RSS SyndicationLast week my colleague, Michael Oswald, provided some very valuable information regarding the traps California’s vacation benefit laws hold for the unwary business. I am taking that cue to let you know that there is an alternative that permits California businesses to provide vacation benefits to employees while avoiding the pitfalls of which Michael speaks.
The Employee Retirement Income Security Act of 1974, as amended (ERISA) preempts state laws that “relate to” employee welfare benefit plans. Section 3(1) of Title I of ERISA defines the term "employee welfare benefit plan" to include: [A]ny plan, fund, or program . . . established . . . for the purpose of providing for its participants or their beneficiaries . . . (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in section 302(c) of the Labor Management Relations Act, 1947 (other than pensions on retirement or death, and insurance to provide such pensions).
An employer can create and fund a tax-exempt voluntary employees’ beneficiary association (VEBA) under section 501(c)(9) of the Internal Revenue Code. This trust can be set up to provide benefits, including vacation benefits, for its members, the company employees. As long as you follow the rules, which are legion (another reason for having in-house counsel), California has no jurisdiction. Moreover, you can set up the rules for vacation you deem appropriate and fair. For instance, the VEBA trust can have no accrual of vacation at all upon termination, and even a “use it or lose it” vacation policy, both of which are limited or forbidden under California law but are permitted under ERISA.
Do keep in mind that, at least initially, you will face California Labor Commission complaints by released employees who do not understand that California jurisdiction does not apply, and that the California Labor Commission is loath to enforce ERISA at the expense of the more generous California employment laws and will look for any opening to find that the VEBA does not qualify for ERISA protection. Thus, it is imperative that the VEBA and the manner in which the program is maintained be bulletproof. However, once past these hurdles, you can provide vacation benefits for employees in a cost-effective manner beyond the vagaries of California employment law.
Employers interested in learning whether these general principals may be applied to their specific needs should consult with experienced counsel.
This article offers clear idea designed for the new
visitors of blogging, that in fact how to do blogging.
Go᧐d day! I simply wⲟuld likе to offer you a huge thumbs up for your
excellent information уou һave here on this
post. I’ll Ƅe coming back to your blⲟg foг moｒe soon.
Thank you a bunch for sharing this with all of us you really
understand what you are speaking about! Bookmarked.
Please additionally discuss with my site =).
We will have a hyperlink trade agreement between us
aku merasa ini adalah sazlah satu dari begitu banyak
info penting bagi aku dan aku mentukai belajar artikel kamu tapi mesti di observasi terhadap beberapa isu umum,
cita rasa web teramat ideal, artikelnya amat sangat bagus D.
pekerjaan keren sorak sorai.
You made some good points there. I did a search on the subject and found most people will agree with your blog.
You’re so cool! I don’t suppose I can learn something like this before.
So excellent to find someone with some unique ideas about this subject.
really thanks for bringing this up. this website is something that’s
needed on the net, somebody with somewhat originality.
excellent job for bringing something new to the internet!
You can also import workouts from an iPod nano equipped with the Nike+ iPod Sport Kit (more on Nike+ iPod shortly),
export data from or import it to a Garmin GPS, and export routes from
or import them to Google Earth.
Weⅼl Ӏ really liked reading it. This article offereⅾ by you is very effectіve for correct planning.
However, seemingly harmless rain can discover its way into tiny scratches or blpemishes and start the corrosion process.
“We’re going tto give you $100 for referring Lydia.
For those who find themselves very selective regarding the kind of automobile they actually want car shopping is an important endeavor.
Its not my first time to visit this site, i am visiting this website dailly and get good information from here everyday.
I pay a quick visit everyday some websites and blogs to read articles or reviews, however this web site gives quality based content.
I blog quite often and I genuinely thank you for your information. This great article has truly
peaked my interest. I will take a note of your blog and keep checking for new details about once a week.
I opted in for your Feed as well.
Asking questions are actually good thing if you are not understanding anything
completely, except this piece of writing gives nice understanding even.
This article presents clear idea in support of the new
users of blogging, that actually how to do blogging.