Attracting and retaining good employees is a major factor in the success of any business. Employee compensation encompasses much more than just salary and wages. Employee benefits such as ERISA governed pension, profit sharing, and 401(k) retirement plans, health insurance, cafeteria plans, HRAs or HSAs, flexible spending accounts, tuition reimbursement, dependent care assistance, or transportation fringe benefits are all part of the total compensation package. When some or all of the business’ labor force is unionized, another layer of complexity is added to employee benefits as they are subject to collective bargaining and their own unique regulations. In addition, there are numerous nonqualified deferred compensation techniques that can be used to compensate executives and other key employees separate from the other employees. These techniques can be used to provide incentive compensation to attract, retain, and reward the performance of such employees on a tax-advantaged basis. They can be designed simply as supplemental retirement income such as a Supplemental Executive Retirement Plan (SERP) or performance based compensation using equity such as stock options or restricted stock or synthetic equity such as Stock Appreciation Rights (SARs) or Phantom Stock. Further, all businesses must keep abreast of the effects of new legislation, regulation, and case law in the employee benefits area such as the requirements of Code section 409A or the effects of health care reform. Whether it’s qualified retirement plans for all employees, incentive compensation for executives, or the effects of new legislation such as health care reform, the Burton Law firm can help businesses design cost-effective benefit plans that accomplish their goals.
In addition, non-profit organizations such as charities or governmental entities have their own issues when it comes to employee benefits and executive compensation. The rules and regulations governing these organizations are different than those governing for-profit businesses. Likewise, the goals behind the benefit may be different. For example, charitable organizations must ensure that they don’t pay excessive compensation which could threaten their tax exempt status. Likewise, California governmental organizations must also be concerned with complying with the "Impairment of Contract" doctrine as well as the recently enacted Public Employees’ Pension Reform Act of 2013 (PEPRA). The Burton Law firm’s attorneys can assist these organizations in navigating the complex regulations governing their provision of employee benefits.
Employee benefits present issues in mergers and acquisitions, as well. The issue is generally what to do about the plans of the acquired entity. This should be negotiated and part of the structure of the deal to avoid misunderstanding or unexpected liability after closing. When an employer participates in a multiemployer plan sponsored by a union pursuant to a collective bargaining agreement questions of withdrawal liability arise. Whether the client is the seller or the buyer, our attorneys can advise on the best solutions for dealing with these issues to provide for a smooth transaction.