March 26th, 2009 | By Paul Cherner
The U.S. General Accounting Office (“GAO”) recently issued a scathing report about the DOL’s handling of FLSA investigations. The title of the report is “Wage and Hour Division’s Complaint Intake and Investigative Processes Leave Low Wage Workers Vulnerable to Wage Theft.”
In response, the new DOL Secretary, Hilda Solis, issued a News Release stating that she takes the issues raised by the GAO report seriously and will be hiring 250 new field investigators to refocus their efforts on enforcement of wage-hour laws. This is a one-third increase in that investigative staff. Employers can anticipate more vigorous enforcement of these laws and should prepare now by conducting an audit of thier compliance with the FLSA
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 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 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 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.
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.
December 10th, 2008 | By Paul Cherner
The U.S. Department of Labor has issued new regulations (effective 1/16/09), which will require all employers subject to the Family and Medical Leave Act (“FMLA”) to update their policies and forms.
Your FMLA policy must provide for Military Caregiver Leave, allowing an eligible employee to take up to 26 weeks in a 12 month period to care for a covered family service member who has suffered a serious illness or injury in the line of duty while on active duty.
Qualifying Exigency Leave may be taken by an eligible employee for up to 12 weeks when an “exigency” arises because a covered family member belonging to the National Guard or Military Reserves is on active duty or is called to active duty. The new regulations specify 8 broad categories that are regarded as exigencies.
The new regulations provide for a revised FMLA notice to be posted, as well as new forms to be used when either of these leaves or traditional FMLA is requested. The notice and forms are available on the DOL’s website.
There is also a change in the time periods involved in administering FMLA requests.
I recommend that all employers inform their managers of these changes, in addition to conducting internal training for FMLA administrators.
