Compliance October 20, 2021

Parties in Church Plan Lawsuit Finally Get Preliminary Approval of Settlement

A judge found the interests of a subclass of terminated, vested participants were adequately protected in a newly proposed settlement.

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On their third try, the parties in a lawsuit claiming that Dignity Health improperly used the Employee Retirement Income Security Act (ERISA)’s “church plan” exemption to evade ERISA funding and reporting requirements for its defined benefit (DB) plan have been granted preliminary approval of a settlement agreement.

According to the terms of the settlement agreement, Dignity Health will contribute $50 million to the plan for the 2020 plan year and will contribute either another $50 million or the amount of the minimum contribution recommendation calculated by the plan’s actuaries for the 2021 plan year, if it’s greater than $50 million. For calendar years 2022, 2023 and 2024, Dignity Health has agreed to make contributions to the plan in the amount of the minimum contribution recommendation calculated by the plan’s actuaries.

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In addition, the settlement calls for a one-time payment to members of what it calls the “vesting subclass” of participants of $950,000 and a one-time payment to members of what it calls the “PEP Plus claimants” of $825,000.

Among other non-monetary settlement terms, Dignity Health has agreed to make available to plan participants and beneficiaries a summary plan description (SPD), a summary annual report (SAR) and pension benefit statements.

Last June, Judge Jon S. Tigar of the U.S. District Court for the Northern District of California denied for the second time preliminary approval of a proposed settlement agreement. Tigar found an underlying conflict between the vesting subclass and the rest of the class and said he could not find that the vesting group’s interests have been adequately protected.

In his order granting preliminary approval of the newly proposed settlement, Tigar noted that the only material changes in the agreement affect the vesting subclass. According to the court document, the changes to the agreement include subclass certification of the vesting subgroup, a $290,000 increase in money paid to the vesting subclass, and the distribution of funds to subclass members proportionate to their previously accrued benefits under the plan. The agreement also establishes eligibility for subsequent plan participation should a vesting subclass member return to employment with Dignity Health.

In the settlement agreement, the Dignity Health defendants deny any and all allegations of wrongdoing made in the complaint.

Break from the Grind October 20, 2021

Employers Are Watching You

The majority of employers with remote employees are monitoring their activity, and 14% are not telling employees about it.

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Sixty percent of companies with employees who work remotely are using monitoring software to track employee activity and productivity, according to a September survey of 1,250 employers in the U.S. by Digital.com.

The top reason employers say they require monitoring software is to better understand how employees are spending their time (79%). Employers also say they want to confirm employees are working a full day (65%) and ensure they aren’t using work equipment for personal use (50%).

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Employers are primarily tracking their employees’ habits by using software that monitors web browsing and application use (76%). They’re also using software that captures random screenshots (60%), blocks content and applications (54%), and logs keystrokes (44%).

The majority of employees know their bosses are virtually watching them. Eighty-six percent of companies using monitoring software informed their employees, but 14% have not.

Eighty-one percent of employers using monitoring software report seeing an increase in employee productivity after the software was implemented. Ten percent of employers say they are unsure about whether it’s making workers more productive, while 9% of employers did not see any improvement in productivity.

The survey found 27% of employers say they have employees who are spending five hours or more per day on non-work activities. Another 52% have employees who spend one to four hours per day away from their workstations or browsing the internet. Only 7% of employers say their employers are focused on work all day long.

A quarter of employers terminated between one and 10 workers as a result of monitoring their productivity habits, while 21% terminated between 51 and 100 employees. Only 12% of employers surveyed did not fire anyone after implementing monitoring software.

More survey results and methodology are available at https://digital.com/6-in-10-employers-require-monitoring-software-for-remote-workers/.

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