Employment Law Monitor : Employment Lawyer & Attorney : Cole Schotz Meisel Forman & Leonard Law Firm : NJ, Mid-Atlantic Wage & Hour, Wrongful Termination

On March 18, 2010, President Obama signed into law the “Hiring Incentives to Restore Employment Act” (the “HIRE Act”). The HIRE Act includes a number of tax incentives for employers to hire new workers, including a payroll tax exemption.

The main focus of the HIRE Act is a provision that provides Social Security tax forgiveness for private employers, state colleges, and universities under certain circumstances. Employers will be exempt from paying their portion of the 6.2% Social Security payroll tax in 2010 for every worker who was previously unemployed for a period of at least sixty (60) days, hired between February 3, 2010, and the end of 2010. In order for the employer to receive the exemption, the newly hired employee must: (1) certify by affidavit that he/she did not work more than forty (40) hours in the preceding sixty (60) days, and (2) not replace another employee of the company, except where the former employee quit or was terminated for cause.

The HIRE Act also provides an incentive for employers to maintain new workers. Employers will receive a $1,000 income tax credit for every new employee hired during the specified time period and retained for fifty-two (52) consecutive weeks. Additionally, under the Act, businesses can write off investments they make in equipment this year.

By some estimates, the HIRE Act will create as many as one million jobs. The implication of the tax incentives alone are anticipated to provide as many as 300,000 jobs.

Employers should factor the tax credit and payroll tax exemption into their hiring decisions this year and consult their counsel if questions arise regarding its applicability.
 

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On March 2, 2010, President Obama signed into law the Temporary Extension Act of 2010 (the "Act"), which extends COBRA subsidy eligibility through March 31, 2010. As we wrote in our January 10, 2010 post, the COBRA subsidy provides that assistance eligible individuals are responsible for only 35% of their COBRA premiums during the subsidy period and employers are responsible for the remaining 65% of the premium, but receive a payroll tax credit for the cost. The COBRA subsidy was originally set to expire on December 31, 2009, but was extended to February 28, 2010. The Act is a stop gap measure while Congress considers legislation that could further extend the COBRA subsidy through December 31, 2010.

Under the Act, employees who are involuntarily terminated between March 1, 2010 and March 31, 2010, are eligible for the COBRA subsidy. Additionally, the Act expands eligibility to cover individuals who were subjected to a reduction of hours between September 1, 2008 and March 31, 2010, followed by an involuntary termination occurring between March 2, 2010 and March 31, 2010. Such individuals are eligible for the COBRA subsidy regardless of whether they elected COBRA coverage at the time of their reduction in hours. The Act also provides further guidance to employers regarding their determination as to whether an employee's termination was involuntary.

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Relative to the perceived threat, infections from the 2009 H1N1 flu (swine flu) have produced fewer cases than expected. Nevertheless, employers should not let their guard down and need to remain vigilant to prevent worker exposure to the flu. A flu outbreak can impact productivity and ultimately the bottom line.

To assist employers in minimizing workplace exposure to the flu, on November 9, 2009, the Occupational Safety and Health Administration (“OSHA”) announced the publication of a fact sheet [link “Fact Sheet” to http://www.osha.gov/h1n1/index.html] informing employers and employees of ways to reduce risk of exposure to the 2009 H1N1 virus at work. By being proactive and following OSHA’s recommendations, an employer may be able to reduce potential exposure to employees and customers. The OSHA fact sheet provides the following guidance to reduce worker exposure:

1. Encourage sick employees to stay home until 24 hours after their fever ends without the use of medication.
2. Develop and communicate to management and, where applicable, to employees, procedures for dealing with workers who may become ill. OSHA recommends that if a worker develops flu-like symptoms at work, that employee should be separated from other workers and advised to go home. If the worker cannot be separated from the other employees, the employee should be given an approved respirator to wear so long as that employee can tolerate wearing a respirator. Employers contemplating providing employees with respirators should consult 29 C.F.R 1910.134.
3. Employers need to promote proper hand hygiene and cough etiquette. To this end, workers should have easy access to soap and water, disposable towels, and alcohol-based hand rubs.
4. Employers should encourage employees to keep the workplace clean. The employee should be instructed to frequently clean all commonly touched work surfaces and areas. In addition, employees should also be provided with disinfectant and disposable towels to clean their work spaces and surfaces.
5. Workers should be encouraged to get vaccinated for seasonal flu and the 2009 H1N1 flu when these vaccinations are available.
6. Employers need to educate workers about conditions that may place them at a higher risk for complications from the flu. Specifically, workers should be informed that some people are at a higher risk of complications from the flu and they should consult their doctor about their own risk and what to do if they become ill.
7. Employers should reconsider business travel to areas where high illness rates exist. Further, workers should be advised to check themselves for fever and any other signs of flu-like illnesses before starting travel and to notify their supervisors and stay home if they feel ill.
8. If disease severity increases in the workplace, employers should be flexible to redesign the workspace or modify job tasks so that employees do not come in close contact with co-workers, clients or visitors. In addition, employers should consider ways to eliminate or minimize face-to-face meetings between staff and clients using such techniques as conference calls, webcasts and other technologies to conduct meetings.
9. Employers should prepare for possible school closures or the suspension of childcare programs. To this end, employers should consider a temporary flexible leave policy to allow workers to stay home to care for sick family members or care for children if schools are closed.

Employers and employees can obtain information regarding OSHA’s 2009 H1N1 guidance document at www.osha.gov.

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