But the one-month extension of the subsidy wasn't the only COBRA news in the Temporary Extension Act: The bill also expands eligibility for the subsidy to those who initially lose their health insurance coverage due to a reduction in work hours, then are laid off. This is a small but vitally important change: Many businesses have tried to weather the current economic storm by cutting back on hours worked (and how much employees are paid for those hours). The most recent figures from the Bureau of Labor Statistics (for February 2010) show that more than six million people are involuntarily working part time due to business conditions or lack of work. Unfortunately, given the current economic climate, many of these businesses will ultimately have to make deeper cuts -- and many of these involuntary part-timers will eventually lose their jobs altogether.
The new law gives these employees another opportunity to elect COBRA coverage once they are terminated -- and, therefore, become eligible for the subsidy. A cut in hours that makes an employee ineligible for group health insurance through the employer's plan is already a COBRA qualifying event, and the new law doesn't change that. Nor does the law make employees who are still working at reduced hours eligible for the subsidy. What the law does is provide an additional election period to these employees if they subsequently lose their jobs and become eligible for the subsidy. If an employee initially declined coverage or elected coverage but let it lapse, the new law gives that employee another chance to elect coverage after a job loss.
]]>Last week, the House of Representatives passed a temporary measure that would have extended the eligibility period for another month, to the end of March 2010, to give Congress some time to get its act together and pass a more comprehensive jobs bill. But the Senate has been blocked from voting on the extension by Senator Jim Bunning of Kentucky. Bunning's camp says he doesn't necessarily oppose the measure, but wants Congress to stop passing spending bills that it can't pay for. (Bunning himself, in response to criticism of his action last week on the floor of the Senate, had a shorter comment: He is reported to have said "tough s%*t" in response to another Senator's remarks that Bunning should drop his opposition to the bill.)
Bunning has been taking a lot of criticism for his action, but that's nothing new for this Senator. After a public fight last year with the National Republican Senatorial Committee (which reportedly included a threat by Bunning to sue the group), Bunning announced he would not run for reelection. In recent years, Bunning's apparent gaffes, from his comments about Supreme Court Justice Ginsberg's cancer to his comment that an opponent in his previous reelection race looked like one of Saddam Hussein's sons, have garnered a lot of press.
Bunning's action prevents the Senate from passing the House's temporary measure by unanimous consent. If that procedural avenue is blocked, the Senate will have to override his objection or simply pass the COBRA extension as part of its broader jobs bill (which, in its current form, extends the program until the end of this year), either of which will take some time.
]]>First, it was reported this week that President Obama's proposed budget includes a $25 million effort to stop the misclassification of employees as independent contractors, with funding for 100 new enforcement positions at the IRS. The Labor Department estimates that up to 30% of businesses misclassify employees as contractors, according to an article in the New York Times.
This move isn't so surprising when you consider the economy -- and the money a company can save by classifying workers as contractors, who aren't entitled to benefits, overtime, workers' compensation coverage, or unemployment if they are let go. I've even heard stories of employees being laid off, then brought back months later as independent contractors to do essentially the same work.
According to a study cited in Inc., about half of the jobs that have been created during the current economic recovery are "contingent," which means they are held not by employees but by temps and contractors. Used properly, contingent workers give companies the flexibility to ramp up quickly for a particular project, using professionals with experience and expertise, then pare back down just as quickly (and with very little legal exposure) once the project is done. Used improperly, turning employees into contingent workers exploits the employees, hurts morale and cohesion in the workplace, depletes state and federal tax coffers, and ultimately leaves workers at far greater risk of hitting bottom -- with no unemployment to protect them -- if the work runs out.
And speaking of hitting bottom and tax coffers, there was a second story about contractors this week. Apparently, the man who crashed a plane into an IRS office in Austin, Texas, yesterday was particularly angry about a provision of the Tax Code involving worker classification. The Times reported that the man's suicide note cited a 1986 law that made it more difficult for companies to classify certain workers who provide technical services as independent contractors. (The pilot of the plane was a computer software engineer.) The law ("Section 1706") essentially takes away certain defenses for these companies if they are audited for misclassification: Other companies can point to past industry practice, court rulings, and similar evidence to show that they had a reasonable basis for classifying workers as contractors, but those defenses aren't available for these technical services workers. The Times cites critics of the law, who say that it has prevented technical workers from becoming wealthy entrepeneurs and stymied technological innovation. The Times also reports that the law was passed essentialy as a way to raise tax revenue.
Taken together, these two stories show the tension underlying worker classification: Workers are supposed to be classified according to the work they do, but the amount of money at stake seems to cloud everyone's judgment. And, the financial interests of private business and the government are decidedly at odds here. Generally speaking, when workers are classified as contractors, companies save money and the government loses money. When workers are classified as employees, companies pay more and the government collects more.
While the financial incentives on both sides of the equation are therefore strong (and opposing), they are not supposed to be decisive. The law says that workers are to be classified according to what they do: Is their work essential to the employer's business? Does it require special training, skills, tools? Considering a long list of factors, do the workers truly look like independent business people, who can be expected to bargain at arm's length with the employer and cover their own costs of doing business? Or do they look more like employees, who have less bargaining power and may therefore need some protection against discrimination, on-the-job injuries, potentially oppressive working conditionsg, and job loss? With both business and government going broke, however, these fundamental policy considerations seem to have taken a back seat to financial concerns.
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A couple of weeks ago, the jury reached a verdict: Crawford was awarded $1.5 million in damages. After losing its legal argument that Crawford couldn't bring a retaliation claim, the employer tried a different tack: It argued that Crawford wasn't fired for participating in the harassment case, but for performance problems. The employer said Crawford was once a good employee, but her performance had been slipping; when an audit revealed problems in the payroll department, including checks that were never deposited, she was ultimately fired.
Of course, we can only know the facts that were recounted in news articles or court decisions about the case. Based on the information I've seen, I think there are a few lessons employers can take from what happened in this case:
It's been reported that the budget proposal would make the subsidy available to those who are involuntarily terminated from March 1, 2010, through the end of the year. These folks would be eligible for up to 12 months of subsidized health care continuation (employees who are involuntarily terminated up until the end of February 2010 are eligible for 15 months of the subsidy, based on the first extension, passed by Congress this past December).
Are people taking advantage of the subsidy? The answer is a resounding yes, according to a survey reported in Business Insurance. Large employers reported that more than twice as many laid off employees have opted to continue their health insurance through COBRA since the subsidy first became available.
If the subsidy extension passes, some state legislatures may have to get on the ball in a hurry. A number of states offer "mini-COBRA" laws, which typically provide the right to continue health insurance to those working for smaller employers (COBRA covers only those with at least 20 employees). These laws differ widely in the details, including what counts as a qualifying event and how long continuation coverage can last. But most of them have this in common: As long as former employees meet the other requirements for the subsidy (for example, they were involuntarily terminated and meet certain income restrictions), they are eligible for the COBRA subsidy, even if they are receiving continuation coverage through a state law rather than through COBRA.
To allow employees to take advantage of the subsidy, a number of states amended their laws -- for example, to give employees who originally passed up continuation coverage a second chance to elect coverage once the subsidy was available. However, some states tied their amendments explictly to the original time frame for which the subsidy was available, and so might have to take legislative action to make sure employees of smaller employers are still eligible if the subsidy is extended.
It's interesting to me that, at a time when health care reform has been described as "on life support," unconscious," or in terms of some other unfortunate medical metaphor, the COBRA subsidy -- which is, after all, government-funded health insurance -- enjoys wide popularity, inside and outside of Congress.
UPDATE: After it was blocked temporarily by a Senator, Congress passed -- and the President signed -- a stopgap measure that extends the COBRA subsidy until the end of March 2010. (Congress is currently beginning work on comprehensive jobs legislation which will extend the subsidy to the end of this year.) The stopgap bill also clarifies that employees who initially lost their health insurance because of a reduction in hours are eligible to claim the subsidy if they subsequently lose their jobs. Read about it here.
]]>The facts of the case allege that Harold, the manager of an equipment rental company, stopped buying tires from Eileen, owner of a tire service, after she refused his sexual advances. She had been selling to the company for almost ten years, earning about $29,000 monthly from the account. After she rejected Harold's advances, he kissed and groped her, delayed payments to her company, and then stopped doing business with her altogether.
She (and her business) sued under a section of New Jersey's nondiscrimination law that makes it illegal to refuse to contract or do business with any person on the basis of a protected characteristic, including gender. The court found that Eileen faced quid pro quo sexual harassment, a form of gender discrimination that violated the statute. The court added that allowing such conduct would create barriers to a woman's ability to run a business on an equal footing with men, and was therefore exactly what the legislature was trying to get at when it passed this antidiscrimination provision.
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Part of the problem seems to be that users of these sites believe themselves to be invisible, at least to their employers. For example, according to an article on Workforce Management (you may have to register to view it), investigators looking into employee workers' compensation claims search social networking sites for photos of employees engaged in activities that are incompatible with their claimed injuries -- such as bowling a perfect game, taking judo classes, or riding a bucking bronco. Then, there's the recently reported case filed by a Canadian woman, who says that her sick leave insurance benefits for depression were improperly cut off after an agent for the insurance company found photos of her on Facebook vacationing and taking in a show at Chippendales.
Even employees who take precautions to make sure employers can't view their posts are finding that management has its ways. In a recent case in the District Court of New Jersey, for example, some employees at Houston's restaurant created a group on MySpace for the stated purpose of venting about their jobs. The group was private and could be joined only by invitation. However, an employee member of the group showed it to a manager (she testified that she felt pressured to do so), a number of managers read it, and the employees who set it up were fired. The court recently upheld the jury's verdict in favor of the employees.
Some companies are so concerned about what employees -- or even the friends of employees -- might be saying about them online that they have instituted content rules or outright bans on social networking. According to an article in the National Law Journal, more than half of the companies responding a survey said that they prohibit employees from visiting social networking sites while on the clock. And, some companies have adopted rules about the content of employee posts. The Associated Press, for example, is reported to have not only set strict rules for employee pages (including that they should not express political affiliations or take a stand on contentious issues, even if their pages are restricted only to friends), but also asked employees to police the content others post on their pages. (You can find an article from Wired about it -- including a link to the actual policy -- here.)
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Then, there are a few Supreme Court cases that should be interesting, including the Quon text messaging case, a case on whether two members of the NLRB have the right to issue decisions, and a disparate impact case on when a claim accrues. The court is also considering whether to hear a case on third-party retaliation, in which a man claims he was fired because his fiance filed a charge of discrimination against their employer with the EEOC.
Put all this together with the grand plans from the regulatory agenda I recently wrote about, and it adds up to another potential blockbuster year.
]]>And 2010 could be another big year: In my next post, I'll talk about some of the changes that might be in the pipeline. Stay tuned.
]]>Currently, the COBRA subsidy allows those who are involuntarily terminated from September 1, 2008, through December 31, 2009 to receive a subsidy of 65% of their COBRA premium payments for up to nine months. The subsidy went into effect on March 1, 2009, which means that the first group of eligible folks -- those who had already lost their jobs and have been receiving the subsidy since the effective date of March 1 -- used up their nine months of subsidy coverage on November 30.
The extension would:
The extension to 15 months of subsidy eligibility also applies to those who have already used up their original nine months. For example, someone who was laid off and began receiving the COBRA subsidy on March 1, 2009, would have used up the nine months of subsidized coverage a few weeks ago. Now, that person will be eligible for an additional six months of subsidy payments. And, this coverage can be retroactive: That is, if an employee's subsidy ran out, and the employee didn't pay the full cost of COBRA coverage for December, the employee will have an opportunity to pay the lower amount to receive retroactive continuation coverage.
]]>Jeff Quon was a segeant on the Ontario, California SWAT team. He was given a pager with wireless text-messaging capability for work, and was told that the department's email policy -- which gave the city the right to monitor, prohibited personal use, and told employees their messages were not private -- applied to the pagers. However, the lieutenant in charge of administering employee use of the pagers said something different: He told employees that each pager was allotted 25,000 characters per month, and that employee use of the pagers would not be audited as long as employees paid any overage charges for their accounts.
For eight months, the department did not audit anyone's pager messages. During this time, Quon exceeded the overage limit several times, and paid for his extra usage. When Quon and another officer again went over the limit, the chief decided to audit the use of certain pagers (including Quon's) to figure out whether the city should increase its 25,000 character allotment and whether the officers were using their pagers for personal reasons. The city asked its carrier (the Arch Wireless of the case title) to provide transcripts of the messages on the selected pagers, and found that many of Quon's messages were personal and some were sexually explicit. Quon, his wife, and two others with whom he exchanged text messages than sued for violation of their privacy rights.
The Ninth Circuit found against the city. Despite the written policy, the court found that the lieutenant's statement that he would not read their messages, combined with his practice of actually not reading messages for months, gave Quon and the others a reasonable expectation of privacy in their messages. The court also found that, even though the city's rationale for reading the messages was reasonable, it could have achieved that goal without reading the messages by, for example, warning Quon in advance that his pager would be audited, asking Quon to delete his personal messages, or asking Quon to count the work-related characters himself. Because there were less intrusive ways to find out what was going on with the pager accounts, the city's decision to read the messages was a privacy violation.
Because Quon involves a government employer, the Fourth Amendment (which prohibits unreasonable searches and seizures) applies. The Fourth Amendment doesn't protect private employees, so the court's decision in Quon won't explicitly extend to the private sector. But it will be highly influential: Courts have generally followed similar standards in analyzing privacy claims against private employers. The case will also have wide resonance because it will be the Court's first foray (as far as I can tell) into modern workplace monitoring -- the kind that involves electronic and digital communication, not phone calls and locker searches.
It's not surprising that the Ninth Circuit is one of the few courts to find in favor of an employee's privacy claim. The Ninth Circuit is still known as one of the more liberal -- and protective of civil liberties -- in the nation. And, the judges of the Ninth Circuit, themselves federal employees, have not taken kindly to the monitoring of their own communications: Almost a decade ago, the judges disabled the monitoring software on their own computer systems to protest an announced policy stating that court employees had no right to privacy in their email messages and Internet activities. That part of the policy was later withdrawn, in part because of the attention drawn to it by the Ninth Circuit protest.
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The Unified Agenda can be somewhat daunting, both in length and in jargon (OMB Watch, a nonprofit that works to promote greater transparency in federal regulatory and budget matters, has a nice guide to some of the terms used in the Unified Agenda). Each federal agency that's included in the Unified Agenda must indicate what rulemaking it has planned in coming months. The list of agencies in the current Unified Agenda is here; when you click on an agency's link, you can see its statement.
The EEOC has identified two regulatory priorities:
The Department of Labor painted with a broader brush: It begins its regulatory plan with a sort of mission statement, lising 12 "strategic outcomes," from improving health benefits to helping injured workers return to the job, all intended to further the agency's goal of "good jobs for everyone." Here are the specific regulatory proposals that interested me:
Considered together, these numbers mean that more job seekers are likely to have a bankruptcy filing on their record. Bankruptcy discrimination is illegal, according to 11. U.S.C. Section 525. However, this protection includes a large exception that leaves most job seekers out in the cold. Although government employers may not discriminate in hiring, firing, or other aspects of employment against those who have declared bankruptcy, private employers have more leeway. They may not fire employees because they have declared bankruptcy, but the statute doesn't explicitly prohibit refusing to hire someone who has declared bankruptcy. Nearly every court to interpret this statute has found that private employers may legally reject an applicant solely because of a past bankruptcy.
Plaintiffs who bring these cases don't have much chance of winning -- unless they can prove that they were actually hired. If the applicant manages to become an employee before the employer rejects him or her, that employee may have a viable case.
A case decided last month by a federal district court in Florida is a good example. In Myers v. TooJay's Management Corporation, Eric Myers claimed that he was denied employment by TooJay's once the company received his credit report and learned that he had filed for bankruptcy. Both parties in the case filed for summary judgment, and Myers lost his claim for discrimination in hiring. The judge found that the statute doesn't prohibit refusal to hire based on bankruptcy, so Myers couldn't win on that allegation.
However, the judge found that Myers was entitled to continue to trial on his claim that he was actually hired by TooJay's, then fired once the company learned about his bankruptcy. Everyone agrees that Myers interviewed for the position, then spent two days in an on-the-job evaluation. When the evaluation ended, Myers was told that he had performed well and was asked to sign a number of documents, including a W-4 form, an I-9 form, an order form for an employee uniform, a nondisclosure agreement, and acknowledgment forms for the company's sexual harassment policy and employee handbook. Myers said the manager he spoke to made him an unconditional offer of employment and discussed his start date, hours, and salary range. The manager denied making these statements, and said that he told Myers any offer of employment was contingent on passing a background check. (Myers signed a consent to the background check along with the other forms.) After Myers gave notice at his old job, he received an adverse action form from TooJay's, stating that the company was rescinding its employment offer because he had filed for bankruptcy.
Based on these facts, the judge decided that a jury could find that Myers had been hired, and was therefore an employee protected from bankruptcy discrimination. So, Myers will have his day in court. TooJay's apparently has an official policy of not hiring anyone who has filed for bankruptcy. This seems overly punitive, given the many legitimate reasons why someone might declare bankruptcy, especially in this economic climate. But no matter where you come down on this issue, there's a lesson for everyone here: If you believe you haven't yet hired someone, don't ask that person to sign employment forms. Save the first-day paperwork for the first day of work.
]]>The Gross case held that employees alleging age discrimination have to do more than show that their age was a "motivating factor" in the decision they're complaining about. They must show that their age was what lawyers call the "but for" cause of the decision -- in other words, that the decision would not have been made if not for their age.
This standard is different than the one used for other types of discrimination. In Title VII cases, if the employee can show that a protected characteristic (such as race or national origin) was a motivating factor in the employer's decision, the burden of proof then shifts to the employer, who must prove that the same decision would have been made regardless. The logic behind this procedure is that any consideration of a protected characteristic is improper and illegal. So, for example, if the employee can prove that the employer was motivated, even in part, by the employee's race, the employer bears the responsibility of defending its actions and proving that race was ultimately not the deciding factor. The employer bears this burden because the employer is already at fault for taking race into account at all.
The Gross decision is just the latest indication that age discrimination is treated differently than other kinds of discrimination. In part, that's because age discrimination is prohibited by a different statute, which uses slightly different language than Title VII. But it's also due to our societal belief that age discrimination just isn't as bad as other types of discrimination. (For an interesting take on the reasons that might motivate this belief, check out this editorial from The New York Times this weekend.)
Anyone who has practiced employment law will tell you that you have to prove a lot to win an age discrimination case. Biased comments that would be the smoking gun in a sex or race discrimination case seem to barely raise an eyebrow. There's a long line of cases dismissing statements about workers being "too old," having "senior moments," or needing to get out of the way to make room for "younger, more energetic" employees as stray comments, not sufficient -- and sometimes, not even considered relevant -- to prove discrimination.
Last month, the "Protecting Older Workers Against Discrimination Act" (HR 3721) was introduced in Congress. Its stated purpose is to overturn the Gross decision. It would require courts to follow the same burden shifting procedure in age discrimination cases as they follow in Title VII cases: Once the employee shows that age was a motivating factor in the decision, the employer would have to show that the decision would have been made even if age had not been considered.
If this bill passes, it could make a big difference. As our population ages and competition for scarce jobs increases, age discrimination claims are on the rise. In 2008, the EEOC reported that charges of age discrimination increased more than 28% from the previous year, the largest increase of any type of claim.
]]>Lately, the news has been filled with stories of workers who don't get paid time off and can't afford to stay home when they are ill. As the press release for the bill points out, many of the estimated 50 million Americans who don't get paid sick leave work in low-wage jobs, such as food services, hospitality, school work, and health care, where they are likely to have contact with the public. And, the Centers for Disease Control (CDC) has said that every worker who comes to work sick will infect one in ten coworkers.
The CDC has recommended that those who have the H1N1 virus stay home until 24 hours have passed since they last had a fever. (Those in the healthcare field are advised to stay home for seven days after they first get sick, or 24 hours after their symptoms go away.) However, the CDC has also said that those who have been sick may continue shedding the virus (that is, they will continue to be contagious), although at lower levels, for up to ten days.
The bill, called the "Emergency Influenza Containment Act," would apply only to employers with at least 15 employees. It's intended as an emergency provision, and would sunset (expire) two years after enactment. The House Committee on Education and Labor is scheduled to hold a hearing on the bill in a couple of weeks.
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