Sep 20, 2019

Final Regulations Update 401(k) Hardship Withdrawal Rules


On September 19, 2019, the IRS issued final regulations updating the rules for hardship withdrawals from 401(k) plans.  These regulations primarily reflect changes made by the Tax Cuts and Jobs Act and the Bipartisan Budget Act of 2018 and are very similar to the regulations that the IRS proposed late last year. Final Regulations.  The final regulations provide, in pertinent part, as follows: Elimination of 6-Month Suspension. Beginning January 1, 2020, plans may no longer impose a 6-month suspension on participants who take hardship withdrawals. In lieu of the 6-month suspension, effective as of January 1, 2020, plans must require… Read more

Sep 17, 2019

California’s Stringent DYNAMEX “ABC” Independent Contractor Test Soon To Be Law


In July we wrote about the California Supreme Court’s landmark decision in Dynamex v. Superior Court, which abandoned a long-followed, multi-factor approach to analyzing independent contractor relationships, and instead imposed a new, 3-factor test (the “ABC test”) which significantly narrowed the range of work relationships which would be deemed true independent contractor relationships, rather than employment relationships. Since then, the California legislature has codified the Dynamex test through Assembly Bill 5, which the Governor is expected to sign, and which will be applicable to work relationships as of January 1, 2020.  Unlike Dynamex, which applied only to California’s Wage… Read more

Aug 30, 2019

Hurricane Dorian’s Impending Landfall Raises Many Employment-Related Concerns

Employer's Emergency Plan

In anticipation of Hurricane Dorian’s landfall, employers should ensure that their emergency policies and procedures adequately address any storm-related issues. The top priority should be the safety of all who may be affected. Employers should stay apprised of storm preparedness information and warnings posted on the websites of both the Federal Emergency Management Agency (FEMA) and the Florida Division of Emergency Management. In the event of business closures during or as a result of the hurricane, or if employees are unable to report to work, employers should make sure employees are paid in compliance with the Fair Labor Standards Act… Read more

Aug 30, 2019

Illinois’ New Employment Laws Expand the Definition of Employer While Creating New Requirements for All

New Illinois Employment Laws

Artificial Intelligence Video Interview Act On August 9, 2019, Illinois’ Governor signed into law the Artificial Intelligence Video Interview Act. This Act allows employers to use artificial intelligence (AI) to assist with the interview and hiring process so long as certain conditions are met, such as the employer gaining the applicant’s consent and explaining to the applicant how the AI will be used. Illinois employers who plan to use AI as an interview aid should ensure the requisite conditions are met before using AI to evaluate interview videos. Public Act 101-0221 Also enacted recently is Public Act 101-0221, that aims… Read more

Aug 2, 2019

Nevada Outlaws Employers’ Ability to Refuse to Hire Prospective Employees Because of Positive Marijuana Screening

Nevada new drug-screening test law

Effective January 1, 2020, Nevada’s newly signed bill, AB 132, criminalizes an employer’s refusal to hire a prospective employee because the prospective employee’s drug-screening test indicates the presence of marijuana. This law will not apply to all prospective employees; firefighters, emergency medical technicians, employees who will operate a motor vehicle, positions funded by federal grant, and employees who could adversely affect the safety of others are explicitly excluded from compliance with the law. Moreover, the provisions of the law do not apply to the extent they are inconsistent with or otherwise in conflict with the provisions of an employment contract,… Read more

Aug 14, 2019

New York Enacts Heightened Protections Against Harassment of Workers

Workplace Sexual Harassment

On August 12, 2019, New York Governor Andrew Cuomo signed into law new legislation that provides greater protections for workers in that state, and employers need to act to ensure they comply. In the wake of the #MeToo movement, New York enacted tough new laws against sexual harassment.  In previous SGR Client Alerts, we have provided information on New York’s anti-harassment legislation regarding sexual harassment (click here to view), New York’s published guidance on compliance with its sexual harassment laws and mandatory employee training (click here to view), and the state’s model policy on sexual harassment. Now, New York has… Read more

Aug 7, 2019

Vendor Fees: The Importance of RFPs

Vendor Fees

The reasonableness of vendor fees has always been an important consideration for fiduciaries of 401(k) plans.  The focus on vendor fees, especially those of investment advisors and recordkeepers, increased dramatically with the Department of Labor’s issuance of the 2012 fee disclosure rules.  These rules allowed fiduciaries, for the first time, to understand and be cognizant of all aspects of investment and recordkeeper fees – both those paid directly by the plan and those paid indirectly through revenue sharing and other soft dollar arrangements.  In addition, with the transparency of fees came a wave of competition among investment advisors and recordkeepers… Read more

Aug 1, 2019

Predictive Scheduling Laws Coming to a City Near You

Employee Work Schedule

What are predictive scheduling laws? Predictive scheduling laws are laws that require employers to post employees’ work schedules a certain amount of time in advance and penalize employers for last minute changes to schedules.  For example, both San Francisco’s and Seattle’s city ordinances require employers to post employee work schedules 14 days in advance.  New York City requires that work schedules be posted 72 hours in advance.  San Francisco’s ordinance requires employers to pay employees 1 to 4 hours of pay if the employer changes the work schedule less than 7 days before the employee’s scheduled shift. Predictive scheduling laws… Read more

Jul 31, 2019

California ABC Test

California ABC Test - Contractors Rule

On April 30, 2018, the California Supreme Court issued its landmark decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles in which it considered whether a worker asserting California Wage Order claims was properly classified as an independent contractor rather than as an employee. Dynamex is a nationwide same-day courier and delivery service. Before 2004, Dynamex classified its California drivers as employees and compensated them pursuant to the state’s wage and hour laws. In 2004, Dynamex reclassified all of its California drivers to independent contractors. In the absence of any special arrangements between Dynamex and its customers,… Read more

Jul 31, 2019

New Access to Multiple Employer Retirement Plans and Potential New Protections for Participating Employers

Retirement Plan Puzzle

On July 29, 2019, the Department of Labor (DOL) issued new rules expanding the availability of multiple employer retirement plans (MEPs).  In addition, earlier in July, the IRS proposed new rules that, when finalized, will provide greater protection for participating employers in a MEP. DOL Expands Employers Who Can Participate in a Single MEP Background.  Under ERISA, a MEP is a single plan that covers multiple unrelated employers.  To be considered a single plan, a plan must be established by one or more related employers or by a “group or association” of unrelated employers.  If a plan covers unrelated employers… Read more