June 17th, 2010 | By Paul Cherner
The U.S. Department of Labor (“DOL”) has issued a final rule implementing President Obama’s Executive Order 13496 requiring all government contracting departments and agencies to include a provision in their solicitations for contracts requiring that contractors must post a notice in conspicuous places informing employees of their rights under the National Labor Relations Act (“NLRA”).
The new notice must be posted for all covered government contracts or subcontracts that result from solicitations issued after June 21, 2010. Go to the DOL’s website for more specific information about the size and placement of the notice and about possible electronic posting. Click here to see a sample of the new notice. Please note that the notice posted must be at least 11″ by 17″. Covered government contracts will mandate that the prime contractor require subcontractors performing services or goods under the covered contract for $10,000 or more to also post this notice.
Prime contracts for less then $100,000 or those for work performed exclusively outside the U.S. do not required the posting of this notice. The notice requirement does not apply to contracts resulting from solicitations issued prior to June 21, 2010.
This notice has an extensive explanation of workers’ rights to organize and take collective action. It also sets forth examples of adverse conduct by an employer (or a union) against an employee that would be unlawful under the NLRA. It informs employees of possible remedies that can be ordered by the NLRB to correct unlawful conduct and tells them how to contact the NLRB to file a charge.
This new Executive Order also revoked an Executive Order by President George W. Bush that federal contractors had to post informing employees of their rights concerning the payment of union dues or fees
April 8th, 2010 | By Paul Cherner
On March 18, 2010, President Obama signed into law the Hiring Incentives to Restore Employment (“HIRE”) Act. This Act contains two new tax benefits that are available to employers who hire certain previously unemployed workers (“qualified employees”). The IRS has issued some preliminary guidance on the application of this new law. We expect further guidance from the IRS on the interpretation of this law as issues and questions arise in the future.
The following summary is based on our review of the relevant provisions of the HIRE Act and the IRS’s preliminary guidance:
1. Employers -
Taxable and tax-exempt employers are eligible for these tax benefits if they hire “qualified employees ” and meet the other requirements of the HIRE Act. Public employers, with the exception of public colleges and universities, are not eligible for these tax benefits.
2. ”Qualified Employees” -
a.) In order to qualify for the tax benefits under the Hire Act, an employer must hire an employee (after February 3, 2010 and before January 1, 2011) who has been unemployed or employed for less then 40 hours during the 60 day period ending on the date that the new employment begins.
b.) Family members and certain employees related to the employer do not qualify.
c.) A qualified employee must sign a sworn affidavit stating that they meet the qualification with respect to the 60 day period. The IRS has prepared an affidavit form [form W-11] to be used for this purpose. This form is to be retained by the employer and not filed with the IRS.
d.) The payroll tax exemption benefit does not apply to an employee hired to replace an existing worker, unless the existing worker terminated employment voluntarily or was terminated for cause. [Note: special rules may apply to employees hired to replace laid off employees].
3. Payroll Tax Exemption –
a.) An employer who hires a “qualified employee” during the relevant time period will be entitled to a Payroll Tax Exemption (“PTE”) on all wages paid to that “qualified employee.” The PTE is an exemption from the employer’s 6.2% share of social security taxes on all wages paid to the “qualified employee(s)” from March 19, 2010 through December 31, 2010,
b.) The PTE does not apply to Medicare tax or any other tax withholdings. It also will not impact on the amount of social security benefit that the “qualified employee” may eventually be entitled to receive.
c.) The IRS is developing forms and guidance with respect to how to handle the PTE for the first calendar quarter of 2010, which will allow appropriate credit to be taken when the employer pays taxes due for the second calendar quarter of 2010.
4. Business Retention Tax Credit Benefit –
a.) There is also a general business tax credit for qualified employers to retain new hires. An employer may claim this credit for each “qualified employee” it hires for purposes of the PTE and who remains an employee for 52 consecutive weeks (a “retained worker”). The “retained worker’s” pay may not significantly decrease during the second half of the 52 week period.
b.) The Business Retention Tax Credit (“BRTC”) is the lesser of $1,000 or 6.2% of the wages paid to the retained worker during the 52 week period.
c.) Caveat: Employers who are eligible for the more generous Work Opportunity Tax Credit (“WOTC”) must opt out of HIRE if they want to continue receiving the WOTC credit.
Note: The preceding summary highlights the key portions of this new law. However, specific situations and questions should be referred to legal counsel and tax advisors, rather then relying on this general summary. Additionally, the IRS will be issuing further guidance and forms which need to be taken into account with respect to the application of the provisions of this new law.
IRS Tax Advice Compliance Disclosure: To ensure compliance with the regulations governing the issuance of advice on Federal tax issues, we advise you that any tax advice in this communication (and any attachments) is not written with the intent that it be used, and cannot be used, to avoid penalties that may be imposed under the Internal Revenue Code
March 29th, 2010 | By Paul Cherner
On March 27, 2010, President Obama announced the following recess appointments to the NLRB and the EEOC.
Craig Becker and Mark Pearce have been appointed to be Board Members of the National Labor Relations Board. While both had been approved by the Senate Labor Commitee, a vote on their confirmation has been delayed in the Senate. There is still one vacancy on the five member NLRB Board. No action was taken on the third nominee to the NLRB, Bryan Hayes, that President Obama had previously sent to the Senate.
Chai R. Feldblum, Victoria A. Lipnic and Jacqueline A. Berrien (Chair) were appointed Commissioners of the Equal Employment Opportunity Commission. P. David Lopez was appointed General Counsel of the EEOC.
The recess appointments will expire in December, 2011 when the Senate next has a recess. In the interim, all of these nominations for a full term will be awaiting a Senate vote.
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.
December 22nd, 2009 | By Paul Cherner
On December 21, 2009, President Obama signed the Department of Defense appropriations bill. Buried within that lengthy legislation are provisions that extend the COBRA subsidy for certain employees who have been or will be involuntarily terminated during a designated period of time.
The following are some of the key points of this new legislation, which becomes effective December 31, 2009:
1.) The subsidy (65% of the COBRA premium which is paid by the federal government through payroll tax credits) will be offered to employees who are involuntarily terminated and become eligible for COBRA before February 28, 2010.
2.) The length of time that an individual can receive the COBRA subsidy has been increased from the prior limit of nine (9) months to a new limit of fifteen (15) months.
3.) The extension to fifteen (15) months is retroactive to all individuals currently receiving the subsidy and will apply to any individuals whose initial nine (9) month subsidy expired.
4.) The extension is also retroactive to those individuals who lost COBRA coverage because they stopped paying premiums after their nine (9) month subsidy expired. Those individuals may be able to re-enroll in COBRA and receive the additional subsidy without any gaps in coverage. Plan Administrators will need to identify such individuals and send them a notice of their right to this option.
The U.S. Department of Labor continues to issue: updated Fact Sheet, FAQs, Job Lost Poster and Poster for Employees and new Model Notices. It is important for employers and plan administrators to carefully review and monitor the situation for any individuals who are or were eligible for the COBRA subsidy or who become eligible for it before February 28, 2010 and to ensure that timely notices of their rights are being sent. On January 22, 2010, the USDOL held a compliance webcast re the extension of the COBRA subsidy, which you can view by clicking on this archive.
November 23rd, 2009 | By Paul Cherner
The EEOC, like the NLRB, has several presidential nominees to the agency who are waiting for confirmation by the U.S. Senate.
In July, 2009 President Obama nominated Jacqueline A. Berrien, associate director-counsel of the NAACP Legal Defense and Educational Fund, to serve as Chair of the EEOC. In September, 2009, the President nominated Chai R. Feldblum, a professor of law and director of the Federal Legislation Clinic at the Georgetown University Law Center in Washington, D.C., to be an EEOC Commissioner.
Recently, the President nominated Victoria A. Lipnic, the former Assistant Secretary of Labor for Employment Standards, to be an EEOC Commissioner. Lipnic’s nomination, if confirmed by the Senate, would fulfill the requirement that two of the five commissioners not be from the President’s political party. Constance Barker, whose term expires in 2011, is the other Republican Commissioner.
In late July, 2009, the Senate confirmed President Obama’s nomination of EEOC Vice Chair Christine Griffin as Deputy Director of the Office of Personnel Management, but, according to the rules governing the EEOC, Griffin will remain an EEOC Commissioner until her successor is confirmed by the Senate. On October 22, 2009, President Obama nominated P. David Lopez to be General Counsel of the EEOC . Lopez has worked for the EEOC for 13 years and is currently a Supervising Trial Attorney in the EEOC’s Phoenix District Office.
April 28th, 2009 | By Paul Cherner
President Obama has announced his intention to nominate two union attorneys to be Board members of the NLRB. They are Craig Becker and Mark G. Pearce.
Becker has been Associate General Counsel for the Service Employees International Union for 17 years and holds the same position at the AFL-CIO. He has practiced and taught labor law for 27 years.
Pearce practices labor law at a law firm in Buffalo, NY that represents unions and individual employees. He previously taught labor law and began his career at the NLRB.
The NLRB has a total of five Board Members. Traditionally, the President appoints three Members from his party to the staggered terms of the NLRB and designates one of them to be Chairman. The two other Board Members are traditionally from the opposition party. At the present time, there are two Board Members serving on the NLRB who were appointed during the prior administration- Chairman Liebman (D) and Member Schaumber (R). If these two new appointments by President Obama are confirmed by the Senate, there will be a Democratic majority for the first time in many years.
The President also nominates the General Counsel of the NLRB.
Update re : EFCA – Senator Arlen Specter (R – PA) previously announced that he would vote against a cloture motion on EFCA thereby making it unlikely that a filibuster could be ended. Today, Senator Specter announced that he will run for reelection to the Senate next year as a Democrat. This will likely change the playing field for the pasage of EFCA. Stay tuned for new developments.
Update re NLRB Nominees: On December 28, 2009, the Washington Post reported that the nomination of Craig Becker to the NLRB has been returned by Congress to the White House for “reconsideration.” Speculation is that Becker may request that his nomination be withdrawn in view of the strong likelihood that Senator John McCain will not allow this nomination to be passed out of the Senate committee for a vote by the full Senate. On January 7, 2010, the NY Times reported that President Obama will resubmit Becker as a nominee to the NLRB.
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.
