Pay it here or pay it there? + 2019 LRC Agenda
Detailed Labor Relations Conference Agenda Now Available
April 15 - 17, 2019 – JW MARRIOTT, NEW ORLEANS, LA
Although there is always a chance that certain times or presenters could change, a new, detailed agenda for the Labor Relations Conference is now available. If you haven’t done so already, please register as soon as possible.
Download the detailed agenda »
Pay it here or pay it there? Part 1
Maintaining a traveling worker's benefit coverage when he or she is on the road.
Fringe benefit reciprocity was intended to operate quietly below the surface, but occasionally employers get drawn in.
Many contractors only think about fringe benefit reciprocity if they are sending workers into another jurisdiction and wonder where they should pay the workers’ fringe benefit contributions. But often, one or more of a contractors’ employees are already utilizing the opportunity afforded by the Electrical Industry Pension and Health & Welfare Reciprocal Agreements to maintain their benefits in their “home” funds without the contractor knowing, or for that matter needing to know.
When a contractor contacts the referral office for applicants, the union may refer workers whose “home local” is in another area. These workers may want to continue to fund the pension plan they have already vested in or to maintain health insurance for themselves or family back in the area where their permanent home is located. If they wish to do this, they will have gone online, signed into the “Reciprocity” website, and authorized the benefit funds where they are working to send all contributions the site funds receive back to their home funds. Clean, efficient, and totally transparent to the contractor who need only make contributions to the site local plans for workers employed in the site local. The contractor has no role or responsibility under this arrangement.
When a contractor sends current employees into another jurisdiction under the National Agreement on Employee Portability – the standard portability language – the contractor needs to pay into the site local funds on those employees according to the CBA that covers the area where the work is performed. If his employees wish to have those contributions returned home, the employees must go on line and direct the site trust funds to reciprocate the money to their home funds.
The site local CBA requires the employer to pay to the site funds. This imposes an ERISA obligation on the employer to pay into the site local funds. If a contractor decides unilaterally to pay directly to a worker’s home fund, he is in violation of the site local CBA and ERISA. Even though the contractor has paid into an employee’s home fund, the contractor may still be found delinquent during an audit conducted by the site local funds and have to pay a second time. Similarly, the home local plans may not be permitted under the law or their own rules to receive contributions for work done under a different CBA.
Contractors often have an issue with the way this works, especially for short term jobs, when the employee is a “service” employee working in multiple locations regularly, or when the benefit payments in the site area are so different from the home area the worker may lose a benefit.
In Part 2, we will look at how these issues present themselves and how to mitigate them as much as possible.