For those of us with school-age children, the school calendar (vacations and all) seems to be the rhythm that most of us adopt. So, now that February break is over, it’s time for a little heavy lifting. In this case, the heavy lifting involves the text of the new economic stimulus bill – which checks in at over 1100 pages and was signed into law last week.
In terms of relevant employment law-related provisions, the final bill (formally titled the "American Recovery and Reinvestment Act of 2009 "(H.R. 1)) has some important sections for employers. I had previous summarized one version of the bill here, but the final version is noticeably different so readers should be aware to rely only on recaps of the final bill.
Notably, the final bill does not have the E-Verify provisions that would have prohibited certain federal contractors from receiving any stimulus funding unless they used the E-Verify system. E-Verify is an internet-based system — administered by the government — that allows employers to verify employees’ work eligibility.
The biggest headline grabber in the new bill is the changes to COBRA (the Consolidated Omnibus Budget Reconciliation Act), which are complex and will require employers to take additional steps. Numerous sites have done a good job summarizing the changes, including World of Work, the Ohio Employer’s Law Blog, and the Pennsylvania Labor & Employment Blog. The changes are effective next month, in March 2009.
The DC Employment Law Update recaps the bill as follows:
The key concept of the new COBRA provision involves the creation of a new “qualifying event” that makes involuntarily-terminated employees (and their covered dependents) eligible for a 65% COBRA premium subsidy for up to 9 months.
An eligible employee is one who has been involuntarily terminated between September 1, 2008 and December 31, 2009 and who earns less than $125,000 if single or $250,000 if filing jointly (for those earning above these limits, the subsidy becomes taxable through an income-based phase in).
Eligible individuals who initially declined coverage must be given an additional 60 days to elect to receive the subsidy. … COBRA notices must provide information about the new extended coverage….
What do employers need to consider now regarding this new COBRA law?
At a minimum, employers can put together a list of all employees who have been involuntarily terminated (other than for gross misconduct, which is excluded under COBRA) since September 1, 2008. Employers can then determine who is currently enrolled and who is not and who may need to receive some additional documentation. Then employers can also consider steps to ensuring full compliance with the notice and administration provisions.
Because of the complexity of the rules (and the lack of additional guidance from the government on these new rules as of now), employers should also consider reviewing its practices with legal counsel.
What else is in the stimulus bill?
There are also provisions restricting executive compensation, provisions relating to the use of H1-B visas for TARP recipients and Work Opportunity Tax Credits.
I will be giving an audio conference for BLR on the subject of the new economic stimulus bill on April 29, 2009. Full details will be available on their website shortly.