March 26th, 2009 | By Paul Cherner
The U.S. General Accounting Office (“GAO”) recently issued a scathing report about the DOL’s handling of FLSA investigations. The title of the report is “Wage and Hour Division’s Complaint Intake and Investigative Processes Leave Low Wage Workers Vulnerable to Wage Theft.”
In response, the new DOL Secretary, Hilda Solis, issued a News Release stating that she takes the issues raised by the GAO report seriously and will be hiring 250 new field investigators to refocus their efforts on enforcement of wage-hour laws. This is a one-third increase in that investigative staff. Employers can anticipate more vigorous enforcement of these laws and should prepare now by conducting an audit of thier compliance with the FLSA
January 28th, 2009 | By Paul Cherner
On January 27, 2009, the House and Senate reconciled their versions of the Lilly Ledbetter Fair Pay Act of 2009 and send the agreed bill to President Obama, who signed it into law on January 29, 2009.
The final version of this law is substantially broader than newspaper accounts, which often refer to it as being necessary to allow female employees to be able to proceed with respect to their claims of unequal pay. This law covers all categories of prohibited discrimination under Title VII, as well as under the ADA, ADEA and the Rehabilitation Act. Additionally, the law refers to decisions which may discriminatorily impact upon benefits and other forms of compensation. This latter provision may result in additional challenges with respect to benefit payments that are based upon compensation decisions that were made many years ago.
The law is intended to have a retroactive effect and apply to all charges that were pending on or after May 28, 2007.
December 16th, 2008 | By Paul Cherner
Section 409A of the Internal Revenue Code has made substantial changes to the manner in which certain forms of deferred compensation need to be handled. The IRS issued final regulations that require that any changes to deferred compensation arrangements that may be needed to comply with the requirements of 409A to be made by no later than December 31, 2008.
If it has not already been done, it is imperative that there be a legal review of deferred compensation arrangements to determine whether they are covered or exempt from these regulations. If they are covered, then there should be a determination as to whether they can be changed to fit within an exemption to 409A or whether there needs to be an amendment to these plans to ensure that they are compliant with the complex requirements of that law. A failure to be in compliance may result in substantial adverse monetary consequences.
The type of agreements that should be reviewed include, but are not limited to:
- Severance pay plans or agreements
- Annual bonus and incentive plans
- Stock options
- Deferred compensation plans, agreements or arrangements
- Supplemental Executive Retirement Plans (SERPs)
- Change of Control Agreements
- Phantom stock plans
- Restricted stock, restricted units and other equity-type awards
- Stock Appreciation Rights
The final countdown has begun. Don’t wait till New Year’s Eve to learn that there is a problem with these type of arrangements.
