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.
February 10th, 2009 | By Paul Cherner
President Obama has issued an Executive Order that encourages federal government agencies to require Project Labor Agreements (“PLA”) on large scale construction contracts. This Order revokes two prior Executive Orders issued by President George W. Bush, which had reversed a memorandum issued by President Clinton to federal government agencies encouraging PLA.
A “PLA” is a pre-hire collective bargaining agreement with one or more unions that establishes the terms and conditions for a specific construction project. If required by an agency, the PLA is binding on all contractors and subcontractors, prohibits strikes, lockouts and similar job disruptions, and sets forth a prompt and mutually binding procedure for resolving labor disputes. Agencies will have discretion, but are encouraged, to require a PLA on construction projects that are for $25 million or more.
February 4th, 2009 | By Paul Cherner
On January 30, 2009, President Obama issued three Executive Orders that impact federal contractors. These Orders are pro labor and are intended to reverse positions taken during President Bush’s administration.
Nondisplacement of Qualified Workers Under Service Contracts - this Executive Order provides for the continuation of employment of employees who are working pursuant to a service contract with the federal government, when that contract is awarded to a new contractor or subcontractor who will be performing the same or similar services at the same location. The successor contractor and/or subcontractor will be required to offer the existing nonmanagerial and nonsupervisory employees the right to continue their employment under the new contract before being permitted to hire other employees. The Order exempts certain contracts and permits a contracting agency to exempt other contracts or subcontracts if the agency determines that the application of these rules would impair their ability to procure services on an economic and efficient basis.
Notification of Employee Rights Under Federal Labor Laws - this Executive Order requires all federal contractors and subcontractors to post a notice in all places where employees covered by the National Labor Relations Act work, informing them of their rights under the federal labor laws. The Secretary of the U.S. Department of Labor has 120 days to initiate rulemaking to specify the size, form and contents of this notice, which is to be posted during the term of the contract.
Economy in Government Contracting - this Executive Order requires that costs associated with activities undertaken to persuade employees to exercise or not exercise their rights to bargain collectively through representatives of their own chosing (e.g. unions) should be treated as “unallowable” and a federal contractor may not be reimbursed for such costs. The Federal Acquisition Regulatory Council has 150 days to adopt rules and regulations needed to implement this Order.
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 26th, 2009 | By Paul Cherner
President Obama has appointed Stuart J. Ishimaru as Acting Chair of the Equal Employment Opportunity Commission and Christine M. Griffin as Acting Vice Chair of the EEOC.
President Obama has also appointed Wilma Liebman as Chairman of the National Labor Relations Board.
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 14th, 2009 | By Paul Cherner
The new FMLA regulations are effective Friday, January 16, 2009 for employers with 50 or more employees. If a covered employer has not already changed their FMLA policies, they should do so now and begin using the new poster and sample forms from the USDOL.
You can obtain the poster and forms from the DOL website by clicking on these links: new poster and Notice of Eligibility (to be given to employees within 5 business days of their request for FMLA leave.) If certification will be required, then the appropriate certification form must be given to the employee (with the Notice of Eligibility) within 5 business days after the leave request: certification for employee’s serious health condition; or certification for family member’s serious health condition; or family military leave for qualified exigency form; or certification for serious injury or illness of covered military service member for Military Family Leave. Within 5 business days after its decision on the leave request, an employer must give a Designation Notice setting forth the terms of such leave if approved, whether additional information is needed or whether the leave request has not been approved.
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.
