Connecticut Employment Law Blog : Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

Over the holiday break, I took a look at various stories that I had "starred" in Google Reader for later reading and followup in the blog. (You ARE using a RSS Feed Reader to subscribe to this blog, right?)

The list is long. But part of starting a new year for me is doing a bit of clean up and that means starting the new year off fresh.

But before I do so, I'm going to spend a post or two recapping some of the employment law stories that never quite made it into the blog for one reason or another.

• With the recession firmly in place, it should not be a surprise that the Connecticut Department of Labor has been swamped with calls recently.   In fact, the jobless rate soared to 6.6 percent in November.  A number of people evidently looked for information from the DOL's website, which would be great, except that the website crashed a few times in December due to high traffic.  
• BusinessWeek recently had an interesting article about how some small employers are finding creative solutions to keeping workers to prepare for the next upturn.  A classic story about making lemonade from lemons.  
• World of Work blogged in December about the the deadlock that occurred at the EEOC about implementing new regulations interpreting the ADA Amendments Act. The result: No new regulations interpreting the act, until that stalemate can be broken.  
• I continue to be fascinated by the employment contracts and other agreements that are highlighted by the Footnoted blog.  Michelle Leder and her team dig up interesting filings with the SEC.  For HR professionals, though, these contracts can be a great source of ideas and a good template for other agreements.  Here's one such post by Footnoted.  
• It may be a little late for most (though some firms insist on having holiday parties after the winter break), but this little article lists the top 10 ways to turn your holiday party into a lawsuit.  
• Remember the big sexual harassment verdict against the lawfirm of Baker & McKenzie in 1994? Ok, me neither, but do you ever wonder what happens to some of the attorneys afterwards? In this case, the attorney for the employee has had bar charges filed against him with one judge stating, "I have never, ever seen an attorney more rude and disrespectful on so many levels." (H/T Overlawyered)  
• The Delaware Employment Law Blog recently compiled a list of the top 100 blogs on leadership and management. Great resources for companies from some of the best bloggers around.  
• As I often mention, when lawsuits by former employees get filed, they often get lots of press. But what happens to the lawsuit?  In some cases, the employees lose, such as this case against Timex (subscription may be required).   
• Looking for yet another summary of the new FMLA regulations? I enjoyed this post from the Employer Law Report. 
• Remember the big fuss about the new deferred compensation rules under Section 409A? This post has a good reminder about what employers should be doing about it. 
• I had meant to do a post on workplace investigations, based on this post from HR Daily Advisor, but never got around to it. It has some interesting Q and A including can an employee "plead the fifth" during a workplace investigation.  

Hope you can find a nugget of interest in one of the above links.  

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Over the next six months, prepare to get bombarded with e-mail alerts and posts and such about Section 409A of the Internal Revenue Code (couldn't everyone have come up with a better name?). Trust me, the hype is going to be comparable with one of those old monster movies.

Why? Because December 31, 2008 is now the deadline for companies to get their non-qualified deferred compensation plans and arrangements -- which includes employment in separation agreements -- into full compliance with Section 409A of the code.

Despite the importance of this provision, and its application to both private and public companies, it's not going to affect everyone.  It's really going to have the most impact on companies that routinely make deferred compensation decisions.

What is deferred compensation? According to one definition:

         An arrangement in which a portion of an employee's income is paid out at a date after which that income is actually earned. Examples of deferred compensation include pensions, retirement plans, and stock options. The primary benefit of most deferred compensation is the deferral of tax.

What are the key concepts of 409A? Since there is a lot to it, here are just a few bullet points; we'll cover more in upcoming posts.

• Elections to defer compensation must be made in a timely manner;
• Compliance with 409A rules is critical for distributions of deferred compensation;
• Severe (20%) penalty for non-compliance with rules.

For separation agreements, there are additional requirements to comply with, but many may be exempted under a broad exception. For executives, however, 409A is going to have a serious bark. 

What should employers be thinking about now?

• Figure out what arrangements you have now to determine if Section 409A even applies;
• If you have an arrangements or agreement in which 409A may apply, determine whether changes need to be made to confirm with Section 409A;
• Review all practices relating to payments on separation from service.

There are lots of other details here and for employers that have any doubt about whether Section 409A applies, they should learn more about it.  But rather than panic, all employers should use the next 6 months to seek appropriate legal advice, get more information, and ensure that all their arrangements comply with these new rules.  There's plenty of time left to comply.

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