Wisconsin Becomes a Hotbed for ERISA Class Action Claims

In recent months, Wisconsin federal courts have witnessed a dramatic increase in class litigation raising breach of fiduciary duty claims under the Employee Retirement Income Security Act of 1974 (ERISA). These claims target sponsoring employers and individuals who oversee plan investments and plan fees for employer-sponsored 401(k) plans.

IRS Issues Instructions on Reporting Emergency Paid Leave Wages

On July 8, 2020, the Internal Revenue Service (IRS) released guidance for employers on reporting qualifying wages paid to employees under the Emergency Paid Sick Leave Act (EPSLA) and Emergency Family and Medical Leave Expansion Act (EFMLEA). Both laws are part of the “phase one” coronavirus legislation, the Families First Coronavirus Response Act (FFCRA), passed on March 18, 2020.

How Recent Changes to RMD Rules Apply to Puerto Rico Participants in Dual-Qualified Plans

All of the recent changes to the required minimum distribution (RMD) rules of Section 401(a)(9) of the U.S. Internal Revenue Code, except for provisions related to the handling of tax-free rollovers, may be applied to Puerto Rico participants in dual-qualified plans (i.e., U.S.-qualified retirement plans that cover both U.S. and Puerto Rico employees) exactly as they are applied to U.S. participants. Puerto Rico participants are, therefore, eligible for the recently extended required beginning date and may waive taking RMDs for 2020.

IRS Issues Additional CARES Act Guidance for Retirement Plan Administrators and Qualified Individuals

The Internal Revenue Service (IRS) recently released two notices that provide additional guidance for retirement plan administrators and qualified individuals about the special distribution, plan loan, and required minimum distribution (RMD) provisions under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

IRS Updates Payroll Tax Deferral FAQs Following Enactment of the Paycheck Protection Program Flexibility Act of 2020

Following the enactment of the Paycheck Protection Program Flexibility Act of 2020, the Internal Revenue Service (IRS) updated its frequently asked questions (FAQs) to state that employers whose Paycheck Protection Program (PPP) loan has been fully or partially forgiven are now eligible to defer the deposit of the employer portion of Social Security tax.

Guidance Clarifies COVID-19 Testing Coverage Requirements for Employer Health Plans

Employers have more clarity on COVID-19 testing coverage requirements—including new details on at-home tests, return-to-work testing, and out-of-network pricing—under new guidance that the U.S. Department of Health and Human Services (HHS), U.S. Department of Labor (DOL) and the U.S. Department of the Treasury jointly prepared.

Workforces Stranded Abroad Due to COVID-19 and Presidential Proclamation? Implications of Remote Work When Employees Cannot Enter the United States

COVID-19 has had significant implications on how employers engage a workforce—particularly with respect to U.S. immigration. The employment changes caused by the pandemic, combined with President Donald Trump’s recent proclamation prohibiting certain H1-B, H-2B, L-1, and J-1 visa beneficiaries from entering the United States, may forever change how U.S. employers engage non-U.S. nationals. In particular, without the opportunity to resume or start the employment of foreign nationals in the United States, employers are forced to consider remote cross-border engagements, including hiring foreign nationals in their home countries or, in cases where individuals are stranded away from home due to COVID-19-related restrictions, in other countries. The European Union’s recent announcement easing entry restrictions on some countries—but not the United States—signals that this phenomenon is relevant elsewhere as well.

ERISA Pension Plan Liability? 10th Circuit Rules in Favor of Foreign Parent of U.S. Subsidiary

On paper, the rule is straightforward: if a company sponsors a defined benefit pension plan or participates in a union/multiemployer pension plan in the United States, all members of that company’s controlled group of corporations (e.g., parents, subsidiaries, and affiliates connected through a common equity ownership of 80 percent or more), including foreign corporations, are jointly and severally liable for that company’s pension-related liabilities.

Idaho Offers Cash Bonuses Program for Employees Who Return to Work

Idaho is offering cash bonuses to employees who return to work as the state lifts COVID-19–related restrictions and businesses reopen. In an effort to incentivize employees who are now earning more money due to the additional benefits provided through the Pandemic Unemployment Assistance program, Idaho has implemented a Return to Work Bonuses program.

Puerto Rico Extends Due Date for Coronavirus-Related Distributions From Qualified Retirement Plans

On June 23, 2020, the Puerto Rico Department of the Treasury (commonly known by its Spanish-language name, Departamento de Hacienda de Puerto Rico, or Hacienda) issued Circular Letter of Internal Revenue No. 20-29 (CL 20-29), which extends the due date from June 30, 2020, to December 31, 2020, for the completion of coronavirus-related distributions (CRDs) from retirement plans qualified in Puerto Rico.

Health Plans Post-Bostock: Mixed Signals on Sex Discrimination?

Most employer-sponsored health plans will be exempt from the primary Affordable Care Act (ACA) provision governing race, color, age, sex, disability, and national origin discrimination under new final rules issued by the U.S. Department of Health and Human Services (HHS). Only plans (or other covered programs and activities) that receive financial assistance from HHS or that are sponsored by entities principally engaged in providing healthcare will have to comply with ACA Section 1557.

Remote Witness Protection: Retirement Plan Consents in the Age of Social Distancing, Part II

The novel coronavirus pandemic has presented novel questions for pension plan administration. One such question has concerned how to balance the spousal consent requirements of participants’ pension elections with the need to protect prospective retirees and their spouses, who may be vulnerable to COVID-19 and avoiding public outings. Since the publication of our article on April 14, 2020, the Internal Revenue Service (IRS) has answered the question and provided guidance for plan administrators in Notice 2020-42.

Supreme Court Clears Bankruptcy Restructuring of Puerto Rico Government Pension Plans

On June 1, 2020, the Supreme Court of the United States issued a unanimous decision in Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment, LLC, No. 18–1334, holding that the selection of the members of the Financial and Oversight Management Board for Puerto Rico did not violate the Appointments Clause of the U.S. Constitution.

Retirement Plan Participants and Standing: Supreme Court’s New ‘No Harm, No Foul’ Ruling

The Supreme Court of the United States has held many times that the federal courts do not have jurisdiction over a lawsuit unless the plaintiff has standing to sue under the federal Constitution. To have standing, the Court has said that the plaintiff must show that he or she suffered or imminently will suffer a concrete and particularized injury to his or her legal rights; that the injury is fairly traceable to the conduct of the defendant; and that the injury can be redressed by a judgment of the court.

IRS Provides Relief for Nonresident Aliens Affected by COVID-19 Travel Disruptions

Because of travel restrictions, such as canceled flights and stay-at-home orders, the COVID-19 pandemic may have significantly limited a nonresident alien’s ability to leave the United States, regardless of whether the individual contracted the COVID-19 virus. An unexpected extended stay in the United States, however, could affect an individual’s tax residency classification or eligibility for certain tax treaty benefits. The Internal Revenue Service (IRS) recently released Revenue Procedure 2020-20 to address the potential tax consequences for eligible individuals impacted by the COVID-19 travel restrictions.

DOL Finally Relaxes Its Electronic Delivery Rule—But Only for Retirement Plans

On May 21, 2020, the U.S. Department of Labor (DOL) announced publication of its long-awaited guidance on electronic participant  disclosures. The good news is that the DOL has taken a step in the right direction in easing some of the difficulties that were present in the prior electronic communications safe harbor. The bad news is that the new guidance applies only to retirement plans.

IRS’s New 2021 HSA and HDHP Limits

On May 20, 2020, in Revenue Procedure 2020-32, the Internal Revenue Service (IRS) announced the annual contribution limits for 2021 for health savings accounts (HSA). The IRS also announced the 2021 definitional limits per Internal Revenue Code Section 223 for high deductible health plans (HDHP).

IRS Updates FAQs to Expand Eligibility for Employee Retention Credits Under the CARES Act

On May 7, 2020, the Internal Revenue Service (IRS) and the Department of the Treasury revised their frequently asked questions (FAQs) guidance on the Employee Retention Credit to allow employers that do not pay wages, but continue to cover the health plan expenses for laid-off or furloughed employees, to qualify for retention credits.

House Democrats Unveil HEROES Act, $3 Trillion Bill Responding to COVID-19 Crisis

On May 12, 2020, Democrats in the U.S. House of Representatives unveiled the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, the latest effort to respond to the ongoing coronavirus health care crisis. Among other provisions, the $3 trillion relief package would provide $1 trillion in aid to states, $75 billion for coronavirus testing and related healthcare measures, and another round of direct stimulus payments to individuals.

Employers Beware: COVID-19–Related Employment Lawsuits Are Heating Up

For the last several months, employers have been forced to learn how COVID-19 spreads, how to maintain or resume safe work environments, and how to navigate a complex web of new and existing laws and regulations implicated by the pandemic. Employers have also had to contend with a growing wave of COVID-19–related employment litigation.

Bankruptcy and Benefits Beyond a Crisis: How Chapters 11 and 7 Affect Retirement and Welfare Plans

Businesses large and small have been affected by the coronavirus crisis. It seems that no industry has been spared economic hardship. As many states prepare to reopen their economies, there are some businesses that will not be able to resume operations—it is too little, too late. Even with massive spending by the federal government to counteract the economic downturn, it appears that a large number of business bankruptcies may be on the horizon.

IRS Issues Update to Form 941 for COVID-19 Related Employment Tax Credits and Other Tax Relief

On April 30, 2020, the Internal Revenue Service (IRS) released a draft of Form 941, Employer’s QUARTERLY Federal Tax Return, and accompanying instructions. The revised Form 941 includes various additional entries to report and reconcile payroll tax credits and deferral opportunities available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and Families First Coronavirus Response Act (FFCRA).

IRS Provides Clarity for Retirement Plans on CARES Act COVID-Related Distributions and Loans

On May 4, 2020, the Internal Revenue Service (IRS) issued informal guidance regarding the coronavirus-related distributions (CRD) and loan options provided for retirement plans and participants under Section 2202 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Time Is on Your Side: Additional COVID-19 Relief Now Available for Employee Benefit Plan Sponsors and Participants

Deadlines are an inescapable aspect of administering employee benefits plans, and even in the midst of a pandemic that seems to have slowed the progress of days to a crawl, time is always in short supply. Fortunately, the U.S. Department of Labor (DOL), with a bit of help from its friends at the U.S. Department of the Treasury, the Internal Revenue Service (IRS), and the U.S. Department of Health and Human Services (HHS), has come to the rescue with broad compliance relief for Employee Retirement Income Security Act (ERISA)-covered plans.