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[As reported by our Baker McKenzie Compensation colleagues]

As of December 20, 2017, both the House of Representatives and the Senate have voted to approve the final version of the Tax Cuts and Jobs Act, in substantially the form released by the Conference Committee on December 15th. The bill is expected to be presented to the President for signature before Christmas, making US tax reform a reality for 2018.

What’s In? From a Compensation & Benefits perspective, among other things, the approved bill includes:

  • Significant changes to Code Section 162(m);
  • A new tax deferral regime for options and RSUs granted by private companies;
  • Elimination of exclusion for fewer than expected employer-provided fringe benefits; and
  • Increased disallowance of compensation-related deductions under Code Section 274.

What’s Out? Fortunately, the final bill does not include a Senate proposal to require the use of a first-in-first-out (FIFO) methodology when calculating capital gains on sale of shares, nor does it add back any of the changes to non-qualified deferred compensation that were proposed in the initial House version of the bill. Also, most of the changes proposed to qualified retirement plans have been eliminated.

Continue Reading Breaking News! Tax Cuts And Jobs Act Expected To Come Into Effect In 2018

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On Wednesday, December 13, Barbara Gressel, Deputy Commissioner, Department of Business Affairs and Consumer Protection (BACP) provided the Chicago Bar Association’s Labor & Employment Committee with an informative presentation about the City of Chicago’s Paid Sick Leave Ordinance (in effect since July 1, 2017).

Ms. Gressel, who leads the Department’s compliance and enforcement efforts, reviewed the Ordinance’s accrual and carry over rules, as well as the provisions concerning usage caps. The remainder of her presentation involved how the Department will investigate charges, and the administrative process for formally enforcing the ordinance. Here are our takeaways:

Department Investigations Initiated by Employee Complaint

  • Enforcement begins with the filing of a complaint by an employee. Employees may obtain a copy of a blank complaint by visiting the Department’s webpage. The charge must be filled out by hand, or on a typewriter. The complete complaint can be filed by facsimile (fax) or in person.
  • The Department intends to investigate each facially valid complaint on a class-wide basis. It reasons that if one employee is not receiving proper payment, accrual, carryover etc., no employee is. The request for information will be by administrative subpoena.
  • At least initially, the Department intends to attempt to resolve complaints informally. Employers who refuse to meet their obligations during this initial period will be prosecuted for a ordinance violation. Similarly, after the initial familiarization period (expected to last 18-24 months), the Department will use its formal ordinance enforcement process whenever it determines to allege a violation has occurred.

Continue Reading Chicago’s New Sick Leave Ordinance May Leave Some Employers Feeling Ill

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The NLRB closed out its busy week of reversing Obama-era standards in two more high-profile decisions, this time addressing the duty to bargain and bargaining unit determination (see our previous post covering work rule and joint employer standards). On Chairman Phillip Miscimarra’s final day in office, the Board’s two key decisions: (1) returned to a standard returning to broader employer rights to make unilateral changes without providing a union notice and an opportunity to bargain; and (2) eliminated the “micro-unit” bargaining unit standard that constricted employers’ ability to expand proposed bargaining units to include other employees who share a community of interest with those of the proposed unit.

Impact on Employers

The return to previous standards of unilateral change analysis will allow employers more discretion in changing terms of employment consistent with past practice. This benefit to employers most commonly arises with company-wide changes to health insurance plans. Under the previous standard, an employer could be forced to delay implementation of health insurance changes until it had provided notice to the union and an opportunity to bargain, even in the face of longstanding past practice. Many employers with medical plans covering union and non-union employees will have less interruption during open enrollment plan changes.

Elimination of the “micro-unit” standard of bargaining unit appropriateness substantially reduces a union’s ability to cherry pick favorable groups of employees to win elections. Unit determination will return to a more holistic review of shared “community of interest” rather than proceeding based on the union’s extent of organizing. Ultimately, the decision will give employers more ability to defend against union organizing campaigns and keep unions from obtaining representation through small pockets of employees amongst a larger department or facility.

Continue Reading NLRB Rounds Out Return To Pre-Obama Standards With Duty to Bargain And Unit Determination Decisions

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In a flurry of high-profile decisions issued on the eve of NLRB Chairman Phillip Miscimarra’s term’s expiration, the NLRB has announced employer-friendly standards reversing recently adopted analyses and restoring the historical analyses in perhaps the two most watched (and criticized) categories of employer unfair labor practice (ULP) charges: (1) evaluating work rules for impact on protected concerted activity (formerly the Lutheran Heritage analysis); and (2) joint employer liability (formerly the Browning-Ferris analysis).

Impact on Employers:

As a result of the “new” work rule analysis, employers will be less likely to face scrutiny of employee handbook provisions. Employers now have broader discretion to implement and enforce handbook provisions relating to civility in the workplace and workplace safety (i.e., no cell phone/camera policies, social media). Employers who have dramatically trimmed employee conduct policies have some freedom to reinstate more usable and effective rules, but should note that this area of law is almost certain to fluctuate based on the presidential administration in power.

With the reversal of the joint employer analysis, employers will have less labor risk (bargaining obligations and strikes) when engaging third parties like staffing companies, temporary workers, or co-located workers. Critically, the prospect of becoming bound to a bargaining obligation with  another entity’s employees will be substantially less likely. Avoiding joint employer liability will focus more limiting actual control and direction of non-employees and less on the contractual arrangements with other entities supplying those employees. While this change is unlikely to dramatically change the scope of outsourcing, employers can have more certainty of the scope of potential ramifications and liability in using third party workers.

Continue Reading Signaling Major Change, NLRB Yanks ‘Joint Employer’ Standard And Adopts A More Pro-Employer Stance On Workplace Policies

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In October, we discussed one of the hottest trending class-action claims: the Illinois Biometric Privacy Act (BIPA). In our alert, we noted that it was not clear whether a plaintiff would need to show a concrete injury to be entitled to damages or whether a mere statutory violation would be sufficient to warrant damages.

On November 21, the Second Circuit Court of Appeals issued a decision on this very issue.

Continue Reading UPDATE Regarding The Illinois’ Biometric Information Privacy Act

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Narendra Acharya, a Partner our Chicago office, answers the question and explains why companies rely on them in their global employee mobility programs.

Moving employees across borders quickly and within budget is a formidable task considering the immigration and visa requirements, tax and social security implications, data privacy mandates, employment rules, stock benefits and compensation issues, and FCPA restrictions. But having the ability to mobilize talent is essential to the success of today’s global businesses.

Reach out to your Baker McKenzie attorney for help designing, implementing and managing global mobility programs that address all of the legal and administrative issues and help clients avoid the pitfalls of international personnel transfers.

Also, to order your complimentary copy of The Global Employer: Focus on Global Immigration and Mobility 2017-2018 — CLICK HERE.

This handbook is the go-to resource for in-house counsel, human resource managers and global relocation professionals to identify key mobility issues — ranging from business immigration and employment to compensation and tax.  It provides guidance, and highlights vital information that multinational employers need to know about managing the movement of managers and professionals, trainees and business visitors — from short trips to long-term assignments.

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Attention employers using biometric identification technology, such as retina scans, fingerprint identification and facial recognition technology:

A number of corporations in Illinois, including internet and video game companies, food product manufacturers, gas stations, and restaurant chains, have been sued in the past few months for alleged BIPA violations.

Here’s what you need to know

Continue Reading How To Avoid Class Action Liability Under Illinois’ Biometric Information Privacy Act

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Keeping up with the pace of change in employment law around the world is quite a challenge.

In our Global Employer Monthly eAlert, we capture recent key developments in employment law from across the globe.

In this month’s issue, we share updates from Argentina, Brazil, Canada, France, Mexico, Singapore, South Africa, Vietnam, Ukraine, the UK and the US.

Click here to read the latest eAlert!