The Employer's Legal Resource - May 2010
Thank You!
For those of you who attended our April 22 Employer's Legal Resource 2010 Workshop, "Getting back to the basics . . .," we want to thank you. We hope you found it time well spent. If you have not yet completed the survey, we would appreciate your feedback.
For all readers, if you have feedback regarding our monthly e-newsletter, you are always welcome to contact the individual author directly or contact Kristen Brightmire at kbrightmire@dsda.com.
Workers Comp Retaliation
A QUICK REMINDER ON WHAT THE LAW PROHIBITS.
Most of you have been involved in, and perhaps grimaced about, a workers comp situation. Many of these work out, allowing the employee to seek necessary medical treatment and return to work.
However, claims of retaliatory discharge are on the rise. These are claims by former employees that they were wrongfully discharged due to some involvement with their rights under Oklahoma's workers compensation act.
So, adding to your list of things to worry about, before you discharge an employee, remember to assess your risks for a lawsuit claiming that the discharge was in retaliation for rights under our workers comp laws.
Motives matter.
Under our law, an employer cannot discharge an employee who has in good faith:
1. Filed a claim;
2. Retained a lawyer for representation regarding a claim;
3. Instituted or caused to be instituted any proceeding under the workers compensation act;
4. Testified or is about to testify in any proceeding under the workers compensation act; or
5. Elected to participate or not to participate in a certified workplace medical plan as provided in the workers compensation act.
As interpreted by courts, the third point ("instituted or caused to be instituted any proceeding") includes the employee seeking medical treatment for an on-the-job injury.
The law also says that an employer may not terminate the employee's group health insurance for any of these reasons, but you may terminate insurance if the employee fails to pay his or her share of the premiums. (Please be sure your paperwork is in order before you cancel any person's group health insurance.)
For each of these claims, the question of whether you violated the law turns on your motives. If you were motivated by any of these 5 points, you have violated the law. If you have a legitimate, non-retaliatory reason, you have not. Of course, it is often up to juries to determine the legitimacy of your reason, so give it some thought and make sure your ducks are in a row.
Sometimes, your motives are irrelevant.
There is another provision in the law under which your motives are irrelevant.
You may not discharge an employee during a period of temporary total disability solely on the basis of absence from work.
If an employee is on temporary total disability (often referred to as "TTD"), the employee is temporarily medically unable to perform his job. This is the time when the employee is (generally) receiving medical treatment but has not yet reached maximum medical improvement. The problem is that sometimes employees are TTD for months and even years. During this TTD period, you cannot discharge the employee simply because he is absent from work. If you have a situation like this, please coordinate with your comp carrier to ensure the employee is working through his medical treatment as quickly as practicable.
Bottom line, if you want to discharge an employee who is TTD, you had better have a solid and extraordinary reason, well beyond "he wasn't a good employee to start with." Reasons that come to mind might include discovering embezzlement or stealing by the employee, workplace violence, etc.
Is there any good news, you ask.
Yes . . . a little. The law does state that you do not have to keep employed a person who, after TTD has ended, "is determined to be physically unable to perform assigned duties."
However, remember, if you are covered by the Americans with Disabilities Act, you may have a legal requirement to assess whether the employee's limitations could be reasonably accommodated. And, if you are an employer covered by the Family and Medical Leave Act, the employee may have rights to additional protected leave.
Bottom line. When you are considering discharging an employee, if that employee has had an on-the-job injury (even if you dispute it), proceed cautiously. As we have discussed on many occasions, dealing with employees' medical issues remains one of the biggest challenges facing all employers.
By Kristen L. Brightmire, kbrightmire@dsda.com
Tax Issues
HIRE ACT Update: IRS Issues Final Form W-11 and New Q&As
On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act into law, providing tax incentives for businesses hiring unemployed workers and extending hiring deduction limits for small businesses that make capital improvements. For more information, see our article in April's e-newsletter here.
Employers may now access the final version of Form W-11, "Hiring Incentives to Restore Employment (HIRE) Act Affidavit" on the IRS website. Click here. This form can be used to confirm that an employee is a qualified employee under the HIRE Act.
A new set of HIRE Act Questions and Answers for Employers is also available on the IRS website. Click here. In addition to addressing general questions regarding the payroll tax exemption, the new Q&As address specific questions about which employees qualify and how to claim the payroll tax exemption.
In addition to the new Form W-11, the IRS has issued revised Forms W-2, W-3, and Instructions for both Forms W-2 and W-3 to reflect changes made by the HIRE Act. A new code for box 12 of Form W-2, Code CC, has been added for employers to report the amount of wages and tips covered by the payroll tax exemption under the HIRE Act. The total of Code CC is reported in new box 12b on Form W-3, and the total of deferred compensation amounts, previously reported in box 12, is now reported in new box 12a on Form W-3. These forms and instructions are available on the IRS website. To view the forms and instructions regarding Form W-2, click here. To view the forms and instructions regarding Form W-3, click here.
Employers will not take into account any first quarter exempt wage amounts accumulated from March 19 through March 31 on the first quarter Forms 941 due April 30, according to the IRS. Instead, these amounts will be treated as a payment made on the first day of the second quarter on the revised Form 941 - as is done with the current COBRA subsidy tax credit. For the following quarters, employers will report total amounts on the first page of Form 941, and reduce the liability on Schedule B of Form 941 by the amount of the tax reduction. The IRS has released an advance proof copy of Form 941 click here which is subject to change and OMB approval before it is officially released.
As always, we will provide updates on further developments if warranted.
By Jeffrey C. Rambach, jrambach@dsda.com
COBRA Subsidy
Further Extension of COBRA Premium Subsidy Signed into Law on April 15, 2010
As reported in our January 2010 e-newsletter and in our March 2010 special alert, the 65% COBRA premium subsidy eligibility period was extended and then re-extended through March 31, 2010. As further reported in our April 2010 e-newsletter, there was much debate as to whether another extension would be signed, but the measure to further extend never made it to a vote. Consequently, employees terminated after March 31, 2010 would remain eligible for COBRA (as applicable) but not the premium subsidy.
Despite Congress' failure to extend the COBRA premium subsidy prior to March 31, 2010, on April 15, 2010, President Obama signed the Continuation Extension Act of 2010 (H.R.4851), available here. The Act extends the COBRA subsidy premium program through May 31, 2010, including the period from April 1, 2010 through the date of enactment. The Act's COBRA subsidy provisions are effective as if originally included in The American Recovery and Reinvestment Act of 2009 ("ARRA"), enacted on February 17, 2009. Below is a summary of the key provisions followed by a summary of possible future COBRA subsidy legislation.
• Extended Expiration Date. The COBRA subsidy program will be available for a loss of group health coverage due to involuntary termination (or a reduction of hours that is followed by an involuntary termination) through May 31, 2010.
• Transition Period. For individuals who experienced a termination of employment on or after April 1, 2010, but before April 16, 2010, the Act requires the plan administrator to notify such individuals by June 15, 2010 of their ARRA rights (including the COBRA subsidy) and to allow them to elect COBRA coverage up to 60 days after they are provided with such notification.
The numerous extensions and new notice requirements have made the administration of COBRA continuation coverage requirements a challenge for employers, plans and administrators and additional extensions are likely. The Jobs for Main Street Act (H.R. 2847), passed by the House last December, would extend the COBRA subsidy program through June 30, 2010. In March, the Senate passed the American Workers, State, and Business Relief Act of 2010 (H.R. 4213), which would extend the COBRA subsidy program through December 31, 2010.
According to various reports, it is possible that Congress will pass a longer-term extension before the Memorial Day Congressional recess, but the timing and legislative means for such an extension remains uncertain.
By Jeffrey C. Rambach, jrambach@dsda.com
USERRA
USERRA RIGHTS: IS VERBAL NOTICE OF THE NEED FOR LEAVE SUFFICIENT?
The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects the employment rights of civilians who serve in the uniformed services. The purposes of USERRA are to encourage non-career uniformed service, provide prompt reemployment upon completion of service, and prohibit discrimination as a result of service. USERRA provides that when a former employee returns from service, he has a right to be reemployed in his civilian job if:
1. he, or someone on his behalf, gave the employer notice of his service;
2. he had 5 years or less of cumulative service while employed by the particular employer;
3. he applied for reemployment in a timely manner after conclusion of service; and
4. he was not separated from service with a disqualifying discharge.
If the former employee meets these qualifications, he must be restored to the job he would have attained if he had not been absent due to military service, or a comparable job.
Recently, the Oklahoma Attorney General issued an Opinion on the USERRA notice provisions. The specific question posed to the Attorney General was:
May a municipality require written notice from an employee, either by an ordinance, a personnel manual or other means, that the employee has been called to military service in order for the employee to be able to return to covered employment?
The question arose because Oklahoma municipalities are subject to the Oklahoma Militia Code, in addition to USERRA, and the Militia Code is silent on this point.
In response to the question, the Attorney General first determined that USERRA, by its own language, preempts any state law on the subject of reemployment rights. In addition, the Attorney General concluded that the clear language of USERRA provides that the employee could give either "written or verbal" notice of impending service. Failure to give written notice, therefore, will not disqualify a former employee from the right to reemployment.
Although the Attorney General's Opinion responded to a very narrow question concerning the notice a municipality may require of employees departing for uniformed service, it appears to reflect an accurate interpretation of USERRA.
Because there is no case law under USERRA which would lead to a different conclusion, we recommend that all employers be prepared to accept verbal notice of impending uniform service.
By Rebecca M. Fowler, rfowler@dsda.com
What's New
AnnouncementS
WOFFORD SPEAKS ON SUPERFUND SITES
Mike Wofford was a guest speaker and facilitated the presentations of a panel of other environmental legal experts from around the nation on "Third Party Liability in Brownfield and Superfund Sites" at the 2010 State of Oklahoma Brownfields Conference, sponsored by the Oklahoma Department of Environmental Quality in Oklahoma City.
Dates to Remember
Calendar of notable events
May 31, 2010
Memorial Day
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