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On Friday, February 26, 2021, the Department of Labor (“DOL”) issued EBSA Disaster Relief Notice 2021-01 (the “2021 Notice”) to address expiring relief provisions previously provided in the DOL’s Disaster Relief Notice 2020-01 (“Notice 2020-01”) and the Notice of Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID–19 Outbreak (“Joint Notice”) (along with Notice 2020-01, the “2020 Notices”) issued by the DOL, the Department of the Treasury, and the Internal Revenue Service (IRS) (collectively “Agencies”).  This highly anticipated guidance provides a somewhat more expansive interpretation of the relief period prescribed under the 2020 Notices.
Continue Reading Oh, What a Relief it Is! DOL Provides Guidance on COVID-19 Relief Periods

No one denies that employers confronted a plethora of challenges in 2020, and many had to make difficult decisions to reduce their workforces due to the pandemic.  Such reductions in force can implicate a number of business considerations and labor laws, but for employers that sponsor qualified retirement plans, these employment decisions can inadvertently implicate the partial plan termination rules under the Internal Revenue Code.  In the event of a partial plan termination, affected participants (which under current guidance includes those who have voluntarily terminated employment) must become immediately 100% vested in their benefits under the retirement plan.

The determination of whether a partial plan termination has occurred is based on the surrounding facts and circumstances.  However, under guidance previously issued by the Internal Revenue Service, there is a rebuttable presumption that a partial plan termination has occurred if the percentage of participants decreased by at least 20%.  When determining whether that threshold percentage has been met, only employer-initiated severances, such as reductions in force and plant closures, are taken into account.

This determination is generally made with respect to each plan year (i.e. as of December 31st for a plan on a calendar year).  However, the applicable measurement period may be extended beyond the initial plan year where the same event that resulted in the decrease in participation in the initial plan year continues to exist in the subsequent period.Continue Reading Relief for Partial Plan Terminations May Be “Too Little, Too Early”

Under the Consolidated Appropriations Act, 2021 (H.R. 133)(the “Act”) (here), which was signed into law on December 27, 2020, new relief is available for employees who participate in health care flexible spending accounts and dependent care flexible spending accounts (“FSAs”).   While the Internal Revenue Service (“IRS”) issued limited relief for FSA participants in 2020 (here), that guidance only expanded opportunities to make mid-year elections.  It did not address the desire of so many employees to extend access to their unspent FSA balances beyond the 2020 plan year.

The changes under the Act are intended specifically to address this concern.  Importantly, the changes are optional.  Employers who implement these changes will likely experience higher costs due to reduced forfeitures and changes in plan administration.  Additionally, changes to health FSAa could adversely affect the participant’s eligibility to contribute (or receive contributions) to a health savings account.  Below is a summary of the changes affecting FSAs:Continue Reading Flexibility for Flex Accounts – Congress Provides New Relief to Employees

On December 11, 2020, the United States Department of Labor (DOL) issued a pre-publication version of its final regulations with respect to proxy voting in plans that are subject to the Employee Retirement Income Security Act of 1974 (ERISA).  The purpose of the rule is to clarify the DOL’s longstanding position regarding fiduciary responsibilities to vote proxies, to coordinate with recent changes implemented by the United States Securities and Exchange Commission (SEC) for investment advisers, and to dovetail on recent changes in DOL guidance regarding ERISA plan investments that promote environmental, social, and governance (ESG) principles.  These final regulations generally apply following the expiration of the 30-day period following publication in the Federal Register (although certain provisions are not effective until January 31, 2022 for plan fiduciaries other than investment advisers).
Continue Reading Plan Fiduciaries: You Have No Right to Vote

Winstead’s Labor & Employment and Executive Benefits attorneys conduct client-tailored training programs for executives and managers on workplace discrimination, harassment, retaliation, regulatory compliance, restrictive covenant and trade secrets enforcement and defense, executive compensation, and benefit structures.  Our attorneys frequently speak on complex workforce issues before local and national trade associations.
Continue Reading Resources

Picture this: you’re sitting in your seventh grade classroom and your teacher asks “can someone give me an example of a multinational bank?”  One of your classmates responds in a stage whisper “a piggy bank!”  The entire class erupts into laughter, but your teacher isn’t amused and demands to know the culprit.  No one owns up, and, in fact, some of your classmates are still laughing, so the teacher issues a whole class detention for that same afternoon.  This is upsetting to you because you totally had plans to [insert generationally appropriate pastime here] after school.
Continue Reading One Bad Apple Won’t Spoil the Whole Bunch? Proposed IRS Regulations Provide an Exception to the Unified Plan Rule for Multiple Employer Defined Contribution Plans

Mandatory arbitration agreements for employees have been enforceable for decades.  Over the last several years, there has been an ongoing controversy between the Fifth Circuit Court of Appeals, among others, and the National Labor Relations Board as to whether mandatory arbitration agreements which prohibit collective actions are enforceable.  In the recent decision of Epic Systems Corp. v. Lewis, the U.S. Supreme Court has now held that employers may impose mandatory arbitration agreements which deny employees the right to file collective action arbitrations.  In other words, agreements requiring employees to proceed individually in arbitration are enforceable.  In the wake of this decision, many employers are opting to require their current employees to agree to mandatory arbitration. 
Continue Reading Implementing Your Mandatory Arbitration Program

In what appears to be the first website accommodation decision within the Fifth Circuit,  Judge Sim Lake of the Southern District of Texas District Court found that a “website is not a place of public accommodation” under the Americans with Disabilities Act (“ADA”).  Zaid v. Smart Financial Credit Union, No. H-18-1130, 2019 U.S. Dist. LEXIS 11363 (S.D. Tex. Jan. 24, 2019).  Stephen W. Schueler and Modinat “Abby” Kotun defended Smart Financial Credit Union (“SFCU”) against allegations that SFCU’s website discriminated against blind individuals due to its alleged incompatibility with the plaintiff’s screen reader, which he used to access websites.  The plaintiff sought declaratory and injunctive relief requiring SFCU to ensure that its website was accessible to the visually-impaired along with attorneys’ fees.
Continue Reading Americans with Disabilities Act (ADA) Website Accommodations