The Internal Revenue Service (IRS) released the 2025 contribution limits for 401(k) and other retirement programs. The Department of Labor (DOL) issued two Wage-Hour Opinion letters concerning the Family and Medical Leave Act (FMLA) and the Fair Labor Standards Act (FLSA). The National Labor Relations Board (LRB) announced a decision concerning the impact on unionization efforts of employer statements about the potential negative impact that unionization would have.
IRS Announces 2025 401(k) Contribution Limits – The Internal Revenue Service (IRS) reported that the annual contribution limit for employees who participate in 401(k), 403(b), governmental 457 plans as well as the federal government’s Thrift Savings Plan will be increased in 2025 to $23,500. This is a $500 increase from the 2024 contribution limit. The limit on annual IRA contributions will remain at $7,000. The catch-up provision for employees at least 50 years of age who participate in 401(k), 403(b), 457, and the Thrift Savings Plan will remain at $7,500 in 2025. Those who qualify can contribute up to $31,000 per year beginning in 2025. The SECURE 2.0 Act established a higher catch-up contribution limit for employees aged 60 – 63 who participate in these plans. The higher catch-up contribution limit will be $11,250 in 2025. Additional information is available in IRS Notice 2024-80.
Participation in Clinical Trial Qualifies for FMLA Leave – A Wage-Hour Opinion Letter issued by the Department of Labor (DOL) concludes that participation in a clinical trial qualifies for leave under the Family and Medical Leave Act (FMLA). The Opinion Letter states, “When all other FMLA eligibility requirements are met, a serious health condition that involves either inpatient care or continuing treatment by a health care provider, including when such care or treatment involves an individual’s voluntary participation in a clinical trial, qualifies the employee to use FMLA leave.”
The Opinion Letter request was filed on behalf of an organization working on finding a cure for a long-term and severe disease as well as improving care for those affected by the disease. Clarifying this issue would help to ensure access to clinical trials, especially among those who are least able to afford job or benefit loss. DOL notes that the FMLA regulations define the term continuing treatment very broadly and would include clinical trials since there is not a requirement “that the treatment meets a certain level of efficacy or that it achieves certain result.”
Can Payment of Tool and Equipment Expenses Be Excluded from the Regular Rate of Pay? – The Department of Labor (DOL) issued a Wage-Hour Opinion Letter that states where “employees do not actually incur ongoing tool and equipment expenses, reimbursement payments provided for purported expenses are not excludable from an employee’s regular rate of pay.” Where reimbursement reflects actual expenses, it complies with the Fair Labor Standards Act (FLSA) and can be excluded when calculating the regular rate of pay. Where payments exceed the actual expenses, the Opinion Letter concludes that “only that portion of the payment which reasonably approximates expenses that are incurred by inspectors…would be excluded from an inspector’s regular rate of pay.”
The Opinion Letter was requested by a company in the oil and gas industry with employees who perform inspections on pipelines. The inspectors currently receive $25 per day to reimburse them for the use of their personal cell phones, cameras, computers, vehicles, and safety equipment and gear. The company would like to increase the payments to as high as $150 - $200 per day and wants to know whether they can exclude the expanded payments from the regular rate of pay. The DOL notes that the FLSA’s regulations provide flexibility on this issue and only require that the method chosen to determine the reimbursement amount reasonably approximate the employees’ expenses. The DOL found that the increased payments could not be excluded from the employees’ regular rates of pay since there is no indication that the “inspectors actually incur such significant ongoing expenses.”
NLRB Issues Decision on Employer Predictions on Impact of Unionization – The National Labor
Relations Board (NLRB) issued a decision in Siren Retail Corp. d/b/a Starbucks that overruled a prior decision and clarified a test the Board will use when considering the impact of unionization predictions by the employer had on the relationship with the union. Citing a 1969 U.S. Supreme Court in the case of NLRB v. Gissel Packing Company, the Board noted that to be lawful and avoid being viewed as a threat of retaliation, “employer predictions of negative impacts from unionization must be carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond its control.” This decision will only be applied prospectively. According to NLRB Chairman Lauren McFerran, “By evaluating employer predictions regarding unionization in a careful and case-specific manner, the Board better protects workers’ right to make a free and fair choice about union representation while respecting an employer’s prerogative to share their views in a non-coercive manner.”
This case challenged statements made by the managers of the employer during mandatory meetings to discuss unionization following the filing of a petition by the Workers Union Affiliated with the Service Employees International Union for a representation election. The managers advised employees that unionization would cause them to lose current benefits since the company would prioritize giving them to employees at nonunionized stores. Managers implied that a union could not help to redress the inability for employees to receive tips from credit card payments as well as their ability to speak to management. The NLRB found that these statements violated Section 8(a)(1) of the National Labor Relations Act by implying that unionization would be futile. The NLRB concluded that “The generally applicable threat analysis that we reinstate…reasonably requires employers to ground their predictions concerning the consequences of unionization in objective fact [and] better protects employee self-organization and thereby advances the Act’s goal of encouraging collective bargaining.”
Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues and was an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at neilreichenberg@yahoo.com.