February 5th, 2010 | By Paul Cherner
The U.S. Dept. of Labor has been updating its website on a weekly basis offering additional information re the COBRA Subsidy (65% of COBRA premium) under the ARRA and should be referred to if you have any questions about administering this benefit.
Legislation is pending in the House and will be introduced in the Senate to extend the current deadline that employees must be involuntarily separated on or before Feb. 28, 2010 in order to be eligible for this subsidy. The current House version extends the date to June 30, 2010, while President Obama’s recent federal budget submission suggested extending the date to December 31, 2010. Given continued high unemployment rate reports, it is likely that an extension will be enacted this month.
March 20th, 2009 | By Paul Cherner
The U.S. Department of Labor has issued updated information for employers on complying with the new COBRA subsidy provisions that were contained in the Economic Stimulus Plan. You can review this information at the DOL web page on this subject.
There are model notices which must be sent to former covered employees (and their qualified beneficiaries) who were involuntarily terminated after September 1, 2008, whether or not they previously elected COBRA coverage. Individuals who were not eligible for COBRA, but were eligible for continuation of health care coverage under state or local law are also entitled to this subsidy and must also be sent an appropriate notice.
A notice must also be given to all covered employees (and their qualified beneficiaries) who are involuntarily separated from February 17, 2009 through December 31, 2009. For a detailed discussion of this subsidy see our posting of March 5, 2009. The DOL webpage also provides links to Frequently Asked Questions about this subsidy from the DOL and the IRS, as well as from the House Ways & Means Committee.
On March 24, 2009 at 11:30 (EDT), the DOL will be presenting a webcast about compliance with these new rules. You may register online for this free webcast.
March 10th, 2009 | By Paul Cherner
The Employee Free Choice Act (EFCA) was introduced today in the House and the Senate with much fanfare and rhetoric.
In our January 19, 2009 post, we set out the key provisions of this legislation from the prior effort to pass it in Congress. This bill will essentially allow unions to organize workers on the basis of the workers signing union authorization cards and will, in effect, obviate the usual process of the NLRB holding a secret ballot election on the issue of union representation. Additionally, the original bill set a short timetable for bargaining the first union contract and provided for binding arbitration when the parties had not reached an agreement within the proscribed time limits.
This new legislation contains essentially the same provisions of the prior EFCA bill. There will be a vigorous campaign within Congress by unions and employers over this legislation. It is too early to predict what will be contained in the final version of this important piece of legislation.
In the coming months you will be reading about this legislative battle in the papers and hearing about it from the broadcast media, since it is a “hot button” topic for many interest groups.
It is currently expected that the process of trying to enact this legislation may take until sometime this summer before it goes to a final vote. However, Senate leadership has announced that they intend to try to have it voted on after the Easter recess. We will keep you advised of further significant developments.
March 5th, 2009 | By Paul Cherner
In our February 19, 2009 post, we alerted you to new COBRA rules that have been passed as part of the Stimulus Plan.
The U.S. Department of Labor (“DOL”) is required to provide guidance and a model notice to be used by no later than March 19, 2009. In the interim, the DOL has issued some preliminary guidance, including a COBRA Premium Reduction Fact Sheet, Frequently Asked Questions About COBRA Continuation for Employers, and Frequently Asked Questions for Workers and Their Families. The House Ways and Means Committee of the U.S. House of Representatives has also issued a list of Frequently Asked Questions about the provisions of this law.
The Internal Revenue Service (“IRS”) has issued an expanded list of Questions and Answers pertaining to the mechanism of funding the government subsidy for COBRA through a credit on the employer’s quarterly federal tax report.
Please click on any of these highlighted items and you will be directed to these documents on the government’s website on the COBRA subsidy issues.
All employers covered by COBRA need to promptly begin reviewing which former employees may be covered under this subsidy program, including which may need to be offered a “second chance” to elect COBRA at the subsidized rate. Within the next two weeks, there should be additional guidance and a model notice form issued by the DOL.
February 19th, 2009 | By Paul Cherner
The American Recovery and Reinvestment Act of 2009 (a/k/a “the stimulus plan”) contains several provisions intended to assist unemployed workers maintain their health insurance coverage pursuant to their COBRA rights. Essentially, the law provides that unemployed workers will only have to pay 35% of the cost of their COBRA coverage, with the remaining 65% to be subsidized by the federal government. This subsidy can last for a period of up to 9 months, unless certain specified events shorten the time period.
These provisions apply to almost all unemployed workers who are involuntarily terminated between September 1, 2008 and December 31, 2009. A “second chance” is provided to those individuals who were terminated during that time period but may have declined COBRA. These workers are allowed 60 days after receiving a new notice of these enhanced rights to decide to take COBRA coverage at the subsidized rate. It is very important that these workers receive a detailed “enhanced notice” about their rights under this new law as soon as possible. The Secretary of Labor is directed to issue a model enhanced notice by March 19, 2009 and employers must send an enhanced notice by April 18, 2009. All COBRA notices issued after February 17, 2009 must also include an explanation of the rights granted under this new law.
Employees who previously elected COBRA, if eligible for this subsidy, will be entitled to reimbursement or a credit for the 65% of COBRA premiums that they may pay for the period beginning February 17, 2009. High income individuals are not eligible for this subsidy.
There are many additional details included in these provisions and the Secretary of Labor will also be issuing regulations to further define these rights and obligations and the procedures to follow. Employers should consult with legal counsel or a knowledgable COBRA administrator as to how to proceed to implement these new requirements.
Pursuant to IRS requirements, you are hereby informed that this information is not intended to be tax advice that should be relied upon for purposes of avoiding taxes and/or penalties.
January 28th, 2009 | By Paul Cherner
On January 27, 2009, the House and Senate reconciled their versions of the Lilly Ledbetter Fair Pay Act of 2009 and send the agreed bill to President Obama, who signed it into law on January 29, 2009.
The final version of this law is substantially broader than newspaper accounts, which often refer to it as being necessary to allow female employees to be able to proceed with respect to their claims of unequal pay. This law covers all categories of prohibited discrimination under Title VII, as well as under the ADA, ADEA and the Rehabilitation Act. Additionally, the law refers to decisions which may discriminatorily impact upon benefits and other forms of compensation. This latter provision may result in additional challenges with respect to benefit payments that are based upon compensation decisions that were made many years ago.
The law is intended to have a retroactive effect and apply to all charges that were pending on or after May 28, 2007.
January 19th, 2009 | By Paul Cherner
There has been a substantial amount of debate concerning the proposed federal legislation entitled the Employee Free Choice Act (“EFCA”).
In 2007, EFCA was passed by the U.S. House of Representatives, but failed to win a cloture vote to end a filibuster in the Senate. Labor unions have listed the passage of EFCA as one of their top priorities. There has been fierce debate about this legislation, often accompanied by statistics supporting either the necessity or the lack of necessity for passing this law.
This law is intended to expedite the process by which unions can organize workers. For the past 60 years, unions were recognized as the collective bargaining representative of a group of employees by either an employer voluntarily agreeing that a majority of their employees wanted the union as their representative (usually through a “card check”) or by the NLRB conducting a secret ballot election. Initially, employees sign union authorization cards, which are then used by a union to obtain voluntary recognition or to petition the NLRB to conduct a secret ballot election. In an overwhelming majority of the situations involving union organizing, the NLRB conducts a secret ballot election.
EFCA would allow a union to have the NLRB certify them as the representative of a group of employees based solely on a card check, which would determine whether a majority of employees in the group have signed cards. This proposed change would have the practical effect of obviating the need (or opportunity) for an NLRB secret ballot election and would expedite the procees of unionization.
According to the NLRB ’s 2008 Operations Report, it conducted elections within 56 days after a petition was filed in 95% of the cases. Where there were post-election matters to consider, the NLRB finalized these elections within 100 days after the petition was filed in 84% of their cases. The unions argue that undue delay has allowed employers to coerce employees into voting against the union. In contrast, employers argue that a secret ballot election is needed to allow employees to weigh the pros and cons of union representation and permit them to vote in privacy without coercion.
EFCA would also expedite the first collective bargaining process by providing a short time (10 days) for the parties to meet and then 90 days to reach an agreement. If an agreement is not reached at that time, either party may request an FMCS Mediator, who has an additional 30 days to persuade the parties to reach an agreement. If a contract has not been agreed to within that time period, the dispute would be submitted to an FMCS Arbitration Panel, which has the authority to resolve the dispute and impose the resolution on the parties for a 2 year period. There would also be enhanced penalties and fines in this new law to protect employees against discrimination during the organizing period until the first contract is entered into.
It will be interesting to see what happens to this legislation during the next Congressional term given the current state of the economy.
January 12th, 2009 | By Paul Cherner
On October 9, 2009, the U.S. House of Representatives also passed the “Paycheck Fairness Act” (“PFA”), which proposes to make several changes to the Equal Pay Act of 1963 (“EPA”). The EPA prohibits discrimination in compensation on the basis of gender for equal work. The EPA sets forth the criteria for determining whether the work performed is “equal” and defenses to such a claim.
The PFA is intended to substantially toughen the EPA, by more narrowly defining the circumstances of a defense to an equal pay claim. It also adds provisions for nonretaliation, compensatory damages and, in cases of malice or reckless indifference, punitive damages. The bill specifically permits the filing of an “opt-in” class action. The damages and class action provisions appear to also apply to other violations of the FLSA.
The PFA is a companion bill to the Fair Pay Act, which the House passed on the same day, and they are likely to be considered together by the Senate.
January 9th, 2009 | By Paul Cherner
The U.S. House of Representatives passed “The Lilly Ledbetter Fair Pay Act of 2009″ on January 9, 2009. On January 22, 2009, the Senate passed its version of the Lilly Ledbetter Fair Pay Act. The House and Senate will have to reconcile the two different versions of this bill and then send it to President Obama, who is expected to sign it. This bill will likely become law before the end of February, 2009. This act would amend Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment act, by expanding the time limit that an individual has to file an employment discrimination claim. The amendment would provide that the time for filing a discrimination claim would start to run after the adoption of a discriminatory compensation decision or when the individual becomes subject to such decision or practice or upon each additional application of that decision or practice. This last factor is known as the “paycheck rule”, which will mean that each time an employee receives a new paycheck that reflects what they believe to be discriminatory action under Title VII or the ADEA, the time for filing a charge will begin anew. This change will also apply to claims for violations of the ADEA, ADA and the Rehabilitation Act, if this bill is signed into law in its current form.
This new Act, if it becomes law, will reverse the 2007 U.S. Supreme Court decision which held that the time for filing an employment discrimination charge by employees (including Ms. Lilly Ledbetter) did not begin upon receipt of each new paycheck. The Senate is expected to consider this bill next week.
December 30th, 2008 | By Paul Cherner
Expect increased activity in the labor and employment law arena from Washington, DC in 2009. The Labor Movement invested more than $300 million and countless volunteer hours to help elect President-elect Obama and enlarge the Democratic majority in Congress and it expects both to enact new legislation and initiate administrative activities that will benefit labor unions and workers.
The number one priority of the labor movement is the Employee Free Choice Act (“EFCA“). EFCA would dramatically change the rules with respect to union organizing of employees by allowing a union to bypass the NLRB’s secret ballot election procedure. If EFCA is enacted, an employer would be required to recognize a union as the representative of its employees after the NLRB has verified that a majority of the employees have signed union authorization cards. After recognition, the employer and the union would have 90 days to negotiate their first collective bargaining agreement. If they are unsuccessful, a mediator from the Federal Mediation & Conciliation Service (“FMCS“) would then become involved in the negotiations. If a contract is not agreed to in the following 30 days, the issues will be submitted to an arbitrator, who will have the power to make a final and binding decision on all open issues. President-elect Obama was a sponsor of the EFCA bill when he was a Senator and Representative Hilda Solis (nominee for Secretary of Labor) voted for it when it passed the House in 2007. It is very likely that EFCA will be enacted, but not necessarily in the first 100 days of the new administration and there may be some modifications made to the proposed collective bargaining procedures and/or to a proposed statutory fine process for unfair labor practices.
President-elect Obama will be able to appoint 3 new Board Members to the 5 member National Labor Relations Board (“NLRB“) and to designate a new Chairman and General Counsel of the Board. These appointees are likely to be more favorable to unions and workers than those appointed during the Bush administration. Also pending in Congress is the “RESPECT” bill, which is intended to reverse a prior NLRB decision that broadly defined which employees were supervisors and thus exempt from union organizing efforts.
The U.S. Department of Labor (“DOL“) is expected to get increased funding and enlarge its staff, so that it will become more active in investigating and enforcing the numerous laws within its purview. There are serious efforts to increase the minimum wage (“FLSA“) and to enact new safety rules (“OSHA“). There is also talk of revising the 2004 DOL regulations pertaining to overtime exemptions, so that more employees will be entitled to overtime.
Several organizations that advocate for a more family friendly workplace are expected to make an effort to have the Family & Medical Leave Act (“FMLA“) require paid leave. There are several states that have recently passed such legislation. The recently promulgated FMLA regulations are not expected to be changed in the near future.
President-elect Obama also has the opportunity to appoint the Chairman, General Counsel and Commissioners to the Equal Employment Opportunity Commission (“EEOC“) and that agency is expected to increase its enforcement efforts during the new administration. Pending in Congress is the “Lilly Ledbetter Fair Pay Act”, intended to reverse the holding of a U.S. Supreme Court case, by allowing an individual to file an employment discrimination charge based on the last date that they were adversely affected by the alleged discrimination.
There are numerous other labor and employment bills pending in Congress which may be enacted as a result in the change in Congress and the administration, so stay tuned for an exciting 4 years.
