ERISA, Waiving benefits and Classification

carteret

Hello Everyone ~

What are you thoughts and knowledged on the following.

We have employees who do not want benefits, because for whatever reason they do not need them. So, the request to be classified in a non-benefited position, in which they recieve 20-40% more in pay. Of course, the Pension Plan is qualified, so they automatically participate in the retirement plan because they work 2080 a year. Can they waive their rights to recieve benefits? Can employers have a classification, full-time no benefits.

I am not comfortable with the arrangement for various reason, but would like other's feedback.

Thanks

ritaanz

Non-benefit position? New to me. If the company pays 100% for a benefit i.e. life insurance, most insurance carriers require all employees be covered. Here, if the employee has medical insurance through their spouse, they can opt out of ours. They receive a weekly "bonus".

Check with your insurance carriers.

AJ SPHR

Please clarify - what benefits are you referring to? As Ritaanz states, opting out of medical, dental, vision insurances are a pretty common feature of most employer benefit plan packages, and sometimes with an opt-out monetary benefit. If you're also including group term life and defined benefit retirement plan, then my reaction is no, they can't opt out of these employer-sponsored and employer-funded plans.

carteret

Sorry for not being very clear.

The question does not center around whether someone can opt out of coverage.

The question has to do with an employee would like to elect to have 20 - 40 percent more pay, but work full-time. The end result that the employee would not be entitled to any benefit, i.e. health, dental, vision, life, supplemental plans, HCR or DCR Accounts, or PTO. Due to ERISA regulations, they will have to be allowed to participate in the Retirement Plan if it is qualified, which our plan is. I am sure that they cannot decline participation in the retirement, ERISA will not allow that. Is this the same with other ERISA qualified plans. Or is Pension the only benefit that employees cannot waive. My line of thinking, albiet possibly wrong, is that employees cannot waive their rights.

I am thinking about Microsoft and the law suit they lost when they had employees that they classifed as temporary who worked full time hours on a long term basis. The DOL said that Microsoft was circumventing benefits, which included not only the qualified benefits, but other benefits as well such as their PTO, Vacation, Holidays etc. In my scenerio we will be classifying the employee in an On Call As Needed status, but we will guarantee them 40 hours a week.

I hope this is clearer. Thanks for your help.

Deirdre

ritaanz

Deidre, you have just described HR's worst nightmare. An audit looking to happen.

I believe MS called their people independent contractors, therefore they believed that they did not have to provide benefits.

A rose is still a rose whether you call it temporary or on call.