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SEC Proposes New Rules Aimed at Mitigating Cyber Risk

"[T]he proposed rules would require registered investment advisers and investment companies to implement written cybersecurity policies and procedures, reviewed at least annually, that are responsive to exposures identified through written risk assessments. The rules would also require advisers and funds to assess the cybersecurity risk posed by service providers that process information on their behalf or that have access to their information systems."

New York City Enacts Law Requiring Severance Pay for Hotel Employees

"On October 5, 2021, Mayor Bill de Blasio signed into law a requirement that New York City hotels pay their non-managerial employees $500 in severance pay every week, for each week after October 11, 2021 that the employees remain laid off. This is in addition to any severance paid to employees for periods prior to October 11, 2021. The law is effective immediately and expires on June 1, 2022."

New York City Paid Safe and Sick Leave Act Amendments

"Last April, New York State enacted a Paid Sick Leave Law which took effect on September 30, 2020 ... [T]he mayor of New York City signed a Bill on September 28, 2020, amending the New York City Paid Safe and Sick Leave Act to remove discrepancies with the [state law] ... But the NYC Safe/Sick Leave Law amendments go further than just aligning with the New York Paid Sick Leave Law, imposing additional requirements on New York City employers[.]"

California Enacts Supplemental COVID-19 Paid Sick Leave Law

"On September 9, 2020, Governor Newsom signed Assembly Bill 1867, which requires private employers that employ 500 or more employees in the United States to provide California employees with paid sick time for COVID-19-related absences. The Act also codifies Executive Order N-51-20, ... which provided supplemental paid sick leave to food sector workers.... The Act and its provisions become effective on September 19, 2020 and expire on December 31, 2020, or upon the expiration of any federal extension of the FFCRA, whichever is later."

DOL Proposes Rule Restricting ESG Investing

"Although the Proposed Rule does not discard the 'all things being equal' test, for the first time, the DOL is clearly shifting the burden of proof to ERISA fiduciaries making ESG investments in reliance on this test. Plan fiduciaries would be required to document any occurrences where such a tie is purported to exist, including the basis for determining that no distinguishing factor could be found between the competing investments and why the investment was chosen based on the purposes of the plan, diversification of investments, and the interests of the plan participants and beneficiaries.... [T]he DOL has expressed a high degree of skepticism that such 'ties' will actually prove to exist when scrutinized."

DOL Proposes New Guidance for Fiduciaries

"The 'new' fiduciary regulation actually reinstates the old ERISA regulation defining who is an 'investment advice fiduciary' (the 'Five-Part Test') which had been revoked with the 2016 Rule, and also reinstates various class exemptions and Interpretive Bulletins ... that had long been in effect prior to the adoption of the now-defunct 2016 Rule.... The Proposed Exemption generally covers any advice to acquire, hold, dispose of, or exchange securities, as well as certain principal transactions and advice to plan participants to rollover assets from an ERISA plan to an IRA."

The Growing Importance of ESG Due Diligence Post-COVID-19 (PDF)

14 pages. "[A] primary challenge is that because 'ESG diligence is still in its infancy,' there is a perceived lack of 'processes to properly judge the ESG risks associated with a target.' This paper seeks to help address that challenge, identifying the key considerations and processes in conducting ESG diligence. It discusses the rise of ESG due diligence in investments and acquisitions, and the steps investors and businesses can take to identify key ESG risks and opportunities by sector and geography, and ultimately, by individual company."

DOL Allows Private Equity Investment Exposure in 401(k) Plans

"The DOL's [Information Letter 2020-06-03] and the SEC's regulatory initiatives signal a willingness on the part of the regulators to consider creative solutions when exploring retail investor access to private equity investments.... [T]he information letter should provide a pathway for including access to private equity investments in individual account plans as part of the overall portfolio mix in diversified investment options."

City of Los Angeles Publishes Guidance on Its New Paid Sick Leave Requirements

"A covered employee is any individual who performs any work within the geographic boundaries of the City for an employer. Notably, the Order covers employees who normally work outside of the City, but who are telecommuting from home within the City. In addition, the Order notes that all workers are presumed to be employees, and that the employer has the burden to demonstrate that a worker is a bona fide independent contractor."

Private Equity Funds ERISA Decision Is Reversed

"While the court's decision is certainly welcome news for private equity and other investors, the court's decision to look beyond the form of entities chosen by the investors and determine whether a 'partnership-in-fact' existed means that the First Circuit might have reached a different conclusion on different facts." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]