hot topics in labor & employment law 2009 the material provided herein is for informational...
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Hot Topics in Labor & Employment Law
2009
The material provided herein is for informational purposes only and is not intended as legal advice or
counsel.
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Please help yourself to food and drinksPlease let us know if the room temperature is too hot or coldBathrooms are located past the reception desk on the rightPlease turn OFF your cell phonesPlease complete and return surveys at the end of the seminar
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Background
• Equal Pay Act (EPA) signed into law in 1963 by President John F. Kennedy
• EPA prohibited the payment of unequal wages to men and women who performed substantially equal work
• At that time, women earned 59 cents compared to every dollar earned by men
• In 2008, women earned 78 cents for compared to every dollar earned by men
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Lilly Ledbetter Fair Pay Act
of 2009• Enacted on January 29, 2009• First law signed by President Obama• Repudiated U.S. Supreme Court holding
in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007)
• Essentially eliminates statute of limitations defense in disparate pay cases
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The Ledbetter Decision
• Ledbetter worked for Goodyear for 19 years • After she retired she filed an EEOC charge
alleging pay discrimination in violation of Title VII and EPA
• Salary increases were based on performance ratings; she claimed her ratings were lower due to sex discrimination resulting in lower pay
• Jury agreed and awarded her backpay and damages totaling 3.3 million dollars on her Title VII claim
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The Ledbetter Decision
Supreme Court’s Holding (5-4 decision): • The period for filing an EEOC charge begins
when the discriminatory decisions were first communicated, not when she received pay reflecting the results of the discrimination
• Case dismissed due to her failure to file within 180 days of original act of discrimination
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Aftermath of the Decision
• Congressional response was immediate• House Committee on Labor & Education
introduced a bill which was passed on July 31, 2007; insufficient votes in the Senate
• Fair Pay Act reintroduced on January 6, 2009 and passed in both House and Senate
• Signed into law on January 29, 2009• Congressional findings in the Act extremely
critical of Supreme Court decision
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Key Provisions of Fair Pay Act
• Unlawful employment practice occurs when:– A discriminatory compensation decision or
other practice is adopted– An individual becomes subject to such a
decision or practice, or– An individual is affected by application of
such decision or practice, including each time wages, benefits or other compensation is paid
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Key Provisions of Fair Pay Act
• Extends statute of limitations– 180/300 days from the date of the
unlawful employment practice to file a charge
– Each payment reflecting a discriminatory decision resets the period to file a charge of disparate pay
– Applicable to pension, severance as well as regular paychecks
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Key Provisions of Fair Pay Act
• Amends Several Anti-discrimination Laws- Title VII of Civil Rights Act of 1964- Age Discrimination in Employment Act- Americans with Disabilities Act of 1967- Rehabilitation Act of 1973
• As a result, it applies to all discrimination claims resulting in disparate pay
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Key Provisions of Fair Pay Act
• Applies retroactively to all claims pending or filed on or after May 28, 2007, including those on appeal
• Aggrieved person may recover back pay/benefits for up to two years preceding filing of the charge if the discrimination during charge period is similar to discrimination that went before
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Potential Impact
• Dramatically lengthens or eliminates statute of limitations defense in discrimination cases
• Makes claims more difficult to defend (missing records, absent managers/supervisors)
• Expands the class of persons who can file• Anticipate increase in EEOC and state agency
filings and lawsuits• Imposes greater responsibility on employers to
address effects of past discrimination• Concept may be applied more broadly to
“other practices” of discrimination
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What’s a Prudent Employer
to Do?• Conduct compensation audit to identify
pay disparities that appear to be the product of discrimination– Research and document explanation for
perceived disparities– Make corrections where appropriate– Do so with assistance of counsel– Obtain releases if disparities are addressed– Do so prior to lawsuit or EEOC claim
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What’s a Prudent Employer
to Do?• Update/redesign existing compensation
structure as needed• Perform periodic salary equity analyses• Review and revise record retention
policies• Train management on new law and
impact on salary decisions• Create procedures to identify and
address disparities in salary decisions
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What’s a Prudent Employer
to Do?• If a claim is filed:
– Advance legitimate reasons for perceived pay disparities such as education, seniority, skill level, experience etc.
– Analyze contemporaneous documents to defend pay disparity
– Stress company’s commitment to pay equality– Note availability of complaint procedures, and
employee’s failure to follow– Equitable defense of laches as result of delay
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On the Horizon• Paycheck Fairness Act
– If enacted, will reduce employer defensesand enhance Equal Pay Act claims
– Will require employers to prove wage disparities are job related and consistent with business needs
– Will protect employees who discuss salary information from retaliation by employers
– Will allow uncapped compensatory and punitive damages
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2007 EEOC Enforcement Guidance: “Unlawful Disparate Treatment of Workers with Caregiving Responsibilities.”
and
2009 EEOC Enforcement Guidance: “Employer Best Practices for Workers with Caregiving Responsibilities.”
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Define “family” and “caregiver” broadly
•Broad application of “family” and those with caregiving responsibilities in less traditional or stereotypical sense • Broad definition of “caregiver”
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The “Benevolent Employer”
An employer should not make employment decisions based on what it believes to be employee’s perceived “best interests” or with the belief that it is being “sensitive” to an employee’s needs, without ever speaking with the employee about his or her actual expectations or needs.
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The Legal Requirements
• No federal law currently makes “caregivers” a protected class
• Best practices set forth in 2009 guidance are not mandatory. Employers are not required to implement all or any of the recommended best practices.
• Federal laws are unchanged. Continue enforcement of equal opportunity policies and follow Title VIII, ADA, etc.
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The Practical Implications• The EEOC has placed employers on notice that
discrimination based on caregiving responsibilities will be taken seriously
• Based on Enforcement Guidance in 2007 and 2009, a trend in litigation is signaled and the number of caregiver discrimination suits filed by the EEOC is expected to increase
• Employers have not lost their ability to fire, discipline, reprimand, or transfer employees based on legitimate business reasons. Caregivers are not given any EXTRA leeway. They can still be fired for not doing their jobs, just like anyone else.
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2009 Best Practices
The 2009 Guidance outlines 3 areas in which best practices can be implemented:(1)General Application(2)Recruitment, Hiring, and Promotion(3)Terms, Conditions, and Privileges of
Employment
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General• Be aware of, and train managers
about, the legal obligations that may impact decisions about treatment of workers with caregiving responsibilities
• Develop, disseminate, and enforce a strong EEO policy
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GeneralAn effective policy addressing caregiver protections
should:• Use broad definition of “family” • Describe common stereotypes or biases about
caregivers that may result in unlawful conduct• Provide examples of prohibited conduct • Ensure managers comply with work-life policies• Require the employer to respond to and
investigate complaints of caregiver discrimination promptly
• Require the employer to conduct prompt and thorough investigation and take appropriate corrective action
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Recruitment, Hiring, and Promotion
• Focus on the applicant’s qualifications for the job in question
• Review employment policies and practices
• Develop specific, job-related qualification standards for each position
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Recruitment, Hiring, and Promotion
• Ensure that job openings, acting positions, and promotions are communicated to all eligible employees regardless of caregiving responsibilities
• Implement recruitment practices that target individuals with caregiving responsibilities
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Recruitment, Hiring, and Promotion
• Identify and remove barriers to re-entry into the workplace
• Ensure that employment decisions are well-documented and transparent (to the extent feasible)
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Terms, Conditions, and Privileges of Employment
• Monitor compensation practices and performance appraisal systems for patterns of potential discrimination against caregivers
• Review workplace policies that limit employee flexibility. Such as fixed hours or mandatory overtime.
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Terms, Conditions, and Privileges of Employment
• Encourage employees to request flexible work arrangements that allow them to balance work and personal responsibilities
Flexible work arrangements may include: • Flextime Programs• Flexible Week Opportunities• Telecommuting, Work-at-Home, or Flexplace
Programs• Job sharing
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Terms, Conditions, and Privileges of Employment
• Reassign job duties (if requested)
• Provide reasonable personal or sick leave to allow employees to engage in caregiving even if not required to do so by the Family and Medical Leave Act of 1993 (FMLA)
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Terms, Conditions, and Privileges of Employment
• Post employee schedules as early as possible
• Ensure that employees are given equal opportunity to participate on complex or high-profile work assignments
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ConclusionIn addition to the specific best practices, there are a few key points to take away today:
1. This is a hot topic for the EEOC and employers should expect more claims in this area
2. Employers should review their policies and practices for equal opportunity compliance
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Conclusion
3. Employers should not act on stereotypes or assumptions even if the employer believes that it is acting in the employee’s best interests
4. The Best Practices may benefit employers
Fernando Pinguelo
Protect Your Business From the Dangers Posed by Email, Online Social Networks, and
Other Electronic Communication
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• What are we talking about?
• Why are we talking about it?
• What are the advantages and pitfalls?
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What are we talking about?
• “Electronic communication”• The growth of existing methods and birth of
new vehicles for communication- Email
- IM
- Blogging
- Texting
- YouTube
- Online Social Networks
- Latest phenomenon – micro blogging (e.g., Twitter)
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What are we talking about?
• “Electronic communication”
• Common features: - Maintain connections with family, friends,
acquaintances, colleagues, customers, and prospects
- Display personality traits, interests, abilities, offerings, and views
- Find those with common interests and needs- Locate long lost contacts - Programmed to be sent to groups en mass- Casual, abbreviated messaging systems
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What are we talking about?
• “Electronic communication”
• Common concerns: - Privacy- Security - Regrettable behavior remains forever- Casual, abbreviated messaging systems
breed ultra-casual, abbreviated messages
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Why are we talking about it?
Employee Personal Internet Use During the Work
Day • 86% use office email for personal purposes• 51% have admitted to shopping online on their
company’s time• 52% use social networking sites while at work
- (72% of them think they should be granted unrestricted access to these sites)
• 85% of employees think their personal internet use at work is acceptable
eLesson: Left unchecked, personal internet use during work hours can reduce productivity.
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Why are we talking about it?
Business Implications• 233 million hours are lost each month globally
due to employee time spent on online social networking sites
• 63% of system operators worry that employee use of online social networking sites threatens the security of the entire company’s system
• 25% of companies have suffered spam attacks from online social networking sites
eLesson: Left unregulated, personal internet use can breach your company’s security.
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Why are we talking about it?
• 12% of employers monitor the “blogosphere” to see what is being written about them
• 44% of employers use social networking sites to examine job candidates
• 39% of employers have looked up profiles of current employees
eLesson: While there are benefits, you should consider the pitfalls.
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What are the advantages and
pitfalls?Pros & Cons of Online Communication • Pros
- Efficient and effective way to conduct business- Identify employees engaging in conduct harmful
to the employer - Business-oriented Online Social Networks (OSNs)
(e.g., LinkedIn (10MM members)) reach new audiences and can be used to promote company
- Use of company blogs/OSNs to recruit employees and vet applicants
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What are the advantages and
pitfalls?Pros & Cons of Online Communication
• Pros - Enables applicants to gain a sense of the
company and gauge whether they would be a good fit
- Lets applicants “hear” from company employees
- Clues to an applicant’s analytical and communication skills and general maturity
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What are the advantages and
pitfalls? Pros & Cons of Online Communication • Cons
- Reveal confidential and proprietary company information- Unprofessional behavior that reflects negatively on
company- Messages may contain spam, viruses, illegal materials,
etc.- Electronic communication not typically hosted by a
company (i.e., Twitter) falls outside the purview of IT department
- Productivity concerns- Ineffective management of information
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What are the advantages and
pitfalls? Legal Implications of ‘Cyber
Snooping’
While searching OSNs may enable employers to complete their due diligence and gain competitive advantages, employers need to be careful not to violate any laws in the process
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What are the advantages and
pitfalls?Legal Implications of ‘Cyber Snooping’ • Discrimination & Harassment Laws
- Federal and state discrimination laws affected if adverse employment decision is based on information obtained from OSNs
- Harassment laws affected if OSNs are used to harass employees
- Some states prohibit employers from making employment decisions based upon activities conducted off-the-job
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What are the advantages and
pitfalls?Legal Implications of ‘Cyber Snooping’ • Retaliation Concerns
- Title VII • “It shall be an unlawful employment practice for
an employer to discriminate against any of his employees or applicants for employment . . . because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.”
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What are the advantages and
pitfalls?Legal Implications of ‘Cyber Snooping’• Retaliation Concerns
- Title VII • Also protects informal protests of discriminatory
practices, “including making complaints to management, writing critical letters to customers, protesting against discrimination by industry or by society in general, and expressing support of co-workers who have filed formal charges.” Sumner v. U.S. Postal Serv., 899 F.2d 203 (2d Cir. 1990)
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What are the advantages and
pitfalls?Legal Implications of ‘Cyber Snooping’ • Retaliation Concerns
- National Labor Relations Act • Section 7 provides that employees “shall have the
right . . . to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . .”
• Section 8 makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [Section 7] . . .” or “to discharge or otherwise discriminate against an employee because he has filed charges or given testimony under this subchapter . . . .”
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What are the advantages and
pitfalls?Legal Implications of ‘Cyber Snooping’ • Retaliation Concerns
- Similar provisions are found in the: • ADA• ADEA • ERISA • FLSA • FMLA • Sarbanes-Oxley
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What are the advantages and
pitfalls?Legal Implications of ‘Cyber Snooping’ • Privacy Claims (e.g., Stored
Communications Act)- Employee may have privacy claim where an employer
accesses a restricted social network• Business Torts
- Possible liability for torts committed by employee use of OSNs including
• defamation of company employees, customers, or competitors (i.e., “cybersmearing”)
• intellectual property infringement• theft of trade secrets• unfair competition, etc.
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What are the advantages and
pitfalls?Legal Implications of ‘Cyber
Snooping’
• Fair Credit Reporting Act
• Terms of Service Violations
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eLessons:
• If it were illegal to ask a potential employee about a particular topic, it is probably also illegal to take such information, found elsewhere, into account when making employment decisions
• Use of OSNs should be done above board, without any misrepresentations, and consistently for each and every job candidate
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What are the advantages and
pitfalls?Legal Implications of ‘Cyber Snooping’ • Real Life Examples: The Impact on Businesses
Pietrylo v. Houston’s Restaurant- Brian Pietrylo filed a lawsuit against Houston’s
Restaurant alleging violations of the Stored Communications Act (SCA)
- Worked as a server and fired for statements made on his personal MySpace account
- Account created to “talk about all the crap/drama/and gossip occurring in our workplace, without having to worry about outside eyes prying in”
- Access designed to be by “invitation only” and access given to select coworkers
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What are the advantages and
pitfalls?• Coworker with access, either voluntarily or through
coercion, gave login information to senior managers who later accessed the forum
• Forum’s conversations regarding sexual and criminal acts and fantasies pertaining to coworkers and customers were not well received by upper management
• Key issue: Whether management properly obtained the password needed to access the forum
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What are the advantages and
pitfalls?• Unrestricted and readily available content found on blogs and public social networking profiles continues to be fair game
• However, restrictions on access may curb employers’ abilities to use information and subject employers to unintended violations of law
eLesson: Don’t coerce employee for information and document your (non-coervice) requests.
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Stengart v. Loving Care Agency, Inc.
• Loving Care is in the business of providing home care services for children and adults
• Plaintiff was the Director of Nursing for all branches as well as a Branch Manager
• Plaintiff resigned and filed suit alleging that a hostile work environment led to her constructive discharge
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Stengart v. Loving Care Agency, Inc.
• Company forensically restored computer
• Searches recovered email correspondence from plaintiff’s office computer between plaintiff and her attorney
• Plaintiff sought aggressively the return of these emails
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Stengart v. Loving Care Agency, Inc.
• Court addressed whether a communication between an employee and her attorney through a personal, password protected, web-based email account, but made on the employer’s computer via the employer’s server during business hours, is protected by the attorney-client privilege
• Court balances employer’s need to monitor computer and internet usage to protect its business with an employee’s reasonable expectation of privacy in the work place
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Stengart v. Loving Care Agency, Inc.
• Company maintains employee handbook it distributes to all employees and which is available electronically
• Handbook governs employee’s use of company’s computers and other technology resources:- Technology resources are considered company assets - Email and voice mail messages, internet use and
communication, and computer files are considered part of the company’s business and client records. Such communications are not to be considered private or personal
- The principal purpose of electronic mail is for company business communications. Occasional personal use is permitted; however, the system should not be used to solicit for outside business ventures.
- Certain uses of the email system are specifically prohibited, including but not limited to job searches or other employment activities outside the scope of company business
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Stengart v. Loving Care Agency, Inc.
• Court relied heavily on company’s electronic communication policy to determine whether plaintiff had a reasonable expectation of privacy
• Holding: Employee’s use of employer’s computer and server to communicate with lawyer waived the attorney-client privilege
eLesson: Be sure you have a detailed employee handbook that addresses technology usage and expectations.
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Final eLessons Protect your business
• Survey employee communication practices• Train employees on electronic communication parameters
and prohibitions- Employees should make clear that views expressed are
personal opinion- Encourage employees to reflect carefully before posting- Warn employees that postings can potentially be
discovered by others and possibly broadcast to millions- Warn employees that making comments about coworkers
could be defamatory and could invade their privacy- Warn employees about disclosing confidential or
proprietary information- Remind employees to respect the company and each
other
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Final eLessons
Protect your business• Provide employees with a centralized
contact for any questions concerning information they would like to post
• System monitoring • Actively protect sensitive or
confidential information • Extend your “No Solicitation” policy to
e-mails and intranets
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Final eLessonsProtect your business
• Maintain a detailed employee handbook that addresses technology usage and expectations.
- All business systems and company-issued equipment and data belong to the company
- Systems and equipment must be used for appropriate and lawful business purposes only
- Warn employees of the consequences of policy violations
- Obtain a signed acknowledgement of employee receipt of the policy
- Incorporate and reference other company policies- Caution against unlawful conduct such as invasion of
privacy, violations of security laws, defamation, etc.• Provide a central source, such as HR, for
reporting abuses
COBRA Continuation Coverage Under the
American Recovery and Reinvestment Act of 2009
-Recent GuidanceCharles Bruder
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COBRA Subsidy Provisions
• Subsidy available only to involuntarily terminated employees
• Must have been involuntarily terminated between September 1, 2008 and December 31, 2009
• Subsidy cannot exceed 65% of the COBRA premium amount payable by former employee
• Employer/plan sponsor gets a corresponding payroll tax credit
• Subsidy can not be paid for more than 9 months
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IRS Notice 2009-27What is an involuntary termination of employment?• Severance from employment due to the
independent exercise of the unilateral authority of the employer
• Employee was willing and able to continue to provide services
- Employee cannot implicitly or explicitly request termination
- However, voluntary employment termination for “good reason” is deemed to be involuntary
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Involuntary Termination of Employment?
What constitutes an involuntary employment termination?• Death -• Disability - • Layoff or furlough period - • Reduction in Hours - • Termination for Cause - • Termination for Gross Misconduct - • Termination due to material change in geographic
location of employment - • Work stoppage due to strike -
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Involuntary Termination of Employment?
• Employee accepts a severance package (a “buy out”) where the employer indicates that after the offer period, a certain number of employees in the offer group will be terminated
• Yes – IRS Notice 2009-27, Question No. 9
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COBRA Subsidy Timing Issues – General
• Involuntary employment termination must occur between September 1, 2008 and December 31, 2009
• If involuntary employment termination occured before September 1, 2008 – No COBRA subsidy eligibility
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COBRA Subsidy Timing Issues – Examples
• Suppose the involuntary termination occured before September 1, 2008, but the individual loses coverage after September 1, 2008?- No COBRA subsidy eligibility – It is employment
termination date and NOT the loss of coverage date which governs whether or an individual is eligible for a COBRA subsidy under these circumstances.
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COBRA Subsidy Timing Issues – Examples
• Suppose the involuntary termination of employment occurs between September 1, 2008 and December 31, 2009, but the loss of coverage occurs after December 31, 2009?- No COBRA subsidy eligibility - Both the
involuntary termination and the loss of coverage must occur within the requisite period.
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COBRA Subsidy Premium Payment Issues
• Coordination with severance arrangements
• The period during which an individual is eligible for a COBRA subsidy depends upon when the COBRA continuation coverage period begins
• When is the loss of coverage date for COBRA purposes?
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COBRA Subsidy Premium Payment Issues – Example
1• Company severance plan provides for 6 months
of group health coverage at no cost to the individual
• After the 6 month severance period, the individual must pay $1,000.00 per month for coverage
• Loss of group health coverage is deemed by the plan sponsor to have occurred as of the employment termination date
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COBRA Subsidy Premium Payment Issues – Example
1 (cont’d)
• No COBRA subsidy for the initial 6 month period - No corresponding payroll tax credit for
employer• After the expiration of the 6 month
period:- Individual pays $350 per month for 3 months
(35% of $1,000); $1,000.00 per month thereafter
- Company receives a corresponding payroll tax credit for the 3 month period
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COBRA Subsidy Premium Payment Issues – Example
2• Same facts as Example 1, but Company
determines that the loss of coverage date starts after the 6 month period
• Employee pays $350 per month for 9 months; $1,000.00 per month thereafter
• Company receives a corresponding payroll tax credit for the 9 month period
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COBRA Subsidy Premium Payment Issues –
Planning Opportunity
• COBRA subsidies/payroll tax credits are only available to the extent that the individual is paying a portion of the premium
• Consider revising agreements to provide for more employee payments
• May be able to make other severance payments to make them whole
• Severance subsidized by the federal government