COBRA Changes in the Stimulus Package

The American Recovery and Reinvestment Act of 2009, otherwise known as the stimulus package, will be signed today by President Barack Obama.  The stimulus package creates many changes that employers should become aware of.  One significant change, however, is COBRA coverage and notices.  The Ohio Employer’s Law Blog sets forth the changes made by the stimulus package to COBRA.  The changes will require employers to amend their current COBRA notices and to re-notify employees terminated between September 1, 2008 and February 17, 2009.

Protect Your Employees' Status During A Furlough

In the wake of tough economic times, many companies are exploring alternative cost cutting methods.  One method is requiring employee furloughs.  Employers are using required furloughs rather than terminations as a cost-cutting measure.  If you are thinking about using a furlough at your company remember the following rules regarding non-exempt and exempt employees:

 

·         Non-exempt employees must be paid only for actual hours worked.  An employer may send non-exempt employees home as a cost-cutting measure without worrying much about the legal problems.  You will need to review any contracts, including collective bargaining agreements, your company may have with non-exempt employees before implementing a furlough to ensure that you are not violating any of the provisions contained within the agreement.

 

·         Exempt employees must receive full salary for any week in which work is performed, without regard to the number of days or hours worked.  If any exempt employee does not receive full salary for every workweek in which the employee performs any work, exempt status is lost and the employee is entitled to overtime pay.  In general, furloughs for exempt employees should be scheduled in full workweek increments to protect an employee’s exempt status.

 

These should be considered general rules.  If you have specific questions about implementing a furlough plan please contact your attorney.

A Modern Case of Involutary Servitude

The Thirteenth Amendment, which prohibits slavery and involuntary servitude except in certain circumstances, is rarely implicated in the modern employment law world.  So I was very interested when I read about Vinluan v. Doyle, --- N.Y.S.2d ---, 2009 WL 93065 (Jan. 13, 2009), a case out of New York, was decided under the Thirteenth Amendment. 

Ten nurses from the Philippines were hired to work in nursing homes caring for chronically ill children dependent on ventilators.  They each signed employment contracts which promised free travel to the U.S., two months of free housing and medical coverage, training and assistance in obtaining legal residency and nursing licenses.  In exchange, the nurses made a three-year commitment to the nursing home.  Soon after their arrival the nurses began complaining that the terms of the contact had been breached.  Nursing licenses had not been obtained.  The housing provided was inadequate—one bathroom, inadequate heat, no telephone service.  Nurses had not been fully compensated for all hours worked.  The nurses found attorney Felix Vinluan and met with him to discuss their options.  He advised them that under the New York Education Law they could not leave their positions during a shift when they were on duty, but had a right to resign after their shifts had ended.  The nurses resigned the following day either at the end of their shift or in advance of their shift.  They all used an identical form letter they agreed upon together.  No patient was deprived of nursing care services.

 

In response to the mass resignation, the employer sued the nurses and attorney Vinluan and filed a complaint with the New York State Education Department.  The nurses and Vinluan were also criminally charged with conspiracy to commit endangerment of a child and a physically disabled person.  It was the criminal charges against the nurses and Vinluan that implicated the Thirteenth Amendment.  The nurses contended that subjecting them to criminal sanctions for their act of resigning effectively compels them to remain at their jobs in violation of the Thirteenth Amendment.  The nursing home contended that the resignations created an imminent threat to the well-being of the children and fell within the “exceptional circumstances” exception to the Thirteenth Amendment.  The court disagreed with the nursing home and prohibited the prosecutor from pursing the criminal charges.  The nurses were engaged in private employment, not public service; they did not have unique or specialized skills; and there was no threat to the health of the children.  The attorney was also cleared of any wrong doing under the First Amendment.

 

Photo on Flickr by eo was taken