President Barack Obama kicked off his first few weeks in office by signing a pair of bills that will significantly affect benefits compliance and discrimination lawsuits against employers.
Obama’s first significant bill, the Lilly Ledbetter Fair Pay Act of 2009, likely will make it easier for employees to sue employers for pay discrimination.
The bill overturns a 2007 Supreme Court ruling that stated that a worker, in order to meet the statute of limitations, had to file a discrimination claim within 180 days from the company’s initial decision to pay that worker less than another employee doing the same job.
The new law, however, removes any statute of limitations, meaning each paycheck can be a possible instance of discrimination.
Camille Olson, a partner at the law firm Seyfarth Shaw LLP, told Employee Benefit News that this new law could foster larger and more frequent wage discrimination lawsuits because it “encourages plaintiffs to sue over employment decisions made long ago – and to characterize them as ‘continuing violations’ – to increase the size and scope of damage recoveries in both single-plaintiff and class action lawsuits.”
To best protect themselves, employers should keep detailed documentation of “the legitimate nondiscriminatory reasons for employment decisions that have a lasting effect on their pay” for each worker, stretching back to the hiring date, Olson said.
Less than a week after signing the Fair Pay Act, Obama signed a bill that expands the State Children’s Health Insurance Program (SCHIP) to cover an additional 4 million children.
The law amends the Employee Retirement Income Security Act (ERISA) to require employers to include workers’ qualified, nonenrolled dependents to join the employer plan if those dependents become ineligible under Medicaid or a state child health plan.
The law also gives states the option to provide a premium assistance subsidy for some employer-provided coverage and requires employers to notify their workers of this subsidy and any other Medicaid or state-run child assistance that is available.
COBRA changes
On February 13, Congress passed the latest economic stimulus plan that changes COBRA eligibility rules and provides a subsidy for unemployed workers. Employees who are laid off between September 1, 2008, and December 31, 2009, would be eligible for a 65 percent federal subsidy for up to nine months of COBRA coverage. An earlier House version of the bill would have allowed terminated employees with 10 years on the job or workers ages 55 and older to remain eligible for COBRA until age 65. That provision was stripped from the final bill. The $787 billion measure also provides $19 billion for a national health information-technology system. The president signed the bill on February 17 in Denver.
~February 2009 HRinsider Bulletin
