Employee Benefits Developments - February 2021 | Hodgson Russ LLP jdsupra.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from jdsupra.com Daily Mail and Mail on Sunday newspapers.
Charles Dharapak
Unions are getting a free pass after mismanaging their multi-employer pensions for decades. In a provision not well-publicized before the stimulus bill narrowly passed by the Senate with only Democrat support, $86 billion dollars will be directed to at least185 multi-employer union pension plans that are close to collapse. According to the
New York Times:
Both the House and Senate stimulus measures would give the weakest plans enough money to pay hundreds of thousands of retirees a number that will grow in the future their full pensions for the next 30 years. The provision does not require the plans to pay back the bailout, freeze accruals or to end the practices that led to their current distress, which means their troubles could recur. Nor does it explain what will happen when the taxpayer money runs out 30 years from now.
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Last week we reviewed five of the most common, and problematic, labor and employment law issues in bankruptcy. You can read last week’s article here. Below are five additional labor and employment law concerns in bankruptcy that companies must know and assess when they are undergoing bankruptcy.
6. Back Wages
Companies must obviously pay their employees. The Bankruptcy Code recognizes this and places a priority on employee wages and benefits that were earned prior to the filing of a bankruptcy proceeding. Employee wages, salaries and commissions owed by an employer, $13,650 in 2020, that were earned within 180 days of a company filing for bankruptcy are given a higher priority in a bankruptcy proceeding (fourth priority level). Contributions to an employee’s benefit plan that were owed within 180 days of the company filing for bankruptcy, up to $13,650, are given a fifth level priority in any bankruptcy proceeding.