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August 11, 2010

Flight Attendant Freakout: A Sign of the Times?

By now, you may have heard about Steven Slater, the Jet Blue flight attendant who reportedly called a passenger a "f---ing a--hole" over the plane's public address system, grabbed some beer from the beverage cart, then deplaned via the emergency chute. (Slater's attorney said Slater had been hit in the head by a piece of luggage as two passengers were fighting over space in the overhead bin, then one of the passengers cursed him out once the plane had landed at JFK Airport in New York.)

This could have been just another case of "take his job and shove it," except that Slater has apparently become a hero to many -- and some say it's because all of us are working long hours, for less pay, and often at jobs that we don't really want. Economist Joel Naroff, cited in a USA Today article, says that businesses should see the Slater incident as a warning sign: Although many workers feel they must stay at their jobs now, despite layoff threats, pay cuts, and the rest, once the economy picks up, "it's going to be payback time." CNBC reports that it's "no surprise" Slater has become a hero, given that so many workers these days "are overworked and underpaid -- and they can't even threaten to quit or go somewhere else."  

April 20, 2010

COBRA Subsidy, Unemployment Benefits Extended to June

The battle over continued extensions of the COBRA subsidy and emergency unemployment benefits continues in Congress. Last week, Congress passed -- and the President signed -- another stopgap measure, continuing these programs through May 31 (COBRA) and June 2 (unemployment benefits). Still under consideration: a bill that would continue these benefits through the end of the year, as part of a larger budget package. Although both the House and Senate have passed a version of this budget bill, they are sufficiently different to require reconciliation and another vote before becoming law.

This time, Congress waited long enough to extend these benefits that some people faced a gap in coverage. The original programs expired on April 5, but the short-term extension passed on April 15. Those whose unemployment benefits ran out must now reapply to receive compensation retroactively for the time they missed.

The unemployment benefits extension helps only those who had not yet exhausted their regular and extended benefits. Currently, between regular state benefits, the extended benefits program (which provides an additional 13 to 20 weeks of benefits), and the four tiers of extended benefits available through the Emergency Unemployment Compensation (EUC) program, unemployed workers in some states can collect up to 99 weeks of benefits. (Because some of these benefits depend on the state's unemployment rate, fewer total weeks of benefits are available in some states.)

The extension Congress passed will help workers who have not yet used up all of these benefits, by continuing the existence of these programs. However, workers who have already exhausted all available benefits through these programs won't be helped by the extension. For these very long-term unemployed, the only hope is the Congress will add a fifth tier to the emergency benefits program, making benefits available beyond the current 99-week maximum.

March 2, 2010

Senator Bunning Blocks COBRA Subsidy Extension

Toward the end of last year, Congress extended the COBRA subsidy provision. The original subsidy program applied only to those who were involuntarily terminated from September 1, 2008, through December 31, 2009. These former employees were entitled to a 65% subsidy of their continuing health insurance premiums for up to nine months. The extension increased the duration of the subsidy to 15 months. It also extended the eligibility period to include those who were involuntarily terminated through February 28, 2010. If you don't have your calendar in front of you, that was two days ago.

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.

December 21, 2009

Congress Extends COBRA Subsidy

Over the weekend, the Senate passed a defense spending bill that included -- among many other things -- an extension of the COBRA premium subsidy provision that's about to expire. (You can find the entire bill at the website of the Library of Congress; search for the bill number, H.R. 3326, then skip ahead to Section 1010). The House already passed the bill, and it's been sent to the President for signing.

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:

  • allow those who are involuntarily through February 28, 2010, to receive the COBRA subsidy, and
  • extend the subsidy period from nine months to a total of 15 months.

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.  

November 16, 2009

Refusing to Hire Based on Bankruptcy

The economic downturn has caused a lot of numbers to decline, such as take home pay, retirement savings, bank account balances, and home equity. But at least two numbers have been skyrocketing recently: the unemployment rate, which is higher than it's been in more than 25 years (10.2%), and the number of personal bankruptcies filed, which surged past the one million mark for the first three quarters of this year, and is expected to exceed 1.4 million by the end of 2009.

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.   

For more information on firing employees, see Nolo's Firing Employees & Employee Resignations area.

October 21, 2009

Will COBRA Subsidy Be Extended?

As the end of the year approaches, Congress and President Obama are considering whether to extend several important economic benefits to help ease the effects of the recession. For instance, the tax credit for first-time homebuyers, an $8,000 credit that one economist says will have resulted in 400,000 home sales during its tenure, is set to expire on December 1, 2009. Unemployment benefits are another topic of discussion: The House of Representatives has already passed a bill that would provide an additional 13 weeks of unemployment benefits in states with unemployment rates of at least 8.5%. The Senate is considering a different approach, which would extend benefits for 14 weeks in every state, and by an additional six weeks in states with higher unemployment.

And what of the COBRA subsidy, by which the government picks up almost two-thirds of the tab for continuing health insurance for workers who have lost their jobs involuntarily? (Learn more about the subsidy in this article.) The subsidy, which lasts for nine months, applies only to employees who are fired or laid off by the end of this year. According to Workforce Management, the percentage of eligible employees who actually enroll in COBRA has doubled since the subsidy went effect. The White House has said that it is considering  seeking an extension of the subsidy. So far, however, Congress doesn't appear to have taken up any legislation that would effect this change. If Congress doesn't act, workers who are fired or laid off after the first of the year will once again have to pay the full cost of continuing health insurance -- and, given the statistics above, many are likely to decide that this is a luxury they can't afford.  

September 19, 2009

It's a Man's, Man's, Man's, Mancession

Despite some signs of an economic rebound in the stock market, housing sales, and other areas, unemployment continues to rise. Earlier this month, the Bureau of Labor Statistics announced that the national unemployment rate has reached 9.7%. The San Francisco Chronicle reported that the jobless rate in California has hit 12.2%, with 2.25 million residents of the Golden State out of work and actively looking for new jobs.

People are starting to refer to our current economic situation as a "mancession," because so many who have lost their jobs are male. Nationally, the BLS reports that the male unemployment rate is 10.1%, while the female unemployment rate is only 7.6%. As a result of this skew, women now make up virtually half of the workforce, for the first time in history.

This morning, the New York Times reported on one effect of these statistics: Women who left the workforce after having children are trying to return to work, often to replace a spouse's lost income or hedge against the possibility of a spouse's layoff down the road. 

The article focuses on women who had the option of staying home with their children, so it's necessarily limited in scope to the upper end of the economic spectrum. A lot of the women profiled were attorneys, for example. And, it's a little bit hard to find too much sympathy for someone who had to return to work in part to offset investment losses "in the healthy six figures." Still, it's one more fundamental change attributable to the recession.

I'm interested in hearing how this gender shift in employment will affect overall pay and benefits. Not every working woman is an attorney pulling down a six-figure salary. In fact, women tend to earn less than men on average (currently thought to be about 80 cents on the dollar), are more likely to work part-time jobs, and are less likely to receive benefits. Will the gender shift -- and the resulting increase in families being supported primarily by women's work -- lead to higher pay and benefits for women? Or will pay and benefits decrease as women increase their participation in the labor force?    


August 3, 2009

EEOC Offers Guidance on Waivers of Discrimination Claims

You won't be surprised to hear that the economic downturn has led to huge numbers of layoffs. According to the Bureau of Labor Statistics, more than half a million employees lost their jobs in a "mass layoff event" in the first quarter of 2009, the highest numbers on record. And this counts only incidents in which at least 50 employees at the same company were laid off in a five-week period, not the many more jobs lost in smaller layoff actions or at smaller employers every day.  

In recognition of these figures, the Equal Employment Opportunity Commission recently released some guidance on waivers of discrimination claims. Many employers who lay off workers condition severance payments on the employee signing a release, agreeing to give up (waive) the right to sue the company for any violations of employment law. To be enforced by a court, such waivers must be knowing and voluntary, and must give the employee something of value (typically money) in exchange.

Additional rules, intended to make sure that the waiver really is knowing and voluntary, apply when an employer asks an employee to waive the right to sue under the Age Discrimination in Employment Act (ADEA). And, an employee who is at least 40 years old and is part of a group that's laid off or offered an incentive to resign must be given certain statistical information on the program and the affected employees. These rules are described in the EEOC's regulations interpreting the ADEA, at 29 C.F.R. 1625.22 and 1625.23.

The EEOC's new guidance, written for an employee audience in the form of questions and answers, doesn't appear to create any new rules or requirements. But it does provide a good refresher for companies that are using releases, including a checklist and some sample language waiving discrimination claims that meets the EEOC's requirements. (If you're using an attorney to draft or review your releases -- as you should -- he or she will no doubt find the brevity of the EEOC's sample language humorous.)

For more information on using a release as part of a severance package, see Nolo's article Using Severance Agreements to Avoid Lawsuits.
July 15, 2009

Involuntary Part-Timers Would Boost the Unemployment Rate

In the past few weeks, we've heard a lot about the unemployment rate. By the end of June, the jobless rate reached 9.5%, the highest it has been in more than 25 years. This data put the kibosh on all the talk from just a month earlier that things were looking up because the economy had lost fewer jobs than expected in May.

The unemployment rate counts only those who are able to work, available to work, looking for work, and not working at all. But what about all of those who are working less than they would like to be, whether because of losing one part-time job, being forced from full time to part time, or taking an hours cut? The New York Times crunched those numbers, and today told us just how high the jobless rate would be if these folks were included: 20% or higher -- that's one in every five workers -- in the states of California, Oregon, Rhode Island, South Carolina, and Michigan. The article said that the rate could reach 25% by the end of the summer in California. Ouch.

The problem of underemployment is highlighted by statistics showing that the aggregate weekly hours worked by private employees in this country has declined to the lowest level since 1964. In fact, most of us are working fewer hours per week now than we were a year ago, according to data from the Bureau of Labor Statistics.

One reason for this decline is that employers are cutting employee hours across the board -- in the form of temporary reductions or unpaid furloughs -- as a way to lower payroll costs and avoid layoffs. Most of the working stiffs I know have faced wage cuts, hour cuts, or both, and have accepted them gracefully, knowing that these measures are helping save jobs.

But employers beware: A recent spate of articles warns that there is currently some legal confusion -- and therefore, a stronger possibility of lawsuits -- over how furloughs can be implemented without running afoul of wage and hour laws. And that's assuming employees really aren't working during the hours for which they aren't being paid. Some experts even advise making sure employees can't work while on furlough by requiring them to leave their company-issued laptops, BlackBerrys, and phones at work. The web is sufficiently tangled that it makes sense for employers considering furloughs to consult first with an experienced employment lawyer.