Recent legislation allows employers to continue offering first-dollar telehealth coverage without jeopardizing the ability to contribute to a health savings account (“HSA”), but only through the end of the 2024 plan year.

Background – HSA Eligibility

Employees can make and receive pre-tax contributions to HSAs to use for qualified medical expenses. To be “eligible” to make or receive contributions to an HSA, you (a) must be covered by a high deductible health plan (“HDHP”), and (b) may not have other non-HDHP coverage that covers benefits before the HDHP deductible has been met.

Certain types of coverage, like dental and vision care, is disregarded in determining whether an individual is “eligible” to contribute to an HSA. Disregarded coverage does not have to be coordinated with HDHPs. This means that participants can receive “first-dollar” coverage for disregarded coverage and still be eligible to make or receive contributions to an HSA.

Continue Reading Employers Can Continue to Cover Telehealth Benefits Before HDHP Deductible Is Met

As we discussed in a previous post, effective January 1, 2023, California employers must include pay scales in job postings, and a similar bill in New York was awaiting signature by Governor Kathy Hochul. The California Labor Commissioner has now issued guidance to assist employers in complying with the new law, and the New York State bill was signed into law on December 21, 2022 and is set to take effect on September 17, 2023.

Continue Reading Update on California and New York Pay Transparency Laws

On January 5, 2023, the Federal Trade Commission (“FTC”) issued a groundbreaking proposed rule that would, if finalized:

  • prohibit most employers from entering into non-compete clauses with workers, including employees and individual independent contractors;
  • prohibit such employers from maintaining non-compete clauses with workers or representing to a worker that the worker is subject to a non-compete clause; and
  • require employers to rescind any existing non-compete clause with workers by the compliance date of the rule and notify the affected workers that their non-compete clause is no longer in effect.

The FTC’s notice of proposed rulemaking explains that the FTC considered possible limitations on the rule—such as excluding senior executives or highly paid employees from the ban—but it ultimately proposed a categorical ban on post-termination non-competes.  The only exception is for non-competes related to the sale of a business.  However, even this exception is unusually narrow: it would only apply to selling business owners who own at least 25% percent of the business being sold.  (The proposal also would not apply to most non-profits, certain financial institutions, common carriers, and others who are also outside the scope of FTC regulation.)

Continue Reading FTC Proposes Rule to Ban Most Non-Competes

On October 1, 2022, the District of Columbia’s new ban on non-compete agreements (the Ban on Non-Compete Agreements Amendment Act of 2020, as amended by the Non-Compete Clarification Amendment Act of 2022 (the “Act”)) went into effect. The final version of the Act is far less restrictive than originally anticipated and permits non-competes with highly compensated employees, non-competes paired with long-term incentives, and certain anti-moonlighting policies.

Key Takeaways

  • As of October 1, 2022, non-competes are prohibited in the District with limited exceptions.
  • Generally, employers can still enter into the following types of non-competes with District employees:
    • Non-competes with highly compensated employees that do not exceed one year; provided 14 days’ advance notice is given to the employee. 
    • Non-competes paired with a long-term incentive.
    • Non-competes entered into in connection with the sale of a business.
  • The Act permits specified workplace policies like confidentiality or non-disclosure policies, anti-moonlighting policies/outside employment restrictions, and conflict of interest policies. However, the employer must provide the policies to employees before October 31, 2022, within 30 days after acceptance of employment, and any time such policy changes.
  • Violations of the Act carry both administrative penalties and civil liability.
  • Prohibited non-compete agreements in effect before October 1, 2022, are not subject to the Act and remain in effect. However, employers should consult with legal counsel before amending these agreements.
  • Non-solicitations of customers and employees are not explicitly considered non-competes under the Act.
  • The Act does not apply to the terms of a valid collective bargaining agreement.
Continue Reading D.C.’s Scaled-Back Non-Compete Ban Is In Effect

As interest rates rise and the threat of a recession looms, many employers are beginning to struggle with balancing the cost of maintaining their workforce with an expected decrease in profits. The frequent result of such a balancing act is a mass layoff. While a reduction in workforce may be inevitable, below are options that employers can consider to try to avoid that outcome. For all of these alternatives, employers should apply any changes consistently across the workforce to avoid claims of inequity or discrimination.

Continue Reading Avoiding Layoffs In an Uncertain Economy

On October 12, 2022, the UK Information Commissioner’s Office (“ICO”) opened a public consultation seeking feedback on the draft guidance document on employment practices, specifically relating to monitoring at work (the “Monitoring at Work Guidance”).

The Monitoring at Work Guidance aims to provide practical guidance and good practices relating to monitoring UK workers in accordance with data protection legislation. It addresses key gaps in the current ICO Employment Practices Code, and provides useful guidelines on the lawful bases for monitoring, the application of data protection principles set out in the UK GDPR as well as practical guidance on specific types of workplace monitoring (e.g., covert monitoring, automated processes, biometric data etc.). The public consultation will be open until January 11, 2023 and interested parties may submit their feedback on how to improve the guidance. For more information on the key issues in the ICO’s draft Monitoring at Work Guidance, and how this latest guidance compares with prior guidance on monitoring at work, please see our Inside Privacy blog here.

Mandatory gender pay gap reporting is new to Ireland and is likely to attract media attention and potential comparisons, particularly for multinational and higher profile companies.  Deciding how best to communicate the gender pay gap – if it exists – will be important in averting any particular anxieties which may arise for employees and their representatives in particular. 

Explores these new rules in detail in a post on our affiliated blog, Global Policy Watch.

To promote pay transparency and equity, an increasing number of states and localities are requiring employers to disclose salary data in job advertisements or postings.  The trend started in Colorado in 2021, and now a number of other jurisdictions have followed suit, including New York City and the states of California and Washington.  The New York City law took effect on November 1, 2022, and the California and Washington laws go into effect on January 1, 2023.  Similar laws have recently been enacted in other areas as well, including Jersey City, New Jersey (effective June 15, 2022), the City of Ithaca, New York (effective September 1, 2022), and Westchester County, New York (effective November 6, 2022).

This post will provide an overview of the New York City, California, and Washington laws, and discuss steps that employers can take to comply with the new requirements.

Continue Reading New Pay Transparency Laws Taking Effect

On October 26, 2022, the Securities and Exchange Commission (the “SEC”) adopted a long-awaited rule that will require listed companies to adopt and publicly file so-called “clawback” policies.  As we discuss in more detail in this alert, the rule requires listed companies to adopt clawback policies to recover, reasonably promptly, incentive-based compensation that proves to be excessive following an accounting restatement.  The executives covered by the rule are persons who served as an executive officer at any time during the performance period for such incentive-based compensation.  The amount that must be recovered generally includes excess compensation earned during the three fiscal years preceding the date on which the company is required to prepare an accounting restatement.

Among other executive compensation implications, the SEC contemplates that existing contractual arrangements with executives may need to be amended as a result of the new rule.  The rule mandates recovery of erroneously paid compensation, subject to narrow exceptions that generally include a finding that it is impracticable to do so because the cost of recovery exceeds the amount to be recovered.  The SEC’s adopting release states that inconsistency between the rule and existing compensation contracts is not a basis for such an impracticability finding.  As such, listed companies may wish to consider whether existing compensation arrangements should be amended to facilitate compliance with the mandate to recover.  In addition, listed companies may wish to review contractual clawback provisions in existing agreements for conformity with their clawback policies (as may need to be amended to conform with the new rule).  Going forward, where clawbacks are required, there may be complex questions concerning whether there may be additional compensation arrangements not cited in the release that may be subject to clawback, the amount of excess compensation that needs to be recovered, and the methods to satisfy the SEC’s requirement to undertake reasonable efforts to recover such compensation.