Benefits & Compensation

As the employer-employee relationship and the meaning of a “workplace” continue to evolve in the “gig” (or “sharing” or “on-demand”) economy, a model of portable employee benefits, which are managed by mobile workers themselves, is gaining appeal. This employee benefits approach is not currently intended to replace employer-provided benefits for all workers but rather to fill a gap for those who may work independently as contractors or as temporary employees, do not have access to workplace benefits, or move from employer to employer quite frequently. Development of such a model, however, calls into question the future of the employer-provided system of employee benefits, which has been under attack in recent years.

As a result of the demise of the employer-provided pension plan and the rise of participant-directed savings plans, workers have already felt the movement away from the paternalistic approach to retirement benefits. This development has not been without controversy, as exemplified by the debates regarding participant savings rates, education regarding investments and fee transparency, and the U.S. Department of Labor’s (“DOL’s”) fiduciary rule regarding investment advice.

Also, on the health care front, the Affordable Care Act has provided a platform for workers to obtain their own individual health insurance in the Marketplace, either through choice or necessity, and the tax benefits of employer-provided health benefits are being threatened in tax reform initiatives. With the implementation of consumer-driven designs, employees are also managing their health spending and insurance choices.

These changes in benefits design and access to employer-provided programs, as well as the rise of the mobile workforce, have provided a foundation for further movement toward portable benefits. This movement continues to manifest itself in several ways, including through:

  • President Obama’s call for portable benefits programs. In his fiscal year 2017 budget, President Obama called for the development of programs to provide grants to states and nonprofits to design ways to provide retirement and other employee benefits that can be portable and accommodate contributions from multiple employers. In addition, he called for legislation regarding open multiple employer plans (“MEPs”) among unaffiliated employers to allow for pooled plans and continued contributions when employees move between employers participating in the same MEP. He also proposed requirements to allow part-time workers to participate in plans and measures for easier rollovers to plans. These initiatives would build upon earlier proposals for automatic payroll individual retirement accounts (“IRAs”) and other tax credit initiatives to small businesses.
  • Automatic payroll IRA programs and other alternatives. For employers that do not sponsor any retirement savings plans, there is increased momentum for automatic payroll IRAs. To date, at least five states (California, Connecticut, Illinois, Maryland, and Oregon) have enacted legislation that will require certain employers that do not sponsor a retirement plan to enroll employees automatically in a state-run IRA program. New Jersey and Washington have approved retirement marketplaces for eligible employers to shop for retirement savings programs, and many more states are considering alternatives, including state-run IRAs and MEPs. These initiatives follow guidance from the DOL facilitating such efforts (including parameters for state-run IRAs to avoid being subject to ERISA) and complement the U.S. Department of the Treasury’s guidance regarding myRA accounts, as well as President Obama’s agenda. Other legislative proposals include mandates for contributions to plans run by third parties or the federal government. Laws in this area will continue to evolve.
  • Portability policy advocates. In “Common Ground for Independent Workers,” an array of businesses, labor organizations, venture capitalists, and other stakeholders in the gig economy have called for policies to ensure a social safety net for all workers. This past May, Uber was among the first employers in the gig economy to come to agreement with the Independent Driver’s Guild, which is working on ways to offer its members a range of portable benefits. Retirement Clearinghouse (“RC”) has advocated for auto-portability plans that move retirement savings assets automatically with workers as they switch jobs. RC has requested an advisory opinion from the DOL to permit negative consent, which would allow plan account balances to roll automatically into a new employer’s plan.

What Employers Should Do Now

In the race for talent, it is important for employers to consider their own philosophy concerning employee benefits and the types of programs that they desire to offer their workers, whether full time, part time, contingent, or otherwise. It is also necessary to assess compliance with any programs that may be mandated by changing laws. In this evolving landscape, an employer should:

  • examine its organization’s workforce and determine which benefits programs are desirable to attract, motivate, and retain these workers in a competitive marketplace;
  • identify any gaps in benefits offerings and consider how to fill those gaps;
  • monitor legislation affecting employee benefits and applicable compliance requirements; and
  • determine whether its organization is subject to laws that will require it to comply with certain government-mandated programs when no applicable benefit program is otherwise offered by the employer, and decide whether it is instead desirable to establish, or expand coverage under, an employer-sponsored plan.

A version of this article originally appeared in the Take 5 newsletter “Five Trending Challenges Facing Employers in the Technology, Media, and Telecommunications Industry.”

Robot Hand Investing on LaptopAs with most aspects of the workplace, employee benefits are going digital.  From online enrollments and administration for all types of benefits, to electronic educational tools, employers are increasingly seeking ways to use new technologies to enhance their benefits programs, increase efficiencies and employee engagement.  Among these innovations is the proliferation of computer-driven, digitally-based investment advisers, or so-called “robo advisers.”  The market for robo-advisers is growing fast with many new companies entering the space with increasing frequency.  Well-established companies are also developing and offering their own automated investment services which can be available to assist individual investors or participants in an employer-sponsored savings plan. Plan sponsors will increasingly be presented with robo-adviser services for their participant-directed retirement plans, and they must be prudently selected.

Robo-advisers are not without their critics.  There is an ongoing debate whether robo-advisers can meet the fiduciary standards of a trained professional who provides investment advice to investors in their best interest.   For example:

  • On March 15, 2016, the Financial Industry Regulatory Authority (FINRA) released a report regarding digital investment advice which raised questions concerning the standard of care that applies to broker-dealers and investment advisers under federal securities laws with regard to investment advice that they provide and the application of same to digital services used either in conjunction with a financial professional or on its own.   The FINRA report recognizes that digital investment advice tools will play a significant role in wealth management and that investor protections must be paramount and should include a foundation for understanding customer needs, with sound methodological groundings and recognition of the tools’ limitations.
  • On April 1, 2016, the Massachusetts Securities Division issued a policy statement and declared that robo-advisers may be inherently unable to act as fiduciaries and perform the functions of a state-registered investment adviser without the necessary due diligence and personalization to act in the best interest of their clients.
  • On April 6, 2016, The Department of Labor also released its final rule regarding investment advice fiduciaries (the “Rule”). The Rule itself continues to come under attack and on June 1, 2016, eight industry and trade groups filed a lawsuit in Texas federal court challenging the Rule and asserting that the DOL overstepped its authority in issuing the Rule, the Rule will increase costs and litigation, and that the Rule will not help investors. (See Chamber of Commerce of the United States of America et al. v. Thomas E. Perez et al., case number 3:16-cv-01476, in the U.S. District Court for the Northern District of Dallas.)  Whether the Rule survives pending challenges remains to be seen.  In the meantime,  robo-advisers that make investment recommendations are fiduciaries under the Rule which provides that fiduciary communications such as recommendations can be initiated by a computer software program.

It is also important to note that while the DOL also released a Best Interest Contract (BIC) exemption from its prohibited transaction rules to allow investment advisers to continue to provide advice and earn compensation such as commissions, sales loads, 12b-1 fees and revenue sharing payments without running afoul of conflicts of interest standards so long as certain requirements are met, this BIC exemption does not apply to the provision of investment advice solely through digital means unless the robo-adviser charges level-fees and is a “level-fee fiduciary.”  It appears that the pre-existing rules for “eligible investment advice arrangements” under Section 408(g) of ERISA provide an alternative path for robo-advisers to follow in order to avoid running afoul of the prohibited transaction rules.

For plan sponsors that desire to incorporate digital investment advice services into their retirement program in the near future, several issues, at a minimum, should be considered, including:

  • Assess the need for investment advice services versus provision of non-fiduciary educational tools, or determine an approach that incorporates both services
  • Ensure that the plan fiduciaries follow an objective process to elicit information necessary to assess the robo-adviser’s qualifications and credentials, quality of services offered and reasonableness of fees and costs charged for the services
  • Evaluate the robo-adviser’s investment approach embodied in the design of the tool
  • Assess whether the digital investment advice tool is paired with access to a human investment professional who is able to assess the plan participant’s needs in a manner that goes beyond the limitations of the digital tool, and, who is trained to utilize the tool effectively
  • Review any conflicts of interests
  • Determine if the robo-adviser charges level fees and meets the requirements of the BIC exemption  or whether it meets the requirements of an “eligible investment advice arrangement” under ERISA which either charges level-fees or uses a compliant computer-model
  • Review service agreements including fiduciary, indemnification, audit, record retention and data privacy and security provisions
  • Confirm that the robo-adviser acknowledges fiduciary status and that the participants are provided with any required disclosures
  • Establish a procedure for prudent ongoing monitoring of the robo-adviser service

For plan sponsors who already offer robo-adviser services to their plan participants, now is the time to review the arrangement under the evolving guidance and implement prudent changes.

In this environment, the fate of the Rule, and the standards for robo-advisers, will continue to evolve and new developments must be monitored.  Whether the robots know best is a question yet to be answered.

If an employer is found to have misclassified an employee as an independent contractor or other contingent worker, then liability can be substantial under applicable federal and state labor, employment, tax and withholding laws including laws regarding payment of wages, overtime and unemployment compensation, workers’ compensation, discrimination and rights of workers and unions.   It is equally important to understand that compliance of employee benefit plans with requirements under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code of 1986, (the “Code”) can also be at risk.  Employers must be mindful of the effects misclassification of employees can have on their employee benefit plans.

Improper exclusion of workers from participation in employee benefit plans governed by ERISA can jeopardize a plan’s tax-qualified status as determined under the Code and can also provide these workers with a cause of action under ERISA. Retirement plans can lose their tax-qualified status for a variety of reasons, including as a result of “demographic failures” (where the plan does not pass coverage and nondiscrimination tests) or “operational failures” (where an employer impermissibly excludes a common law employee from plan participation believing that the worker is an independent contractor).   Worker misclassification can also expose employers to penalties under the Patient Protection and Affordable Care Act for failure to properly account for the number of its employees to determine applicable large employer status as well as its failure to offer any health coverage or to offer adequate or affordable coverage to full-time employees (and their dependents).   Further, the employer may be subject to penalties for violating the Code’s annual informational return and statement requirements.  Workers who are improperly excluded from ERISA plan participation may be able to bring a lawsuit for benefits due, to enforce rights under a plan or to clarify rights to future benefits, or raise breach of fiduciary duty claims.

Leased employees, as defined under Section 414(n) of the Code[1], also present additional challenges for plan administration and can place the qualified status of the plan at risk. Leased employees must be counted in the nondiscrimination tests of qualified retirement plans unless a safe harbor exception[2] is met.   Leased employees are also counted when conducting nondiscrimination tests for other benefit plans under various provisions of the Code (such as Section 79 (group-term life insurance), Section 106 (contributions by an employer to accident and health plans), Section 125 (cafeteria plans) and Section 132 (certain fringe benefits)).  Generally, where these plans do not pass applicable nondiscrimination tests, the benefits that are otherwise provided on a tax-free basis are includible in the income of the key and/or highly compensated employees benefiting under the plan. Furthermore, in the case where a leased employee converts his or her status to that of a regular employee, he or she must be credited with any periods of service previously performed for the employer for purposes of retirement plan eligibility and vesting.  Prior service as a leased employee is not required to be credited for determining eligibility under a self-insured medical plan.[3]

Employers must also be careful when engaging in joint-employer relationships, especially if they have not evaluated whether they are party to such relationships or whether they are the employer of the employees.  It is imperative to define in all relevant agreements and documentation which party is responsible for providing the workers with their benefits.

Plan sponsors may generally exclude from participation in employee benefit plans any leased employees or independent contractors.  However, there have been situations where such individuals have challenged their non-employee classifications and their exclusion from plans.  For example, in Vizcaino v. Microsoft (120 F.3d 1006 (9th Cir. 1997)), a class of freelancers sued Microsoft for participation in various employee benefit plans after the Internal Revenue Service determined, upon audit, that these workers were common law employees since they performed the same work as regular employees, under the same conditions and often under the same supervision.  As a result of this case, many plans include a provision which provides that if a leased employee or independent contractor is reclassified as an employee by a government agency or a court, then such worker shall not become eligible to become a participant in the plan by reason of such reclassification. These types of plan provisions may be drafted to exclude participation on a retroactive basis or on both a retroactive and prospective basis, provided applicable plan coverage and nondiscrimination tests can be met.  Such a provision is meant to evidence the clear intent of the plan sponsor.  Furthermore, many plans also include certain “Bruch” language (Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989)) which gives the plan administrator discretionary powers to interpret the plan itself and make determinations of fact with respect to such issues as eligibility for benefits, which can only be overturned by a court if the decision is deemed arbitrary and capricious.

It is important for employers to self-audit their worker classifications and to review benefits issues as part of any analysis, such as:

  • Benefit plan eligibility terms and distinctions between definition of employees, independent contractors, temporary employees and leased employees to ensure proper inclusion/exclusion of workers
  • Plan nondiscrimination tests and inclusion of leased employees
  • Proper crediting of service for workers who have converted to employee status
  • Plan language regarding treatment of workers following reclassification and plan administrator discretion
  • Consistency of provisions in all plan related documents, policies, procedures, communications and agreements regarding eligibility for benefits and excluded workers

Once an initial assessment is completed, decisions should be made as to any plan and related document revisions, or any corrective plan action, which may be required.

[1] A leased employee is a person who provides services to a service recipient if (i) such services are provided pursuant to an agreement between the recipient and a leasing organization, (ii) such person has performed such services for the recipient on a substantially full-time basis for a period of at least one year, and (iii) such services are performed under the primary direction or control by the recipient.

[2] The safe harbor exception which allows the exclusion of leased employees from nondiscrimination testing requires that the (i) leased employees comprise not more than 20% of the service recipient’s non-highly compensated workforce, (ii) leased employee is covered under the leasing organization’s qualified pension plan, and (iii) the leasing organization’s qualified pension plan is a money purchase pension plan that provides for immediate participation and vesting and employer contributions of at least 10% of compensation for each participant.

[3] Self-insured medical plans also undergo nondiscrimination tests under Section 105(h) of the Code and must cover at least 70% of a company’s employees.  If too many workers are misclassified as independent contractors, for example, a self-insured medical plan might not pass its nondiscrimination tests which could cause benefits to become taxable to highly compensated employees.

My colleagues Nancy L. Gunzenhauser and Barry A. Guryan published a Health Employment And Labor Law blog post that will be of interest to many of our readers: “Massachusetts AGO Provides Safe Harbor on New Sick Leave Law.”

Following is an excerpt:

On May 1, 2015, we reported on proposed regulations to the Massachusetts paid sick leave law, which becomes effective on July 1, 2015.  The regulations have not yet been adopted, and in light of the uncertainty about many provisions of the law, the Massachusetts Attorney General’s Office has issued a “Safe Harbor for Employers with Existing Paid Time Off Policies.”  Under the safe harbor, any employer with a paid time off policy in existence as of May 1, 2015, which provides employees with the right to use at least 30 hours of paid time off per year, will be deemed in compliance with the new sick leave law.  The safe harbor will expire on December 31 of this year, and as of January 1, 2016, all covered employers will be required to comply with the provisions of the new law. Our November 10, 2014 Advisory summarizes the law’s provisions and requirements.

Read the full blog post here.

Today, Law360 published our article “Considering Best Data Practices for ERISA Fiduciaries.” (Download the full article in PDF format.)

In this article, we outline steps that ERISA plan fiduciaries can take to develop a policy concerning protection of plan data and prudent selection and monitoring of plan service providers who handle PII.  Benefit plan service providers, including technology-based outsourcing companies, should also consider these important guidelines and implement the appropriate safeguards to protect against infringement of plan and participant data.  These issues must be addressed in service arrangements and will continue to evolve.

Following is an excerpt:

Employee benefit plan fiduciaries are charged with meeting a prudence standard when discharging their duties solely in the interest of plan participants and beneficiaries. With increasing regulation of benefit plans, these duties and associated responsibilities are mounting. With advancements in technology, online enrollment and access to account information, as well as benefit plan transaction processing, participant identifiable information and data have become increasingly more vulnerable to attack as it travels through employer and third-party systems.

Earlier this year, the attack on Anthem Inc.’s information technology system, which compromised the personal information of individuals under numerous health plans (including personally identifiable information, bank account and income data, and Social Security numbers), raised questions of privacy and security under the Health Insurance Portability and Accountability Act and Health Information Technology for Economic and Clinical Health Act, and there have been other similar attacks.

These cases remind us that in today’s world, plan participant information, whether it be protected health information, personally identifiable information or retirement savings account information, is vulnerable to theft. Employee Retirement Income Security Act plan fiduciaries must not only act prudently in responding to a breach of their plan participants’ PHI, but should also consider developing prudent policies and procedures with respect to the handling and transmission of all PII and participant data in the regular course.

In 2011, the Advisory Council on Employee Welfare and Pension Benefit Plans studied the importance of addressing privacy and security issues with respect to employee benefit plan administration. The council examined issues and concerns about potential breaches of the technological systems used in the employee benefit industry, the misuse of benefit data and PII and the impact on all parties, including plan sponsors, service providers, participants and beneficiaries. The council recognized several potential causes of breaches relating to benefit plan information, including hacking into retirement plan financial data, and recommended that the U.S. Department of Labor provide guidance on the obligation of plan fiduciaries to secure PII and develop educational materials. To date, the the Department of Labor has issued no such guidance.

My colleagues Nancy L. Gunzenhauser and Barry A. Guryan published a Health Care and Employment Law blog post that will be of interest to many of our readers: “Massachusetts Issues Proposed Sick Leave Regulations.”

Following is an excerpt:

As we reported, last November, voters in Massachusetts approved a law granting Massachusetts employees the right to sick leave, starting on July 1, 2015.  The law provides paid sick leave for employers with 11 or more employees and unpaid sick leave for employees with 10 or fewer employees. While the law set forth the basics, many of the details, which have differentiated the various sick leave laws across the country, were not previously specified (e.g., minimum increments of use, frontloading, documentation).  The Massachusetts Attorney General’s Office (“AGO”) has set forth proposed regulations to guide employers in implementing the upcoming sick leave law.

Read the full blog post here.

In the lifecycle of a start-up company, there are many key issues, situations and milestones when it is important to seek legal consultation. Epstein Becker Green has developed an easy to follow guide to highlight common workforce management issues (including employment, benefits and immigration concerns) start-up employers must consider as they grow their business and application of important laws which are triggered by employee count.

The Workforce Guide outlines critical areas such as:

  • Onboarding and compensation;
  • Managing existing workforce;
  • Separation; and
  • Statutory thresholds triggered by employee count.

This is merely a guide but should be helpful in determining when to seek legal consultation on these and other workplace management issues.   Click here to download the guide.

My colleagues Frank C. Morris, Jr., Adam C. Solander, and August Emil Huelle co-authored a Health Care and Life Sciences Client Alert concerning the EEOC’s proposed amendments to its ADA regulations and it is a topic of interest to many of our readers.

Following is an excerpt:

On April 16, 2015, the Equal Employment Opportunity Commission (“EEOC”) released its highly anticipated proposed regulations (to be published in the Federal Register on April 20, 2015, for notice and comment) setting forth the EEOC’s interpretation of the term “voluntary” as to the disability-related inquiries and medical examination provisions of the American with Disabilities Act (“ADA”). Under the ADA, employers are generally barred from making disability-related inquiries to employees or requiring employees to undergo medical examinations. There is an exception to this prohibition, however, for disability-related inquiries and medical examinations that are “voluntary.”

Click here to read the full Health Care and Life Sciences Client Alert.

One day before the U.S. Department of Labor’s Family & Medical Leave Act (“FMLA”) same-sex spouse final rule took effect on March 27, 2015, the U.S. District Court for the Northern District of Texas ordered a preliminary injunction in Texas v. U.S., staying the application of the Final Rule for the states of Texas, Arkansas, Louisiana, and Nebraska. This ruling directly impacts employers within the technology, media, and telecommunications industries who are located or have employees living in these four states.

Background

In United States v. Windsor, the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act (“DOMA”) as unconstitutional, finding that Congress did not have the authority to limit a state’s definition of “marriage” to “only a legal union between one man and one woman as husband and wife.”  Significantly, the Windsor decision left intact Section 2 of DOMA (the “Full Faith and Credit Statute”), which provides that no state is required to recognize same-sex marriages from other states.  Further to the President’s directive to implement the Windsor decision in all relevant federal statutes, in June 2014, the DOL proposed rulemaking to update the regulatory definition of spouse under the FMLA. The Final Rule is the result of that endeavor.

As we previously reported, the Final Rule adopts the “place of celebration” rule, thus amending prior regulations which followed the “place of residence” rule to define “spouse.”  For purposes of the FMLA, the place of residence rule determines spousal status under the laws where the couple resides, notwithstanding a valid out-of-state marriage license.   The place of celebration rule, on the other hand, determines spousal status by the jurisdiction in which the couple was married, thus expanding the availability of FMLA leave to more employees seeking leave to care for a same-sex spouse.

The Court’s Decision

Plaintiff States Texas, Arkansas, Louisiana, and Nebraska sued, arguing the DOL exceeded its authority by promulgating a Final Rule that requires them to violate Section 2 of the DOMA and their respective state laws prohibiting the recognition of same-sex marriages from other jurisdictions.  The Texas court ordered the extraordinary remedy of a preliminary injunction to stay the Final Rule pending a full determination of the issue on the merits.

The court first found that the Plaintiff States are likely to succeed on at least one of their claims, which assert that the Final Rule improperly conflicts with (1) the FMLA, which defines “spouse” as “a husband or wife, as the case may be” and which the court found was meant “to give marriage its traditional, complementarian meaning”; (2) the Full Faith and Credit Statute; and/or (3) state laws regarding marriage, which may be preempted by the Final Rule only if Congress intended to preempt the states’ definitions of marriage.

The court then held that the Final Rule would cause Plaintiff States to suffer irreparable harm because, for example, the Final Rule requires Texas agencies to recognize out-of-state same-sex marriages as valid in violation of the Texas Family Code.

Lastly, although finding the threatened injury to both parties to be serious, the court decided that the public interest weighs in favor of a preliminary injunction against the DOL.  The court found in favor of upholding “the stability and consistency of the law” so as to permit a detailed and in-depth examination of the merits.  Additionally, the court pointed out that the injunction does not prohibit employers from granting leave to those who request leave to care for a loved one, but reasoned that a preliminary injunction is required to prevent the DOL “from mandating enforcement of its Final Rule against the states” and to protect the states’ laws from federal encroachment.

What This Means for Employers

Although the stay of the Final Rule is pending a full determination of the issue on the merits, the U.S. Supreme Court’s decision in Obergefell v. Hodges likely will expedite and shape the outcome of the Texas court’s final ruling.  In Obergefell, the Supreme Court will address whether a state is constitutionally compelled under the Fourteenth Amendment to recognize as valid a same-sex marriage lawfully licensed in another jurisdiction and to license same-sex marriages.  Oral arguments in Obergefell are scheduled for Tuesday, April 28, 2015, and a final ruling is expected in late June of this year.

Before the U.S. Supreme Court decides Obergefell, however, employers in Texas, Arkansas, Louisiana and Nebraska are advised to develop a compliant strategy for implementing the FMLA—a task that may be easier said than done.  Complicating the matter is a subsequent DOL filing in Texas v. U.S. where the DOL contends that the court’s order was not intended to preclude enforcement of the Final Rule against persons other than the named Plaintiff States, and thus applies only to the state governments of the states of Texas, Arkansas, Louisiana, and Nebraska.

While covered employers are free to provide an employee with non-FMLA unpaid or paid job-protected leave to care for their same-sex partner (or for other reasons), such leave will not exhaust the employee’s FMLA leave entitlement and the employee will remain entitled to FMLA leave for covered reasons.  We recommend that covered employers that are not located and do not have employees living in one of the Plaintiff States amend their FMLA-related documents and otherwise implement policies to comport with the Final Rule, as detailed in EBG’s Act Now Advisory, DOL Extends FMLA Leave to More Same-Sex Couples.  Covered employers who are located or have employees living in one of the Plaintiff States, however, should confer with legal counsel to evaluate the impact of Texas v. U.S. and react accordingly, which may depend on the geographical scope of operations.

We were recently interviewed in Corporate Counsel, in “Employment Law Risks Abound for Startup Companies,” by Rebekah Mintzer. (Read the full version — subscription required.)

Following is an excerpt:

“We think they should be focused on it from day one,” Ian Carleton Schaefer, a member in Epstein Becker & Green’s labor and employment practice and co-leader of the firm’s technology, media and telecommunications strategic industry group, told CorpCounsel.com. “Oftentimes it takes a triggering event, whether it’s a lawsuit or a government audit to get them focused—and we think that’s a little late.”

The risks of putting employment law considerations off until later or ignoring them entirely are very real. The last thing a startup fighting to survive and thrive wants to deal with is a lawsuit. No matter how great the organization, a black mark of litigation or noncompliance can hurt its reputation and chances to secure more investment. “Getting it wrong can cripple an otherwise brilliant idea and a very sound business plan,” said Schaefer. …

Those trying to hire more employees for a startup have to think about employee benefit issues, including the Affordable Care Act. “We have a whole new legal scheme with the ACA,” Michelle Capezza, a member of Epstein Becker in the employee benefits and health care and life sciences practices, as well as co-leader of the firm’s technology, media and telecommunications strategic industry group, told CorpCounsel.com.