of this and our ever-increasing efforts to foster harassment-free workplaces, Alyesha Asghar Dotson discusses how employers can prepare for and respond when potentially offensive symbols appear in their workplace.
  

Philadelphia, PA/ March 20, 2009 -- Littler Mendelson (Littler), the nation's largest employment and labor law firm representing management, is pleased to announce the arrival of shareholders Warren E. Fusfeld and Melissa B. Kurtzman to the firm’s Philadelphia office, both formerly of WolfBlock LLP.

In Schachter v. Citigroup, Inc.,¹ the California Supreme Court rejected claims that an incentive plan that conditioned the earning of restricted stock based on continued service was unlawful where the employee voluntarily elected to participate in the plan, and the employee quit before the date on which the incentive was earned. The plan was lawful even though the incentive plan was funded from wages that the employee would have otherwise received in cash.

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173) (the "Act"), which is intended "to promote the financial stability of the United States by improving accountability and transparency in the financial system" and "to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes." While the Act is directed at the financial system, it incorporates broad executive compensation provisions that apply beyond the financial services industry.

The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") mandates, for publicly traded companies, shareholder advisory votes on compensation packages provided to top executives and on "golden parachute" packages payable in connection with corporate transactions.

The Securities and Exchange Commission (SEC) released proposed rules on March 2, 2011, in connection with provisions of the Dodd-Frank Act that prohibit "covered financial institutions" from providing incentive-based compensation that encourages inappropriate risks, by providing either excessive compensation or incentives that could lead to material financial loss to the institution.

Section 162(m) of the Internal Revenue Code (the "Code") generally limits the deductibility of compensation paid by a publicly traded corporation to its top executive officers (the "covered employees") to $1 million annually (the "Million Dollar Cap"). However, this limit will not apply to certain amounts that qualify as "performance-based compensation." Compensation attributable to stock options, stock appreciation rights ("SARs") and restricted stock grants may qualify as performance-based compensation if they meet certain requirements.

The Securities and Exchange Commission (SEC) has adopted a final rule requiring publicly traded corporations to disclose, to the SEC and shareholders, the ratio of CEO compensation to the "median compensation" of the corporation's employees (except the CEO).

The Internal Revenue Service recently issued proposed regulations under Section 457 of the Internal Revenue Code (the “Code”) that prescribe rules regarding deferred compensation plans sponsored by state and local governments and tax-exempt organizations.  These regulations relate primarily to the taxes imposed (under Code Section 457(f)) on the organization at the time the individual’s right to compensation vests, without regard to actual time of payment. 

Monica Schiaffino contributed an overview of the primary sources of law that govern or affect executive compensation arrangements or employee benefits in Mexico.

Getting the Deal Through

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Updates: On November 12, 2020, in James Anthony Manastersky v.

Enacted on Friday, March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (H.R. 748, the “CARES Act” or the “Act”) is intended to stimulate the U.S. economy in light of the COVID-19 pandemic. The CARES Act contains a number of provisions relating to employee benefits and executive compensation, which are summarized below.

Retirement Plan Provisions

As many employers are on the way to normalizing their business practices and re-engaging their employees, they should not overlook the many potential pitfalls in the administration of their retirement, health and welfare plans and their executive compensation arrangements. The risks of missteps are high, and include loss of tax-qualification of retirement plans, penalty taxes in connection with the Affordable Care Act’s (ACA) employer mandate rules, other IRS penalties, employee lawsuits and Department of Labor enforcement actions.

On August 18, 2022, the Office of Federal Contract Compliance Programs (OFCCP) issued a revised version of its Directive 2022-01 - Advancing Pay Equity Through Compensation Analysis, which was originally issued on March 15, 2022.

Michael Lotito says the U.S. Supreme Court’s decision to nix Chevron deference sends a message to federal agencies that the days of administrative overreach are over.

Law360 Employment Authority

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In July, the Third Circuit upheld a District of New Jersey decision to throw out a withdrawal liability assessment, finding the multiemployer pension fund was barred from pursuing its claim because the fund unreasonably delayed notification of a withdrawal liability assessment for 12 years.

Withdrawal Liability Assessments Under ERISA

Natasha Adom discusses proposals from the FCA, PRA and Bank of England that would require financial services firms to provide more detailed monitoring and report of diversity and inclusion. 

IFA Magazine

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