COBRA Is Aptly Named; It Bites Its Victims

The Consolidated Omnibus Budget Reconciliation Act of 1985, now known as COBRA, contains a clause allowing employees to keep their company’s health insurance for up to 18 months after they leave their jobs, provided they pay the premiums.

With people being laid off right and left and the ranks of the unemployed rapidly swelling, many Americans are getting their first introduction to COBRA–and they don’t like it. It ain’t cheap; it’s the whole enchilada, not just the small portion of the premium they may have paid at work.

In nine states, monthly unemployment benefits barely cover or don’t cover the premium for COBRA. They are Alabama, Alaska, Arizona, Delaware, Florida, Louisiana, Mississippi, South Carolina and West Virginia.

Nationally, COBRA costs on average gobble up 84 percent of monthly unemployment checks for families (more than 30 percent for individuals). Factor out the nine states already mentioned, and the average is still 75 percent for the remaining 41 states for family coverage.

Now, I know what many people are going to conclude from these stats–nationalize health care! Granted, that would start to alleviate the situation, but under none of the proposals now floating in Washington, D.C., would the individual or his or her employer not have to pay (substantially) for the “right” to health insurance.

And if the system works anything like the health care delivery platforms in Canada and France, for instance, you’d have to buy supplemental insurance to cover things like, well, operations beyond the tonsil removal variety–to say nothing of enduring long waits for doctor visits, tests and hospitalization, sometimes stretching out to months and even years in Canada.

“We’ve got to cut your tumor out immediately, Bob, or you’ll not make it another six months,” the Canadian doctor explains.

“Great, let’s get it done,” Bob replies quite naturally.

Doctor: “Unfortunately, there are no hospital openings for 18 months.”

That kind of thing.

The one time I got laid off, I received the COBRA notice in the mail and immediately knew I couldn’t pay the premium. It was just under $2,000 a month for my family. I could pay the premium and lose my house or stay in my house and worry about everyone’s health needs. I stayed in the house, and fortunately nothing happened. (However, I did learn how to buy my medications from Canada, which in many cases is still cheaper than paying the co-pay here!)

That’s why I compare COBRA to the snake of the same name–it’ll bite you.

Maybe those long lines and waits are better, but I’m hoping there’s a still better solution.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Lilly Ledbetter Triumps Over (In) Congress

A week ago I wrote that the Lilly Ledbetter Fair Pay Act was being put on fast track for passage by the 111th Congress. With a snap of their fingers (actually, pushing their “yes” buttons), members of Congress did just that and sent Lilly over to the Senate, where Harry Reid and other leaders are confident of having the necessary votes to choke off a Republican filibuster.

(To recount, the Fair Pay Act reverses a Supreme Court decision regarding when the statute of limitations begins on pay discrimination complaints. The court said it begins once the pay-discrimination decision is made; the new law says it begins anew each time a paycheck is issued.)

Meanwhile, this opening salvo in the pro-employee, pro-union, pro-trial-lawyer assault on Bush’s eight pro-business years is already drawing criticism and producing warnings.

So far, I haven’t heard the word “Armageddon” used in connection with the Fair Pay Act (as it was used toward the Employee Free Choice Act), but here’s one dire warning from Forbes.com:

Libertarian Richard A. Epstein calls the passage “Democratic Death Wish On Labor Relations.”

Interesting stuff. Epstein is a libertarian and a professor of law at the University of Chicago. He predicts that companies will now have to spend more time preparing for legal action and more time defending themselves in court in cases involving lots of “stale evidence.”

He writes that “every dollar that is spent in litigating the past is one less dollar for hiring new workers.”

Everytime a new labor law comes up for a vote, just remember who contributed the most to the Democrats and Barack Obama in the November 2008 election–unions and trial lawyers. Then you can see who’s really going to benefit from any laws or economic stimulus packages coming out of D.C.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Businesses Fear His Very Sight

Tom Mundy earns a princely income in California by going around to various business establishments with an eye to finding violations of the ADA (Americans With Disabilities Act), usually related to accessibility issues. In one instance, the condiments counter at a fast food joint was one inch too high to be properly accessible. So what did Mundy, who himself is disabled and in a wheelchair, do?

Like any good, red-blooded American, he sued, of course. In cahoots–oops, I meant in concert–with his lawyer, Mundy is chalking up enough settlements each year to fill his pockets at the six-figure pace. He calls what he does advocacy; others say it’s nothing but extortion.

HERE’S HIS FULL STORY

Meanwhile, I strongly advise any of you owning businesses to keep abreast of ADA requirements (recently affirmed and expanded by the ADA Amendments Act) by procuring a copy of Personnel Concepts’ ADA Compliance Kit.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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New Perspectives on the Unemployed

I ran across a blog posting today by someone named Chef Sheila, but it appears as if the article itself was done by someone else judging by the first paragraph that praises “this journalist’s informative piece” (unless she’s vainly referring to and complimenting herself).

Be that as it may, the piece is called “Meltdown 101: Unemployment by the numbers,” and it starts off by factoring in categories of unemployed and underemployed that the “official” figures excludes and comes up with a total unemployment rate for December 2008 of 21 million people, or 13.5 percent unemployed. That’s compared to the official rate of 7.2 percent, or 11.1 million.

If you want more details on how that figure was pieced together, just hit the hot link above, but what I personally found most interesting was a breakdown of unemployment by category, to wit:

DECEMBER UNEMPLOYMENT RATE BY GROUP:

7.2 percent: Adult men
5.9 percent: Adult women
9.5 percent: Female heads of households
5.1 percent: Asians
6.6 percent: Whites
9.2 percent: Hispanics
11.9 percent: Blacks
20.8 percent: Teenagers
15.3 percent: Construction workers
17 percent: Agriculture workers
2.3 percent: Government workers

There is a wealth of other statistics and information available, so hit the ol’ hot link above. When I finally read to the end of the article, I realized that it had been taken from AP (without permission?) and was written by AP Business Writer Ellen Simon.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Republic Windows and Doors Offers WARN Test Case

The WARN Act (Worker Adjustment and Retraining Notification Act) specifies that 60 days’ notice must be given in firms with more than 100 full-time employees when large-scale layoffs are going to take place. The act kicks in when 50 employees at one location are laid off within a 30-day period, or when 33 percent of the workfoce is laid off, or when 500 employees are laid off (regardless of the percentage of the workforce).

However–and there are a lot of howevers in WARN–the window extends to 90 days when the layoffs are staggered but reach those same thresholds in combination. (“Caught you trying to cheat!” is the emphasis here.)

Here’s another however: WARN defines full-time employees as those who have averaged at least 20 hours per week in six of the past 12 months, or another definition–if the entire workforce averages 4,000 hours per week excluding overtime.

I bring this up for a couple of reasons. One is that the incoming Obama administration has been loud about extending the 60-day notification to 90 days. The other is that just this week one union at Republic Windows and Doors in Chicago (remember the showdown over WARN during that factory shutdown?) filed suit to force the owners to return equipment to the Chicago site that was reportedly relocated before closing.

Now, here’s the interesting part: The union alleges that Republic’s owners ferreted away the machinery in the middle of the night to a location in Indiana, where they intended to set up new, non-union operations, and then told the workers that the Chicago firm was shutting down because Bank of America wouldn’t extend them a line of credit.

If this is true, it brings to light a fascinating new wrinkle and shows that Republic did indeed scheme to avoid WARN.

In the end, to avoid a public relations nightmare, BofA forked over about $1.5 million to Republic, and the workers received 60 days of pay and benefits.

Which brings up the final point: There’s no way an employer would want dozens of laid-off workers sitting around the workplace for 60 days while knowing they’re getting the axe. It’s doubtful they’d do much constructive work, and it’s likely that pilferage and sabotage would take place. Pay them 60 days’ worth and see them off.

So, if the Obama team manages to up the WARN stakes, many companies will face paying three months of wages and benefits just to downsize in an effort to survive in tough economic times.

Better to gid rid of them now! LOL Just kidding, of course.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Dems Launch Effort Toward Pay Parity

House Speaker Nancy Pelosi, D.-Calif., indicated today that two labor bills are being put on the fast track for passage. Both deal with ensuring women are paid the same as men for doing the same jobs, all other factors being equal.

The Lilly Ledbetter Fair Pay Act is named for a litigant who lost her case for fair pay in 2007. The Supreme Court, though agreeing Ms. Ledbetter was probably discriminated against, offered what labor advocates called a too-narrow definition of the statute of limitations for filing a discrimination charge. The court determined that the statute began ticking once the decision had been made to pay her less than her male counterparts, while her lawyers argued that the statute remained open so long as the discriminatory wages were being paid.

So, the eponymous Lilly Ledbetter Fair Pay Act simply proclaims that the statue of limitations begins anew on each payday so long as the unequal pay is still taking place. This, of course, could open up employers to many new EEOC filings and legal actions.

The conjoining Paycheck Fairness Act, co-sponsored by Hillary Clinton when it was introduced, also redefines provisions of the Equal Pay Act of 1963. Under the earlier act, employers could avoid liability if they could show that the uneqal pay was based on factors other than sex.

The Paycheck Fairness Act raises the bar on that other-than-sex defense by demanding the mitigating factors be shown to be job-related or serving a legitimate business interest.

Needless to say, but the upshot of these two measures would be to open up the administrative and legal process in fair pay claims and make it easier for filers to prevail over employers.

I personally doubt that the Republicans can muster a filibuster on either of these bills, first because they have no margin for error and second because they’re no doubt saving their ammunition for the Employee Free Choice Act (EFCA), which they call the card-check bill.

More on EFCA as it moves along the legislative process.

Meanwhile, if you’re an employer, you may want to delve into both the Employee Communication and Compliance Handbook and the Employee Handbook and Personnel Policies Manual from Personnel Concepts to avoid unwanted legal hassles.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Recession, or Return to Normalcy?

This morning I was poring over a press release from a law firm advising employers to use caution and follow labor law mandates in laying people off in hard times. The release began by lamenting a 40-percent rise in business bankruptcies in the 12-month period ending in June 2008, which saw a total of 33,822 firms seek protection, up from 23,889 in 2007.

The release listed the Administrative Office of the U.S. Courts as its source, so I began doing some digging around the Web. What I discovered was actually pretty startling.

First, as for the release, the authors didn’t even use the latest data, which was for the 12-month period ending September 2008, which saw business filings rise 49 percent from September 2007–38,651 now and 25,925 then.

Now for the somewhat startling part: As bad as the current figures are, for the most part things were much worse in 2004 and 2005, and nobody is calling those recessionary years.

Over the past five years (September to September), business bankruptcies have stayed nearly steady except for two fairly “good years” in 2006 and 2007. In 2004, 34,817 businesses filed; in 2005, 34,222; in 2006, 27,333; in 2007, 25,925; and in 2008, 38,651.

Overall, there are four types or chapters of bankruptcy–chapters 7, 11, 12 and 13. Let’s look at the trends for all chapters and all filers over the past five years: In 2004, there were 1,168,987 filings; in 2005, 1,782,643; in 2006, 1,112,542; in 2007, 801,269; and in 2008, 1,042,993. So, in point of fact, bankruptcy filings have a ways to go to catch up to the good ‘ol “boom days” of the housing bubble in 2004-2005.

If I were to offer my interpretation to all of this, I would say that the twin good years of 2006 and 2007 saw people exhausting and living high off the hog from the salad days of the real estate bubble. Then in 2008, as it always does, reality caught up to everyone from Wall Street to Main Street.

(Of course, there’s another side to this, and that is that the Bush Boys tightened bankruptcy rules around 2005, so there may have been a rush to file before the new, more restrictive law kicked in.)

Today, Mr. and Mrs. Small Business can no longer tap into their HELOCs, which they’ve depleted, and for everyone on Main Street and Wall Street, the banks and lenders have adopted a policy of “just say no.”

That leaves the federal government, whose largess has gotten so ridiculous that porn magnates Larry Flynt and Joe Francis yesterday asked for a $5-billion federal bailout of the adult industry.

“People are too depressed to be sexually active,” Flynt said in a statement. “This is very unhealthy as a nation. Americans can do without cars and such, but they cannot do without sex.”

Can’t argue with that logic, I guess.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Construction Industry Draws Most OSHA Fire

The Occupational Health and Safety Administration (OSHA), which has drawn a lot of fire from labor rights groups–as has the whole Department of Labor–for lax workplace regulation under the Republicans, recently posted its 2008 Top Ten List of most commonly cited standards (in other words, standards that resulted in the most citations for violations).

Construction came out in the top two spots, the first relating to scaffolding and the second to fall prevention. (Somehow, these two seem intertwined, don’t they?)

For the full list, plus another list on violations that resulted in the most fines, go to this OSHA page.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Come Morn and Minimum Wage Rates Will Rise

Some eleven states and two municipalities are raising their minimum wage hourly rates on New Year’s Day 2009, topped by the City of Santa Fe with its $9.92 rate (closely followed by San Francisco at $9.79).

Heading the states is Washington at $8.55 an hour. For a full list, check out this site.

The federal rate goes to $7.25 on July 24, 2009, but most of the January 1 state increases already match or top that except for Florida ($7.21) and Arizona ($6.90).

Employers, if you want to keep compliant with federal and state labor law posting requirements, check your requirements on this site.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Meanwhile, Back in the U.S. of A.: Severance Pay Woes

Turns out that a survey of severance pay around the world reveals that the U.S. pays the least of all monitored countries.

READ THE SURVEY RESULTS


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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