Quarterly Compliance Update
October 31, 2024
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Quarterly Compliance Update

Federal District Court Blocks the FTC’s Noncompete Ban

On August 20, 2024, the U.S. District Court for the Northern District of Texas issued an order that halted the Federal Trade Commission’s (FTC) ban on noncompete agreements, which was set to take effect on September 4, 2024. Typically, the enforceability of noncompete clauses is determined by state and local legislatures as well as courts. However, the FTC’s rule aimed to regulate the enforceability of these clauses at the federal level, overriding any state laws or judicial interpretations that were less restrictive. The District Court’s decision has blocked the ban for all employers, preventing its implementation.

OSHA Proposes Heat Injury and Illness Prevention Standard

On August 30, 2024, the Department of Labor’s OSHA released a proposed rule aimed at safeguarding workers from heat-related injuries and illnesses. This new standard would extend to all employers engaged in indoor and outdoor work across various sectors, including general industry, construction, maritime, and agriculture, where OSHA holds authority, with certain exceptions. If implemented, this standard would mandate that employers develop a plan to assess and manage heat hazards within their work environments.

ACA’s Pay-or-Play Affordability Percentage Will Increase for 2025

On September 6, 2024, the IRS announced the affordability percentage threshold for 2025 plan years in relation to the Affordable Care Act’s (ACA) pay-or-play rules. These regulations mandate that applicable large employers (ALEs) must provide affordable, minimum-value health coverage to their full-time employees to avoid potential penalties. For plan years starting in 2025, employer-sponsored coverage will be deemed affordable under the ACA’s pay-or-play guidelines if an employee’s required contribution for self-only coverage does not surpass 9.02% of their household income for that year. This marks an increase from the affordability percentage for 2024 plan years, which was set at 8.39%. As a result of this rise, ALEs may enjoy greater flexibility in determining employee contribution levels for the 2025 plan year.

DOL Confirms Cybersecurity Guidance Applies to Health and Welfare Plans

The Department of Labor (DOL) has affirmed that its cybersecurity guidance is relevant to all employee benefit plans, including health and welfare plans. Fiduciaries of ERISA-covered plans must take responsibility for effectively managing cybersecurity risks. Since employers frequently depend on service providers to handle employee benefit plan records and safeguard participant data, it’s essential to choose providers that adhere to robust cybersecurity practices. The DOL’s cybersecurity guidance offers recommendations for selecting plan service providers, outlines best practices for cybersecurity programs, and provides online security tips.

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