Some Highlights from the Recently Enacted SECURE Act

Daniel L. Morgan

One of the spending bills signed by President Trump to avert a government shutdown late last year had attached to it the Setting Every Community Up for Retirement Enhancement Act of 2019, or as it’s known by its acronym, the SECURE Act.

The SECURE Act, which passed the House on May 23, 2019, but languished in the Senate, has important implications for retirement savings.

In a series of four posts, I will provide an overview of a few of the more noteworthy features of the legislation. In this first post, I examine the creation of a new rule requiring 401(k) plans to cover long-term part-time workers. A subsequent post will discuss other changes impacting 401(k) plans, including liberalizations of the safe harbors that allow a 401(k) plan to bypass contribution nondiscrimination testing, and a provision that seeks to encourage the inclusion of annuity payments as a form of 401(k) plan distribution. Another will describe an extension of the time limit on adopting a new retirement plan, to make it effective for a tax year, and the fourth post will discuss the changes made by the Act to the required minimum distribution rules applicable to retirement plans and IRAs. Continue reading “Some Highlights from the Recently Enacted SECURE Act”

No New York Employee Wage Liens—Yet!

Stephen E. Tisman

In July, we reported that the New York State Legislature had passed a bill that could substantially alter the legal landscape of wage disputes by allowing employees with wage claims to file liens against their employers’ assets in the amount of the claim. The lien could be filed without any court order or determination of probable liability. The bill further permitted attachments of the employer’s property and would have expanded the personal liability of the 10 largest shareholders of non-public companies by making them liable not only for wages, but also for interest, penalties, liquidated damages, attorneys’ fees, and costs.

On January 1, 2020, anxious employers got a reprieve—albeit a temporary one—when Governor Cuomo vetoed the legislation. Continue reading “No New York Employee Wage Liens—Yet!”

New York Expands Discrimination Protection to Reproductive Health Decision-Making

Stephen E. Tisman

On November 9, Governor Cuomo signed into law an amendment to the New York Labor Law making it illegal to discriminate against employees based upon the reproductive health decisions of employees or their dependents. The law went into effect immediately upon signing.

Specifically, the new law (N.Y. Labor Law § 203-e):

      • Prohibits an employer from accessing an employee’s personal information regarding reproductive health decision-making without the “employee’s prior informed affirmative written consent.”
      • Prohibits an employer from taking “retaliatory personnel action” against an employee with respect to compensation and terms of employment, because of the employee’s (or dependent’s) decision-making, including decisions regarding use of a drug, device, or medical service.
      • Prohibits requiring an employee to waive the right to make particular reproductive healthcare decisions.
      • Requires employee handbooks to include notice of employee rights and remedies under the new law.
      • Prohibits retaliation against an employee for protesting the violation of rights under the new law, filing an action under or related to the new law, or providing information to a public body.

The new law creates a legal right of action that an employee can pursue in any court of competent jurisdiction for damages, injunctive relief, reinstatement, attorneys’ fees, and liquidated damages equal to the damages awarded, with liquidated damages subject to a defense if the employer proves “a good faith basis to believe that its actions… were in compliance with the law.”

Immediate Takeaway

All New York employers must immediately revise employee handbooks to give notice of the law and available enforcement remedies.

Prediction

The Legislative Supporting Memorandum makes explicit the legislature’s intention to protect employees against employer efforts to deny them the benefit of the provision in the federal Affordable Care Act which requires that health insurance plans cover FDA-approved birth control methods, without out-of-pocket costs. The law will undoubtedly be challenged by an employer claiming that providing such coverage violates the employer’s religious beliefs (think Masterpiece Cakeshop v. Colorado Civil Rights Commission). The ultimate fate of this statute will be resolved under federal First Amendment law.

New York Closes in on Comprehensive Employee Wage Lien Law

Mara B. Levin, Anthony A. Mingione, and Stephen E. Tisman

New York is on the precipice of passing a law that would allow employees to easily file liens against an employer’s property in connection with pending wage disputes. The bill also would permit employee access to certain sensitive employer records and expand the scope of personal liability for owners in disputes over wages. Employers should monitor these developments and work with counsel to prepare an action plan should this bill become law.

The New York State Legislature has recently passed a bill that could substantially alter the legal landscape of wage disputes if signed into law by Governor Cuomo. The proposed Employee Wage Lien bill would allow employees to obtain liens against an employer’s real property and personal property based on allegations involving nonpayment of wages. If signed into law, the bill will become effective within 30 days. Similar laws have been enacted on other states.

The law will allow employees to file a notice of a lien up to three years following the end of the employment giving rise to the wage claim. Employees will be able to place liens up to the total amount allegedly owed based on claims relating to overtime compensation, minimum wage, spread of hours pay, call-in pay, uniform maintenance, unlawful wage deductions, improper meal or tip credits or withheld gratuities, unpaid compensation due under an employment contract, or a claim that the employer violated an existing wage order. In addition, the State Attorney General and Department of Labor will be able to obtain a lien on behalf of an individual employee—or a class of employees—against an employer that is the subject of an investigation, court proceeding, or agency action.

Please click here for the full client alert. 

Supreme Court to Review What It Takes for a Plan Participant to Have Actual Knowledge of a 401(K) Plan’s Investments

Daniel L. Morgan

The Issue before the Supreme Court

On June 10, 2019, the Supreme Court granted certiorari in a case from the 9th Circuit Court of Appeals involving the statute of limitations applicable to claims under the Employee Retirement Income Security Act (“ERISA”). The outcome of this case has potentially important implications for employers maintaining 401(k) and other retirement plans with employee-directed investments.

The participant’s underlying claim in the case relates to whether the fiduciaries with oversight of the investments of two of Intel Corporation’s retirement plans breached their ERISA duties on the ground that the funds in which the participant invested his plan benefits included excessive amounts of hedge funds and private equity, and as such, violated ERISA’s prudence requirement. Continue reading “Supreme Court to Review What It Takes for a Plan Participant to Have Actual Knowledge of a 401(K) Plan’s Investments”

Attention NY Employers—Tippecanoe and Time Off Too!

Anthony A. Mingione

New York State has this week enacted sweeping election reforms that go into effect immediately. The changes will impact private employers across the state. Section 3-110 of the New York Election Law now permits all registered voters to request and obtain up to three hours of paid time off, regardless of their schedule, to vote in any public election. Employers will be permitted to designate whether the time off will be taken at the beginning or end of an employee’s shift.

To qualify, employees must be registered to vote and must provide at least two days’ advance notice to their employer of the need for time off to vote. The law is silent on whether the employer can count voting time against other paid time off programs it provides. We anticipate that regulations will be issued relating to this and other elements of the law and we will report on them as they are published.

Employers also must comply with a voting rights posting requirement. Employers are required to post a notice that explains the employees’ right to paid time off for voting. You can see a version of the approved poster on the New York State Board of Elections website here.

The notice must be posted in a conspicuous location in the workplace where it can be seen as employees come or go to their place of work, at least 10 days before a public election, and must remain up until the polls close on election day.

Employers should take note that these rules apply to all public elections; the next such statewide election will be the New York primaries on June 25, 2019.

More Money, More Problems? New Jersey Significantly Expanding Family Leave Benefits

Thomas J. Szymanski

The bill (NJ A3975), revamping the New Jersey Family Leave Act (“NJFLA”) and Family Leave Insurance (“FLI”), was passed in both houses of the New Jersey Legislature on January 31, 2019. Governor Murphy is expected to sign the bill today, with some changes effective immediately.

As a reminder, NJFLA provides job-protected leave for workers at large employers to care for family members. On the other hand, FLI provides wage-replacement benefits to workers during a leave used to care for a family member. FLI applies regardless of the size of the employer and is funded by employee payroll deductions.

Summary of the most significant changes: Continue reading “More Money, More Problems? New Jersey Significantly Expanding Family Leave Benefits”