Posted by marykeating on December 25, 2009 under Employment benefit issues | 
Yesterday morning, on Christmas Eve, the Senate passed its version of the Patient Protection and Affordable Care Act. Whether the law will be good in the short or long term is now unknown, but it will allow many more people to obtain health insurance who were otherwise considered uninsurable.
And earlier this week, on December 21, the President signed a law extending the COBRA subsidy. The subsidy is available for a maximum of 15 months. As discussed here a few months ago, the COBRA subsidy reduces the premium for the terminated individual to 35% of the full freight; the employer pays the remaining 65%, but receives a dollar-for-dollar credit against withholding taxes, so it’s really just an advance. Employees who were eligible for the original COBRA subsidy can extend their coverage at the reduced cost through February. (These were employees involuntarily terminated between September 1, 2008, and December 31, 2009; now the termination cutoff date is extended through February.) Employees who dropped the coverage as too expensive will be given the option to rejoin the plan.
Posted by marykeating on December 23, 2009 under Employment benefit issues, Maryland wage law |
Workers are entitled to be paid for the hours they work. So, even if they are fired, the employer has to pay for the time spent in its employ. If the worker was pulling a Wally in Dilbert’s company, and working harder on avoiding work than actually doing any work, the employer still has to pay for those hours, and deals with the lack of productivity by firing the “Wally.”
Things get more complicated for other types of compensation. Some people are paid entirely or in large part by commission; others get a significant portion of their annual compensation by bonus. What rights does the departing employee have to commissions for sales brought in before he left? What right does the employee leaving in November have to her year-end bonus, if her numbers were stellar until she was laid off or quit?
The best way to deal with these questions is in advance, with a contract. Highly compensated, gifted salespeople are more likely than other non-union workers to have contracts. The end of the relationship should be addressed in the employment agreement. Unless the employee leaves only because the company goes defunct, there will be some work in progress that may merit commission or partial compensation.
Without a clear provision in the employment contract, the employee should look to the commission structure and any policies that have been written about it. Fortunately, some of the more draconian policies are unenforceable under Maryland law. Consider, for example, a policy that states “no commission is payable unless the employee is currently employed on the date of payment of the commission.” The Maryland Court of Appeals rejected this policy in the case of a salesperson who had performed all of the tasks necessary to earn the commission, other than being present on the date of the payment to him. If the deal has been struck, delivery made, and the client paid the bill, the salesperson has earned that commission. In a structure like this, there will always be some uncompensated work, but when there is nothing left for the sales force to do, the whole commission should be paid. On the other hand, if the salesperson has done only a part of the work to conclude the sale, and someone else must step in to finalize the deal, he can legally be denied the commission.
Questions about bonuses can be murkier. One question is whether anyone should be paid a year-end or Christmas bonus if the worker is no longer employed; another is whether the amount of the bonus can be determined. These questions are related, and usually come down to this: how much of the bonus is based on objective numerical criteria? A court cannot enforce a deal if it has to guess how much a worker’s bonus should have been.
Often, bonuses are paid based on a handful of factors, including the company’s productivity and the worker’s specific goals. Some bonus plans allot a bonus pool to a department, and the manager has the discretion to dole out the bonus among the department members. When an element of subjectivity is allowed to define the amount of the bonus, the unhappy worker cannot mount a claim (unless there is proof that the subjective factor is an illegal one, such as the recipients’ race).
Other bonus plans are almost completely subjective. These may weigh the employee’s attitude and contribution to team spirit, for example. Moreover, they may be intended not just to reward past performance, but to provide an incentive to stay. The amount of these types of bonuses cannot be figured out until they are paid.
On the other hand, if a bonus is based solely on the employee’s performance, then an employee who reached her goals in eleven months should not be deprived of the bonus. This is akin to the commission structure, though it’s paid not on one deal but the year’s effort.
If an employer withholds bonuses or commissions without a genuine dispute about whether it has been earned, the employee is entitled to get attorney’s fees for the enforcement action, and can request the court to double or triple the amount owed, under the Maryland Wage Payment and Collection Act.
Bonus or no, enjoy your end of year holidays.
Posted by marykeating on December 19, 2009 under Government contractors, Pending legislation, sexual harassment |
The Franken Amendment has passed the House and is expected to become law. Under the amendment to next year’s appropriations bill, contractors doing more than $1,000,000 of business with the federal government must agree not to require arbitration, rather than court, claims of discrimination, sexual assault, and other employment claims. Six months after the effective date of the law, the contractors are responsible for ensuring that their own subcontractors with jobs of more than a million dollars also abide by the law.
The amendment forbids mandatory arbitration on the following types of claims:
- any claim under title VII of the Civil Rights Act of 1964, and
- any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.
The law arose out of a horrendous situation involving a woman who was raped and terrorized overseas while working for an American company. The perpetrators worked for an American company, and our government. Her employment contract required her to arbitrate her claims, and limited her remedies. Senator Franken’s amendment forbids companies from imposing this waiver of rights on people working as employees or independent contractors on major goverment contracts.
Posted by marykeating on December 16, 2009 under Discrimination in employment |
The staffing levels at the Equal Employment Opportunity Commission suffered during the Bush administration. With the latest funding bill passed last and this week by Congress, the EEOC will receive $23,000,000 for more investigators.
When claims are filed by complainants, the agency typically offers a mediator to allow the parties to work out their differences quickly. If both parties fail to consent to this, or if mediation is unsuccessful, the case is given to an investigator. There the case can languish, since the investigators are inundated with more claims than ever before, and their ranks had been dwindling.
Although it may seem counter-intuitive, the employers welcome quicker investigations, too. According to the this article, employers are eager to have claims resolved more quickly, in part to weed out the weak claims. For both sides, it is helpful when an investigator gets witness recollections in writing before those memories fade.
The EEOC is unlikely to feel that $23 million will solve all of the backlogs, but another 200 investigators is surely a good start.
Posted by marykeating on December 6, 2009 under Race-based discrimination |
The Supreme Court surprised and dismayed people across the spectrum of employment law in June when it ruled in the Ricci v. DeStefano case. In that case, the Supreme Court held that white firefighters were entitled to proceed on their claims that New Haven discriminated against them on the basis of their race. New Haven scrapped a promotional exam, on the ground that minority applicants scored poorly on the test. New Haven feared that it would be sued by the non-selected promotional candidates; instead, by ignoring the test results, and refusing to promote from the top of the list down, it was sued by the top scorers. Employers have been chewing their fingernails since, wondering if there is a way to avoid a lawsuit.
The simple answer is that any test needs to be carefully tailored to the job duties, and narrowing down the candidates most likely to succeed in the job. There seems to be a huge range of jobs these days that require a bachelor’s degree, for no particular reason. Does this not weed out sectors of the population less likely to have afforded a college education? Similarly, the entry or the promotional exam needs to be vetted, or validated. Does a good score on the test relate to the best attributes of the successful employees? Does a firefighter really need to read quickly, or are there more important attributes to focus on?
Last week, the city of New Haven has to promote the 14 firefighters who scored well on the challenged 2003 tests. Justice can be slow, certainly, but these firefighters will advance. Public employers, especially, will also be more careful in the procedures used to decide who moves up the ranks, and how they should be selected, or trained for their eventual success. I hope that if minority candidates continue to do poorly on written tests, as a group, that employers will use other means of determining the best candidates for the job.
Posted by marykeating on December 5, 2009 under Unemployment compensation |
Receiving unemployment benefits is a mixed benefit: it’s better to have a job, both financially and for the sense of security and accomplishment it gives a worker. Unemployment benefits are a reasonably good safety net, though, when the job search effort is not working out. It might keep the roof over the heads, the mac and cheese in the bellies.
Congress and Maryland have been gradually increasing the number of weeks of benefits allowed, in the context of the lingering recession and the unemployment rate at 10%, according to the latest statistics, but topping that in many places.
This morning’s New York Times reported that we may not see the pattern in former recessions, where unemployment continued to rise even as the economy climbed back.
Still, it could be awhile before the unemployment rate drifts back down to 4 or 5%. Maryland now has increased the maximum weekly benefit, which is now $410. This rate applies to employees who formerly earned from $9,816 per calendar quarter and up. For many people that is a major comedown from their former salaries, but this benefit is necessary for many people to survive. The schedule of benefits can be found here.
Posted by marykeating on December 2, 2009 under Employment benefit issues, Pending legislation |
The discussion about health care reform has increased awareness of the high cost of health insurance for people who are not in a group plan. While employed and in an employer-sponsored plan, an employee usually gets a reasonable plan for a pretty reasonable price, or even free, depending on the employer’s policies. But then the job ends, whether voluntarily or not. If the employer has at least 20 employees, the departing employee is entitled to COBRA coverage for 18 months, in most cases.
With unemployment still high, Congress is now thinking about extending the COBRA coverage for six more months, for those people who lost their jobs between April 1 and December 31 of 2009. In addition, even better for some, the COBRA subsidy discussed here would be extended as well. The subsidy has the federal government picking up 65% of the cost of the premium, which is repaid to the employer by a credit on the payroll taxes. If passed, the new law will be called the “Extended COBRA Continuation Protection Act of 2009.”
It’s hard to think of an interest group that would oppose this law, other than those who think that the government is subsidizing the unemployed too much.
