What Is An “Employee Benefits Program”?
Federal law[2] defines “employee benefit plan” to mean “an employee welfare benefit plan,”[3] an “employee pension benefit plan,”[4] or a plan that is both an employee welfare benefit plan and an employee pension benefit plan. Under federal law, there is a significant difference between an “employee benefit program” and “wages.” For example, wages are excluded from the definition of an employee benefit plan in regulations issued under the federal statute governing employee benefits, the Employment Retirement Income Security Act, or ERISA.[5] Moreover, a plan to pay wages in the form of profits is not an employee benefit plan. Courts will look to the underlying purpose of the agreement between the employer and employee to decide whether the payment to the employee is for benefits and thus is subject to ERISA, or is for wages and thus is not subject to ERISA. As the U.S. Court of Appeals for the Fifth Circuit has made clear, where an agreement is intended to compensate employees for thei
