by Paul J. Compernolle, Michael T. Graham and Maggie McTigue
The U.S. Court of Appeals for the Fifth Circuit recently held that a paragraph in an asset purchase agreement qualified as an amendment to an employee benefit plan, highlighting a split between circuits of the U.S. Courts of Appeal.
by Heather Egan Sussman, Stephen D. Erf and Sabrina Dunlap
On April 25, 2012, the U.S. Equal Employment Opportunity Commission (EEOC) issued new guidance for employers on using arrest and conviction records when making employment decisions. The guidance, which is available here, passed by a 4-1 vote of EEOC commissioners, and consolidates and supersedes the EEOC’s prior policies on this topic.
The agency decided to re-evaluate its policy on the use of criminal background checks in employment decisions after the U.S. Court of Appeals for the Third Circuit suggested to the EEOC in a 2007 case that the agency provide analysis and updated research on the use of background checks in employment. Since 2007 the EEOC has examined social science and criminological research, as well as court decisions and state and federal laws, to assess the effect of the use of criminal records and background checks in employment decisions. Of particular concern to the EEOC are the arrest and incarceration rates for certain minority groups, and the potential that the use of criminal records and background checks in employment decisions could have a disparate impact on people in those groups.
While the new guidance does not change the EEOC’s fundamental position on applying principles of Title VII of the Civil Rights Act (the federal law prohibiting employment discrimination based on race, color, religion, sex, national origin, etc.) to an employer’s use of criminal records in the workplace, it does offer more in-depth analysis of disparate treatment and disparate impact, and provides employers with clearer rules on the proper use of criminal records and background checks. In particular, the guidance explains in detail how employers can establish a defense to claims of disparate impact by showing that employment decisions based on criminal records or background checks are job-related and consistent with business necessity.
In addition to the guidance, the EEOC issued a Q&A, available here. (Note that certain states have further restrictions regarding how such information is gathered and used.) Please stay tuned for a more detailed discussion of the guidance and its implications for employers.
by Sébastien Le Coeur, Jilali Maazouz and Todd A. Solomon.
Multinational companies with employees in France should be aware that terminated employees subject to a non-compete restriction must be compensated during the non-compete period after termination of employment. Given this legal requirement, non-compete and severance agreements for employees in France must provide for financial compensation after employment termination during any non-compete period. If compensation is not provided during the non-compete period, the non-compete agreement is null and void, and the terminated employee is free to work for competitors. In the event an employer becomes aware that a former employee is breaching his or her non-compete agreement, the employer should still pay the financial consideration until it has strong written evidence of the breach. If the employee stops receiving financial consideration, the former employee could argue that the employer is breaching the severance or non-compete agreement and that the non-compete provision thus is no longer binding. Alternatively, non-compete agreements in France should provide that the employer can waive the non-compete restriction within a certain number of days following the employee’s termination of employment. This type of provision allows an employer to voluntarily choose to waive non-compete restrictions and avoid paying the former employee further financial consideration following employment termination.
In light of these requirements, multinational companies should make sure local management in France establish non-compete and severance agreements with French employees that allow a waiver of non-compete provisions within the prescribed time periods or that provide adequate financial consideration for any non-compete agreement provisions they want to enforce.
by Paul Melot de Beauregard and Todd Solomon
As large companies increase their global presence, their workers are becoming increasingly mobile between jurisdictions. Such companies need to be aware of a number of international benefits issues that can have an impact on companies and their mobile employees.
To read the full article, please click here.
by May Lu
As a result of discussions around China’s pending Draft Salary Regulation, collective salary negotiation has once again become a hot topic.
There have been several well-known, recent cases relating to collective salary negotiation. In 2010 one Japanese-invested car company raised its Chinese employees’ salaries by 35 percent after experiencing a strike that lasted more than two weeks and interrupted almost all of its manufacturing in China. In 2011 it was reported that French supermarket Carrefour had not raised employees’ salaries for 12 consecutive years. This drew considerable attention from the local government in Shanghai and Carrefour was forced to raise wages by 8 percent after a Government-led collective negotiation with the employees.
In addition, trade unions at different levels have been very active in urging employers to sign collectively bargained contracts that include salary increase as the main content. Furthermore, additional rules relating to the collective negotiation process have been issued to provide guidelines regarding collective negotiation for enterprises that do not have trade unions. The future for collective salary negotiation looks bright, but is that really the case?
To read the full article, click here.
What is changing?
From April 6, 2012, the length of continuous service needed by an employee in the UK to qualify:
Will this affect existing employees?
The new two year qualifying period will apply to an employee who commences work on or after April 6, 2012.
Employees who are already in employment on April 5, 2012, will not be affected by this change. They will still be able to bring a claim of standard unfair dismissal if they have at least one year’s continuous service.
Employees who transfer to a new employer under TUPE after April 6, 2012, but who were employed by the transferor prior to April 6, 2012, will also be covered by the one year service threshold for standard unfair dismissal.
What about employees who are currently being recruited?
An employee’s period of continuous employment “begins with the day on which the employee starts work.” This means that the increased qualifying period will only apply to employees who start work on or after April 6, 2012.
The date on which an employee commences a recruitment process, or is offered a job, is not relevant when it comes to calculating continuous employment.
What does this mean for employers?
If commercially possible, employers in the UK may wish to push new joiner start dates back to April 6, 2012 or beyond.
Ensure that your internal recruitment team, who may be making offers to candidates to start with you in early April 2012, know about the change.
Going forward, the date on which an employee started work will be as important as the date on which their employment ended for the purposes of determining if they are eligible to bring a standard unfair dismissal claim.
To make the position as certain as possible, ideally both the start date in the employment contract, and the date on which an employee commences work, should fall on or after April 6, 2012.
by Amy M. Gordon, Joanna C. Kerpen and Susan M. Nash
Recently issued final regulations and related guidance clarify the requirement under the Patient Protection and Affordable Care Act that group health plans and health insurance issuers provide a summary of benefits and coverage and a uniform glossary. The guidance includes final regulations and sample summaries and instructions.
To read the full article, click here.
A lot has happened in the area of UK employment law in 2011, and there are many issues to consider as we plan for 2012. We are pleased to provide a resource of information following a recent webinar, which reflects on key learning points from 2011, and discusses what to look forward to as an employer in the UK in 2012. Topics include:
Click here to view the slides.
Click here to view the full webinar (in audio).
Click here to view the overview brochure.
by Amy Gordon and Susan Nash
The Patient Protection and Affordable Care Act (PPACA) requires non-grandfathered group health plans to provide coverage for certain preventive services on a first dollar basis (i.e. without deductibles, co-payments, co-insurance or other cost-sharing). Interim final regulations provide an exemption for a very narrow subset of religious employers with respect to coverage of contraceptive services. To qualify for the exemption the entity must be a nonprofit religious employer that offers insurance to its employees. Many entities affiliated with religious institutions, such as hospitals and universities, do not meet this narrow exception.
Now, the U.S. Department of Health and Human Services (HHS) has provided additional guidance for nonprofit employers that do not cover contraceptive services under their current plans because of religious beliefs and that do not fit within the previous exemption. These employers will have an additional year, until August 1, 2013, to comply with the new law. Employers wishing to take advantage of the additional year will have to certify that they are eligible for this delayed implementation. The announcement also indicates that employers that do not offer coverage of contraceptive services will be required to provide notice to employees stating that such services are available with income-based support at sites such as community health centers, public clinics and hospitals.
by Amy Gordon, Susan Nash and Ashley McCarthy
The Internal Revenue Service (IRS) has issued revised guidance, Notice 2011-28, regarding the requirement under the Patient Protection and Affordable Care Act (PPACA) that employers report to employees the cost of their employer-sponsored group health plan coverage on Forms W-2. This requirement applies to calendar year 2012 W-2s, which employees will receive from their employer in 2013.
The guidance provided assistance on calculating aggregate reportable cost. Aggregate cost may be calculated in accordance with one of several methods including the “COBRA applicable premium” method, the “premium charged” method (for fully-insured coverage), or a “modified COBRA premium” method.
In addition to medical coverage, employers must include in the cost of employer-sponsored group health plan coverage, coverage under an Employee Assistance Program, wellness program coverage, on-site medical clinic coverage (but only aggregate reportable cost to the extent that the coverage is provided under a group health plan and the employer charges a premium for such coverage to beneficiaries of federal continuation coverage [e.g., COBRA]), Health Flexible Spending Account coverage (FSA), but only where the employer itself contributes to the FSA or otherwise provides flex credits through a Internal Revenue Code Section 125 cafeteria plan, and coverage under a dental plan or vision plan if such plans are not excepted from the Health Insurance Portability and Accountability Act (HIPAA). Employers do not need to include in the cost of employer-sponsored group coverage the cost of coverage under a dental plan or vision plan if such plans are excepted from HIPAA, amounts contributed to an Archer medical savings account (MSA) or a Health Savings Account, amounts of any salary reduction election to an FSA, the cost of coverage under a multiemployer plan, cost of coverage under a Health Reimbursement Arrangement not included in aggregate reportable income, and the cost of coverage provided under a self-insured group health plan that is not subject to federal continuation coverage requirements (i.e., a church plan).
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