I blogged last year (here and here) about a couple of decisions in which courts concluded that various related companies were part of a controlled group of trades or businesses and therefore liable for the withdrawal liability of one of the companies. As I mentioned in earlier blogs, the courts have noted that
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This Time the Employer is Responsible for the Withholding Error
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I recently blogged (here and here) about a situation involving Verizon withholding US taxes from payments to former employees who never lived or worked in the U.S. The employees attempted to recover the withheld taxes from Verizon on a breach of fiduciary duty claim against the employer and also attempted to have the …
Maintaining Poor COBRA Procedures Can Be Expensive
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I blogged a few months ago about an employer who had to pay more than $83,000 in penalty, attorneys’ fees and costs for failure to give a proper COBRA notice for a dental plan. I warned employers that failure to maintain adequate procedures for COBRA compliance can be costly. That amount pales in relation to …
If the Tax Withholding is Wrong, Don’t Rely on the Employer to Fix it – Part 2
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Over a year ago I blogged about the situation of former employees of Verizon who had never worked or resided in the United States but who had U.S. income taxes withheld from payments under benefit plans in which they participated while they worked for Verizon. The former employees had brought a claim for breach of …
Courts Do Not Always Agree
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I blogged recently about a decision from a federal district court in Virginia (Eastern Distrct) involving a widow who sought to recover life insurance benefits from her late husband’s employer-sponsored group term life insurance plan. The employer had improperly allowed the late husband to enroll in the plan. The court had found on summary judgment …
IRS Says: Be Careful If You Outsource Payment
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The IRS recently issued a fact sheet containing tips for employers who outsource payroll duties. In the fact sheet, the IRS reminded employers that they remain responsible for paying withholding taxes even if the employer has paid the payroll provider, but the payroll provider has failed to pay the money to the IRS.
Among the …
IRAs and Bankruptcy – This is a Technical One
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This post deals with protecting IRAs in bankruptcy – and the IRA was ultimately protected – but the arguments made are ones that only an ERISA junkie might appreciate.
1. IRAs are protected in bankruptcy only if the IRAs are tax exempt.
2. IRAs are tax exempt only if they do not engage in prohibited …
Company Owners Can be Personally Responsible for Contributions to Multiemployer Plans
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I have blogged in the past about the reach of obligations to multiemployer plans and how other businesses owned by a participating employer can be held responsible for withdrawal liability based upon the common ownership. If one of the businesses is owned personally by an individual, the liability can be personal. A recent case from …
Health Insurance Carriers Must Also be Careful in What They Tell Plan Participants
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I blogged recently warning employers to be careful when enrolling employees in plan benefits because the employer could be responsible to pay life insurance or disability benefits if an employee who is improperly enrolled incurs a claim. The increased liability comes from the recent Supreme Court decision, Cigna v. Amara, allowing certain types of …
Be Careful With Your Life Insurance Enrollments
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Over the years there have been a number of cases that have involved employers improperly enrolling employees in group life or disability insurance benefits. If the employee who should not have been enrolled dies or becomes disabled, the insurance carrier will deny coverage on the grounds that the employee should never have been enrolled. These …