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Showing posts from January, 2018

Striking a balance between fraud prevention and employee privacy

The expense of preventing fraud is minimal compared to the cost of cleaning up after fraud has been committed. One common fraud deterrent is to monitor employees on the job. But are you legally entitled to monitor employees? The answer is “sometimes.” One thing is certain: You must follow current employment law to the letter.

Two competing interests

Many laws apply to employees’ privacy rights. In general, they attempt to balance employers’ interests in minimizing losses and injuries and maximizing production with employees’ interests in being free from intrusion into their private affairs.

By adopting and clearly communicating employment policies, your company can, within limits, establish its authority to conduct searches and surveillance that might otherwise be deemed intrusive. But before you state your policies, check with your attorney to ensure they don’t violate any federal or state laws.

Allowable actions

In most cases, federal law allows employers to take the following act…

Protect retirement plan fiduciaries through training, insurance

When an employer decides to sponsor a retirement plan for employees, it takes on great responsibility. Anyone who exercises discretionary authority over any vital facet of plan operations likely will be considered a plan fiduciary. In turn, these individuals face a significant risk of liability if anything goes seriously wrong with the plan.

Your plan document should identify the corporate entity or individual serving as the “named fiduciary.” But other common examples of fiduciaries include those who serve as plan trustees and members of the board of directors. It’s critical to protect these individuals from the potential negative outcomes of serving in this capacity.

Provide training

First and foremost, given the critical function of plan fiduciaries, they must be properly trained. This is a step that’s often neglected and can be of concern for employees who don’t have full-time jobs related to running the plan.

The U.S. Department of Labor is known to focus on this when it reviews …

Walking on eggshells: ERISA compliance depends on plan documents

The Employee Retirement Income Security Act (ERISA) covers both defined-benefit and defined-contribution retirement plans. If your organization offers its employees either, you may feel like you’re constantly walking on eggshells trying to oversee all the regulatory details involved. One critical way to stay in compliance and avoid costly penalties is to ensure your plan operates consistently with its plan documents.

Most important requirement
Although abiding by your plan documents might sound like a straightforward proposition, this isn’t always the case. As a reminder, ERISA requires plan fiduciaries to discharge their duties solely in the interest of participants and their beneficiaries “in accordance with the documents and instruments governing the plan.”

For example, one employer recently found itself the defendant in a class action suit primarily involving alleged violations of the Fair Labor Standards Act. During this legal action, the employer was also accused of violating ER…

2019 adjusted penalty amounts for health and other plans

The Department of Labor (DOL) announced in very late January the 2019 annual adjustments to the civil monetary penalties for a wide range of benefits-related violations. Legislation enacted in 2015 requires annual adjustments to certain penalty amounts by January 15 of each year. Because of the government shutdown, however, the 2019 penalties weren’t published by this deadline and, thus, have a later-than-usual effective date.

To wit, the 2019 adjustments are effective for penalties assessed after January 23, 2019, for violations occurring after November 2, 2015. Here are some highlights specifically related to health plans, retirement plans and other employee benefits:

Form 5500. Employers must file this form annually for most ERISA plans to provide the IRS and DOL with information about the plan’s operation and compliance with government regulations. The maximum penalty for failing to file Form 5500 has increased from $2,140 to $2,194 per day that the filing is late.

Group health pla…

IRS raises valuation limit for employer-provided vehicles

One of the most popular fringe benefits for employees at many organizations isn’t an insurance plan or a health club membership; it’s shiny chrome and steel — a vehicle. Providing a car, van or truck that an employee can use for both work and personal purposes can attract better job candidates or just make sense practically. If your organization offers such a fringe benefit, you should know that the IRS recently updated its valuation limit for employer-provided vehicles.

Read the Notice

Generally, you must include the value of an employer-provided vehicle that’s available for personal use in an employee’s income and wages. The personal use may be valued using the cents-per-mile or fleet-average valuation rules for the 2019 calendar year.

Because of tax law changes under the Tax Cuts and Jobs Act (TCJA), the maximum dollar limitations on the depreciation deductions for passenger automobiles significantly increased and the way inflation increases are calculated changed. In Notice 2019-8…