Category: Labor & Employment

U.S. Immigration Strategies to Attract, Retain, and Develop Talent

Amid the evolving global economy throughout the past year, employers may be reassessing their approach to talent acquisition and retention. Companies are navigating uncertainty by recalibrating mobility programs, aiming to not only attract but also retain talent to fulfill a skills gap in the U.S. workforce. Central to leveraging foreign talent is the power of immigration branding and messaging. A strategic emphasis on employee longevity proactively curtails workforce attrition and preempts potential labor shortages in the future.

Attracting talent

Understanding and leveraging avenues offered by U.S. immigration laws can be pivotal in securing the right skills and meeting business demands to drive success. Employers commonly leverage F-1 student OPT/STEM OPT training and the H-1B and L-1 work visa programs to source foreign workers in the talent ecosystem.

Foreign students with work authorization pursuant to OPT/STEM OPT are prime candidates for expanding a company’s talent pool with long-term development potential. Employers may attract foreign students through internships while the student completes their academic program, post-graduation employment pursuant to OPT/STEM OPT, and subsequent work visa and green card sponsorship. For most foreign students, switching from a student visa to a work permit is often challenging due to the restrictions and limited availability of H-1B visas. However, companies with an overseas presence may be able to set up strategically located hubs abroad to recruit and employ foreign nationals who were not able to obtain an H-1B visa, and then transfer them back to the United States with L-1 intracompany transfer visas following their employment abroad over at least one year. A company’s corporate immigration policy outlining support of various immigration pathways, and benchmarked against the policy of industry peers, is a competitive tool to meet foreign workers’ needs and attract high-potential talent.

Retaining talent

In response to the need for talent retention, employers are strategically tapping into their existing talent pool to bolster operational efficiency. With post-COVID-19 employees seeking greater fulfillment, employers may want to consider proactively refining their retention efforts to include top-tier foreign talent.

Companies are increasingly turning to their internal talent reservoirs to bridge skill gaps and curtail additional hiring costs. Retaining current talent is becoming pivotal for success, mobility, and business continuity. To address the evolving landscape of talent retention and the demand from foreign talent for immigration support, employers may consider several key strategies.

Various immigration pathways offer avenues for continued employment, providing stability to existing talent. For example, some companies leverage sponsorship for work visa programs and employment-based green cards to retain skilled foreign workers. Payment of legal fees and the provision of immigration counsel are initial steps in this effort, and other offerings including immigration seminars for employees and family members, an internal immigration portal with FAQs and self-service features that provide status reports, and access to documents and opportunities for interaction with the immigration team are also important. Employers leverage streamlined extension processes for work authorization to ensure continuity for employees and the business without disruptions. Embracing technological advancements in immigration processes may streamline procedures, reduce processing times, and minimize errors. Further, a robust green card sponsorship program signals a long-term commitment to retain valuable talent and grants employees a sense of security and stability in their professional journey within the company. Clearly defined benchmarks when the company initiates green card sponsorship are not only a recruitment and retention tool but also ensure that foreign workers do not lose immigration status or work authorization.

Adaptability and foresight also benefit companies navigating corporate immigration policy frameworks. Companies can implement consistent yet flexible approaches to immigration sponsorship that cater to both business needs and the foreign worker’s circumstances. For example, timing adjustments in initiating green card sponsorship may prevent work authorization gaps. Evaluating risks versus benefits might lead to early green card sponsorship for students to safeguard their status and work authorization if they are not selected in the H-1B lottery. Exploring alternative sponsorship options, such as supporting family-based or self-sponsored petitions, could be viable alternatives for a company to retain critical talent and may streamline the process and save time. Finally, recognizing and addressing the needs of dependents, such as spouses and children, within the immigration sponsorship process may be determinative to retain valuable talent.

Developing talent

Companies recognize the importance of not just attracting and retaining foreign talent but also developing their skills and potential. With strategic planning, immigration strategies can help advance the capabilities of international talent within a corporate setting.

Demand for H-1B visas has increased while the number of available visas has remained static. In response, employers are assisting international talent to develop their credentials to become eligible for an O-1 visa as an alternative. The O-1 visa for individuals with extraordinary abilities allows companies to support foreign workers in advancing their careers by recognizing their exceptional talent and contributions. Although the standard to qualify is high, for many foreign workers there are specific steps they can take to proactively bolster their resume toward becoming “O-1 visa ready.”

Sponsorship of certain visa categories, such as EB-1A for individuals with extraordinary ability or a National Interest Waiver to bypass the requirement to test the labor market, may encourage innovation and leadership among an employer’s foreign workers. Elevating a green card process to a higher preference category generally accelerates the process and the prospect of a higher preference category may lead foreign nationals to excel in their fields, drive innovation, and propel critical progress for the company.

Multinational employers are increasingly implementing international rotational programs and cross-border exchanges to foster skill development and broaden experiences. This approach not only addresses internal labor shortages but also mitigates the need for expensive talent searches and replacements. These programs offer benefits akin to longer-term assignments, facilitating knowledge transfer and nurturing company culture at a reduced cost. Such exposure can empower foreign workers with diverse market insights, enriching their skill sets and fostering a global perspective. Moreover, it allows businesses to harness internal expertise to bolster critical initiatives. However, the rise in popularity of these short-term rotation and remote work programs may invite heightened compliance measures, including increased audits and inspections. Hence, employers should anticipate a trend towards more rigorous immigration requirements aligning with labor, tax, and social security laws.

©2024 Greenberg Traurig, LLP. All rights reserved.
For more on Immigration Strategies, visit the NLR Immigration section.

Domestic Visa Processing – Application Slots Now Available

On January 29, 2024, the Department of State’s stateside visa pilot renewal program began accepting DS-160s for qualifying individuals seeking to renew their existing H-1B visas while they are in the United States. As discussed in our previous blog post about this new program, the program allows individuals in the United States who are renewing an H-1B visa issued by US consular sections in Canada between 1/1/2020 and 4/1/2023 or one issued by US consular sections in India from 1/2/2021 and 9/30/2023 to do so online through the Department’s CEAC website rather than having to travel outside the US to obtain the visa.

Under the pilot program, each week for five weeks the Department will release 4000 application slots—2000 for applicants whose most recent H-1B visa were issued in Canada, and 2000 for those whose most recent H-1B visas were issued in India. If all designated slots are filled before the next week’s allotment becomes available, the Department will lock the portal until the next group is released. Applications can be submitted online at https://travel.state.gov/content/travel/en/us-visas/employment/domestic-renewal.html, where you can also find program FAQs published by the Department of State.

The first group of application slots was released on Monday, January 29. Later groups will be released on February 5, February 12, February 19, and February 26. The program will end when all available slots are filled or on April 1, 2024, whichever happens first.

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Copyright © 2024, Hunton Andrews Kurth LLP. All Rights Reserved.
For more on Domestic Visas, visit the NLR Immigration section.

Reminder to Employers Regarding Mandatory Workplace Posters

As employers march through the beginning of the new year, they should ensure they are in compliance with the various mandatory workplace notice and posting requirements under applicable state and federal laws.

To that end, the U.S. Department of Labor provides a poster advisory tool for employers to reference. Similarly, most state department of labor websites will, at the very least, provide a list of required state employment posters. Many of these websites also provide links for employers to download mandatory posters for free.

For Texas employers, for example, the Texas Workforce Commission’s website contains a list of optional and required posters. In addition to federally mandated posters, private Texas employers are required to post information related to the Texas Payday law and unemployment compensation, and workers’ compensation, if the employer has workers’ compensation insurance coverage. Further, as of January 8, 2024, Texas employers must post a “Reporting Workplace Violence” notice in both English and Spanish.

Federal and state laws typically require that required posters be physically posted conspicuously at each of the employer’s facilities and/or work sites that are convenient and easily accessible to employees and, in some cases, job applicants. Because many employers have transitioned to or otherwise permitted hybrid and remote-work environments, such employers should remember that federally mandated notices may be electronically provided to remote employees, as well as displayed in the physical workspace for hybrid workforces. But, according to the U.S. Department of Labor’s guidance, electronic posting or access should be at least as effective as a physical posting, and employees should be able to access the electronic posting without having to request permission to view it. Employers should verify whether the applicable state law allows for electronic delivery or posting of mandatory notices to remote and hybrid employees. In Texas, employers should look to federal guidance regarding the same.

© 2024 Winstead PC.
For more news on Mandatory Workplace Posters, visit the NLR Labor & Employment section.

2024 FLSA Checklist for Employers in the Manufacturing Industry

Wage and hour issues continue to challenge most employers, especially those in the manufacturing industry. The manufacturing industry tends to be more process- and systems-oriented and generally employ many hourly workers who are not exempt from overtime pay under the Fair Labor Standards Act (FLSA).

It is imperative manufacturers ensure they are on the right side of legal compliance. Indeed, non-compliance can trigger audits, investigations, and litigation — all of which can be disruptive, time-consuming, and costly for manufacturers. The U.S. Department of Labor (DOL), which is charged with investigating alleged violations under the FLSA, assesses hundreds of millions of dollars each year in penalties to employers.

With the new year, we offer this short (by no means exhaustive) checklist of common pay issues the manufacturing industry:

1. Donning and Doffing

The FLSA requires employers to compensate non-exempt employees for all time worked, as well as pay the minimum wage and overtime compensation. Whether pre-shift (donning) and post-shift (doffing) activities are included as compensable time is not always clear. Activities including putting on or taking off protective gear, work clothes, or equipment could be compensable time under the FLSA depending on the unique facts of the situation. At bottom, to be compensable, such activities must be found to be integral and indispensable to the “principal activity” of the employer’s work under the FLSA and the Portal-to-Portal Act of 1947.

Courts differ on whether time spent donning and doffing is compensable because these issues often implicate mixed questions of law and fact. Moreover, collective bargaining agreements can affect whether time spent changing clothes and washing is compensable for the purposes of determining hours worked for minimum wage and overtime calculations under the FLSA. Employers should carefully review their policies to ensure the compensability of pre-shift or post-shift activities being performed by non-exempt employees.

2. Rounding Time

Accurately keeping up with time worked by non-exempt employees is critical to compliance with the FLSA. Further, employees forgetting to clock-in and clock-out timely is a persistent issue. While the FLSA allows employers to round employees’ clock-in and clock-out times rather than pay by the minute, it is generally unnecessary (and not recommended) with today’s sophisticated time clocking systems. If employers choose to round time, they must ensure that any rounding policy is neutral on its face and neutral in practice — that is, the policy rounds both in the favor of the employer and the employee at roughly an equal weight. For employers engaging in rounding, audits are crucial as even a facially neutral rounding policy that, in practice, has disproportionately benefited the employer and cumulatively underpays the employees can be found to violate the FLSA.

3. Meal Breaks

Under the FLSA, employers must compensate for short rest breaks that last 20 minutes or less. However, employers do not have to compensate employees for a bona fide meal break, which ordinarily lasts at least 30 minutes. Importantly, an employee must be completely relieved from work duties during this uncompensated time and cannot be interrupted by work (even for a short time). Indeed, some courts have held that, where a meal break has been interrupted by work, the entire meal break (not just the time when work was performed) becomes compensable.

To ensure compliance under these rules, employers should have policies and practices in place so that employees can take an uninterrupted meal break. Employers should also have a well-communicated reporting system in place for employees to record any interrupted meal break to ensure the employee is compensated for the meal break or, when possible, a new meal break is scheduled.

4. Regular Rate

A common and incorrect assumption many employers make is that overtime pay under the FLSA is calculated at one-and-a-half times a non-exempt employee’s hourly rate when they work more than 40 hours in a workweek. In fact, the FLSA states overtime is calculated based on the non-exempt employee’s “regular rate” of pay. The FLSA requires that all payments to employees for hours worked, services rendered, or performance be included in the “regular rate” unless the payment is specifically excluded in the law. Thus, any non-discretionary bonuses, shift differential pay, and other incentive payments such as commissions should be included in the regular rate of pay calculation for purposes of calculating overtime under the FLSA.
This is relatively easy when a bonus is paid during a week where the non-exempt employees work more than 40 hours, but it can become complicated when the additional pay is paid on a monthly or quarterly basis. In this scenario, the payment must be averaged out over that longer time period to determine the regular rate such that overtime can be properly calculated. Thus, employers should review their payment processes on the front end to ensure compliance before any small errors or omissions (quite literally) multiply out of control.

Finally, state wage laws should always be top of mind as well. Employers should work with their employment counsel to ensure compliance with all state wage requirements.

Jackson Lewis P.C. © 2024
For more news on FLSA Standards, visit the NLR Labor & Employment section.

International Trade, Enforcement & Compliance Recent Developments Update (January 17, 2024)

One of the most consistent messages coming from the U.S. government is that multinational companies need to take control of their supply chains. Forced labor, human trafficking, supply chain transparency, OFAC sanctions, even conflict minerals — all are areas in which the best defense against potential violations is strong compliance and due diligence to ensure that companies properly manage their supply chains, rights down to the last supplier. Today’s mix of enforcement actions and guidance from the U.S. government underscores the importance of doing so.

EXPORT CONTROLS AND HUMAN RIGHTS

The Department of Commerce has stated that it has the authority to put companies on the Entity List (requiring special licensing and restrictions) solely for human rights violations. Does your company conduct full due diligence on its suppliers and sub-suppliers to ensure that they are operating in accordance with U.S. forced labor and human trafficking laws?

FORCED LABOR/UFLPA

The Department of Homeland Security continues to add Chinese and other companies to the Uyghur Forced Labor and Prevention Act (UFLPA) Entity List. Does your organization specifically screen against the UFLPA Entity List, as well as have in place UFLPA compliance and due diligence measures?

FORCED LABOR/UFLPA

The U.S. government has issued a pointed six-agency set of compliance guidelines regarding “the Risks and Considerations for Businesses and Individuals with Exposure to Entities Engaged in Forced Labor and other Human Rights Abuses linked to Xinjiang Uyghur Autonomous Region.” Does your organization maintain a compliance policy, vendor code of conduct, supply chain transparency and due diligence procedures, and other measures designed to ensure your supply chain is free of forced labor, human trafficking, or goods sourced from forced labor in the Xingjian Autonomous Region?

CUSTOMS PENALTY FOR ERRONEOUS USE OF FIRST SALE RULE

Due to the imposition of special Section 301 tariffs on most goods from Customs, many companies have begun to use the first sale rule, which allows the reporting of a lower value where there is a bona fide sale to a middleman. Improper application of the rule, however, can be the basis for substantial penalties, as an apparel company that paid a $1.3 million settlement with the DOJ found out. If your company uses the first sale rule, do you regularly review pricing and relevant circumstances to ensure you are meeting all the requirements for all entries?

EXPORT CONTROLS

Pledging “a new era of trilateral partnership,” the U.S., Japan, and South Korea governments have announced expanded collaboration to fight illegal exports of dual-use products, including high-tech products that might be shipped to China in violation of U.S. export controls. Has your organization performed a recent classification review to confirm it is aware of any restrictions that might adhere to the export of any of its products to sensitive countries, governments, or users?

© 2024 Foley & Lardner LLP
For more on Trade and Enforcement, visit the NLR Antitrust & Trade Regulation section.

DOL Announces New Independent Contractor Rule

On January 9, 2024, the United States Department of Labor (“DOL”) announced a new rule, effective March 11, 2024, that could impact countless businesses that use independent contractors. The new rule establishes a six-factor analysis to determine whether independent contractors are deemed to be “employees” of those businesses, and thus imposes obligations on those businesses relating to those workers including:  maintaining detailed records of their compensation and hours worked; paying them regular and overtime wages; and addressing payroll withholdings and payments, such as those mandated by the Federal Insurance Contributions Act (“FICA” for Social Security and Medicare), the Federal Unemployment Tax Act (“FUTA”), and federal income tax laws. Further, workers claiming employee status under this rule may claim entitlement to coverage under the businesses’ group health insurance, 401(k), and other benefits programs.

The DOL’s new rule applies to the federal Fair Labor Standards Act (“FLSA”) which sets forth federally established standards for the protection of workers with respect to minimum wage, overtime pay, recordkeeping, and child labor. In its prefatory statement that accompanied the new rule’s publication in the Federal Register, the DOL noted that because the FLSA applies only to “employees” and not to “independent contractors,” employees misclassified as independent contractors are denied the FLSA’s “basic protections.”

Accordingly, when the new rule goes into effect on March 11, 2024, the DOL will use its new, multi-factor test to determine whether, as a matter of “economic reality,” a worker is truly in business for themself (and is, therefore, an independent contractor), or whether the worker is economically dependent on the employer for work (and is, therefore, an employee).

While the DOL advises that additional factors may be considered under appropriate circumstances, it states that the rule’s six, primary factors are: (1) whether the work performed provides the worker with an opportunity to earn profits or suffer losses depending on the worker’s managerial skill; (2) the relative investments made by the worker and the potential employer and whether those made by the worker are to grow and expand their own business; (3) the degree of permanence of the work relationship between the worker and the potential employer; (4) the nature and degree of control by the potential employer; (5) the extent to which the work performed is an integral part of the potential employer’s business; and (6) whether the worker uses specialized skills and initiative to perform the work.

In its announcement, the DOL emphasized that, unlike its earlier independent contractor test which accorded extra weight to certain factors, the new rule’s six primary factors are to be assessed equally. Nevertheless, the breadth and impreciseness of the factors’ wording, along with the fact that each factor is itself assessed through numerous sub-factors, make the rule’s application very fact-specific. For example, through a Fact Sheet the DOL recently issued for the new rule, it explains that the first factor – opportunity for profit or loss depending on managerial skill – primarily looks at whether a worker can earn profits or suffer losses through their own independent effort and decision making, which will be influenced by the presence of such factors as whether the worker: (i) determines or meaningfully negotiates their compensation; (ii) decides whether to accept or decline work or has power over work scheduling; (iii) advertises their business, or engages in other efforts to expand business or secure more work; and (iv) makes decisions as to hiring their own workers, purchasing materials, or renting space. Similar sub-factors exist with respect to the rule’s other primary factors and are explained in the DOL’s Fact Sheet.

The rule will likely face legal challenges by business groups. Further, according to the online newsletter of the U.S. Senate Health, Education, Labor and Pensions Committee, its ranking member, Senator Bill Cassidy, has indicated that he will seek to repeal the rule. Also, in the coming months, the United States Supreme Court is expected to decide two cases that could significantly weaken the regulations issued by federal agencies like the DOL’s new independent contractor rule, Loper Bright Enterprises v. Raimondo and Relentless Inc. v. U.S. Dept. of Commerce. We will continue to monitor these developments.1

In the meantime, we recommend that businesses engaging or about to engage independent contractors take heed. Incorrect worker classification exposes employers to the FLSA’s significant statutory liabilities, including back pay, liquidated damages, attorneys’ fees to prevailing plaintiffs, and in some case, fines and criminal penalties. Moreover, a finding that an independent contractor has “employee” status under the FLSA may be considered persuasive evidence of employee status under other laws, such as discrimination laws. Additionally, existing state law tests for determining employee versus independent contractor status must also be considered.

1 The DOL’s independent contractor rule is not the only new federal agency rule being challenged. On January 12, 2024, the U.S. House of Representatives voted to repeal the NLRB’s recently announced joint-employer rule, which we discussed in our Client Alert of November 10, 2023.

Eric Moreno contributed to this article.

© Copyright 2024 Sills Cummis & Gross P.C.
For more on the Independent Contractor Rule, visit the NLR Labor & Employment section.

Blazing Trails: Exploring ESOPs in the Cannabis Industry

The budding cannabis industry, despite its rapid growth and gradual acceptance in recent years, still faces a major sustainability challenge: Cannabis businesses cannot deduct most ordinary business expenses. Under Internal Revenue Code Section 280E, no tax deduction or credit is allowed for amounts paid or incurred in carrying on a business if the business consists of trafficking in controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act) that are prohibited by federal law or the law of any state in which such trade or business is conducted. Since marijuana is a controlled substance, cannabis businesses face a particularly high tax burden. In this context, employee stock ownership plans (ESOPs) emerge as a strategic solution, offering a pathway for cannabis businesses to enhance their cash flows while also retaining and motivating their workforce.

UNDERSTANDING ESOPS

ESOPs are a type of tax-qualified retirement plan with assets held in a tax-exempt trust. If an ESOP is established for an S corporation and acquires all of the stock of the corporation, the ESOP will not be subject to federal income tax (or state income taxes in most states). With an S corporation, any income tax obligation passes through to the shareholder, and, in this case, the shareholder is a tax-exempt entity. ESOPs also provide a way for the owners to obtain liquidity, and they enable employees to become beneficial owners of the company. This is ordinarily achieved through the allocation of company shares to participants over the course of the repayment of a loan that finances the sale.

THE TAXING REALITY OF CODE SECTION 280E

Code Section 280E was initially introduced in the 1980s to prohibit businesses engaged in illegal drug trafficking from deducting ordinary business expenses. Despite the changing legal landscape of cannabis, with numerous states legalizing its use for medical and recreational purposes, Section 280E continues to prohibit federal tax deductions and credits for the business expenses of cannabis companies, including items such as rent and salaries. However, such businesses are generally permitted to deduct the cost of goods sold.

MITIGATING TAX LIABILITY

A 100% ESOP-owned S corporation in the cannabis industry holds a unique advantage in mitigating tax liability. Unlike traditional corporate structures, an ESOP-owned S corporation does not pay federal income tax, does not pay state income tax (in most states), and, perhaps most significantly, is not affected by the Code Section 280E restrictions on deductions and credits. Accordingly, the ESOP structure eliminates a significant expense for many cannabis companies and increases cash flow, allowing the company to reinvest its earnings into the business. This increase in resources can be used for any number of expenses, from growth and development of the business to repayment of its debts.

CONCLUSION

Although the cannabis industry is subject to a significant disadvantage under Code Section 280E with respect to tax deductions and credits, an ESOP offers an alternative that entirely mitigates this disadvantage. Furthermore, the ESOP provides liquidity for the selling shareholders and the opportunity to create an ownership culture among employees who will benefit from participating in a tax-qualified retirement plan.

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© 2023 Bradley Arant Boult Cummings LLP
For more news on ESOPs in the Cannabis Industry, visit the NLR Biotech, Food, Drug section.

Another Government Shutdown Looms: What It Means For Employers With Foreign National Employees

Only two days before the deadline in November 2023, the U.S. Senate passed a temporary budget to fund federal agencies through Jan. 19, 2024, marking the first time since 2012 that Congress entered a holiday season without the threat of a December shutdown. Now, following the start of a new year, lawmakers have less than two weeks to advance a recent spending agreement and reach a more permanent solution.

The November 2023 vote marked the second time Congress extended the budget for fiscal year 2023, which expired in September, to avert a government shutdown.

IMPACT ON IMMIGRATION

For employers, immigration funding and legislation are top of mind whenever a shutdown looms. Each time the government is on the verge of a shutdown, employers must identify cases that are affected and attempt to locate an avenue to mitigate the impact of the potential shutdown. This increases costs and reduces efficiency, among other complex consequences.

During the 2019 government shutdown, the U.S. Department of Justice suspended 60,000 hearings for non-detained migrants, causing significant delays in the immigration system. Rescheduling an appearance on the immigration docket can often take years, leaving migrants and their families to wait in uncertainty in the interim.

On the employment-based side of immigration, a mad dash ensues each time a government shutdown becomes imminent because applications made to the Department of Labor that are critical steps in both nonimmigrant and immigrant visa categories come to a halt. With already lengthy processing times, foreign national beneficiaries and their employers cannot afford to wait 90 days, as we saw in 2019, for government processing to resume.

Employers and their legal teams would be wise to shift their focus during these times to pushing forward the submission of as many Labor Condition Applications (LCAs), permanent labor certification applications (PERM), and prevailing wage determination requests as possible. A missed window of opportunity can result in years-long delays, or worse, the loss of work authorization, for critical foreign national talent in the U.S.

HOW TO PREPARE

With deadline déjà vu, now is the time for employers to prepare. Employers should consider the following three actions:

1) Submit Labor Condition Applications for all foreign nationals with a nonimmigrant visa (NIV) status expiring within the next six months, should the relevant nonimmigrant visa category require an application, such as for H-1B, H-1B1, and E-3 visa classifications

2) Submit Prevailing Wage Requests for all initiated PERM processes

3) File any PERM applications of individuals for whom the requisite recruitment steps and waiting periods have been completed

© 2023 BARNES & THORNBURG LLP
For more on Foreign National Employees, visit the NLR Labor & Employment section.

OSHA and NLRB Set Forth MOU to Strengthen Protections for the Health and Safety of Workers: A 2024 Outlook

On October 31, 2023, the National Labor Relations Board (NLRB) and Occupational Safety and Health Administration (OSHA) entered into a Memorandum of Understanding (MOU) to strengthen their interagency partnership. The purpose of this partnership is to establish a process for information sharing, referrals, training, and outreach between the agencies. Additionally, the agencies wish to address certain anti-retaliation and whistleblowing issues through this collaboration.

Since 1975, the NLRB and OSHA have engaged in cooperative efforts during investigations. According to NLRB General Counsel Jennifer Abruzzo and OSHA Assistant Secretary Doug Parker, the MOU seeks to strengthen this interoffice coordination in an effort to provide greater protection for workers to speak out on unsafe working conditions without fear of punishment or termination.

Exchange of Information

According to the MOU, the NLRB and OSHA “may share, either upon request or upon the respective agency’s own initiative, any information or data that supports each agency’s enforcement mandates, whether obtained during an investigation or through any other sources.” This information may include complaint referrals and information in complaint or investigative files. The MOU notes that this information will be shared only if it is relevant or necessary to the recipient agency’s enforcement responsibilities and ensures that the sharing of information is compatible with the purposes of the agency that is collecting the records.

For example, if OSHA learns during an investigation that there are potential victims of unfair labor practices who have not filed a complaint with the NLRB, OSHA will explain the employees’ rights and provide them with the NLRB’s phone number and web address. Additionally, if an employee files with OSHA an untimely complaint of retaliation, OSHA may then advise the employee to file a complaint with the NLRB, because the NLRB has a six-month time limit for filing such complaints whereas OSHA’s time limit is only 30 days. As a result, employers may be facing both agencies during an investigation.

Coordinated Investigations and Enforcement

The NLRB and OSHA will determine whether to conduct coordinated investigations and inspections in order to facilitate appropriate enforcement actions. If coordinated investigations occur and there are overlapping statutory violations, each agency may take relevant enforcement actions. In practice, employers should assume that if either agency is conducting an investigation into alleged retaliation, that agency will consider involving the other.

Takeaways for Employers

Heading into 2024, employers can expect to see more interagency coordination between the NLRB and OSHA during investigations. While the two agencies remain separate, there is a clear entanglement of enforcement action as the NLRB seeks to increase federal agency collaboration. As such, employers may presume that information collected by one agency will be provided to the other. As the agencies seek to increase worker protection across the board, employers will want to ensure that their management personnel are trained and up-to-date on the anti-retaliation and whistleblowing provisions of the Occupational Safety and Health Act and the National Labor Relations Act.

© 2023 Jones Walker LLP
For more news on the Partnership between OSHA and NLRB, visit the NLR Labor & Employment section.

2024 New Years’ Resolutions for Retirement Plans

Over the past few years, numerous pieces of legislation affecting retirement plans have been signed into law, including the Setting Every Community Up for Retirement Enhancement (SECURE) Act, the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Bipartisan American Miners Act, and the SECURE 2.0 Act (the “Acts”). While some of the changes, including both mandatory and optional provisions under the Acts previously became effective, other provisions under the SECURE Act and SECURE 2.0 Act had a delayed effective date. As we enter into 2024, many of the remaining mandatory and optional provisions established under these Acts are now going into effect. As a refresher, we have compiled a brief list of some of the important changes that will affect retirement
plans in 2024:

Long-Term Part-Time (“LTPT”) Employee Rule –
We resolve to permit more part-time employees to defer to our plans.

Beginning January 1, 2024, 401(k) plans are required to allow eligible employees who have at least 500 hours of service over 3 consecutive, 12-month periods beginning on or after January 1, 2021 to participate for purposes of making elective deferrals only, even where the 401(k) plan provides for a longer service requirement for deferral eligibility. See our prior SECURE Act and SECURE 2.0 Act newsletters, linked below, for more details on the LTPT employee rule; however, note that the IRS recently published proposed regulations on the LTPT employee rule, which are not addressed in these newsletters.

Effective January 1, 2025, the SECURE 2.0 Act changed the rule to require only 2 consecutive 12-month periods of service with at least 500 hours of service, and to apply the LTPT employee rule to 403(b) plans.

RMD Age and Roth Accounts –
We resolve to permit our elders to stay in our plans longer (again).

The age at which required minimum distributions (“RMDs”) must commence was increased again by SECURE 2.0, this time to age 73 for individuals who turn age 72 on or after January 1, 2023. Additionally, pre-death RMDs are no longer required for Roth accounts in retirement plans, generally effective for taxable years after December 31, 2023.

New Emergency Withdrawals –
We resolve to permit more access to retirement plan savings.

Beginning January 1, 2024, plan sponsors may add a number of new optional features addressing emergency situations, including:

  • Emergency Expense Distributions – Plans may permit participants to receive one emergency distribution of up to $1,000 per calendar year to cover unforeseeable or immediate financial needs relating to personal or family emergency expenses.
  • Distributions for Victims of Domestic Violence – Plans may permit a participant who is a domestic abuse victim to take a distribution up to the lesser of $10,000 (indexed) or 50% of the participants vested account balance during the 1-year period beginning on the date on which the individual is a victim of domestic abuse by a spouse or domestic partner.
  • Emergency Savings Accounts – Plan sponsors may offer an emergency savings account linked to their defined contribution retirement plan. Participants who are not highly compensated employees may contribute (on a post-tax, Roth basis) a maximum of $2,500 (indexed), or such lower amount that may be set by the plan sponsor. The account must allow for withdrawal by the participant at least once per calendar month, and the first 4 distributions per year from the account cannot be subject to fees or charges.

Mandatory Distribution Threshold –
We resolve to increase our automatic IRA rollover threshold.

The limit on involuntary distributions (i.e., the automatic IRA rollover limit) is increased from $5,000 to $7,000 for distributions occurring on or after January 1, 2024. However, this increase is optional – therefore, the limit under a plan will stay at $5,000 unless the plan administrator takes action to increase it to $7,000.

Roth Employer Contributions –
We resolve to treat employer contributions more like Roth.

Plans may permit employees to designate employer matching contributions or nonelective contributions as Roth contributions if such contributions are 100% vested when made.

Matching Contributions on Student Loan Payments –
We resolve to treat student loan payments like employee deferrals.

Plan sponsors may treat certain “qualified student loan payments” as elective deferrals for purposes of matching contributions.

2024 Resolutions Saved for Another Year

Roth Catch-Up Contribution Requirement is Pushed Back.

SECURE 2.0 required that all catch-up contributions made to a retirement plan by employees paid more than $145,000 (indexed) in FICA wages in the prior year be made on a Roth basis. The original effective date of this requirement was generally January 1, 2024 – however, in September, the IRS provided for a 2-year administrative transition period, which essentially moved the effective date for this requirement from January 1, 2024 to January 1, 2026. This extension provides plan sponsors with additional time to prepare for this new requirement.

Amendment Deadline to Reflect the Acts

IRS Notice 2024-02, released in the last week of December 2023, further extended the amendment deadline for changes made by the Acts. In general, the deadline to adopt an amendment to a qualified plan for required and discretionary changes made by the Acts is now December 31, 2026.

For more in-depth analysis of the new provisions briefly described above, please refer to our prior newsletters linked below:

The Secure Act Becomes Law!

SECURE 2.0 Passes

IRS Relief for Roth Roth Catch-up Requirement

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