Employment Law Alert
April 30, 2009
2009 EMPLOYMENT LAW ALERT – Volume 3
Jill Fisher, Esquire ♦ Employment Law Practice Group
Zarwin ♦ Baum ♦ DeVito ♦ Kaplan ♦ Schaer ♦ Toddy ♦ P.C.
BEWARE OF THE PITFALLS OF BACKGROUND CREDIT CHECKING
With the economic crisis in full bloom, and consumer credit defaults soaring, employers should tread carefully when performing background credit checks – and rejecting applicants with negative credit, and criminal records. As more people lose their jobs, or are rejected from a candidate pool, the risk of discrimination lawsuits is likely to increase.
Although background checks remain relevant for certain positions, widespread screening may not be a valid predictor of employee behavior today. As always, an employer’s use of credit information should be job-related and consistent with business necessity (such as access to cash or accounts or financial records). Employers should have some standard for how to evaluate the information. Employers who use credit checks to screen for high levels of debt or financial irresponsibility as a way of assessing character need to re-evaluate the type of negative credit information that might disqualify a job candidate. In today’s economy, detrimental information may have an innocent explanation or, at the least, be unrelated to actual job duties. In addition, federal (and some state) law prohibits employers from rejecting candidates because they filed for bankruptcy.
With credit checks coming under more scrutiny, employers must keep careful track of their applicant flow to ensure that, not only are they in compliance with the Fair Credit Reporting Act, but that there is no disparate impact on any legally protected group of individuals.
STIMULUS BILL - DRAMATIC CHANGES TO COBRA COMPLIANCE
The American Recovery and Reinvestment Act of 2009 (“ARRA”) provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months for those eligible for COBRA during the period beginning September 1, 2008 and ending December 31, 2009 due to an involuntary termination of employment that occurred during that period.
“Involuntary termination” includes: (1) terminations by the employer; (2) voluntary retirement solicited prior to a reduction in force; (3) reductions in hours through layoffs or furloughs; (4) certain constructive discharge situations; (5) termination in response to change in working conditions (e,g, resignation because of reduction in hours). Involuntary terminations will not include (1) divorce; (2) loss of coverage by a dependent; (3) death of the employee; (4) reduction in hours that does not reach zero; and (5) military call-up.
For more information regarding the COBRA subsidy, recently released Model Notices that must be provided to qualifying employees by April 18, 2009 and rules regarding COBRA benefits offered in severance agreements, contact your health insurance provider or employment attorney.
PHILADELPHIA FAIR PRACTICES AMENDMENT
PROTECTS VICTIMS OF DOMESTIC VIOLENCE
Philadelphia’s new ordinance, “Entitlement to Leave Due to Domestic or Sexual Violence” became effective January 5, 2009. The new law requires Philadelphia employers to provide certain amounts of unpaid leave to victims of domestic abuse, sexual assault, or stalking, or their qualifying family or household members. The law provides for job and benefits protection during the leave and prohibits retaliation against employees or interference with leave rights.
Employees may take leave to do any of the following for themselves or members of their family or household: (1) seek medical attention; (2) obtain services from victim organizations; (3) obtain counseling or therapy; (4) make safety plans, including relocating; and (5) seek legal assistance.
Employees who work for employers with 50 or more employees are entitled to take up to 8 weeks of leave in a 12-month period. Employees who work for employers with less than 50 employees are entitled to up to 4 weeks of leave in a 12-month period. During any such leave, employees’ health insurance benefits must continue on the same terms as if they were not on leave, and they must be restored to their original or an equivalent position at the end of the leave.
Employees must provide certain advance notice to their employer, where practicable, and may be required by their employer to provide certification of the domestic or sexual violence and the reason for the leave (which must be kept confidential by the employer.) Employers must post an official notice in the workplace and may not refuse to grant such leave or retaliate against the employee for taking or requesting the leave.
We will be happy to forward a copy of the required Notice to you, and to give you more specific details on the Ordinance.
REMINDER: USE OF NEW I-9 FORM BEGINS APRIL 3, 2009
This is a reminder that starting April 3, 2009, all employers must use a revised I-9 Employment Eligibility Verification form when hiring a new employee or re-verifying the work authorization of an existing employee.
(Note: The above is intended to be informational only. It is not intended to be, nor should it be taken as legal advice for any particular situation.)
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For more information about the topics in this alert, or other employment matters, to inquire about training programs, or to obtain employment law forms please contact Jill Fisher, Esquire at jfisher@zarwin.com or 215-569-2800 x186.