My name is Terry Mumford. I'm a partner with Ice Miller LLP. We work with governmental pension plans across the country – single employer, multiple employer, multiemployer. We have been and will continue to be assisting our clients in preparing written comments on the ANPRM.
My goal today is to bring to your attention the issues that we have seen so far that are causing concern among our clients.
A. Governmental pension plans do not want to get caught between a rock and a hard place. That is, they don't want the eventual final regulations to put them in the difficult situation where one set of laws is going one way and the final regs are going another. Here are some examples:
- Most the plans that we work with view an IRC section 115 ruling as sufficient evidence that the employer is governmental. Therefore, this should be a safe harbor.
- The same would go for an entity that has been determined by the Social Security Administration to be covered by a 218 agreement, or a modification. That should be enough without reviewing other factors.
- The same approach would be followed if a state or federal court has ruled that an entity is a governmental instrumentality.
- While we do understand that the draft proposed regulations only address IRC 414(d), we ask that the Service take into consideration the issue of consistency across governmental agencies. This is a different point than the de minimis participation question. What the plans are saying here is that, if one federal agency says an entity is the instrumentality of state or local government, that should be enough for these purpose.
- The most common concern – probably for multiple employer plans – is the potential conflict between the final regulations and state legislation. Many state laws specifically allow the participation of nonprofit entities, which may not pass the eventual 414(d) tests if those are similar to the current factors. This is an issue where many of the plans that we represent hope participating employers can be grandfathered. There is a split in opinion on how that grandfathering would be implemented – would it protect current employees only or the employer permanently?
We have two points that we would like to make with regard to Revenue Ruling 89-49, which relate to grandfathering:
- For employers and systems who are fortunate to have PLRs under 89-49, we believe that all of these would be protected forever.
- For pension plans that have been applying a good faith interpretation of 414(d), including specifically 89-49, in terms of evaluating participating agencies, we believe that those decisions should remain undisturbed by the final regulations.
- When proposed regulations are issued, we believe that good faith interpretations of those proposed regulations should also be protected.
Now for some final points for what it should mean to be an entity that is grandfathered into a governmental plan – a grandfathered entity and its employees should be treated for all purposes as a non-grandfathered entity: For example:
- 1. ERISA wouldn't apply.
- Special IRC governmental provisions would apply – 415(b), 401(a)(17).
I also want to comment on the concept that a governmental plan must be established and maintained by the governmental employer. There are two scenarios here that should be approved in the final regulations, perhaps via one or more examples.
- The pension plan for bargaining unit employees that its governed by a labor-management board -- This should be a governmental plan if the employer is a governmental entity.
- The pension plan that is maintained by an entity that is separate from the governmental employer should be treated as a governmental plan. This is a very common structure across the country – designed to assure even-handed administration and protection of fiduciary responsibility.
- In this context we also want to address the issue of the governmental employees that could be covered in a governmental plan We believe that a governmental plan could include the following employees of a governmental employer: The employer's employees; the employees that the employer leases FROM another entity; the employees that the employer leases TO another entity.
In closing, I would like to deal with specific IRS procedures.
- First, I would like to make a suggestion with regard to the next Cycle C – which will close in less than 2 years. Based upon what we've been told, it is unlikely that the regulations will be finalized by then. To continue to encourage governmental plans to obtain and maintain their determination letters, it would seem to make sense for the IRS to allow governmental plans to enter the next Cycle C on the same basis that they were allowed to enter the past Cycle C – what might be called as "self-identified" governmental plans.
Finally, our clients would urge you to institute a ruling procedure as soon as possible after the issuance of the final regulations.
On March 15, 2012, the Internal Revenue Service conducted one of two scheduled town hall meetings to allow public testimony and Q&A with regard to the Advanced Notice of Proposed Rulemaking (ANPRM) that was issued November 8, 2011 regarding the definition of governmental plans under IRC Section 414(d). Reg. 157714-06, 76 Fed. Reg. 69172, https://federalregister.gov/a/2011-28853. At this town hall meeting, held in Oakland CA, Terry Mumford presented these remarks. Presenters were limited to 7 minutes each, so Terry could only hit the highlights of client concerns. Ice Miller will be filing more detailed, complete comments prior to the deadline for comments – June 18, 2012.
My name is Terry Mumford. I'm a partner with Ice Miller LLP. We work with governmental pension plans across the country – single employer, multiple employer, multiemployer. We have been and will continue to be assisting our clients in preparing written comments on the ANPRM.1 And as a firm we will file a formal comment letter. I appreciate very much the opportunity to speak to you today.
At the Town Hall meeting in Oakland, I presented you with an overview of many issues that our clients are facing with regard to the definition of a governmental agency or instrumentality. My goal today is to focus on issues that our clients are facing with respect to the participation of non-profit entities in governmental plans. At the outset, I would note that I have read ERISA Advisory Opinion 2012-01A2 . I do not believe that my comments are inconsistent with that letter, but I'd be happy to provide any clarification on that point.
- Our clients believe that the final regulations should clearly recognize that a non-profit corporation can be a participant in a governmental plan if it is also treated as a governmental entity. The examples in the draft proposed regulations paint a pretty bleak picture for non-profit entities' participating in a governmental plan. Our clients believe that the final regulations should provide more examples of when a dual status entity may participate in a governmental plan.
Our clients have observed that a number of truly governmental functions are being performed by non-profit entities. The Service has heard and received extensive testimony on behalf of charter schools. In addition to the education field, non-profits in many states perform governmental functions in other fields. Also, many legislatures, governors, local governing bodies, and mayors have provided for participation in governmental plans by these non-profits that perform governmental functions. It seems that the draft proposed regulations do not fully recognize the current relationship between non-profits and governmental entities, which has evolved over the decades. We view this as part of the modernization that Ms. Kinard3 referenced. We would suggest the following revisions for the proposed regulations to achieve that recognition.
- 1. We believe that because policy makers focus primarily on the question – does the entity serve a governmental purpose? – that should be a Main Factor. Under the draft proposed regulations governmental purpose is Other Factor H.
- The current version of the draft proposed regulations focuses on control in both the Main and the Other Factors. With regard to non-profit entities, our experience is that the control comes from the contract or the charter between the non-profit entity and the state or political subdivision. Contrary to what the draft proposed regulations currently provide, we believe that the final regulations should recognize that a contract or a charter can be the equivalent of the control that is described in the current version. Therefore, we would ask that the Main Factors A and B and Other Factor A be modified to recognize this broadened definition of control. Our clients do not take the position that any contract is sufficient to meet the control requirement, but that certain contracts should be sufficient.
- The current draft proposed regulations (Main Factor D) ask whether employees of the non-profit entity are treated as public employees for purposes other than employee benefits. In states or political subdivisions where there is no civil service system, being treated as a public employee may boil down to eligibility for employee benefits. Therefore, we would suggest that that question be refined to ask whether the employees of the non-profit are treated as public employees for purposes other than the governmental retirement plan.
- In Main Factor E, the Service has quite appropriately focused on sovereign powers and the delegation of sovereign powers. Education and the health and welfare of children, the disabled, and senior citizens are paramount governmental purposes. It would seem that entities that perform these functions on behalf of state or local government should be viewed in the same light as entities that have been delegated taxing or police powers. Therefore, we would ask that the Main Factor on delegation of sovereign powers be broadened and perhaps combined with the Other Factor on governmental purpose. We believe that this approach would recognize the modern realities of state and local government and the role that non-profit entities play in providing governmental services.
- We would recommend that a change be made to the funding factor (Other Factor B). If a non-profit entity is primarily funded by tax dollars via a contract or charter, we believe that factor should weigh in favor of governmental status. The draft proposed regulations imply that funding via contract or charter is not enough. We believe that is an area for substantial revision. Again, we are not saying that public funding via contract on charter should be an automatic "passing" factor – but neither should it be an automatic "fail."
- The current version of the draft proposed regulations leaves the impression that a non-profit entity that is established under a general statutory provision as opposed to a specific statute will have a "failing mark" in the "Other Factor" category. (This is Other Factor C.) Instead we would ask the Service to make it clear that this is not the case. Having a "special" incorporation statute may provide a clear legislative determination that an entity is performing a governmental function. But the absence of such a statute should not be viewed as a legislative determination that an entity is not performing a governmental function.
- We also want to raise with you an issue that we do not believe is addressed in the draft proposed regulations – the issue of affiliated non-profit entities. Treas. Reg. §1.414(c)-5(b) provides that, if a 501 entity's employees participate in a plan, then the employer with respect to the plan includes "any other organization that is under common control with that exempt organization." This is required aggregation. Permissive aggregation is described in Treas. Reg. §1.414(c)-5(c), which allows aggregation of non-profit entities that regularly coordinate their day-to-day exempt activities. In each case (required and permissive aggregation), governmental plans would need guidance as to whether the decision to categorize a non-profit entity as a governmental entity would mean that all aggregated entities would also be required to be treated as governmental entities for purposes of plan participation or whether they could permissively be treated as governmental entities.
In closing, I would like to reiterate what are probably the most consistent requests from our clients:
- Please open a ruling program as soon as possible after the regulatory process.
- If the final regulations are not modified as suggested above to allow flexibility in the participation of non-profit entities in governmental plans, then the final regulations should provide grandfathering for non-profit entities that participate in a governmental plan as of the effective date of the final regulations if those entities were participating in the governmental plan pursuant to state or local law and the terms of the plan document.
1. On May 3, 2012, the Internal Revenue Service conducted the second of two scheduled town hall meetings to allow public testimony and Q&A with regard to the Advanced Notice of Proposed Rulemaking (ANPRM) that was issued November 8, 2011 regarding the definition of governmental plans under IRC Section 414(d). Reg. 157714-06, 76 Fed. Reg. 69172, https://federalregister.gov/a/2011-28853. At this town hall meeting, held in Cleveland, OH, Terry Mumford presented these remarks. Presenters were limited to 8 minutes each, so Terry focused her remarks on client concerns regarding non-profit entities. Ice Miller will be filing more detailed, complete comments prior to the deadline for comments – June 18, 2012.
2. This advisory opinion, issued by the Department of Labor's Employee Benefits Security Administration on April 27, 2012, found that participation by private, nonprofit employers in Connecticut's state group health plan would adversely affect its status as a governmental plan under ERISA Section 3(32).
3. Pamela Kinard, Senior Technician Reviewer, Qualified Plans Branch 2, Office of Division Counsel/Associate Chief Counsel (Tax-Exempt and Governmental Entities).
The Internal Revenue Service has announced in a notice in the Federal Register (77 FR 3202) that it will hold a public hearing in Washington, D.C. on June 5, 2012, to discuss proposed regulations relating to the determination of governmental plan status. The proposed regulations were previously published in the Federal Register on Nov. 8, 2011, (our Nov. 7, 2011, bulletin regarding the proposed regulations can be found here). Outlines of the topics to be discussed at the public hearing must be received by Feb. 6, 2012.
If you have any questions or need additional information regarding the public hearing and how the proposed rulemaking may impact your governmental plan, please contact Mary Beth Braitman, Terry A.M. Mumford, Katrina Clingerman, Lisa Harrison or your Ice Miller Employee Benefits attorney.
Ice Miller Proud to Help FFA Students Prepare Themselves for New Issues and Opportunities in Agriculture
Ice Miller is proud to have joined so many others last week in Indianapolis to show support for the National FFA and its student leaders. Ice Miller's relationship with FFA began just four years ago, but our commitment to its mission and efforts is deep. We judged outstanding student competitions - including the Star in Ag Placement and the Diversified Livestock Entrepreneurship proficiency. We led workshops on the Farm Bill and how to pursue advanced studies and even a career in law. And, we hosted many of the other industry partners who share our commitment to these talented students.
It is the very positive impression made through National officer visits and other meetings with so many FFA members that has pushed us to do more for FFA. Consider just a few of the talented officers we have met:
• Paul Moya was an '08/'09 National President and is finishing his degree at Notre Dame and considering a career in law;
• Riley Branch is another '08/'09 National officer who is in his first year at Texas Tech Law School; and
• Alex Henry was a National officer last year who shared her career goal of someday becoming the Secretary of Agriculture.
The efforts and aspirations of so many other FFA officers and members clearly deserve recognition as well. I mention these three because they have inspired Ice Miller to help FFA develop the next generation of talented leaders who will become lawyers, business executives, policy makers and government leaders.
Today's food and agriculture industries continue to develop and refine complex strategies to address market, business and weather related risks. Increasingly, though, the industry is challenged with burdensome policy and regulations that pose a significant threat. As this trend is likely to continue, our future leaders need to develop the tools today to critically evaluate these issues and to learn how to deal with and, where possible, shape them.
At Ice Miller, we remain committed to helping open these young minds. We do this by relaying the importance of basic legal services, such as business or farm estate planning or intellectual property protection – many of their own successful start-up businesses could already use these services ... by debating the merits of today's farm subsidies with them and brainstorming new policy ideas for their future ... and by candidly sharing what it takes to get through law school and what to do with that degree once you have it!
In a time when our overall jobs and employment outlook remains quite challenging, it is refreshing to think of the immense opportunities for young people in agriculture. The students of the FFA will be a part of an agriculture industry that will feed the 7 billion people on our planet, improve human health, create new sources of energy and help care for our planet's environment. Ice Miller is extremely proud to support this great organization and its talented young leaders.
Beth Bechdol and I participated in Farm Journal's Top Producer Summer Seminar in Moline, Ill on June 7-8, 2011. The audience of 130 was mostly commercial, full-time farmers from across the country (mostly from the Midwest).
I led a breakout session on agricultural legal "pitfalls" and focused primarily on critical environmental regulatory issues for agriculture. I also spent time describing more positive opportunities for producers with on-farm alternative energy projects, including wind, solar, biomass and others. The PowerPoint presentation from the session is available below for reference. The discussion on enhanced regulatory scrutiny of the agriculture industry was timely, as news sources reported today that Nebraska Senator Mike Johanns, speaking on the floor of the U.S. Senate, has questioned the sincerity of the Environmental Protection Agency over a campaign the Senator is calling EPA's "Charm Offensive." According to Johanns, as reported by Hoosier Ag Today, "the problem is what the EPA is selling publicly to farmers and ranchers just doesn't match up with reality. They say one thing on the road while the regulatory train just continues to barrel forward in Washington."
The overall themes of the conference sessions centered on how farmers should plan for the future - whether it be in business management, risk management, commodity marketing, access to credit and financing, regulatory compliance, or estate and succession planning. It was clear from our conversations with producers that estate planning and corporate and tax restructuring are front of mind and can be seen as overwhelming efforts. This is something we hear frequently from our clients as well. For more details please visit the firm's farm restructuring and estate planning services web site.
We look forward to being a part of future Farm Journal events and conferences. After 135 years of providing quality information to farmers, they clearly know and appreciate the issues most critical to success in farming.
Post Tags:Top Producer Summer Seminar 2011.
I have had the privilege the last two years to serve on the Steering Committee for the Indiana Humanities Council's (IHC) Food for Thought Initiative. IHC has convened an enthusiastic and diverse group of partners to develop the multi-year Food for Thought Initiative. They recognized that the need for food links all of us, but the food we eat, the way we grow, prepare and eat it, our mealtime rituals, traditions and conversations…all of these elements distinguish us as cultures and individuals.
Food for Thought is an examination and celebration of the ways food helps to define Indiana’s culture, considering food in the context of history, law, politics, science, the arts, religion, ethnicity and our place in the world. Through this program, Hoosiers have shared and sampled the cultures reflected at the state’s table and addressed the local and global issues of hunger, nutrition, food production, obesity, food security and safety.
There have been numerous events connected to Food for Thought, including a one-night community conversation about food and ethnic identity called Chew on This. More than 150 people met at one of nine locally-owned restaurants for the fun evening full of diverse views and opinions. Last Fall, IHC joined with Spirit and Place and several sponsors including Ice Miller and hosted an evening conversation with internationally recognized chefs, Anthony Bourdain and Eric Ripert.
There also is a traveling exhibit designed to engage and educate Hoosiers about global and local food issues, increase awareness about Indiana’s rich agricultural history and stimulate conversation among families and communities. The exhibit will be traveling across the state this summer and is well worth the visit. The summer schedule is below.
June 4 - 19: Randolph County Convention & Visitors Bureau, Winchester
July 19 - Aug. 3: Knox County Public Library, Vincennes
Aug. 5 - 21: Indiana State Fair, Indianapolis
Aug. 30 - Sept. 8: West Lafayette Public Library, West Lafayette
Sept. 10 - Oct. 2: Evansville-Vanderburgh Public Library, Evansville
At a time when there is much debate over the "right kind" of food or the "right kind" of agriculture, IHC has motivated Hoosiers to think about ALL kinds of food and agriculture. There's a lot more "food for thought" on IHC's website at http://www.indianahumanities.org/foodforthought/.
Over the years, the interest in agritourism has grown. The popularity of farmers' markets is high. Families look for activities which are educational and entertaining, many of which include visits to farms and ranches. Further, with the continued focus on exercise, outdoor activities such as hiking and trail riding are popular. However, although the interest in these activities is generally viewed favorably, the increased number of participants, many of whom are inexperienced, means an increase in the potential liability to the providers of these agritourism activities. Starting this summer, agritourism providers can now take a few simple steps to limit the potential liability they may face from the inherent risks of agritourism activities. In Indiana Code Section 34-31-9, effective July 1, 2011, the Indiana General Assembly created a safe haven for agritourism providers who provide a statutory warning to participants and meet other specific requirements
The protections provided by this new statute apply not only to traditional activities at agricultural, horticultural, or agribusinesss operations where the general public is allowed or invited to participate in, view or enjoy the activities for recreational, entertainment, or educational purposes and animal exhibitions at an agricultural fair, but also to a broader range of natural resource based activities and attractions. Ind. Code Section 34-31-9-2(1)(2)(3). Essentially, the statute limits liability which may arise from the "inherent risks of agritourism activities." In the statute, inherent risks are defined as "those conditions, dangers, or hazards that are an integral part of an agritourism activity." Ind. Code Section 34-31-9-4.
In order to fall within the safe haven created by the statute, a warning sign must be posted which includes specific language about the potential risks. The sign must be visible from the main entrance and contain lettering of a specific size. Alternatively, all participants can sign a release containing the same warning language. If all of the statutory requirements are met, then a participant or his/her representative cannot make a claim for injury, loss, damage or death, caused by the inherent risks of an agritourism activity. However, as with any statute, there are exceptions and exclusions. For instance, this statute does not limit liability for injuries caused by improperly trained employees or due to a known dangerous condition on the land which is unknown by the participant.
So if you operate a pumpkin patch, have land with hiking trails or may be otherwise involved with agrotourism, you will want to take the steps needed to meet the requirements of this statute so that your business can take advantage of all of the protections which it affords. Further, you should also be prepared to address the exceptions - through well documented training sessions of employees, discussions of potential risks with participants, and other steps.
Ice Miller's agricultural law group monitors this and other similar issues for clients in the food and agricultural industries. View our full list of services at our agribusiness website. If you would like to further discuss this new statute or how to implement these statutory protections, please contact Judy Okenfuss at firstname.lastname@example.org or (317) 236-2115.
By the year 2050, experts predict that the world's population will grow to over nine billion people and we will need to double food production. At the same time, many American consumers, particularly "early adopters" (thought and opinion leaders who seek information and frequently drive change) seem concerned that modern agriculture is not "farming" and express their preference for food produced locally, by organic methods or by other means that are not sufficiently scalable to feed the world.
On May 9 and 10, I attended the Center for Food Integrity's North American Strategy Conference on Animal Agriculture at Hamburger University in Oak Brook, Illinois. The conference brought together a group of organizations and companies who engaged with consumers, reporters and "mommy bloggers" to better understand their perspectives and how to bridge the gap. Many of the panelists were "early adopters" on food issues and expressed their preference for local or organic foods and for shopping at Whole Foods or farmer's market – in other words, food sources that many would not equate with "modern agriculture." At the same time, several panelists expressed a desire to feel a connection with their food by getting to know the producer personally at a farmers market, by having a garden or even visiting a farm.
Charlie Arnott, the CEO of Center for Food Integrity (CFI), also reviewed some of CFI's research on the attitudes of early adopters toward the food system. One of CFI's findings that left me deeply puzzled is that only half of early adopters are "very concerned" with having enough food to feed the U.S. and only 31 percent are "very concerned" with having enough food to feed the developing world. Yet, with the world's population headed to nine billion by 2050, and needing to double food production in the same time frame, we are faced with a choice of whether or not to produce enough to feed the world – and if we choose not to, the consequences could be dire.
The closing speaker was Ted McKinney, Elanco Animal Health's Senior Director of Global Corporate Affairs. He described affordable food, food choice and sustainable global food production as three rights that must be recognized in order to make the dream of providing nine billion people with safe, affordable and abundant food a reality. So, it seems that our challenge is to convince policymakers and consumers that we need to produce enough food to feed the world, while preserving consumer's right to choose the foods that fit their lifestyles and means. As Vanessa Druckman, one of the blogger panelists, put it, "We need to find food selections that work for the entire world, not just people like me who can choose to buy organic and grass-fed."
Ice Miller is a proud sponsor of many CFI events and routinely participates in its conferences to stay abreast of its research and information, as well as other research, information and policies affecting agriculture and agribusinesses. If you're interested in seeing more of the conference discussion, check out #CFI11 on Twitter.
Last week I attended the Association of Equipment Manufacturer's Product Liability seminar in Bloomingdale, Ill. The seminar focused on how technical personnel and corporate representatives of equipment manufacturing companies and outside counsel can work together during litigation proceedings for effective litigation tactics and strategies. The topics ranged from coordinating litigation on a national scale to the important role corporate representatives can take in alternative dispute resolution. Some of the key themes which emerged are:
- The importance of a well-organized litigation program at the corporate level. One speaker highlighted the challenges emerging from cooperation and organization of the plaintiffs' bar. For example, many plaintiff's attorneys' associations maintain forums on specific products where the attorneys can share common claims involving a product, document libraries where attorneys can share successful pleadings, and deposition repositories that attorneys can use to research a corporate representative in a matter. In order to combat this cooperation by the plaintiffs' bar, manufacturers need to coordinate their litigation on a company level to ensure that the manufacturer's discovery responses and other pleadings do not contradict those filed in cases in other jurisdictions. The plaintiff's attorneys are sharing these documents and will use them to surprise a corporate representative at deposition or trial. Manufacturers typically accomplish such coordination by employing internal litigation managers or product specialists, or by employing national counsel.
- Recent changes to the Federal Rules of Civil Procedure may benefit manufacturers, specifically changes to Federal Rule of Civil Procedure 26, which governs expert witness discovery. The new version of Rule 26 will provide more protection to communications between counsel and a testifying expert witness. The most relevant changes include that draft expert reports and communications relating to an expert's opinions will no longer be discoverable by the other side.
- Deposition preparation should begin early in a matter. This perspective highlights the importance of, an incident reporting network. After an initial meeting with counsel, the corporate representative should learn why he or she was selected to serve as corporate representative, whether there are any deadlines he or she needs to be aware of, the time frame in which the deposition is likely to occur, and the number of documents that the attorney anticipates the corporate representative will need to review. After this meeting, the corporate representative should have a good sense of whether he is the right witness. If so, the representative should expect to meet with counsel at least one more time where the "nitty gritty" details of the case will be discussed. Corporate representatives should be proactive in preparing for depositions and should not hesitate to contact counsel with questions or concerns.
- One speaker noted that it should not be the objective of the corporate representative to "win" the deposition or trial. Rather, their demeanor should reflect that they are trying to be helpful by educating the jury and/or opposing counsel. Thus, it is important to use basic terms that anyone can understand and to maintain a calm presence in front of the jury or, in the case of a videotaped deposition, the videographer.
Ice Miller represents a number of clients on product liability matters, including those in the agricultural and construction equipment industries. For help or more information about how Ice Miller can assist your business with additional background on the litigation process and the important role corporate representatives and technical personnel play in it, please contact Jim Petersen, Judy Okenfuss, or Jen Johnson.
In previous articles in this space, we have suggested that employers should review their employment handbooks for rules and policies that may be found unlawful under the National Labor Relations Act (Act). On March 31, the National Labor Relations Board (Board) issued another such reminder to us all.
Read about the National Labor Relations Board policy.
On March 18, 2011, the Department of Labor (DOL) issued Technical Release 2011-01 (2011 Technical Release) to provide an extension of the non-enforcement period relating to certain interim procedures for internal claims and appeals under the Patient Protection and Affordable Care Act (PPACA). The Technical Release serves to extend and modify the original non-enforcement period that was provided under Technical Release 2010-02 (2010 Technical Release), issued by the DOL on Sept. 20, 2010. The 2011 Technical Release gives employers that sponsor non-grandfathered group health plans yet more time to comply with PPACA's requirement to have an effective internal claims and appeals process, which is generally effective for plan years beginning on or after Sept. 23, 2010.
Read the entire article on the extended delay in enforcement of internal claims and appeals.
Months of speculation came to an end March 24, 2011 when the Equal Employment Opportunity Commission (EEOC) issued its final amended regulations implementing the Americans with Disabilities Act Amendments Act (ADAAA), which took effect on January 1, 2009.
The EEOC's final regulations, which are effective 60 days from their publication in the Federal Register on March 25, 2011, contain significant changes from the pre-Amendments Act ADA. Consistent with Congress's stated purpose in passing the ADAAA, the new regulations expand the ADA's coverage by lowering the standard for proving disability. Although the new regulations do little to quell employer fears of increased liability under the ADAAA, the EEOC has retreated, at least incrementally, from some of the more controversial positions it took in the proposed regulations.
This article highlights some of the more significant changes effected by the final ADAAA regulations, and their likely impact on employers, noting where the EEOC has pulled back from positions it took in its proposed regulations.
Read the entire article about the final ADAAA regulations.
Everyone would probably agree that kittens are cute, cuddly and playful. But a recent decision of the United States Supreme Court has made playing with cats more risky for employers.
The case in question, Staub v. Proctor Hospital, involved what is known as the "cat's paw theory" of proving employment discrimination. Under this theory, it is generally recognized that an employer can be liable for employment discrimination even when the person who made the adverse employment decision was unbiased if the decision was influenced by the discriminatory acts and animus of a non-decision maker (such as biased reports of misconduct). The decision maker is considered to be the "paw" of the discriminatory cat. Over the years the courts have differed somewhat in their application of this theory.
Read the entire article.
On February 24, 2011, the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury issued final regulations under 31 CFR Part 1010 addressing the reporting of foreign financial accounts and the form used to file these reports (Form TD-F 90-22.1, Report of Foreign Bank and Financial Accounts, which is commonly referred to as the "FBAR" form). While the language in the final regulations is substantially consistent with the proposed FBAR rules that were published one year ago (read our March 10, 2010 summary of the proposed regulations), the FinCEN clarifies and revises certain provisions regarding which persons will be required to report accounts and which accounts will be reportable, as well as any specific exceptions to the filing requirements.
The final rules are effective March 28, 2011, and apply to FBARs required to be filed by June 30, 2011, for foreign financial accounts maintained in 2010 and for reports required to be filed for all subsequent years. In addition, filers who properly deferred their filing obligations under IRS Notice 2010-23 (which extended the FBAR filing due date from June 30, 2010 to June 30, 2011 for certain groups) may, but are not required to, apply the provisions of the final rule in determining their FBAR filing requirements for reports due June 30, 2011, for foreign financial accounts maintained in years beginning before 2010.
Note that the regulations under the Bank Secrecy Act (BSA) have been reorganized; therefore, the text of the final FBAR regulations have been renumbered for consistency. The regulations that were originally under 31 CFR 103.24 in their proposed form now appear under 31 CFR 1010.350 as the final regulations.
Applicability to Governmental Pension Plans
The regulations still exempt governmental pension plans from the FBAR filing requirements. The proposed rules were accompanied by proposed revisions to the FBAR instructions which, among other things, specifically exempted governmental entities from the filing requirements, as follows:
A foreign financial account of any governmental entity is not required to be reported on an FBAR by any person. For purposes of this form, governmental entity includes: (1) a college or university that is an agency or instrumentality of, or owned or operated by, a governmental entity; and (2) an employee retirement or welfare benefit plan of a governmental entity. (Emphasis added.)
While the FinCEN states in the preamble that the FBAR instructions have been revised to reflect the language adopted in the final regulations, the instructions were not included in the final regulations, and the rules do not explicitly make the above statement. However, when the final FBAR instructions are released, we expect they will include this exemption. In addition, the final rules retain the language from the proposed rules excepting from the filing requirements persons who have a financial interest in or signature or other authority over an account of any State or any political subdivision thereof. 31 CFR 1010.350(c)(4).
Thus, the rules provide a filing exemption for the accounts of governmental pension plans, both with respect to the plan itself and with respect to the plan's employees with signature authority over foreign investments. The exemption is applicable for accounts held during 2010 and subsequent years. In addition, both pension plan employees with signature authority over accounts but no financial interest in those accounts who took advantage of the extension provided in IRS Notice 2010-23, and pension plans having commingled funds, none of which were mutual funds, which did not file an FBAR for prior years in reliance on Notice 2010-23, may rely on the final regulations to determine whether the delayed filing is now required.
For more information about FBAR, the final rule, and how the FBAR materials may impact your governmental plan, please contact Mary Beth Braitman, Terry A.M. Mumford, Katrina M. Clingerman, Lisa Harrison, or your Ice Miller LLP employee benefits attorney.
Earlier this year, the Western Farm Press publication interviewed Roger McEowen, director of Iowa State University’s Center for Agricultural Law and Taxation (CALT), about his thoughts on the most significant agriculture-related legal developments of 2010. Many of these involved court decisions while others were legislative or regulatory actions at the federal level. The list is a diverse one and highlights biotechnology approvals as well as environmental, depreciation, tax, livestock marketing, and food safety issues, among others. Read the entire list of top 10 farming related law stories of 2010.
Checking job applicants' credit history, a common screening practice of many employers, has come under attack from state legislatures, private litigants and the U.S. Equal Employment Opportunity Commission (EEOC). In August 2010, Illinois enacted the Employee Credit Privacy Act, making it the fourth state to ban employers from inquiring about the credit histories of job applicants or employees, or obtaining copies of their credit reports. Three months later, Loudy Appolon, an applicant for employment at the University of Miami's Miller School of Medicine, filed a class action lawsuit against the university after it informed her she would not be hired because of her credit history. Just last month, the EEOC sued Kaplan Higher Education over its use of credit histories in the hiring process.
The common thread binding all of these challenges to the consideration of credit records in the hiring process is the claim that this practice discriminates against African Americans, Hispanics and perhaps other protected groups.
Read the entire article about using credit checks in the hiring process.
Who would imagine that you could, with the magic of the Internet and from the comfort of your living room, sell or buy shares of later stage private companies that you hear about over the Internet (or for some on TV or in old fashioned newspapers or magazines)? Companies like Groupon, Twitter and Facebook come to mind.
For employees and other owners of promising young companies that are not yet public (or possibly may never be publicly-held), these new online “markets” are a potential source of liquidity.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law No. 111-203 (Dodd-Frank) was signed into law on July 21, 2010. Among other changes to securities law, Dodd-Frank imposes registration and other obligations, including fiduciary duties, upon municipal advisors who engage in certain activities with respect to "municipal entities." See Section 975 of Dodd-Frank. These new obligations include the requirement, which became effective Oct. 1, 2010, to register with the Securities and Exchange Commission (SEC). In addition, Dodd-Frank grants the Municipal Securities Rulemaking Board (MSRB) regulatory authority over municipal advisors, so municipal advisors will be required to comply with the MSRB's registration and other requirements as well as those of the SEC.
Read the entire alert regarding municial advisor registration under Dodd-Frank Act.
The H-1B visa category is the most common classification available to foreign professionals working in the U.S. This category, however, is subject to an annual quota or "cap" each fiscal year, and based on numbers recently released by U.S. Citizenship and Immigration Services, the cap for fiscal year 2011 is expected to be exhausted very soon. Employers should also note that a revised form for H-1B and certain other nonimmigrant filings requires employers to make attestations regarding "deemed exports" or the release of controlled technology or technical data to foreign nationals. While the regulations regarding release of this type of information to foreign nationals are not new, employers should review their export control compliance procedures to ensure they have appropriate plans and policies in place to comply with the attestation requirement.
Read the entire article on the H-1B visa.