Preparing for New Laws Impacting the Workplace
Under the American Recovery and Reinvestment Act (ARRA), signed into law in February 2009 by President Obama, protections for whistleblowers have expanded. Additionally, under the ARRA employers must now pay 65% of COBRA premiums for terminated employees. While the law allows for government reimbursement of employers through withholding and FICA taxes, the changes themselves introduce a number of issues likely to confuse many employers. At the Law Offices of John A. Gallagher, our employment law attorneys provide ongoing consultative services for small and medium-sized companies in regard to new employment laws. We assist businesses with compliance and regulatory issues while taking preventative measures to minimize a company's exposure to unwanted liability.
If you own or operate a business and need legal counsel or representation in regard to new employment law requirements, contact the Law Offices of John A. Gallagher today to schedule an appointment and learn how we can help you.
Changes to COBRA and the ARRA
The ARRA essentially creates a temporary subsidy for laid-off workers to continue employer-sponsored healthcare benefits through COBRA. However, the subsidy cannot be used for health flexible spending accountants. Under the ARRA, the COBRA premium for employees involuntarily terminated between September 1, 2009 and December 31, 2009 can't exceed 35% of the cost to the plan. Before these changes were enacted, employees who opted for COBRA coverage were required to pay 102 percent of the cost of the premiums. Under ARRA, employers are now responsible for paying up to 65 percent of COBRA premiums for terminated employees.
Employers - Recovering COBRA Premium Costs
If an employer wants reimbursement for the full 65 percent of what they pay for an employee, they must first collect the employee's 35 percent COBRA premium share. If an employer does not charge an employee the full 35 percent of premium COBRA costs, they will not be able to recover their full 65 percent subsidy from the government. This raises a number of issues for employers. For example, should an employer provide a continuation of coverage for employees with domestic partners? Technically, domestic partners are not legally entitled to COBRA benefits. If benefits are provided, they must be considered taxable income, thereby making the benefits provided ineligible for a subsidy credit.
Whistleblower Protection, Employers, and the ARRA
The ARRA provides additional protection for whistleblowers who work for an employer that receives a contract, subcontract, or grant funded in part by the federal stimulus package. Under the ARRA, protections apply to employees who formally or informally complain to a supervisor or company representative regarding safety violations, waste, fraud, public health violations, and mismanagement. Here, employees who make complaints and expose malfeasance in the regular performance of their job are afforded whistleblower protection.
Additionally, the ARRA provides a relatively easy burden of proof for whistleblowers who claim they were retaliated against by their employer: they need only prove that their role as a whistleblower contributed to their harassment or unfair treatment. Here, circumstantial evidence can be used to meet the burden of proof. Alternatively, employers are required under the ARRA to provide "clear and convincing evidence" that their actions towards an employee had nothing to do with his or her whistleblower activities.
Questions? Contact the Law Offices of John A. Gallagher Today
The ARRA presents a number of challenges for employers. Our attorneys can explain your rights and obligations under the American Recovery and Reinvestment Act, providing legal counsel and representation in any legal matters that might arise involving the ARRA. To schedule an appointment and discuss your case, contact employment law attorneys at the Law Offices of John A. Gallagher today.