AARA, HR, and Employment Law
So much has been written about the American Recovery and Reinvestment Act signed by President Obama in February that I’ve sat on the sidelines. Since the AARA does impact human resources professionals and employment law, I decided to add my two cents.
Most significant are changes to COBRA. Qualifying employees terminated between September 1, 2008, and December 31, 2009, pay only 35% of their COBRA premiums after February 17, 2009. Employers advance the other 65% as a subsidy until the employer’s payments are recouped through reduced federal payroll tax. The subsidy is available for nine months unless the period of continuation coverage expires earlier. The Department of Labor has posted new forms for employers to use to notify employees at http://www.dol.gov/ebsa/COBRAmodelnotice.html.
Download the free white paper from HRhero.com What the Obama stimulus plan means for employers: COBRA, benefits, and more
AARA expands unemployment benefits, extending the Emergency Unemployment Compensation program through December 31, 2009, adding 33 weeks to those who have exhausted their regular benefits. AARA gives states incentives to reform their unemployment compensation systems and expand eligibility.
AARA expands the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules to include business associates of “covered entities.” It includes new notification requirements for security breaches and increases penalties for HIPAA violations.
AARA expands the Work Opportunity Tax Credit to include two new categories: unemployed veterans and disconnected youth. Accordingly, 40% of the first $6,000 of wages is available to employers if they hire employees in specific categories.
AARA protects whistleblowers reporting mismanagement of funds, safety and health violations, or legal violations by entities receiving ARRA money. This applies to all non-federal employers and their supervisors and managers.
Finally, AARA restricts immigrant hiring and executive compensation for businesses that accept funds from the Troubled Asset Relief Program (TARP). For more, see Delaware Employment Law Blog, Dan Schwartz, Jon Hyman, Michael Moore, and Mike Maslanka.
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About Chris Parker
Chris Parker's practice focuses on the representation and counseling of companies in matters pertaining to the workplace and the protection of their intellectual property and trade secrets. In addition to serving as an advocate for clients, Mr. Parker is also trained as a mediator and frequently serves as a third-party neutral.
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About Jimmy Daniel
Jimmy Daniel provides counseling to businesses of all sizes related to the employment relationship. He assists in the drafting of employment agreements, policies, and handbooks, as well as provides guidance related to compliance with federal, state, and local legislation such as the Fair Labor Standards Act and the Family and Medical Leave Act.
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About Larry Bridgesmith
While serving in an Of Counsel relationship with the firm, Mr. Bridgesmith also serves as the Executive Director at the Institute for Conflict Resolution at Lipscomb University and as an officer and principal in Strategic Resolutions Group, LLC. In these roles, Mr. Bridgesmith brings over 30 years of legal experience in dispute resolution and innovative workplace strategies to clients, students and business entities alike.
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I was fired from my job 4/1/2009. Direct Buy is a franchise company that has owners who have no tack on the way they treat their employees! In 2008 they fired 3 of their staff 2 days before Christmas. Then in January a salesman was fired because he did not want to work the phones since he was a floor salesman. As of 4/1/2009 myself and a coworker was fired because Quote” We were not producing over 500 daily. My sales to ratio per closing was over calls was well over 87%. I feel that they was bring in staff at a lower rate and firing the staff that was making more commission. Are the laws to any business that they should give you a warning before they fire you. Thank you Chris Metz unemployed again.
I don’t know of a law that requires a warning. Sometimes, a company’s policy says a warning will “ordinarily” be given, but that’s not legally binding. A collective bargaining agreement might require a warning where you’ve got a union involved. With respect to public or government employees, there is sometimes a statute or ordinance that requires a warning.
For most employees in the private sector, there’s no law requiring it, to the best of my knowledge.
In this tough economy most small businesses are lucky if their even providing the option for health insurance! Now, their going to take that risk, if they have to lay off or fire someone, to have to pay 65% of their health insurance for the next 9 months?! Thats ridiculus! I wonder why small business are quickly sinking!
Is there anything in the AARA that would provide a discount on COBRA for full time students who are dropped from parents health insurance due to age? My daughter still has 4 months of college to complete her degree. To keep her on our insurance through cobra will cost $407 per month. From what I can tell AARA Cobra discount only kicks in if you are “involuntarily terminated” from employment.
I think you’re right unfortunately. You might check with your daughter’s school to see if it has something to offer. My daughter just graduated from college. We received a letter from school offering health insurance to her if she was no longer on an insurance plan. I don’t know if she would have been eligible had she still been in school. Good luck.