The Florida Bar - Labor and Employment Law Section - Protecting Rights, Pursuing Justice, Promoting Professionalism

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FAQ

Coverage of Federal and State Anti-Discrimination Laws
Exhaustion of Administrative Remedies
The Family and Medical Leave Act of 1993
Wage and Hour Issues
The Americans with Disabilities Act of 1990
OSHA - Occupational Safety and Health Act of 1970 ("OSHA")
PERC - Public Employees Relations Commission ("PERC")
ERISA - The Employee Retirement Income Security Act of 1974

Coverage of Federal and State Anti-Discrimination Laws

Q: On what basis do the federal anti-discrimination statutes prohibit discrimination in the workplace?

A: There are three primary areas of federal law that prohibit discrimination in the workplace. Title VII of the Civil Rights Act of 1964 ("Title VII") prohibits discrimination on the basis of race, color, religion, sex, and national origin. The Age Discrimination in Employment Act of 1967 ("ADEA") prohibits discrimination basis of age and the Americans with Disabilities Act of 1990 ("ADA") prohibits discrimination based on disability.
Q: On what basis does Florida law prohibit discrimination in the workplace?

A: The Florida Civil Rights Act of 1992 (“FCRA”), Chapter 760, Florida Statutes, prohibits discrimination based on an individual's race, color, religion, sex, national origin, age, handicap, or marital status.
Q: What type of actions do Title VII, the ADEA, the ADA and the FCRA prohibit regarding the treatment of individuals covered by the protected categories in each of the anti-discrimination statutes?

A: For employers: the hiring, promotion, discharge, compensation, terms, conditions and privileges of employment, classifying, limiting or segregating employees or job applicants;

A: For Labor Organizations: limiting, segregating, or classifying membership or applicants for membership; and in referral of individuals for employment. Labor organizations may not exclude, expel or otherwise discriminate against persons covered by these laws and may not cause an employer to discriminate against covered individuals. Labor organizations are covered as employers for the purpose of interpretation of these laws.

A: For Employment Agencies: the classification or referral of individuals for employment. For purposes of these anti-discrimination statutes, employment agencies are covered as employers.

A: For Employers, Labor Organizations and Employment Agencies: Printing or publishing discriminatory advertisements; and retaliating against any individual for opposing a discriminatory practice, or the filing of a charge of discrimination with the Employment Opportunity Commission ("EEOC"), the Florida Commission on Human Relations ("FCHR"), a local fair employment practices agency ("FEPA") or participating in an investigation by one of these agencies.

In addition to the above, Title VII, the ADA and the FCRA explicitly prohibit discrimination based on the protected classes covered by these statutes by any employer, labor organization, or joint labor-management committee controlling apprenticeship or other training or retraining, including on-the-job training programs or employment in any program established to provide apprenticeship or other training.
Q: If a claimant believes that he or she has been subjected to discrimination in violation of Title VII, the ADA, the ADEA or FCRA, can he or she immediately file a lawsuit seeking damages for the harm they believes the have suffered?

A: No. A claimant must first file a charge of employment discrimination so as to properly exhaust his or her administrative remedies.

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Exhaustion of Administrative Remedies

Q: Where can a claimant file a charge of employment discrimination in the state of Florida?

A: In Florida, a claimant may file a charge with the United States Equal Employment Opportunity Commission ("EEOC"), the Florida Commission on Human Relations ("FCHR"), or one of several local fair employment practices agencies ("FEPAs") throughout the state.
Q: What does dual-filing of a charge of discrimination mean?

A: Certain states, including Florida, possess state and/or local FEPAs that are empowered to enforce state and/or local anti-discrimination statutes and ordinances which are similar to the federal anti-discrimination statutes. These states are known as "deferral states." In a deferral state, a charge of discrimination asserting a claim which violates both a federal and state or local antidiscrimination law, must be dual-filed with both the federal EEOC and the state or local FEPA. The practice of filing a charge of discrimination with both the federal EEOC and the state or local FEPA is called "dual-filing."
Q: How much time does a Florida claimant have to file a charge of discrimination?

A: Claimants filing charges in Florida pursuant to Title VII of the Civil Rights Act of 1964 ("Title VII"), the Age Discrimination in Employment Act of 1967 ("ADEA"), and/or the Americans with Disabilities Act of 1990 ("ADA") must typically file a charge of discrimination with the EEOC, or a state or local FEPA, within 300 days of the last alleged discriminatory event. However, claimants filing charges of discrimination pursuant to the Florida Civil Rights Act of 1992 ("FCRA") must file their charges of discrimination within 365 days of the last alleged discriminatory event.
Q: Must a federal civil rights claimant who has filed a charge of discrimination always receive a notice of right to sue from the EEOC before he or she can file a lawsuit asserting violations of Title VII, the ADEA, or the ADA?

A: For Title VII and ADA claims, the answer is yes. No suit can be initiated under Title VII or the ADA until the EEOC issues the claimant a notice of right to sue. However, under the ADEA, the claimant is not required to receive a notice of right to sue from the EEOC, but is instead permitted to initiate a civil action at any time 60 or more days after he or she has filed his or her charge with the EEOC.
Q: How much time does a claimant have in order to file a federal civil rights lawsuit after receiving a notice of right to sue from the EEOC?

A: Typically, the claimant has 90 days from the date of receipt of the EEOC's notice of right to sue in order to initiate a civil action pursuant to a federal civil rights statute in either state or federal court.

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The Family and Medical Leave Act of 1993

Q: What employers are covered by the FMLA?

A: Private sector employers who are engaged in commerce, or an industry affecting commerce, who employ 50 or more employees for each workday in 20 or more calendar workweeks in either the current or preceding year, are deemed covered by the FMLA. On the other hand, public sector employers are deemed automatically covered irrespective of how many employees they employ.
Q: Are employees of employers who are covered by the FMLA automatically eligible to receive FMLA leave?

A: No. In order to be eligible to receive FMLA leave, the employee must: (1) have worked for the covered employer for a period of at least 12 months (although not necessarily consecutively); (2) have worked a total of 1,250 hours immediately preceding the commencement of the leave; and (3) be employed at a worksite at which 50 or more employees of the covered employer are employed within a 75 mile radius.
Q: When is an eligible employee of a covered employer entitled to take FMLA leave?

A: An eligible employee is only permitted to take FMLA for one of the following reasons: (1) for the birth of a son or daughter, and to care for the newborn child; (2) for placement with the employee of a son or daughter for adoption or foster care; (3) to care for the employee's spouse, son, daughter, or parent with a serious health condition; and (4) because of a serious health condition that makes the employee unable to perform the functions of the employee's job.
Q: How much FMLA leave is an eligible employee entitled to take from a covered employer?

A: An eligible employee of a covered employer is entitled to receive 12 weeks of unpaid FMLA within a 12 month period.
Q: How can leave under FMLA be taken?

A: FMLA leave can be taken all at one time, or when medically necessary, it may be taken on either a reduced schedule or intermittent leave basis. A reduced leave schedule is a leave schedule that reduces an employee's usual number of workdays per workweek, or hours per workday (i.e., an employee who worked 5 days a week, now works 4 days a week; or an employee who worked 8 hours a day, now works 6 hours a day). Intermittent leave may include periods of leave of differing increments (i.e., two hours on one occasion, three weeks on another). If leave is taken on either a reduced schedule or intermittent basis, only the time the employee is actuallyon leave may be subtracted from the employee's 12 week leave entitlement.

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Wage and Hour Issues

Q: What is the current minimum wage?

A. In Florida, the current minimum wage is $6.40 per hour. However, the federal minimum wage is $5.15 per hour.
Q: Which employers are eligible for overtime pay and under what circumstances are they entitled to it?

A: Pursuant to the federal Fair Labor Standards Act ("FLSA"), employees who do not fall within one or more exemption as defined by the FLSA and who work in excess of 40 hours in a work week, are entitled overtime calculated at the premium rate of one and one-half of the employee's regular hourly rate of pay.
Q: How does one calculate an employee's regular rate of pay?

A. An employee's regular rate of pay is calculated by dividing the employee's weekly pay (from all sources)by the number of hours the employee has worked per week. If the employee works more than 40 hours in the work week, the employee would be entitled to extra half-time overtime pay for all hours worked in excess of 40 per week.
Q: Can compensatory time off or "comp time" be substituted for overtime pay?

A. Only in the public sector. Pursuant to the 1985 Amendments to the FLSA, state and local governmental entities may award comp time instead of paying overtime. However, there are certain stipulations in the use of comp time. First, comp time generally must be awarded at a time and one-half rate for hours worked in excess of 40 per week. Second, law enforcement, fire protection,emergency services and seasonal employees can accrue 480 hours of comp time before any overtime payment must be made. All other public employees can accrue up to 240 hours of comp time before overtime must be paid.
Q: Are nonexempt employees entitled to be paid if they take working lunches?

A: Yes. Unless a nonexempt employee is relieved from all work duties during his or her lunch break, that employee is entitled to be paid his or her hourly rate of pay for working through lunch.

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The Americans with Disabilities Act of 1990

Q: Are allemployees with disabilities protected by Title I of the ADA?

A: No. Only "qualified individuals with disabilities" are protected by Title I of the ADA. A qualfiied individual with a disability is an individual who is capable of performing the essential functions of the position desired or held with or without a reasonable accommodation.
Q: When is a person deemed to have a "disability" under Title I of the ADA?

A: Title I of the ADA defines the term "disability" as one of the following: (1) having a physicial or mental impairment that substantially limits one or more major life activities; (2) having a record of such an impairment; or (3) being regarded as having such an impairment.
Q: Can employers require applicants for employment to submit to pre-employment medical examinations?

A: Under the ADA, an employer's ability to require medical examinations of applicants depends upon the particular phase of the pre-employment process. An employer cannot require an applicant to submit to a medical examination at any time prior to the time a conditional job offer has been extended to the applicant. However, once a conditional job offer has been extended to an applicant, the employer can require the applicant to submit to a pre-employment medical examination as long as: (1) the medical examination is job-related and consistent with business necessity; and (2) all other applicants for the position are required to submit to the same kind of medical examination.
Q: May an employer ask an applicant about his or her workers' compensation history prior to making the applicant a conditional job offer?

A: No. An employer cannot ask about an applicant's job-related injuries or workers' compensation history at this phase of the pre-employment process, as these questions are directly related to the severity of an applicant's impairments and therefore may be likely to elicit information about a disability.
Q: Is an employer required to offer an employee with a disability a light duty assignment?

A: No. However, the offer of a light duty assignment may be a form of reasonable accommodation that an employer should consider.

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OSHA

Q: What is OSHA’s purpose and who enforces the Act?

A: To assure, as far as possible, safe and healthy working conditions for the American workers. To accomplish this purpose, employers are required to comply with two guidelines: General Standards and the General Duty Clause. When OSHA was signed into law, the Occupational Safety and Health Administration (the “Agency’) was created to enforce and assure compliance with OSHA.
Q: What are OSHA’s General Standards?

A: OSHA has adopted a large number of federal safety and health standards divided into various categories. These standards are measures of safety formulated to reduce employees exposure to hazardous conditions. Some standards govern all worksites generally, and other standards address specific industries. OSHA requires employer compliance with these standards. Although employers may be allowed input on which standards are adopted and can contest standards believed to be unfair, once the standard is adopted and published by the Agency, noncompliance by an employer is grounds for enforcement.
Q: What is OSHA’s General Duty Clause?

A: The clause requires that every employer furnish to each of its employees the following: "employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm." The clause is intended to cover serious hazards for which there are no specific standards in place, so that employees are provided a relatively safe workplace. Noncompliance by an employer is also grounds for enforcement.
Q: What additional responsibilities do employers have regarding their employees pursuant to OSHA?

A: In addition to the meeting OSHA’s General Standards and its General Duty Clause employers must also do the following:

a. Post OSHA Notice: employers must display a poster in a conspicuous place providing employees notice of OSHA’s protections and obligations.

b. Maintain Records of Injuries: OSHA requires all private-sector employers to maintain a log and summary (OSHA form no. 200) of occupational injuries and illnesses for each of their establishments. (Exempted are small employers with no more than ten employees.) This log and summary must be made available for inspection and copying by current and former employees or their representatives. Refusal to provide access to this log is a violation of the Act.

c. Maintain Exposure records: OSHA, in some situations, requires employers to monitor and measure employee exposure and to keep a record for the term of employment plus thirty years.

d. Provide Medical Examinations: OSHA, in some situations, requires employers to provide periodic medical examinations of employees, with records to be kept by the employer. When an employer is required to maintain exposure and medical records the Act provides employees and their representatives with the right to access and copy those records.
Q: What rights do employees have if they have a reasonable belief that there is an OSHA violation at their workplace?

A: If an employee believes that an OSHA violation exists in the workplace, he or she may submit a request to an OSHA compliance officer or Area Director for an inspection. If the Agency determines there are reasonable grounds to believe that a violation or imminent danger exists, an inspection will be conducted. Employees have the right to accompany inspectors on inspections and further to point out violations during an inspection. (Employees participating in inspection are not entitled to compensation from the employer.) The employee also has the right to access and copy inspection results.
Q: What protection is provided to employees who exercise their rights pursuant to OSHA?

A: An employee, who exercises his or her right to request an inspection, records, or to point out violations, may not be subjected to retaliatory discrimination or termination. An employee who believes that he or she has been subjected to retaliatory treatment as a result of exercising his/her rights pursuant to the Act has the right to file a complaint alleging retaliation within 30 days of the violation.

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PERC

Q: Who is considered a public employer subject to the jurisdiction of PERC ?

A: The following are generally considered public employers in Florida: the Governor; the Board of Trustees of each state university, college, or community college; municipalities; school boards; board of county commissioners; special districts; sheriffs; and other constitutional officers (tax collector, property appraiser, clerk of courts). A public employee is any person employed by a public employer except those individuals excluded in Section 447.203(3) of the Florida Statutes.
Q: Can supervisory employees be represented by a union/employee organization?

A: Yes, even though employees with significant supervisory duties are excluded from bargaining units containing employees they supervise because of a conflict in interests, they may be represented in a separate supervisory unit.
Q: What is a confidential employee and can they be represented by a union?

A: A confidential employee is a person who acts in a confidential capacity to assist or aid a managerial employee. Confidential employees are excluded from the definition of public employee and, therefore, are not afforded the same protection and rights as public employees, including, the right to be represented by a union.
Q: What is an unfair labor practice charge?

A: An unfair labor practice occurs when the statutory rights of a public employee, public employer, or employee organization are violated. Pursuant to Section 447.503 of the Florida Statutes, an employer, employee, or employee organization can file an unfair labor practice charge with PERC for an employer or union’s violation of any of the provisions of Section 447.501 of the Florida Statutes.
Q: Do public employees have the right to “strike”?

A: No, the Florida Constitution states that public employees do not have the right to strike. Strike is defined very broadly to include any concerted conduct which adversely affects the services of the public employer. A public employer whose employees are affected by a strike can either file an unfair labor practice charge or seek an injunction in circuit court.

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ERISA

Q: What is ERISA?

A: The Employee Retirement Income Security Act of 1974, or ERISA, protects the assets of millions of Americans so that funds placed in retirement plans during their working lives will be there when they retire.
ERISA is a federal law that sets minimum standards for pension plans in private industry. For example, if an employer maintains a pension plan, ERISA specifies when an employee must be allowed to become a participant, how long they have to work before they have a non-forfeitable interest in their pension, how long a participant can be away from their job before it might affect their benefit, and whether their spouse has a right to part of their pension in the event of their death. Most of the provisions of ERISA are effective for plan years beginning on or after January 1, 1975.

ERISA does not require any employer to establish a pension plan. It only requires that those who establish plans must meet certain minimum standards. The law generally does not specify how much money a participant must be paid as a benefit.

ERISA does the following:
1. Requires plans to provide participants with information about the plan including important information about plan features and funding. The plan must furnish some information regularly and automatically. Some is available free of charge, some is not.
2. Sets minimum standards for participation, vesting, benefit accrual and funding. The law defines how long a person may be required to work before becoming eligible to participate in a plan, to accumulate benefits, and to have a non-forfeitable right to those benefits. The law also establishes detailed funding rules that require plan sponsors to provide adequate funding for your plan.
3. Requires accountability of plan fiduciaries. ERISA generally defines a fiduciary as anyone who exercises discretionary authority or control over a plan's management or assets, including anyone who provides investment advice to the plan. Fiduciaries who do not follow the principles of conduct may be held responsible for restoring losses to the plan.
4. Gives participants the right to sue for benefits and breaches of fiduciary duty.
5. Guarantees payment of certain benefits if a defined plan is terminated, through a federally chartered corporation, known as the Pension Benefit Guaranty Corporation.
Q: What are defined benefit and defined contribution pension plans?

A: Generally speaking, there are two types of pension plans: defined benefit plans and defined contribution plans. A defined benefit plan promises participants a specified monthly benefit at retirement. The plan may state this promised benefit as an exact dollar amount, such as $100 per month at retirement. Or, more commonly, it may calculate a benefit through a plan formula that considers such factors as salary and service - for example, 1 percent of average salary for the last 5 years of employment for every year of service with an employer.

A defined contribution plan, on the other hand, does not promise a specific amount of benefits at retirement. In these plans, the participant or the employer (or both) contribute to the participant's individual account under the plan, sometimes at a set rate, such as 5 percent of their earnings annually. These contributions generally are invested on the participant's behalf. The participant will ultimately receive the balance in their account, which is based on contributions plus or minus investment gains or losses. The value of the account will fluctuate due to changes in the value of investments. Examples of defined contribution plans include 401(k) plans, 403(b) plans, employee stock ownership plans, and profit-sharing plans. The general rules of ERISA apply to each of these types of plans, but some special rules also apply.
A money purchase pension plan is a plan that requires fixed annual contributions from an employer to a participant's individual account. Because a money purchase pension plan requires these regular contributions, the plan is subject to certain funding and other rules.
Q: What are simplified employee pension plans (SEPs)?

A: An employer may sponsor a simplified employee pension plan or SEP. SEPs are relatively uncomplicated retirement savings vehicles. A SEP allows employers to make contributions on a tax-favored basis to individual retirement accounts (IRAs) owned by the employees. SEPs are subject to minimal reporting and disclosure requirements.
Under a SEP, the employee must set up an IRA to accept the employer's contributions. As a general rule, the employer can contribute up to 25 percent of the employee's pay into a SEP each year, up to a maximum of $40,000.

Starting January 1, 1997, employers may no longer set up Salary Reduction SEPs. However, the Small Business Job Protection Act of 1996 (Public Law 104-188) permitted employers to establish SIMPLE IRA plans beginning in 1997. A SIMPLE IRA plan allows salary reduction contributions up to $6,000 in 2001 ($7,000 in 2002).

If an employer had a salary reduction SEP in effect on December 31, 1996, the employer may continue to allow salary reduction contributions to the plan. Employees are generally permitted to contribute up to 15 percent of pay, or $10,500 for 2001 ($11,000 for 2002). SEP participants may also be required to earn at least $450 (this number is indexed for inflation) (for 2001) to make salary reduction contributions.
Q: What are 401(k) plans?

A: Your employer may establish a defined contribution plan that is a cash or deferred arrangement, usually called a 401(k) plan. A participant can elect to defer receiving a portion of their salary which is instead contributed on their behalf, before taxes, to the 401(k) plan. Sometimes the employer may match their contributions. There are special rules governing the operation of a 401(k) plan. For example, there is a dollar limit on the amount a participant may elect to defer each year. The dollar limit in 2001 is $10,500 ($11,000 in 2002). The amount may be adjusted annually by the Treasury Department to reflect changes in the cost of living. Other limits may apply to the amount that may be contributed on a participant's behalf. For example, if the participant is highly compensated, they may be limited depending on the extent to which rank and file employees participate in the plan. An employer must advise participant's of any limits that may apply to them.

Although a 401(k) plan is a retirement plan, participants may be permitted access to funds in the plan before retirement. For example, if a participant is an active employee, the plan may allow them to borrow from the plan. Also, the plan may permit a withdrawal on account of hardship, generally from the funds the participant contributed. The sponsor may want to encourage participation in the plan, but it cannot make participants' elective deferrals a condition for the receipt of other benefits, except for matching contributions.
The adoption of 401(k) plans by a state or local government or a tax-exempt organization is limited by law.
Q: What are profit sharing plans or stock bonus plans?

A: A profit sharing or stock bonus plan is a defined contribution plan under which the plan may provide, or the employer may determine, annually, how much will be contributed to the plan (out of profits or otherwise). The plan contains a formula for allocating to each participant a portion of each annual contribution. A profit sharing plan or stock bonus plan may include a 401(k) plan.
Q: What are employee stock ownership plans (ESOPs)?

A: Employee stock ownership plans (ESOPs) are a form of defined contribution plan in which the investments are primarily in employer stock. Congress authorized the creation of ESOPs as one method of encouraging employee participation in corporate ownership.
Q: When should participants expect to receive distributions from their pension plans after terminating employment?

A: Generally, the law requires plans to pay retirement benefits no later than the time a participant reaches normal retirement age. But, many plans, including 401(k) plans, provide for earlier payments under certain circumstances. For example, a plan's rules may provide that participants in a 401(k) plan would receive payment of his or her benefits after terminating employment. The plan's SPD or Summary Plan Description should set forth the plan’s rules for obtaining the distribution as well as the timing of distribution after termination of employment.
Q: How long does a participant have to wait to become a member of a pension plan and to become vested in their benefits?

A: Generally, a plan may require a person to reach age 21 to be eligible to participate in the plan and to have a year of service. Vesting means the employee has earned a non-forfeitable right to benefits funded by employer contributions. Employees always have a non-forfeitable right to their own contributions.

Beginning in 2002, there are two basic vesting schedules. Under the three-year schedule, workers are 100% vested after three years of service under the plan. The six-year graduated schedule allows workers to become 20% vested after two years and to vest at a rate of 20% each year thereafter until they are 100% vested after six years of service. Plans may have faster vesting schedules.
Q: What protections do the fiduciary rules of ERISA provide?

A: ERISA protects plans from mismanagement and misuse of assets through its fiduciary provisions. ERISA defines a fiduciary as anyone who exercises discretionary control or authority over plan management or plan assets, anyone with discretionary authority or responsibility for the administration of a plan, or anyone who provides investment advice to a plan for compensation or has any authority or responsibility to do so. Plan fiduciaries include, for example, plan trustees, plan administrators, and members of a plan's investment committee.

The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Fiduciaries must act prudently and must diversify the plan's investments in order to minimize the risk of large losses. In addition, they must follow the terms of plan documents to the extent that the plan terms are consistent with ERISA. They also must avoid conflicts on behalf of the plan that benefit parties related to the plan, such as other fiduciaries, service providers, or the plan sponsor.

Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets. Courts may take whatever action is appropriate against fiduciaries who breach their duties under ERISA including their removal.
Q: When must employers deposit withheld employee contributions into a 401(k) plan or other pension plan?

A: Employers must transmit employee contributions to pension plans as soon as they can reasonably be segregated from the employer’s general assets, but not later than the 15th business day of the month immediately after the month in which the contributions either were withheld or received by the employer.
Q: Can a pension be attached for family support?

A: In general, pension benefits cannot be taken away from a participant by people to whom they owe money. The law makes a limited exception, however, when family support is at stake. Thus, a state court can award part or all of a participant's pension benefit to their spouse, former spouse, child or other dependent by issuing a qualified domestic relations order, which must be honored by the plan. The person named in such an order is called an alternate payee. The court's order can be in the form of a state court judgment, decree or order, or court approval of a property settlement agreement.
Q: What requirements must be met for a domestic relations order to be qualified?

A: When a plan receives a domestic relations order purporting to divide pension benefits, it must first determine whether the order is a qualified domestic relations order (QDRO). The order must relate to child support, alimony, or marital property rights and be made under state domestic relations law. To be qualified, the order should clearly specify your name and last known mailing address and the name and last address of each alternate payee. It also must state the name of your plan; the amount or percentage - or the method of determining the amount or percentage - of the benefit to be paid to the alternate payee; and the number of payments or time period to which the order applies. The order cannot provide a type or form of benefit not otherwise provided under the plan and cannot require the plan to provide an actuarially increased benefit. And if an earlier QDRO applies to your benefit, the earlier QDRO takes precedence over a later one.

In certain situations, a QDRO may provide that payment is to be made to an alternate payee before the participant is entitled to receive their benefit. For example, if the participant is still employed, a QDRO could require payment to an alternate payee to begin on or after their earliest retirement age, whether or not the plan would allow you to receive benefits at that time.
Q: Can a plan be terminated?

A: Although pension plans must be established with the intention of being continued indefinitely, employers may terminate plans. If a plan terminates or becomes insolvent, ERISA provides participants some protection. In a tax-qualified plan, a participant's accrued benefit must become 100 percent vested immediately upon plan termination, to the extent then funded. If a partial termination occurs in such a plan, for example, if an employer closes a particular plant or division that results in the termination of employment of a substantial portion of plan participants, immediate 100 percent vesting, to the extent funded, also is required for affected employees.

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