Navigating Children’s Online Privacy Protections: Primary Legislative Objectives of KOSA

Kids Online Safety Act (KOSA): Key Legislative Updates

As digital platforms place greater emphasis on younger users, legislators are calling for stricter measures to safeguard children and teens online. The first installment of this two-part advisory series provided an in-depth analysis of the Children’s Online Privacy Protection Act (COPPA 2.0), and how its proposed updates will strengthen protections relating to the collection, use and disclosure of children’s personal information online. This second installment examines the Kids Online Safety Act (KOSA) and how it aims to actively mitigate potential harm to children by including design features and providing parents with tools to manage kids’ online activity.

The Senate initially passed KOSA in July 2024 with overwhelming support. More recently, KOSA was advanced by the House Committee on Energy and Commerce (the “Committee”) in September. Although there was pessimism around whether KOSA would even make it to a full House vote due to certain concerns around the burden KOSA would place on businesses to police their content, the bill ultimately saw some last-minute changes before receiving sufficient support in the Committee to proceed to a vote on the House floor. 

KOSA is designed to address the broader safety risks children face online, including harmful content and exploitation. The requirements outlined in the bill apply to a “covered platform” which is defined as an “online platform, online video game, messaging application, or video streaming service that connects to the internet and that is used, or is reasonably likely to be used, by a minor.” There are certain exceptions outlined in the bill, including internet service providers, email services and educational institutions. The bill grants enforcement powers to state attorneys general and the Federal Trade Commission (FTC) under section 18(a)(1)(B) of the FTC Act, regulating unfair or deceptive acts or practices. Key elements of KOSA include:

  • Duty of Care: KOSA introduces a duty of care requirement for covered platforms, mandating that platforms act in the best interests of minors under the age of 17 to protect them from a variety of online harms. Specifically, platforms must take reasonable steps to prevent and mitigate risks of exposure to content that could negatively impact minors’ mental or physical well-being. The list of harms that covered platforms must protect against are promulgated in the bill, however, this list is one of the more contested elements. In order to garner sufficient support to advance through the Committee, the promulgated list of harms was minimized. While the removal of some harms by the Committee has been seen as gutting the purpose of the bill, the inclusion of others is seen as potentially having unintended consequences. This list is likely to be debated further before this bill passes.

  • Design Requirements: KOSA requires that covered platforms adhere to a variety of design requirements, including enabling default safeguard settings for minors and providing parents with tools to manage and monitor their children’s online activity.

  • Reports and Audits: Under KOSA, covered platforms must issue an annual public report describing reasonably foreseeable risks of material harms to minors and assessing the prevention and mitigation measures they are taking to address said risks. In drafting the report, covered platforms must undergo an independent, third-party audit.

While KOSA has garnered bipartisan support, it has also faced significant criticism, particularly from privacy advocates and civil liberties groups. Some critics argue that the bill could lead to increased surveillance and censorship, as platforms might over-moderate content to avoid liability, potentially infringing on free speech rights. The bill’s broad definition of “harm” has also raised concerns, as it could lead to overreach by the FTC and state attorneys general, who would be responsible for enforcing the law. These enforcement powers, critics warn, could be used to target content based on political or ideological grounds, raising the risk of censorship. Industry leaders have also raised concerns about the feasibility of implementing KOSA’s requirements, particularly for smaller platforms. On November 18, 2024, more than 30 state attorneys general wrote a letter to federal lawmakers urging them to back this legislation in order to “act to aid [their] state-level efforts” to bolster youth online safety.

Varnum’s Data Privacy and Cybersecurity team is closely monitoring these legislative developments and stands ready to guide clients through the complexities of the new regulations. Should these laws be enacted, businesses will need to swiftly adapt to avoid legal risks and ensure they are effectively protecting the rights and safety of younger users.

2024 Salary Basis Regulation Struck Down Nationwide – Minimum Salary Requirements Revert to Prior Levels

Advisory

Update November, 15, 2024: Today, the Federal District Court for the Eastern District of Texas issued a ruling striking down the United States Department of Labor’s 2024 regulation that had increased the minimum required salary levels required to support exempt status under the Fair Labor Standards Act (FLSA). The Judge’s order invalidates the rule nationwide. The order further invalidates the entire 2024 rule, a portion of which went into effect for most of the country in July 2024.

The Department of Labor could choose to appeal this decision, but the likelihood and long-term impact of any such action is uncertain given the upcoming change of presidential administration. Employers should continue to monitor this issue.  For the time being, employers should note that, absent further developments:

  • The upcoming additional increase of the minimum weekly salary amount to $58,656, which had been scheduled for January 1, 2025, will no longer go into effect; and
  • The applicable minimum salary requirement for exempt status reverts back to the level stated in the 2019 version of the rule: $684 per week ($35,568 annually). 

Other elements covered in the 2024 rule likewise revert to the terms as stated in the 2019 version.

The U.S. Department of Labor (DOL) has issued a final rule that significantly raises the required salary threshold for many salaried exempt employees starting July 1, 2024. Under this final rule, issued on April 23, 2024, the guaranteed salary that most employees must receive to qualify as exempt from the overtime rules will increase dramatically over the next nine months. Effective July 1, it will jump from $35,568 per year to $43,888 per year; and then just six short months later, on January 1, 2025, it will jump to $58,656 per year.

Under the Fair Labor Standards Act, employees who work in executive, administrative, professional, and certain computer positions must generally meet both the salary basis test and the job duty requirements to be classified as exempt from the overtime rules. In addition to being paid on a salary basis (which means there can be no deductions from salary, subject to certain limited exceptions), the threshold salary is currently $684 a week, amounting to $35,568 annually. The final rule raises the threshold for salaried employees significantly, according to the following schedule:

      • Effective July 1, 2024: $844 per week (equivalent to $43,888 per year)

      • Effective January 1, 2025: $1,128 per week (equivalent to $58,656 per year)

      • Effective July 1, 2027, and every three years thereafter: To be determined based on available earnings data

    In addition, the new rule increases the total annual compensation threshold for highly compensated employees from $107,432 per year to $132,964 per year effective July 1, followed by yet another increase to $151,164 per year effective January 1, 2025. This will result in an increase of nearly $44,000 per year to the salary threshold necessary to qualify for the highly compensated employee exemption.

    It is widely expected that various business and industry groups may file suit to attempt to block these changes from taking effect. Many employers may remember that a similar scenario occurred in 2016, when the DOL under the Obama Administration proposed a large increase in the salary threshold for these white collar exemptions, before that increase was blocked by court action. If the final rule issued by the DOL is not blocked through court action, it will mean significant changes for employers in compensation structure, as more employees nationwide will qualify for overtime pay unless their salaries are increased over the new threshold.

    Employers should immediately review their workforces to determine what changes, if any, may be necessary if the final rule takes effect. Possible considerations include:

        • Raising the annual salary of employees who meet the duties test to at least $43,888 as of July 1, and $58,656 as of January 1, 2025, to retain their exempt status;

        • Converting employees to non-exempt status and paying the overtime premium of one-and-one half times the employees’ regular rate of pay for all overtime hours worked; or

        • Converting employees to non-exempt status and eliminating or reducing the amount of overtime hours worked by such employees.

      Similar considerations should be undertaken with highly compensated employees. While it is wise to review pay practices proactively and identify potential changes that may become necessary, employers may wish to continue to monitor legal developments prior to actually implementing such changes. As employers will recall from 2016, significant changes can occur between the announcement of a final rule and the date on which it is scheduled to become effective.

      Employers are encouraged to consult with legal counsel to discuss their options and strategies for implementing these changes, if necessary. Varnum’s Labor and Employment Practice Team stands ready to assist employers with any questions or concerns they may have about this new rule.

      This advisory was originally published on April 24, 2024.

      Navigating Children’s Online Privacy Protections: Key Legislative Priorities Under COPPA 2.0

      Children's Online Privacy Protections: Key Legislative Priorities Under COPPA 2.0

      As digital platforms increasingly cater to younger audiences, lawmakers are pushing for stronger protections for children and teens online. This advisory series examines two proposed laws that may change the landscape for children’s privacy online. This first installment will offer an in-depth look at the Children and Teens’ Online Privacy Protection Act (COPPA 2.0) and its potential impact on privacy standards.

      COPPA 2.0 was initially passed in the Senate with overwhelming support back in July. More recently, the bill was advanced by the House Committee on Energy and Commerce (the “Committee”) in September. If enacted, this law could have a significant impact on businesses operating online platforms.

      COPPA 2.0 is an update to the original Children’s Online Privacy Protection Act, which was enacted in 1998. The new version significantly expands the scope of protections and imposes stricter requirements on companies with online platforms. The key provisions of COPPA 2.0 include:

          • Age Expansion: COPPA 2.0 extends the law’s protections to include not just children under 13, but also teens under the age of 17. Many businesses that were confident they were not targeting children under 13 with their services, and therefore less concerned with COPPA, may have more difficulty committing to such an assessment now that the scope of the law has expanded.

            • Data Minimization: The law introduces a “data minimization” requirement, which mandates that companies collect only the information that is necessary for the functioning of their services. This provision aims to reduce the amount of personal data collected from minors, thereby limiting the potential for misuse. This is a concept many businesses have already been grappling with in light of requirements under various comprehensive data protection laws. However, given the national reach of this law, businesses will need to be more intentional in how data is mapped across the enterprise (regardless of the state of residence of the data subject) to ensure it is meeting this obligation.

              • Prohibition on Targeted Ads: COPPA 2.0 places a ban on targeted advertising to minors without explicit consent from their parents or guardians. Businesses that rely heavily on advertising revenue would need to develop new strategies that comply with these restrictions while still reaching their target audiences effectively.

                • Right to Erasure: The law grants minors and their parents the right to request the deletion of any personal data that has been collected. This “right to erasure” is designed to give young users more control over their digital footprints. Businesses would need to establish clear and accessible processes for handling these requests. Similar to data minimization, businesses that already have processes in place for compliance with other laws will still potentially need to expand what they are covering under their current processes.

                  • Parental Rights: The law would allow parents to obtain information about their child’s use of social media platforms directly from platform operators without their child’s consent, ultimately giving parents significant oversight into what their child or teen is doing online. This particular change was one of the additions made in the Committee and has been faced with some scrutiny from House Democrats who feel this change would undermine the privacy of a minor and may be the subject of continued debate.

                Despite the changes in the Committee, the legislation still has bipartisan support, reflecting a shared concern across party lines about the need for enhanced protections for children and teens online. Given this support, the bill is expected to pass the House, although the timeline for its passage and the likelihood of any additional modifications remains uncertain.

                Varnum’s Data Privacy and Cybersecurity team is closely monitoring these legislative developments and stands ready to guide clients through the complexities of the new regulations. Should laws like COPPA 2.0 be enacted, businesses will need to swiftly adapt to avoid legal risks and ensure they are effectively protecting the rights and safety of younger users. Stay tuned for the follow up advisory that will discuss the Kids Online Safety Act (KOSA) and its potential changes.

                When Is the Best Time to Start Planning Your Estate?

                When is the Best Time to Start Planning Your Estate?

                The optimal time to begin estate planning is now. It is easiest to make these important decisions before a crisis occurs. Therefore, schedule a meeting with an estate planning attorney at your earliest convenience. Your attorney will assist in guiding you through discussions with the individuals you wish to designate as your trustee or the guardian of your minor children.  If meeting with an estate planning attorney is not feasible due to budget constraints or time limitations, there are three simple, free actions you can take to better organize your affairs.

                • Review all the beneficiaries listed on your retirement accounts and life insurance policy to ensure they are accurate, up-to-date and aligned with your wishes.
                • Compile a list of all your assets and securely store it. Also, inform the person overseeing your estate about the location of the list.
                • Assign a legacy contact on your iPhone or an inactive account manager for Android users. This grants the designated person access to the data on your phone, containing crucial information about your estate.

                Update your plan anytime you have a major life change or if there is a legal amendment requiring an update. Major life changes can include celebratory occasions such as having a child, getting married or adding a grandchild to your family.  They can also include events such as divorce or the death of a loved one, especially if they are named in your plan for a specific role or as a beneficiary. Another good reason to update your plan is if you acquire a new asset. It is crucial to update the ownership of your new asset to align with your estate plan and integrate it seamlessly.

                Consider reviewing or updating your plan every few years even if you have no major changes. For instance, we proactively reach out to our clients every three years to assess if any updates are needed. Regularly reviewing your plan keeps it aligned with your goals and helps ensure future success.

                Contact Varnum’s Estate Planning Team to start or update your estate plan today.

                2025 Cost of Living Adjustments

                The Internal Revenue Service has announced the 2025 cost of living adjustments to various limits. The adjusted amounts generally apply for plan years beginning in 2025. Some of the adjusted amounts, however, apply to calendar year 2025. Please click for a printer-friendly version of the table below.

                Employee Benefits Plan

                Plan Year
                2025
                2024
                401(k), 403(b), 457 deferral limit
                $23,500
                $23,000
                Catch-up contribution limit (age 50 or older by end of year)
                $7,500
                $7,500
                Catch-up contribution limit (age 60, 61, 62, or 63 by end of year)
                $11,250
                N/A
                Annual compensation limit
                $350,000
                $345,000
                Annual benefits payable under defined benefit plans
                $280,000
                $275,000
                Annual allocations to accounts in defined contribution plans
                $70,000 (but not more than 100% of compensation)
                $69,000 (but not more than 100% of compensation)
                Highly compensated employee
                Compensation more than $155,000 in 2024 plan year
                Compensation more than $150,000 in 2023 plan year

                Health Savings Accounts

                Calendar Year
                2025
                2024
                Maximum contribution
                Family
                Self
                $8,550
                $4,300
                $8,300
                $4,150
                Catch-up contribution limit (age 55 or older by end of plan year)
                $1,000
                $1,000
                Minimum deductible
                Family
                Self
                $3,300
                $1,650
                $3,200
                $1,600
                Maximum out-of-pocket
                Family
                Self
                $16,600
                $8,300
                $16,100
                $8,050

                Social Security

                Calendar Year
                2025
                2024
                Taxable wage base
                $176,100
                $168,600
                Maximum earnings without loss of benefits
                Under full retirement age
                Year you reach full retirement age
                $1,950/mo. ($23,400/yr.)

                $5,180/mo. up to mo. of full retirement age ($62,160/yr.)
                $1,860/mo. ($22,320/yr.)

                $4,960/mo. up to mo. of full retirement age ($59,520/yr.)

                Social Security Retirement Age

                Year of Birth
                Retirement Age
                Prior to 1938
                Age 65
                1938
                65 and 2 months
                1939
                65 and 4 months
                1940
                65 and 6 months
                1941
                65 and 8 months
                1942
                65 and 10 months
                1943 – 1954
                66
                1955
                66 and 2 months
                1956
                66 and 4 months
                1957
                66 and 6 months
                1958
                66 and 8 months
                1959
                66 and 10 months
                1960 and later
                67

                Unpacking Michigan’s SOAR Fund and the Future Landscape for Economic Development

                What's ahead for Michigan's SOAR Fund

                With the election this week, there may be significant changes to the Strategic Outreach and Attraction Reserve (SOAR) Fund that supports the state’s economic development initiatives. Enacted in December 2021, the SOAR Fund comprises the Critical Industry Program (CIP) and the Strategic Site Readiness Program (SSRP), but it faces uncertainty with future funding. A proposed legislative package aims to transform the SOAR Fund with substantial appropriations, yet it has met resistance from Republican lawmakers.

                Proposed Changes

                Currently, the SOAR Fund does not have any revenue sources beyond 2024-2025. The package of legislation would provide an annual $600 million appropriation for the fund through the year 2034-2035. The package of bills would provide:

                • $250 million annually for the Make it in Michigan Fund, a rebrand of the SOAR Fund
                • $200 million annually for a new program providing funding for public transit and public development projects funded by the Michigan Mobility Trust Fund
                • $100 million annually to the Housing and Community Development Fund, a program aimed at alleviating affordable housing shortages in the state
                • $50 million annually to the Revitalization and Placemaking (RAP) Fund, which would aim to help with community revitalization and rehabilitation

                Expanded Economic Assistance Under MSF

                In its current form, the Michigan Strategic Fund (MSF) can award funds under the CIP to provide assistance due to a technological shift in product or production. Under the proposed legislation, the MSF could provide economic assistance that it determined was critical to the economic growth and development of the State, with a wide number of factors informing this determination, including the investment’s economic impact on the local community, availability of other sources of funding, and whether the qualified jobs created are at or above the median hourly wage of the prosperity region in which the project was located, among many other factors.

                The MSF can also award funds under the SSRP to provide economic assistance to create investment-ready sites to attract and promote investments for eligible activities. Under the program, eligible activities are defined as “land acquisition; site preparation and improvement; infrastructure improvements that directly benefit the site; demolition, construction, alteration, rehabilitation, or improvement of buildings on the site; environmental remediation; and architectural, engineering, surveying, and similar professional fees.”

                Legislative Challenges

                Overall, the package of legislation has failed to garner any support from Republican House or Senate members and stalled in both chambers. Senate Bills 559 and 562 were passed in the Senate along party lines on March 19, 2024, and were reported out of the House Committee on Economic Development and Small Business on June 11, 2024, but have yet to receive a vote from the full chamber. House Bills 5768, 5769 and 5780 also passed out of the House Committee on Economic Development and Small Business on June 11, 2024, but have yet to be voted on by the chamber. Finally, Senate Bills 560, 561 and 569 were all reported out of the Senate Committee on Economic and Community Development on October 31, 2023, but have yet to receive a full vote in the chamber. Given Republican opposition to these bills, if House Republicans gain control of the chamber, it could be difficult for this package of bills or a similar reintroduction to garner support. In fact, House Republicans introduced a set of bills in October 2023 aimed at imposing greater oversight of the SOAR Fund: House Bills 5136, 5137 and 5138. These bills would mandate audits of all payouts, impose heightened transparency requirements on recipients of the funds, and claw back funds when recipients fail to meet the statutory and administrative requirements. While these bills did not receive a hearing in committee, a Republican-led House could seek to institute similar oversight and enforcement provisions on the state’s various tax credits and incentive programs in the next legislative session.

                With a pivotal election approaching, Varnum LLP is closely monitoring the changes that new leadership could bring to the state’s various tax credits and incentive programs. For questions or concerns regarding any of the developments in Lansing, eligibility requirements for one of the state’s various incentive programs, or general questions regarding potential programs your business could qualify for, please reach out to Zach Meyer or Brady Diller.

                 

                Emergency Benefits for Employees: Key Programs Employers Can Provide

                Navigating Employee Support During Emergencies

                Employers can provide valuable emergency benefits to help employees in some of their most trying times, whether illness, natural disaster, or anything in between. Having these benefits ready and available can help employers attract and retain employees and make hard times a little smoother. This advisory will explore some of the most common options to assist employees who have been affected by emergencies or disasters.

                Leave Sharing Programs

                Leave sharing allows employees to donate their personal leave or vacation time to a leave sharing pool. Employees who need leave for a medical emergency or major disaster (natural or otherwise) may use the leave that other employees have contributed to the leave sharing pool to extend the time they can take paid leave. Leave sharing programs are voluntary, and employees may not donate leave that is required by state or other applicable laws. Donors may not select the recipients of the leave they donated. Assuming the program is correctly established, employees who choose to donate do not pay tax on the leave they contribute, making this a good option for people who wish to help their fellow employees.

                Qualified Disaster Payments

                Employers may provide tax-free payments to employees who have experienced disasters for necessities such as residential repair, reasonable and necessary family and living expenses, funeral expenses, and replacement of key, non-luxury items including beds and kitchen appliances. Employers may not provide tax-free payments for items already covered by the employee’s insurance. Employers can select almost any payment amount, small or large, and can limit amounts by individual or for all employees, so long as the benefits are provided in a non-discriminatory manner.

                Retirement Plan and Qualified Disaster Withdrawals

                Recent changes to retirement plan rules have created new options for helping employees who experience a qualified federally-declared disaster. Employers sponsoring 401(k), 403(b), or governmental 457(b) plans may allow plan participants affected by a federally-declared disaster to take a distribution from their accounts. The distribution can be in an amount up to $22,000 (although not all participants will be permitted to take that amount). These qualified disaster recovery withdrawals are not subject to the 10% early withdrawal penalty that may otherwise apply to distributions before age 59½. Participants may repay qualified disaster recovery withdrawals to the plan over the three years following the withdrawal. This ability to repay a previous distribution can allow participants who recover from the disaster to restore retirement savings, a rare option with regard to plan distributions. To provide for qualified disaster withdrawals and repayments, the retirement plan must be amended to reflect the availability of this option.

                Non-Employer Provided Benefits

                Beyond what employers provide, employees who have experienced a federally declared emergency may be eligible for a variety of governmental (local, state, and federal) benefits. What is available depends on the specific circumstances. Employers interested in informing employees about these benefits should talk with their legal counsel or consultants to determine what is currently available and how to best communicate those options.

                Before and during a disaster, employers have many options to help employees and maintain morale. If you have questions, want more information, or need help preparing the right documentation, please contact a member of Varnum’s employee benefits team.

                5 Essential Documents for a Basic Estate Plan

                Titlescreen 01

                Prepare for your future by exploring the intricacies of estate planning. Creating a comprehensive estate plan focuses on the five key documents crucial for a secure legacy including:

                1. Will

                There are two types of wills to consider. The first is a simple will that outlines how you want your assets distributed after your passing, designates a personal representative, and if applicable names a guardian and conservator for minor children. This document is filed with the probate court, and probate is required for asset administration. The second type of will, which is more common for our clients to put into place, is a pour-over will. In a pour-over will, you still designate individuals for each of the previously described roles, but instead of asset distribution, you direct that the assets without listed beneficiaries solely in your name be moved into your trust.

                2. Trust

                A trust is a legal arrangement where you (the grantor) transfer assets into the trust, managed by a trustee (usually you during your lifetime) for the benefit of beneficiaries. While alive, you serve as the grantor, trustee, and beneficiary. Upon your passing or incapacitation, a successor trustee takes over, managing assets for and distributing assets to beneficiaries according to your outlined preferences.

                3. Power of Attorney

                By signing a power of attorney, you empower someone to make legal and financial decisions on your behalf during your lifetime. It can be drafted to take effect only upon your incapacitation, but more commonly, it becomes effective upon signing. In all cases, it becomes invalid upon your death.

                4. Designation of Patient Advocate and Living Will

                This document designates someone to make medical decisions on your behalf when you cannot communicate with your treatment team. It also outlines your medical treatment preferences.

                5. Deed

                If you own real estate, you may want to consider a deed. Various types exist, all aimed at facilitating the transfer of real estate to intended beneficiaries without probate.

                In addition to these primary documents, Varnum’s Estate Planning Team also reviews clients’ beneficiary designations on retirement accounts and life insurance policies regularly to ensure alignment with their evolving needs and changes in the law.

                Contact Varnum’s Estate Planning Team to start or update your estate plan today.