Employment Law Update

Michael Patrick O’Brien
March 9, 2009 | COMMENTS

With a record number of new claims for unemployment compensation filed recently, it is no wonder than many employers these days are thinking about unemployment compensation. A recent article in The Washington Post noted that more and more employers are fighting claims for such benefits as a way to minimize some expenses (you can read this article online here).

The Utah Department of Workforce Services website has some excellent resources on this issue, including tips on how to limit unemployment compensation costs. Some of the tips are: (1) Have clear written statements of policy and rules concerning employee conduct at work. (2) Keep accurate records of attendance, tardiness, and all warnings given. (3) Do not condone violations of rules. Be consistent in taking disciplinary actions against employees who violate your work rules. (4) Be specific in providing separation explanations. For example, report "claimant was absent on May 2 and May 3, and did not call in, and was aware of company policy on reporting time off. By his failing to report for work we were left shorthanded and had to find additional help to meet our production goals on those days," rather than merely reporting "absenteeism." Make sure you put down all the facts. Do not give conclusions. (5) Make sure someone attends the benefits appeal hearing who has first-hand knowledge of the reason the employee was separated.

Temporary COBRA Premium Subsidy Enacted

Under COBRA, an employer with 20 or more employees that offers health care benefits to an employee must give the employee the option to continue such benefits, at the employee's expense, when coverage ends due to various circumstances, such as termination of employment. As part of the economic stimulus bill, Congress has enacted an employer/insurer COBRA subsidy for employees (of certain income levels, i.e. below $125,000/year) who are involuntarily terminated from employment and eligible for COBRA between September 1, 2008 and December 31, 2009. In a nutshell, the subsidy requires the employer/insurer to pay 65% of COBRA premiums and the government will reimburse this amount to the employer/insurer with a tax credit. Generally, employers bear this obligation in self-funded benefits plans and insurers in insured benefits plans. The employee remains responsible for 35% of the COBRA premium. COBRA notices must be modified to inform interested persons about the subsidy.

President Obama Revises Labor Executive Orders

A recent national SHRM article describes how President Obama has revised some federal labor orders. Here are excerpts from the article:  "Two of the orders signed by Obama directly contravene directives signed by [former President George] Bush. One of Obama's new directives revokes Executive Order 13201, which required federal contractors to post a notice of nonunion employee rights concerning payment of union dues—also known as the Beck Poster. According to Obama's order, federal contractors will no longer use the Beck Poster and will be required to post another notice that the U.S. Department of Labor (DOL) will develop. The new notice will advise employees of their rights under the National Labor Relations Act. The new directive requires the DOL to develop and publish the new notice by May 2009. Obama signed a directive that revokes Executive Order 13204 issued by Bush in February 2001. The new order will require businesses that sign new contracts with the federal government to offer jobs to the qualified employees of companies that held the same or similar government contracts. When issuing the order, Obama said his administration is working to reduce disruptions that occur when new contractors begin working with the federal government. The new directive offers a right of first refusal to employees whose employment will be terminated whenever the federal government agrees to do business with a new contractor. The third executive order will prohibit federal contractors from using taxpayer money to influence their employees' choices on union representation. The directive will bar federal agencies from reimbursing contractors to pay for any activities or programs that the business might use to persuade employees to exercise or not to exercise their rights of union representation and collective bargaining. The directive states that those costs must be excluded from any billing, invoice, proposal or reimbursement for any federal government contract. The three directives instruct the DOL to develop rules and guidelines to enforce the orders. According to the orders, DOL officials have from 120 to 180 days to release the new regulations."

Recent Big Dollar Employment Case Settlements

As a warning and lesson for us all, here is a brief review of some recent big dollar settlements of employment law cases. A pallet management services company based in Texas has agreed to pay over $20 million to settle claims that it violated the immigration laws. The settlement also was made to avoid criminal prosecution of its management employees. The company allegedly ignored notices of many irregularities in the Social Security numbers reported by numerous employees. An Ohio trucking company has agreed to pay almost $2.5 million to resolve claims it denied driver and dockworker positions to women.  Finally, a national investment bank has settled job bias claims brought by an Iranian Muslim former employee by agreeing to pay him over $1.5 million. The former employee claimed he was fired because of his religion and national origin.

The Employment Law Update is a legal and legislative update service sent out about twice a month to various members of the Utah League of Credit Unions HR Council. The author, Utah law attorney Michael Patrick O'Brien, is also the Legal and Legislative Director for Utah SHRM (Society for Human Resource Management). These updates are merely updates and are not intended to be legal advice. Receipt of this information does not create an attorney-client relationship. Contact O'Brien at 801-534-7315 or mobrien@joneswaldo.com or visit www.joneswaldo.com. Reprinted with permission.