Issue 1 - 2010

In December, the President signed a law which contains provisions extending the assistance available for COBRA coverage. Now an involuntary termination that occurs during the extended period (from September 1, 2008 through February 28, 2010) is eligible for the 65% premium assistance. This extension is available on a retroactive basis. Also, the maximum duration of the period for which an eligible individual can receive the 65% COBRA premium assistance has been extended from 9 months to 15 months. Plan administrators are required to notify any individual who qualifies for the subsidy on or after October 31, 2009, or who experiences a qualifying event on or after October 31, 2009 of these changes. This notice must be provided by February 17, 2010 or in the case of a qualifying event occurring after October 31, 2009, with the COBRA election notice. Plan administrators must also provide notice of the changes to those individuals who previously used up their original 9 month entitlement.

The effective date of the final rule requiring certain federal contractors and subcontractors to use E-Verify was delayed multiple times but went into effect September 8, 2009. Most federal contracts awarded as well as solicitations issued after September 8, 2009 must include a clause mandating the use of E-Verify for all employees hired during the contract period and all existing employees assigned to perform work under the contract. Covered contractors and subcontractors must enroll within 30 calendar days of the contract or subcontract or date. Covered contractors then have 90 days from the date of the enrollment to initiate verification inquiries for employees working on the contract and begin using the E-Verify system to verify employment eligibility for newly hired employees. After the 90 day "phase in," for newly enrolled federal contractors, covered contractors must initiate verification queries for all new hires within three business days of the new hire's start date. Contractors also may be required to use E-Verify on employees assigned to work on particular contracts. Covered construction contracts include prime contracts with a value above $100,000 and subcontracts with a value above $3,000. Companies enrolled in the E-Verify program, but who do not qualify as federal contractors or subcontractors, may only use the E-Verify program to verify employment eligibility for newly hired employees, and only after the I-9 Form has been completed.

In October, the President signed a new law which includes an expansion of recently enacted exigency and care giver leave protections for military families under the Family and Medical Leave Act (FMLA). The law extends the exigency leave benefits to include family members of active duty servicemembers. Under prior law, only family members of National Guard and reservists were eligible for exigency leave. The law also expands the caregiver leave to include veterans who are undergoing medical treatment and recuperation or therapy for serious injury or illness that occurred anytime during the five years preceding the date of treatment. Employers covered by the Family and Medical Leave Act should update their policies to reflect these new developments.

Under the California Labor Code, employees have a right to be reimbursed for work-related expenses such as work-related purchases, travel, etc. Many companies maintain policies with requirements, forms and deadlines for reimbursement. Can an employee waive his/her reimbursement rights by not following the policy? In a recent federal appellate court case, the court ruled "No."

In this case, a former RadioShack employee filed a class action lawsuit claiming that numerous employees were not reimbursed for all work-related expenses. RadioShack responded that the employees did not follow internal company policies for requesting reimbursement including meeting deadlines for timely requests. As a result, RadioShack alleged that the employees waived their rights to reimbursement. However, the Court rejected the employer's arguments holding that employee expenses cannot be waived. As long as an employer knows or should know that employees are incurring work-related expenses, it is an employer's duty to take steps to ensure that the employees are reimbursed. Other than statute of limitations for filing lawsuits, an employee's rights to reimbursements cannot be extinguished. Of course this would apply to former employees as well. (Stewart v. RadioShack Corporation, 9th Circuit 2009).