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No ERISA benefits if employees aren’t on the payroll

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in Employee Benefits Program,Human Resources

Now is a good time to review the eligibility requirements for your health and welfare benefits plans. If you word them correctly, you can exclude people who work for the company under third-party contracts.

Have your attorneys assist with the review. They can tailor restrictions that fit your circumstances—and help you avoid unpleasant surprises later if subcontractors or temps sue.

Recent case:
The 9th Circuit upheld the dismissal of an ERISA class-action lawsuit against McGraw-Hill Cos. Inc., agreeing with the trial court that the plaintiffs, who worked at McGraw-Hill through a staffing agency, were not eligible for employee benefits plans because they weren’t on the company payroll.

The benefits plans specified that only employees on the company’s U.S. payroll were eligible. (Curry v. CTB McGraw-Hill LLC, U.S. Court of Appeals for the 9th Circuit, No. 06-15397, 2008)

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