McNees’ Benefits Group will be issuing a “Did you know?” series throughout the year providing short compliance reminders.

Did you know that the IRS has published cost of living adjustments for retirement plans for the year 2026?

  • The limit on elective deferrals into a 401(k) plan is increased from $23,500 to $24,500.
  • The limit on age 50 and older catch-up contributions is increased from $7,500 to $8,000.
  • The limit on age 60-63 super catch-up contributions stays at $11,250.
  • The total employee and employer contribution that can be made to a defined contribution plan is increased from $70,000 to $72,000.
  • Roth catch-up threshold is increased from $145,000 to $150,000.
  • Highly compensated employee threshold remains at $160,000.
  • The annual compensation amount is increased to $360,000.

For more information regarding compliance for your benefit plans, contact any member of the McNees Labor and Employment Group.

Online interactions often have a more adversarial and less courteous tone than traditional, in-person discussions. In certain instances, an employee’s conduct on social media may escalate beyond mere disagreement and enter the realm of aggressive or hostile behavior.

It’s no surprise that people are more frequently taking to social media to express their viewpoints on contentious societal issues, and that this sometimes spills over into professional environments. Although employees may voice their beliefs on social media in their personal time, there is a growing expectation—both within corporate governance structures and among the general public—that employers exercise oversight and, where appropriate, impose disciplinary measures in response to conduct deemed inappropriate or damaging to the organization’s reputation.

These circumstances frequently compel employers to evaluate the scope of their legal authority to regulate and, if necessary, discipline employees for off-duty social media activity, particularly when their conduct conflicts with company policies or adversely affects the workplace.

Legal Overview

Pennsylvania follows the at-will employment doctrine, meaning employers can (in theory) terminate employees at any time, for any reason—or no reason at all, so long as that reason doesn’t violate the law. Conversely, this also means that employees can quit their jobs at any time, without notice or explanation. While this may appear to suggest that employers can terminate employees for their social media posts without worry, such situations are rarely so simple.

Individuals critical of employer actions in response to employee social media posts often point to the First Amendment, which protects speech from government censorship. Importantly, the First Amendment right to free speech does not extend to private employers.

If an employee works for a private company, the employer can discipline or fire the employee for social media posts—even if made off-duty—without violating the First Amendment (unless the post is protected by other laws such as Title VII, the ADA, the PHRA, etc.)

Types of Social Media Posts That May Result in Termination

While it is difficult to provide a rule of thumb for discipline-worthy social media activity, the following types of social media posts and comments may give rise to discipline from private employers:

  • Content containing offensive, discriminatory, or inappropriate language
  • Disclosure of confidential or proprietary company information
  • Posts that harm or undermine the company’s reputation
  • Threatening language or advocacy of violence
  • Spreading false or misleading statements about the employer

Such posts may be especially concerning if the employee’s profile provides a clear connection to the employer, such as publicly listing their place of employment directly on the profile.

Best Practices for Employers

With the rapid rise of social media and its growing potential to spark controversy, employers should carefully consider whether to respond to employees’ off-duty online comments.

It’s wise for organizations to adopt the following proactive strategies:

  1. Develop a social media policy for employees that clearly outlines the expectations for social media activity and the potential consequences for violating the policy.
  2. Carefully consider whether discipline is appropriate on a case-by-case basis.
  3. Enforce the social media policy consistently across political viewpoints.
  4. Record any disciplinary measures taken and seek legal advice when appropriate.

At McNees, we bring deep expertise in employment law and corporate compliance to help organizations navigate the evolving digital landscape with confidence. We understand that a well-crafted social media policy isn’t just a legal safeguard—it’s a strategic tool that protects your brand, promotes responsible online behavior, and respects employee rights.

Whether you’re building your social media handbook from the ground up or refining existing guidelines, our team is ready to partner with you. We’ll ensure your policies reflect current legal standards, align with industry best practices, and embody your company’s values. From managing online conduct and confidentiality to reinforcing brand representation, McNees delivers practical, enforceable solutions that minimize risk and foster a culture of accountability.

For assistance with any employment law matters, please reach out to the McNees Labor & Employment team.

The Fifth Circuit Court of Appeals recently held that the statutory removal protections for members and administrative law judges of the National Labor Relations Board are likely unconstitutional under separation of powers principles. The Court determined that these protections deprive the President of the necessary level of control over officers of the executive branch. Based on that determination, the Court affirmed the district courts’ granting of preliminary injunctions, which halted NLRB proceedings in several cases. The Court determined that by facing “unconstitutional agency authority[,]” the employers suffered irreparable harm.

This decision has the immediate impact of providing employers facing NLRB proceedings in the Fifth Circuit—which includes Louisiana, Mississippi, and Texas—with the option of petitioning for similar relief. Notably, the decision creates a circuit split with the Tenth, Sixth, and Second Circuits, which have held that aggrieved parties must show that the unconstitutional removal provision interfered with the underlying proceedings in order to obtain injunctive relief. The circuit split may prompt the Supreme Court to consider the matter, which could have a nationwide impact on the NLRB’s enforcement authority so long as the statutory removal protections remain in place, or could result in the President having the authority to unilaterally fire NLRB members and ALJs (along with officials in other agencies who currently enjoy similar protections). When it recently ruled that NLRB Member Gwynne Wilcox could not return to her position pending her legal challenges to her termination, the Supreme Court signaled an inclination to find the removal protections unconstitutional if presented with the issue. In addition to the recent Fifth Circuit decision, Wilcox’s appeal in the D.C. Circuit is a candidate for the case on this issue that ultimately reaches the Supreme Court.

Employers presently involved in NLRB matters should be aware of the potential impact these developments may have on their cases. If you have any questions about this recent ruling or how it may impact your business, please contact a member of the McNees Labor & Employment group.

Nearly all employers maintain confidential or protected personal information, and many also maintain trade secrets and other confidential business information. Most of these employers also should – and typically do – enact policies to protect and limit access to such information, which their employees must follow or face discipline. Federal and state laws also exist to protect confidential information stored electronically by imposing civil and criminal penalties upon anyone who accesses, or attempts to access, confidential information without authorization.

But how, if at all, do employer policies and federal/state laws interact? Might an employee who violates an employer’s computer use policy also face criminal or civil penalties? With these questions in mind, below are some best practices for employers to consider.

Recently, the United States Court of Appeals for the Third Circuit clarified the relationship between policy violations and the Computer Fraud and Abuse Act (CFAA), the Federal Defend Trade Secrets Act (FDTSA) and the Pennsylvania Uniform Trade Secrets Act (PUTSA). Spoiler alert – violation of an internal policy will not automatically equate to a violation of state or federal law.

First, analyzing the CFAA, the Court noted that the Act was passed to “stem the tide of criminal behavior involving computers.” The CFAA imposes civil and criminal penalties upon anyone who accesses a protected computer without authorization or who exceeds their authorized access. The Court was clear that the activity prohibited by the CFAA is hacking activity; merely obtaining information, to which the employee has the means to access, for improper purposes or through improper means, is not a violation of the Act. The Court further explained, “if workplace [policy] violations were cognizable under the CFAA, an employee who sends a personal email or reads the news using their work computer would violate the CFAA.” In other words, a policy violation alone is not enough.

The Court also examined the FDTSA and the PUTSA, which protect information that satisfies four conditions: (1) the owner has taken reasonable measures to keep the information secret; (2) the information derives independent economic value from being kept secret; (3) the information is not readily ascertainable by proper means; and (4) if the information is disclosed or used, it would have economic value to those who cannot readily access it. Again, a policy violation alone will not be a breach of these Acts.

So, what are the takeaways from this case?

  • Federal and state laws that prohibit hacking and protect trade secrets are not automatically violated when an employee violates an employer’s internal computer use policies.
  • Federal and state laws guard against more egregious behavior than what is contemplated by most computer use policies.
  • Employers have every right to enact policies to safeguard confidential information and limit access to such information. These policies act as the first line of defense to prevent more egregious conduct or data breaches. Accordingly, employers should continue to prohibit activities that fall well short of violating the law.
  • As a supplement to their policies, Employers should also implement technology access controls to further safeguard confidential information and trade secrets. Such controls should, for example, keep confidential information behind firewalls and restrict employees from accessing data outside of what they need to perform their job duties. Using two-factor authentication and training employees regarding the risks and consequences of disclosing confidential information are also highly recommended.

Should you have any questions or concerns about your organization’s data protection or computer use policies, please do not hesitate to reach out to a member of the McNees Labor and Employment or Data Privacy and Protection groups.

With the passage of President Trump’s signature One Big Beautiful Bill, all the chatter about eliminating tax on tips and overtime wages has become something of a reality.  However, the details of how the elimination of these taxes will work, and what obligations this may impose on employers, are worth a closer look.

What do employers need to know about the elimination of tax on tips and overtime?  For starters, employers should continue to pay ordinary employment taxes on tips and overtime wages.  The elimination of the tax comes in the form of an exemption employees will now be eligible for – up to $25,000 for tipped employees and up to $12,500 for qualifying overtime compensation – which employees may claim on their personal income taxes beginning with tax year 2025.

For overtime wages, the Beautiful Bill permits employees to deduct up to $12,500 in “qualifying overtime compensation” from their taxable income.  You may ask, “What is ‘qualifying overtime compensation?’”  It is overtime that is mandated by the Fair Labor Standards Act.  In other words, it is not overtime that is paid to an employee because of an employer’s policy to pay overtime for weekend work, for instance, or for daily overtime that might be paid pursuant to a collective bargaining agreement.  It is only overtime that is legally required by the FLSA.  Employers will be required to identify this specific overtime pay separately on employee W-2s, beginning with tax year 2025.

Similarly, the Big Beautiful Bill permits employees who “customarily and regularly” receive tips to deduct up to $25,000 of tips from their taxable income.  This amount is reduced by $100 for each $1,000 that an employee’s adjusted gross income exceeds $150,000 (or $300,000 for joint filers).  The Bill also expands employers’ ability to take tip credits on FICA taxes beyond food service employees, and now includes tipped employees in the beauty service business.

We hope to get more guidance soon on how these tax credits will work and how employers must identify these now tax-exempt wages on their W-2s.  If you have questions about the One Big Beautiful Bill or how it may impact your organization, you should reach out to any member of the McNees Labor & Employment Group.

Pennsylvania House Bill 799 – which mandates new workplace posting requirements related to veterans’ benefits and services – passed on June 30, 2025, and was signed into law by Governor Shapiro on July 7, 2025.  The Bill and its posting requirements will go into effect beginning January 2026.  So, what does the Bill say and what do Employers need to know?

–          The posting requirements apply to Employers with a worksite in Pennsylvania at which more than 50 full-time employees are employed.  Full-time employees are defined as employees who work at least 40 hours per week.

–          Covered employers will not need to create their own posting.  The Bill directs the Pennsylvania Department of Labor and Industry to create a uniform posting.  Though the uniform posting has not been released, we know that it must contain:

  • Information and contacts for a range of Federal and State benefits and services available to veterans and veterans’ families.
  • Contact information for the US Department of Veterans Affairs Crisis Line.
  • Contact information for County veterans’ affairs directors.

–          The posting need not be in “hard copy.”  Employers who maintain an employee accessible website or intranet can comply with the Bill by posting the information on such website/intranet.

Pennsylvania employers that are covered by this Bill will want to ensure that they are complying with the new posting requirements prior to January 2026.  If you have any questions about this Bill or any other L&E matter, do not hesitate to contact any member of the McNees L&E Team.

In June 2025, the Pittsburgh City Council approved an ordinance that amends the Pittsburgh Paid Sick Days Act (“PSDA”) to significantly increase the number of hours of paid sick leave employers must provide to eligible employees annually and increase the rate at which paid sick leave is accrued.  The PSDA applies to most employers who employ at least one individual within Pittsburgh’s city limits and covers any employee who works within the City of Pittsburgh (“City”) or who performs at least 35 hours of work in the City annually.  These changes to the PSDA will take effect on January 1, 2026.

What’s Changing on January 1, 2026?

Under the current version of the PSDA, covered employers with 15+ employees must give employees at least 40 hours of paid sick leave per year, and employers with fewer than 15 employees must provide 24 hours of paid sick leave per year.  Currently, employees earn one hour of paid sick leave for every 35 hours worked in the City.

The amendments to the PSDA increase the number of paid sick leave hours employers must provide to eligible employees.  Effective January 1, 2026, employers with 15+ employees will be required to provide 72 hours of paid sick leave per year, and employers with fewer than 15 employees will have to provide 48 hours of paid sick leave per year.

Additionally, the amendments will allow employees to accrue paid sick leave at a faster rate. Starting January 1, 2026, employees will accrue a minimum of one hour of paid sick leave for every 30 hours worked.

What Does this Mean for Employers?
While the amendments provide for significant increases in the amount of paid sick leave a covered employer must provide to employees, employers have 6 months to prepare for these changes.  Additionally, under the PSDA, existing paid time off policies may comply if they allow employees to accrue and use leave on terms that are at least equivalent to what is provided in the ordinance.  Employers should review their existing policies and make any necessary changes to ensure compliance with these amendments.

If you have any questions about the recent amendments to the PSDA or need assistance reviewing or updating your existing policies, please contact an attorney in our Labor & Employment Group.

The City of Philadelphia recently enacted the Protect Our Workers, Enforce Rights Act (“POWER Act”), which imposes a variety of new requirements for most employers operating within the City limits. The POWER Act extends additional protections for workers in several areas, including paid sick leave, wage theft protections for misclassified independent contractors and immigrant workers, stronger anti-retaliation provisions, and more.

Expansion of Sick Leave: The POWER Act requires sick leave to be provided to probationary employees covered by a collective bargaining agreement, who were previously excluded from the City’s sick leave requirements. The Act also implements a new formula for calculating the hourly rate for paid sick leave for tipped workers based on the average wage for Bartenders, Waiters & Waitresses, and Dining Room & Cafeteria Attendants & Bartender Helpers, as determined for Philadelphia County by the Pennsylvania Department of Labor. The threshold of who is considered a “tipped” employee was also raised from $30 to $50 per month in tips.

Wage Theft Protections: The POWER Act empowers immigrant workers—regardless of immigration status—and independent contractors who believe they have been misclassified to file wage theft complaints.

Other Immigrant Worker Protections: Additionally, the Philadelphia Department of Labor’s Office of Worker Protections (“OWP”) is authorized to certify and submit statements of interest on behalf of immigrant workers who may be eligible for certain Visas under the Victims of Trafficking and Violence Protection Act or for the Deferred Action Program.

Increased Anti-Retaliation and Damages: The Act contains strong anti-retaliation provisions, including a rebuttable presumption of unlawful retaliation if an adverse employment action occurs within 90 days of the employee engaging in activity protected by the Act. Employers must provide clear and convincing evidence that they would have taken the adverse action regardless of the protected activity. The OWP has an increased ability to conduct investigations into potential violations of the POWER Act. Finally, the Act requires employers to provide notice to employees of their rights under the Act.

Employees with a cause of action under the POWER Act may pursue damages in court without first exhausting administrative remedies. Other penalties include fines of up to $2,000 per violation, plus suspension of business licenses and procurement contracts for repeated violations. Employers can also appear in a “Bad Actors Database” if they incur three or more infractions.

Takeaways: Employers operating in Philadelphia should take the time to become familiar with these new requirements, consider any necessary changes to policies or practices, notify employees of their rights under the Act, mitigate potential instances of retaliation, and stay tuned for additional guidance from the City.

Employers with questions about the POWER Act should contact the McNees Labor and Employment Group.

On May 19, 2025, U.S. Deputy Attorney General Todd Blanche issued a memorandum launching the “Civil Rights Fraud Initiative” (the “CRFI”).  The CRFI outlines how individuals can pursue claims against federally funded organizations that knowingly violate federal civil rights laws through the use of the False Claims Act (“FCA”).

I. Overview of the False Claims Act (FCA)

The FCA allows the government – and private individuals acting on its behalf – to bring civil lawsuits against those who defraud the federal government.  These lawsuits are called “Qui Tam” claims and allow private individuals (acting as whistleblowers) to file lawsuits on behalf of the government.  Successful individuals can potentially collect up to 30% of the recovered damages.  Damages under these types of claims can be costly – as those found liable may be subject to civil penalties, including treble (triple) damages.

The FCA may be implicated when an organization (1) accepts federal funds; (2) falsely certifies compliance with federal civil rights laws; and (3) knowingly engages in conduct that violates such laws.

II. Trump’s Executive Orders and the FCA Overlap

Federal contractors and federal grant recipients are required to (1) agree that they comply with applicable federal anti-discrimination laws and (2) certify that they do not operate any programs promoting DEI.  That certification could serve as the basis for an FCA claim.

III. Civil Rights Fraud Initiative (CRFI)

The CRFI team will be co-led by the Civil Division’s Fraud Section and the Civil Rights Division, as well as other federal entities. Private individuals, such as employees, are encouraged to aggressively pursue FCA “qui tam” claims through whistleblowing. This means that employees could begin pursuing FCA claims against employers who are not in compliance with all applicable federal anti-discrimination laws.

IV. Employer Guidance

Employers receiving federal funds should act promptly and conduct due diligence into their policies, programs, training, etc., to ensure they are fully aligned with federal anti-discrimination laws and provide equal access to all employees.  Employers need to carefully consider their policies and practices to ensure they do not discriminate against employees of any protected class.  Employers should also review current and prospective government contracts with counsel to assess any potential liability.

If you have any questions about the CRFI or want to ensure that your organization is in compliance with the developing federal guidance, contact any member of the McNees Labor and Employment Group.

On June 5, 2025, the Supreme Court issued its opinion in Ames v. Ohio Department of Youth Services in which the Plaintiff alleged reverse discrimination based on sexual orientation.  Marlean Ames was hired in 2004 as an employee at the youth services agency, where she was promoted to an administrator position in 2014. Ames applied for a promotion to become a Bureau Chief in 2019. She did not receive that job and was instead demoted. Her employer promoted a gay man to fill her former administrator position, and later selected a gay woman for the Bureau Chief job.  Ames sued her employer alleging that it discriminated against her on the basis of her sexual orientation as a heterosexual female in violation of Title VII of the Civil Rights Act of 1964, as amended.  The district court ruled for the Defendant on summary judgment, determining that Ames had not met her burden to show a discriminatory motive on the part of the employer under the McDonnel Douglas burden shifting test because she failed to show the additional element of “background circumstances” to indicate that the employer had a bias against heterosexuals.  The Sixth Circuit Court of Appeals agreed.

 

The well-established McDonnel Douglas test is a three-step inquiry. The plaintiff bears the “initial burden” of “establishing a prima facie case” by producing enough evidence to support an inference of discriminatory motive.  If the plaintiff clears that hurdle, the burden then “shifts to the employer to articulate some legitimate, nondiscriminatory reason for the employee’s rejection.” Finally, if the employer articulates such a justification, the plaintiff must then have a “fair opportunity” to show that the stated justification “was in fact pretext” for discrimination.  In ruling for the Defendant, the district court and the Sixth Circuit created an additional hurdle for Plaintiffs who are members of majority groups. As the Sixth Circuit put it, Ames, as a straight woman, was required to make this showing “in addition to the usual ones for establishing a prima-facie case.”

 

The Supreme Court reviewed this case and in a 9 to 0 opinion ruled in favor of Ames, invalidating the additional element for majority plaintiffs and remanding the case for further proceedings consistent with its ruling.

This case stands as one of the most stunning misuses of judicial resources we have seen in employment law cases for some time.  The very idea that Title VII’s prohibition of discrimination based on protected class implies that members of a majority group must meet a higher standard to avail themselves of Title VII’s protections, is itself discriminatory.  The Supreme Court had previously addressed the idea of different standards for majority and minority plaintiffs in 1976.  In McDonald v. Santa Fe Trail Transportation Co., the employer argued that certain forms of discrimination against white employees fell outside the reach of Title VII.  The Court rejected that argument, holding that “Title VII prohibited racial discrimination against the white petitioners in that case upon the same standards as would be applicable were they Negroes.”

 

So, what is the takeaway for employers after the Ames decision?  In the current political climate of anti-DEI efforts, and in light of both this case and the $25 million dollar award to a white manager claiming reverse discrimination in Phillips v. Starbucks, the Plaintiff’s bar may well see an opportunity here.  Gone are the days when an HR professional could rest easy in the face of a discrimination complaint by a white male.  All complaints of discrimination must be investigated with vigor, regardless of the demographics of the complainant.  The term reverse discrimination is a misnomer. Discrimination is discrimination regardless of who the alleged victim is.