The Washington Report
May 01, 2024
Note to Subscribers
While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change after our publication deadline.
Health
DOL Rescinds 2018 AHP Rule
On April 29, 2024, the Department of Labor (DOL) released a final rule rescinding the 2018 rule entitled Definition of Employer Under Section 3(5) of ERISA – Association Health Plans (2018 AHP Rule). The 2018 AHP Rule established an alternative set of criteria from those set forth in the DOL’s pre-2018 AHP Rule (pre-rule) guidance for determining when a group or association of employers is acting “indirectly in the interest of an employer” under Section 3(5) of ERISA for purposes of establishing an AHP as a multiple employer group health plan. The “2018 AHP Rule was a significant departure from the Department’s longstanding pre-rule guidance on the definition of ‘employer’ under ERISA. This departure substantially weakened the Department’s traditional criteria in a manner that would have enabled the creation of commercial AHPs functioning effectively as health insurance issuers. The Department now believes that the core provisions of the 2018 AHP Rule are, at a minimum, not consistent with the best reading of ERISA’s statutory requirements governing group health plans.” The final rule becomes effective on July 1, 2024.
The news release is available here.
The final rule is available here.
A Fact Sheet is available here.
Retirement
DOL Issues Final Retirement Security Rule: Definition of an Investment Advice Fiduciary
On April 25, 2024, the Department of Labor (DOL) published a final rule defining when a person renders “investment advice for a fee or other compensation, direct or indirect” with respect to any moneys or other property of an employee benefit plan, for purposes of the definition of a “fiduciary” in ERISA. The final rule also applies for purposes of Title II of ERISA to the definition of a fiduciary of a plan defined in Internal Revenue Code (Code), including an individual retirement account or other plan identified in the Code. The DOL also published separately amendments to Prohibited Transaction Exemption (PTE) 2020-02 (Improving Investment Advice for Workers & Retirees) and several other existing administrative exemptions from the prohibited transaction rules applicable to fiduciaries under Title I and Title II of ERISA. The final rule becomes effective on September 23, 2024.
The news release is available here.
The final rule is available here.
The Amendment to PTE 2020-02 is available here.
The Amendment to PTE 84-24 is available here.
The Amendment to PTEs 75-1, 77-4, 80-83, 83-1, and 86-128 is available here.
The Fact Sheet: Retirement Security Rule and Amendments to Class Prohibited Transaction Exemptions for Investment Advice Fiduciaries, is available here.
The Retirement Security Rule: Definition of an Investment Advice Fiduciary website is available here.
Other HR/Employment
EEOC Releases Final Workplace Harassment Guidance
On April 29, 2024, the Equal Employment Opportunity Commission (EEOC) published final guidance on harassment in the workplace (Enforcement Guidance on Harassment in the Workplace). This resource provides the legal standards and employer liability applicable to harassment claims under federal employment discrimination laws. These laws protect covered employees from harassment based on race, color, religion, sex (including pregnancy, childbirth or related medical conditions; sexual orientation; and gender identity), national origin, disability, age (40 or older) or genetic information. Since the EEOC last issued guidance on workplace harassment, notable changes in the law have occurred, including the Supreme Court’s decision in Bostock v. Clayton County; as well as other issues, such as online harassment. The new guidance updates and replaces the agency’s five guidance documents issued between 1987 and 1999, and serves as a single resource on EEOC-enforced workplace harassment law.
The guidance includes over 70 examples illustrating unlawful harassment, including situations involving older workers, immigrant workers, and survivors of gender-based violence. It illustrates how employees may be subjected to unlawful harassment not only by coworkers or supervisors, but also by customers, contractors, and other third parties. The guidance additionally addresses the growth of virtual work environments and the increasing impact of digital technology and social media on how harassment occurs in the work environment.
On the same day the final guidance was issued, the EEOC also released several educational resources, including a Summary of Key Provisions document, a document for employees, and a Fact Sheet for small businesses.
The news release is available here.
The final guidance, Enforcement Guidance on Harassment in the Workplace, is available here.
The Summary of Key Provisions is available here.
The document for employees, Questions and Answers for Employees: Harassment at Work is available here.
A Small Business Fact Sheet is available here.
WHD Announces Final FLSA Overtime Rule
On April 23, 2024, the Department of Labor’s Wage and Hour Division (WHD) announced its final overtime rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, which amends the regulations at 29 CFR Part 541 under the Fair Labor Standards Act (FLSA). The final rule follows a Notice of Proposed Rulemaking published on September 8, 2023, in the Federal Register and makes the following changes:
- Increases the standard salary level and the total annual compensation requirement for highly compensated employees (HCE).
- On July 1, 2024, the standard salary level will equal $844 per week and HCE total annual compensation level will equal $132,964.
- On January 1, 2025, the standard salary level will equal $1,128 per week and the HCE total annual compensation level will equal $151,164.
- Adopts a mechanism to update the earnings thresholds every three years.
The final rule is effective on July 1, 2024. Sections 541.600(a)(2) and 541.601(a)(2) are applicable beginning January 1, 2025.
The news release is available here.
The final rule is available here.
The Final Rule: Restoring and Extending Overtime Protections website is available here.
FTC Approves Final Non-Compete Clause Rule
On April 23, 2024, the Federal Trade Commission (FTC) approved a final non-compete clause rule that adopts a comprehensive ban on new non-competes with all workers, including senior executives. The final rule provides that it is an unfair method of competition for persons to, among other things, enter into non-compete clauses (non-competes) with workers on or after the final rule’s effective date. With respect to existing non-competes—i.e., non-competes entered into before the effective date—the final rule adopts a different approach for senior executives than for other workers. For senior executives, existing non-competes can remain in force, while existing non-competes with other workers are not enforceable after the effective date. The final rule is effective 120 days after publication in the Federal Register (date unknown at time of this newsletter publication)—not after the FTC's public announcement.
The final rule is temporarily available here.
The FTC Noncompete Rule website is available here.
Aon Publications
Now Available: Legal Consulting & Compliance Quarterly Update
The Retirement Legal Consulting & Compliance practice is pleased to present its Quarterly Update of recent legal developments for the second quarter of 2024. In this issue you will find the following articles:
- Spring Cleaning: The Crucial Role of Auditing Payroll and 401(k) Data
- Tax-Exempt Employers: Access to VEBA Assets
- Interested in Eliminating Your Cash Balance Plan Minimum Interest Crediting Rate?
- New Present Value Rules Present Challenges and Opportunities
- Actuarial Equivalence Litigation Extends to Multiemployer Plans
- Quarterly Roundup of Other New Developments
- Recent Publications
The second quarter 2024 issue of the Retirement Legal Consulting & Compliance Aon Quarterly Update is available here.