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HR Matters
HR Matters September 2007 - Volume XI, Issue 125
September 28, 2007
LABOR & EMPLOYMENT NEWSUSERRA Claims are Subject to Arbitration. A federal district court has recently upheld contractual agreements to arbitrate employment claims under the Uniformed Services Employment and Reemployment Rights Act (USERRA), which protects employees from discrimination because of service in the Armed Forces. Although the plaintiff argued that USERRA preempted any contractual obligation to arbitrate because arbitration reduces the rights available under USERRA, the court held that nothing in USERRA or its legislative history indicates that USERRA should preempt arbitration agreements. Instead the court found that precedent favors arbitration in employment claims unless Congress has asserted clear intent to make the courts the exclusive forum. (Landis v. Pinnacle Eye Care LLC)
WORKPLACE HEALTH & SAFETY NEWS
Reconsidering a worker’s ability to work is permissible when rehearing a PTD claim . The Industrial Commission initially approved an injured worker’s application for permanent total disability (PTD). The employer appealed the PTD order, and the Court of Appeals for Franklin County found that the Commission had abused its discretion by failing to address whether the worker had failed to participate in rehabilitation or had voluntarily abandoned the workforce before becoming PTD. After rehearing the matter, the Commission denied PTD. The worker then filed a motion to show cause why the Commission should not be held in contempt for violating the court’s order regarding the rehabilitation and voluntary abandonment issues. Also, the worker argued that the Commission was forbidden from reconsidering her ability to work. The Court of Appeals denied the motion because it had vacated the entire order, which required the Commission to re-examine all facets of the worker’s eligibility for PTD. (State ex rel. York Int’l Corp. v. Kopis)
IMMIGRATION NEWS
New “No Match” letter regulations will not go into effect September 14. We reported in last month’s HR Matters that new “No Match” letter regulations were intended to go into effect on September 14, 2007. However, due to a temporary restraining order, the Department of Homeland Security (DHS) and the Social Security Administration cannot implement the new rule yet. The AFL-CIO (who filed for the temporary restraining order) argued that the DHS violated the Regulatory Flexibility Act by failing to provide an analysis of the economic impact of the final rule, particularly the impact of imposing the rule on small businesses. We will keep you posted on this developing area.
EMPLOYEE BENEFITS & EXECUTIVE COMPENSATION
Limited Relief of 409A Deadline. By notice, the IRS has extended the deadline for document compliance with the final 409A regulations until December 31, 2008. However, the effective date of the regulations remains as of January 1, 2008 and many decisions must still be made and documented before December 31, 2007. The notice includes requirements for a timely designation of the time and form of payment, along with guidance on how to obtain relief for certain employment agreements. The IRS anticipates offering a limited voluntary compliance program that will allow correction of certain operational violations. Even after this limited relief, it is imperative for a benefits attorney to review all deferred compensation arrangements, severance plans, employment agreements, change in control agreements, and bonus plans prior to the end of 2007.
EB Question of the Month: If our 401(k) plan has an automatic enrollment feature do we have to annually notify participants of their rights? Yes, plan sponsors must give participants a notice before automatically enrolling them into the plan and at least once each plan year. The notice must explain the employees’ rights and obligations on how to opt out of the plan or to change their contribution levels, to give employees a reasonable amount of time to make their decisions, and to explain how contributions will be invested if employees fail to elect an investment option. The notice must be given to all affected participants a reasonable time before the plan year (generally 30 to 90 days). The Pension Protection Act of 2006 modified the notice requirement and the IRS expects to issue guidance along with sample notices sometime in the next month.
This Newsletter is a periodic publication of Graydon Head & Ritchey LLP and should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult your own advisor concerning your situation and any specific legal question you may have.