Benefits & Compensation

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With many thanks to Chris Guldberg for this post. 

Employers considering COVID-19-related layoffs and RIFs right now should add one more item to their checklist of considerations: the possibility of inadvertently triggering a “partial termination” of their tax-qualified retirement plan.

Where plan participant numbers decrease substantially, the plan may incur what’s known as a “partial termination.” This is significant because, once triggered, the IRS requires the benefits of all “affected employees” be fully vested. Failure to provide such vesting could put the plan’s tax-qualified status at risk.Continue Reading Beware — COVID-19 Layoffs May Trigger Liability for Partial Plan Terminations

Welcome to Baker McKenzie’s Labor and Employment video chat series! In these quick and bite-sized video chats, our employment partners team up with practitioners in various areas of law to discuss the most pressing issues for employers navigating the return to work.

This series builds on our recent client alert and webinar on reopening for…

With our thanks to Chris Guldberg for this post. 

The financial fallout from the outbreak of COVID-19 has unfortunately forced employers to turn to layoffs and furloughs. Many employers facing these decisions are looking for cost effective ways to mitigate the financial impact on affected employees. A supplemental unemployment benefit plan (“SUB Plan”) may be one way to assist employees while generating some cost savings for the company.

A SUB Plan is a unique type of severance benefit plan that permits employers to supplement state unemployment benefits on an employment tax-favored basis. The employer can make up the difference between an employee’s normal wages and state unemployment benefits and, unlike traditional severance, payments under a SUB Plan are treated as a benefit rather than wages and are thus not subject to FICA or FUTA for the employer or employee.Continue Reading An Alternative to Traditional Severance: SUB Plans

On March 31, SBA Administrator Jovita Carranza and Treasury Secretary Steven T. Mnuchin announced that the SBA and Treasury Department have initiated a “robust” mobilization effort of banks and other lending institutions to provide small businesses with $349 billion in much-needed capital pursuant to the Paycheck Protection Program, established by the Coronavirus Aid, Relief, and…

On Friday, March 20, 2020, the Internal Revenue Service (IRS), US Department of Labor (DOL), and US Department of the Treasury published a joint news release (Release) regarding tax credits available to employers who will be required to provide paid sick and family care leave for COVID-19-related purposes under the Families First Coronavirus Response Act…

The Ninth Circuit just reiterated one of the late U.S. Circuit Judge Stephen Reinhardt’s last opinions after the U.S. Supreme Court wiped it out last February. (Decision here.) In February 2019, the Supreme Court vacated and remanded Rizo v. Yovino, which held that employers cannot justify a wage differential between men and women…

(With thanks to Barbara Klementz for this post.)

Why hire through a PEO?

When companies start expanding internationally, it is often important to “put boots on the ground” as quickly and cost-effectively as possible.  The traditional approach of establishing a local entity and employing employees through the local entity may not always work due to the cost and time involved in setting up and maintaining the local entity and local payroll, as well as the complexity of establishing and administering supplementary benefits.Continue Reading Granting Equity Awards To PEO Employees

This summer the U.S. Women’s Soccer team won more than the World Cup – they’ve had tremendous success in garnering public support in their bid for equal pay. However, beyond the star power of Alex Morgan and Megan Rapinoe, pay equity continues to be a hot button issue for employers in the U.S.

We’re pleased…

[With special thanks to our summer associate Whitney Chukwurah for her contribution to this post.]

All private employers with 100 or more employees in the US and certain federal contractors with 50 or more employees in the US must report data on race/ethnicity and gender across job categories in their annual EEO-1 filings. As previously reported (HERE), in 2016, under the Obama Administration, the Equal Employment Opportunity Commission revised the EEO-1 form to require certain employers to report W-2 wage information and total hours worked (referred to as Component 2 Data) for all employees by race, ethnicity and sex within 12 EEOC created pay bands.

The implementation of the revised EEO-1 form has been subject to litigation; however, covered employers now have until September 30, 2019 to provide EEOC with pay data.Continue Reading New EEOC Guidance On Submitting Component 2 Pay Data