Nurse participants in a hospital retirement plan were upset that their unpaid meal breaks, during which they were required to work, and an unpaid 20-40 minute period of patient status review before the official start of their shifts were not counted for benefit purposes in the hospital's retirement plans. The plan administrator and plan documents based benefit accruals on wages reportable on Form W-2. The nurses' argument is that wages should have been paid for these unpaid periods. Two lawsuits were filed related to the dispute: a state court action claiming violation of state wage and hour laws and a federal claim under ERISA that the plan administrators had improperly disregarded the unpaid service periods in determining retirement plan benefits. The ERISA claims were dismissed in federal district court, and the U.S. Court of Appeals for the Third Circuit has now upheld the district court ruling. The Third Circuit reasoned that only wages actually paid to employees are reportable on Form W-2. While the underlying dispute relates to the amount of wages that should be paid, the plan administrators have properly administered the plan by considering only wages actually paid and reported. (Henderson v. University of Pittsburgh Medical Center, 3d Cir. 2011)
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Plan administrator not obligated to provide benefit accruals for unpaid hours
- Hodgson Russ LLP
- Peter K. Bradley, Anita Costello Greer, Michael J. Flanagan, Richard W. Kaiser, Arthur A. Marrapese III and Daniel R. Sharpe
- July 29 2011
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