Employee Benefits & Executive Compensation: An Interview with Luke Habeeb

Q: Luke, how did you end up working as an attorney in employee benefits and executive compensation??

A:?The genesis of my practice began with my role as a Research Assistant in law school where I collected information and data relating to golden parachute payments made by public companies – this piqued my interest in executive compensation. Additionally, my first job out of law school was at a boutique firm representing Taft-Hartley (collectively bargained) benefit funds. Both of these roles led me to Michael Best, where I am able to leverage each experience in unique ways.?

Q: Tell me one or two things you enjoy about your job.?

A:?One thing I really enjoy is the opportunity to work with a diverse client base ranging from individuals and start-ups to small private companies and large public corporations. This provides a great deal of variety in the types of projects and issues I work on.

Another aspect of the job that is enjoyable is the intellectual challenge of working on complex legal issues encountered on a weekly basis – each problem presented is like a puzzle that our clients rely on us to solve. It is very rewarding when our team develops a creative and innovative solution to a challenging problem.

Q: For folks unfamiliar with this practice area, can you describe how these issues come up for most employers, particularly nonprofit employers??

A: Nonprofit employers encounter similar issues that for-profit employers face, most notably being the design and administration of employee benefit plans. We help ensure our clients’ retirement and health & welfare plans are compliant with applicable federal and state laws, such as ERISA, the Affordable Care Act, and the Internal Revenue Code.

Nonprofit employers must also comply with various tax-exempt organization requirements under the Code, such as limitations on executive compensation, the prohibition on private inurement, and the requirement to maintain tax-exempt status. The penalties for a tax-exempt organization for failing to comply with the various laws and regulations are far more onerous than those levied on for-profit employers, so it is vital that non-profit employers remain compliant.

Q: In your work, what are one or two issues that are commonly overlooked by employers when it comes to employee benefits/executive compensation??

A:?One issue that is commonly overlooked by employers is the failure to regularly review and update their benefit plans to remain compliant with applicable laws, and that they continue to meet the changing needs of their workforce. For example, employers may fail to update plan documents to reflect changes to the Affordable Care Act, or to incorporate the CARES Act and SECURE Act into their plan documents. This has especially been the case throughout the COVID-era.

Another issue that is often overlooked is the importance of data privacy and cybersecurity. These plans often contain sensitive personal information, such as Social Security numbers, birthdates, and financial information, making them a target for cyber criminals. In recent years, there have been several high-profile data breaches affecting employee benefit plans, resulting in significant harm to plan participants and beneficiaries. These breaches underscore the importance of taking steps to protect employee benefit plan data from unauthorized access or disclosure.?

In 2021, the Employee Benefits Security Administration (an agency of the DOL) issued guidance for plan sponsors, plan fiduciaries, record keepers, and plan participants on best practices for maintaining cybersecurity, including tips on how to protect the retirement benefits of America’s workers. Failure to take certain steps to protect sensitive information from unauthorized access could expose employers and plan to significant risks of litigation from employees and plan participants.?

Q: Is there anything a non-profit employer can do right now to avoid major issues later on???

A: Non-profit employers can take several steps to avoid major issues down the road, including the following:

1. Nonprofit employers should establish sound governance policies in place regarding the administration of employee benefit plans and executive compensation. These policies should be regularly reviewed and updated to ensure compliance with applicable laws and regulations.
2. Nonprofit employers should also consider benchmarking their compensation and benefits programs against comparable organizations in their industry or region. This helps ensure that their compensation and benefits programs are competitive, are more likely to remain compliant with applicable laws and regulations, and can also help attract and retain talented employees.
3. Nonprofit employers should also work with experienced legal counsel (such as our team at Michael Best (shameless plug!)). Our team can help identify and address potential issues before they become larger problems, and can help to ensure compliance with applicable laws.

Q: Final question: Tell us something about yourself that isn’t on your LinkedIn bio.?

A:?The toughest question of the interview! I love to cook and try new recipes. Recently, I have been cooking a lot of Lebanese food, using recipes that were passed down by my “Teta” (Arabic for “grandma”).

If you have any questions about employee benefits or executive compensation, feel free to reach out to Luke Habeeb at [email protected].