New York Labor and Employment Law Report : New York Employment Lawyer & Attorney : Bond Schoeneck & King Law Firm : NY Labor Relations, Employee Benefits

The U.S. Department of Labor ("DOL") has proposed regulations that more broadly define the circumstances under which a person or entity will be considered to be a plan "fiduciary" by reason of giving investment advice to an employee benefit plan or to a plan's participants or beneficiaries. If the proposed regulations are made final in their current form, the number of plan service providers that will be considered plan "fiduciaries" will increase significantly. Plan sponsors need not take any current action with respect to the proposed regulations, but should be aware that agreements with service providers may need to be reviewed and modified to conform to the regulations.

Background

Under the Employee Retirement Income Security Act ("ERISA"), a person is a fiduciary with respect to an employee benefit plan to the extent that the person: (i) exercises any discretionary authority or discretionary control respecting the management or disposition of the plan's assets; (ii) renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the plan, or has any authority or responsibility to do so; or (iii) has any discretionary authority or discretionary responsibility in the administration of the plan.
Individuals and entities, including plan service providers, who are considered plan "fiduciaries" are subject to a number of strict duties and responsibilities and are prohibited from engaging in a number of specific acts with respect to the applicable plan. Among other consequences, fiduciaries who fail to satisfy their plan-related duties, or who engage in plan-related prohibited transactions, can be subject to personal liability for losses suffered by the plan.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

After more than five years of litigation, a defendant school board member was recently awarded over $136,500 in attorneys’ fees and costs from the plaintiff’s counsel in an employment discrimination case. An employer’s recovery of its attorney’s fees in an employment discrimination case is a fairly rare event. Under the federal anti-discrimination laws, when an employee sues his/her employer for discrimination and wins, the employee is considered to be the “prevailing party” and is therefore entitled to recover the reasonable amount of attorneys’ fees incurred in proving that he/she was unlawfully discriminated against. When the sued employer wins, the employer is likewise the prevailing party. However, the employer is generally not able to recoup the attorneys’ fees that were incurred in defending the claims. The policy behind this rule is a belief that an individual who has meritorious discrimination claims may nonetheless chose not to sue to enforce his or her rights out of fear that the individual may lose and have to pay the former employer’s attorneys’ fees. For that reason, the law builds in extra hurdles which victorious employers must overcome. For a prevailing defendant employer to be awarded fees, the employer must typically show that the claim was frivolous and should never have been brought in the first place. In other words, it must show that the employee’s claim had no foundation in either law or fact.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As reported in the Daily Labor Report, Equal Employment Opportunity Commission officials have disclosed that the White House’s Office of Management and Budget has completed its review of the long awaited regulations implementing the 2008 Americans with Disabilities Amendments Act. The next step is publication of the regulations in the Federal Register. At that time, we will know what the final regulations contain. The Commission was not able to say exactly when that will occur. When it does, we will provide an update.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last month, New York’s Appellate Division, Second Department determined that offering health insurance coverage to employees’ same-sex domestic partners, but not to opposite-sex domestic partners, does not necessarily constitute sexual orientation discrimination. Putnam/Northern Westchester BOCES v. Westchester County Human Rights Commission.

The case arose when the Joint Governance Board of the Putnam/Northern Westchester Board of Cooperative Educational Services, which provides health care benefits to employees of school districts in Putnam and Northern Westchester counties, extended health care benefits to same-sex domestic partners. Thereafter, a teacher in the Croton Harmon Union Free School District sought coverage for her opposite-sex domestic partner. The Board denied the request, and the teacher brought a claim before the Westchester County Human Rights Commission, alleging discrimination based on marital status and sexual orientation. The teacher prevailed in a hearing before a Human Rights Commission Administrative Law Judge, and the Board commenced a proceeding to overturn the Commission’s determination. The Appellate Division, Second Department did so. The Court concluded that the Board decided to offer the benefit only to same-sex partners because same-sex partners could not lawfully marry in the State of New York, and so could not obtain the benefits offered to employee spouses. Because that was the reason for the Board’s action, the Court concluded the action was not the result of sexual orientation discrimination. The Court also overturned the Commission’s finding of marital status discrimination, because the benefits sought by the teacher did not turn on marital status. In fact, the benefits she was seeking were made available to unmarried couples.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As challenging as 2010 was, 2011 promises to be even more challenging for employers trying to remain in compliance in an ever-changing legal and regulatory environment. While coming into full compliance may seem daunting, addressing the ten concerns discussed below will be a meaningful step in that direction.

1.  Meal Periods. New York State requires employers to provide employees who work shifts in excess of six hours a meal period of not less than 30 minutes. Penalties for noncompliance start at $1,000 per offense and increase with each offense. In addition, if an employer automatically deducts meal periods from working time and such deductions do not accurately reflect the meal periods taken, the employer may not be paying employees for all time worked – resulting in far greater legal exposure.

What To Do: Employers should develop and enforce a meal period policy, requiring employees to take their meal periods (which cannot be waived). Employers should also require employees to leave their work area and prohibit employees from performing any work during meal periods. If employees’ meal periods are frequently interrupted, they should be paid for the entire meal period. Employers should also maintain accurate records demonstrating that they are complying with meal period obligations. Employers who automatically deduct for meal periods should have a policy notifying employees of this practice, a mechanism for employees to report when they have worked during a meal period, and should require employees and their supervisors to certify the accuracy of time records. Employers should also train supervisors on the legal obligations associated with meal periods.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link