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Department of Labor Announces $5.5 Million Settlement With Time-Warner in Benefit Plan Dispute
November 2000

On November 20, 2000, the United States Department of Labor announced that Time-Warner had agreed to pay $5.5 million to settle charges that Time-Warner had improperly excluded misclassified independent contractors and temporary workers from Time-Warner benefit plans. The charges arose as a result of a Department of Labor ERISA audit. Such audits are increasingly common (and expensive) for employers and the Department of Labor is aggressively seeking recoveries on behalf of employees as well as civil penalties of 20% of any amount recovered. Time-Warner might have avoided civil liability had its benefit plans been drafted in a manner that expressly limited coverage to those workers "who the employer classified for personnel purposes as employees and paid through the employer's regular payroll system."