The U.S. Department of Labor (the "DOL") issued an Information Letter on December 8, 2018 (the “Letter”) confirming that state laws requiring written consent before amounts are withheld from employees’ wages to contribute to an employee benefit plan covered by the Employee Retirement Income Security Act of 1974 (“ERISA”) are preempted under ERISA § 514(a), which generally preempts state laws that “relate to” ERISA plans. The Letter confirmed that it continues to be the DOL’s view that such a state law would be preempted by ERISA to the extent the law is interpreted to limit, prohibit, or regulate an employer’s adoption of automatic enrollment arrangements in connection with a welfare benefit plan (such as a disability benefit plan) covered under Title I of ERISA, or making related deductions from wages for contribution to such a plan.

BACKGROUND -

ERISA Section 514(a), subject to certain exceptions, provides that Title I of ERISA preempts state laws insofar as they “relate to” any ERISA-covered employee benefit plan. The U.S. Supreme Court has said that a state law has a prohibited relation to an ERISA plan if it makes reference to, or has a connection with, employee benefit plans.