Month: May 2016

In 2015, the Employee Benefits Security Administration (EBSA), through its enforcement of the Employee Retirement Income Security Act (ERISA), recovered $696.3 million for direct payment to plans, participants and beneficiaries. They closed 2,441 civil investigations, 275 criminal investigations and 201,000 inquiries through the informal complaint resolution process. The later resulted in $402.9 million restored to U.S. workers. To say the Department of Labor (DOL) and EBSA were busy would be an understatement.

If you’d like to avoid landing on their hit list in 2016, take these steps to avoid a DOL audit of your employer-sponsored 401(k) plan.

1. Always be responsive. DOL audits are often triggered by employee complaints. Promptly respond to all retirement plan questions you receive. Should you need to part ways with an employee, do so as professionally as possible. Terminated employees who feel that they’ve been treated unfairly are among the most likely to register a complaint with the DOL.

2. Improve your benefit communication. Retirement plans can be confusing, and accompanying documentation that is incomplete or difficult to understand can frustrate employees and lead to DOL complaints. In addition to annual benefit education meetings, consider addressing 401(k) plan questions at other employee meetings and/or your company newsletter.

3. Fix any problems before as soon as you find them. This includes tracking down lost participants, dealing with uncashed distribution checks, and properly accounting for ERISA spending account expenses. Miscalculation of contribution amounts and profit sharing as well as failing to enroll or vest employees on time can also trigger an audit.

4. Conduct your own audit. Whether you do so yourself or hire a consultant to do it for you, an internal audit can be helpful in identifying potential issues with your 401(k) plan.

5. Correctly file your 5500. While employee complaints are the most common cause of DOL 401(k) plan audits, errors on your annual Form 5500 are a close second. By some accounts, the most common errors include failing to answer multi-part questions, forgetting to attach the required schedules, and ignoring EFAST 2 Electronic Filing Guidance. Failing to file on time will also catch the attention of the DOL.

Are you concerned about your employer sponsored 401(k) plan? If so, we can help. Contact us today to learn more about retirement plan compliance, Form 5500 filing, DOL audits and the importance of benefit communication.

Each year the Equal Employment Opportunity Commission (EEOC) collects data on the race, ethnicity, sex and job category of private sector employees. The data is then provided to the Office of Federal Contract Compliance Programs (OFCCP) at the Department of Labor.Employers with 100 or more employees—or those with fewer than 100 if the company is owned or affiliated with another company for a total of 100 or more employees—submit the data to the EEOC using Standard Form 100, also known as EEO-1. Federal contractors with 50 or more employees are also required to report employment data to the EEOC.

This year, the EEOC proposed changes to the data it collects. Officially published in the Federal Register on February 1, 2016, the changes include adding data on employees’ pay ranges and hours worked. The new data will assist the EEOC in its efforts to identify pay discrimination and assist employers with providing equal pay in their workplaces. Members of the public haduntil April 1, 2016, to submit comments on the proposed changes. Should the EEOC elect to move forward with their proposal, the additional data will be required beginning in September 2017.

“More than 50 years after pay discrimination became illegal it remains a persistent problem for too many Americans,” EEOC Chair Jenny R. Yang said in a January press release. “Collecting pay data is a significant step forward in addressing discriminatory pay practices. This information will assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal anti-discrimination laws.”

Many employers have expressed concerns about the EEOC’s proposed changes. Some believe that the additional data reporting requirements will create an unnecessary and significant administrative burden for employers. Others don’t feel that the changes will be useful, as they say the EEOC has failed to address how they will account for a variety factors that impact individual pay such as performance, education and seniority.

While U.S. laws require equal pay for equal work, many women earn less than men when doing the same job. The gender pay gap has narrowed since the 1980s, when women only made 60 cents to every male dollar earned, but it’s still there. The latest figures, from 2015, show women making 80 cents to the dollar.

The pay gap is higher in some industries. A recent survey by Glassdoor found that female dentists, physicians, psychologists, pharmacists, medical technicians and opticians are often paid 14 to 28 percent less than their male colleagues. Female social workers, communications associates, social media representatives and research associates earn—on average—marginally more than males in the same role.