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Congressional negotiators trying to assemble a mammoth economic stimulus bill are considering including a provision to have the federal government subsidize COBRA health care continuation premiums for employees who lose their jobs, business lobbyists say.

Few details of the proposals are known, though lobbyists say their understanding is that the government would pay 50 to 60 percent of the premium, while the length of the subsidy would be 18 months, the maximum period of time employees can obtain COBRA coverage from their former employers. In other situations, such as divorce, death or marital separation, beneficiaries are eligible for up to 36 months of COBRA. A federal COBRA subsidy “has been pretty much agreed to,” said Sen. Max Baucus, D-Montana, who chairs the Senate Finance Committee.

President-elect Barack Obama also appears to back the idea. In a speech Thursday, January 8, at George Mason University in Fairfax, Virginia, Obama said his economic recovery plan would provide extensions of coverage for those who have lost their jobs and can’t find new ones.

Lobbyists said they didn’t know what criteria—such as income below a certain level—beneficiaries would have to meet to be eligible for the government subsidy.

There is precedent for federal COBRA premium subsidies. Under a 2002 trade law, the government grants a tax credit to pay 65 percent of premiums for those who lose their jobs due to foreign competition or for people 55 to 64 who are enrolled in pension plans taken over by the Pension Benefit Guaranty Corp. The tax credit also can be used to offset premiums from health insurance available from other sources, including state pools.

According to statistics provided by Hewitt Associates, about 20 percent of those eligible for COBRA coverage actually opt for coverage. That percentage, though, could rise as the economy slumps and fewer beneficiaries line up new jobs.

By law, employers can set the COBRA premium at 102 percent of the cost of coverage offered to employees. However, because beneficiaries who opt for COBRA are more likely to use medical services than employees, the premiums for beneficiaries typically do not come close to covering their costs. Experts say that for every dollar of COBRA premiums, employers pay about $1.50 in claims.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Two bills that would make it easier for employees to sue for pay discrimination—and collect larger damages—are poised for House approval on Friday, January 9, three days after the new session of Congress began.

Both bills were approved by the House over the last two years. But they have to be acted on again because they did not make it through the Senate.

After an election that increased the Democratic majorities in both chambers and put a Democratic president in the White House, the prospect for the bills becoming law has improved dramatically.

The Lilly Ledbetter Fair Pay Act (http://thomas.loc.gov/cgi-bin/thomas) would restart the statute of limitations for filing a suit with each paycheck diminished by discrimination. The Paycheck Fairness Act (http://thomas.loc.gov/cgi-bin/thomas) would allow employees to pursue unlimited compensatory and punitive damages in pay suits.

The Senate won’t move quite as fast as the House. Within the next two weeks, the Senate intends to take up only the Ledbetter bill, according to Senate Majority Leader Harry Reid, D-Nevada.

“We’re going to do just that narrow issue,” Reid said at a press conference Wednesday.

Critics say the bills would significantly change civil rights law and foster costly lawsuits at a time when businesses are struggling to survive the recession.

The measures were put on a fast track by House Democratic leaders to address what they call pressing economic and social problems for women caused by workplace bias.

“It is the highest priority to us,” House Speaker Nancy Pelosi, D-California, said in a press conference call Thursday. “It is very important because of what it means for the economic security of our country.”

Proponents of the Ledbetter bill say that it is designed to overturn a 2007 Supreme Court decision. Ledbetter, a former supervisor at a Goodyear Tire & Rubber plant in Alabama, sued the company for paying her less than her male counterparts for the same job for 20 years.

Ledbetter said she didn’t realize the discrepancy existed until a colleague placed an anonymous note in her mailbox at work many years later. The Supreme Court ruled that Ledbetter should have filed a suit within 180 days of the initial discriminatory action rather than nearly two decades later.

The Ledbetter bill would make each paycheck a continuing violation. “We will reinstitute the law as it was before the Supreme Court decision,” said Rep. George Miller, D-California and chairman of the House Education and Labor Committee.

Miller said that “especially in this economy when every dollar counts” the Ledbetter decision has to be overturned because it “is costing women across the country millions and millions and millions of dollars.”

President-elect Barack Obama often highlighted the Ledbetter bill during his campaign to increase his support among women. Pelosi calls Ledbetter “our heroine.”

The House also will vote on Friday on the Paycheck Fairness Act. That measure would change a federal pay discrimination law, the Equal Pay Act, so that plaintiffs could sue for unlimited compensatory and punitive damages.

It would make it more difficult for employers to argue that the pay discrepancies are based on factors other than sex. The measure also would prohibit company retaliation against employees for discussing wages with other employees.

Opponents of the paycheck bill say it would apply to unintentional discrimination. They also say that both bills would make it easier to file class-action lawsuits and that the Ledbetter bill would significantly alter the statute of limitations for all discrimination claims, not just those involving pay.

“Unfortunately, these bills do little to prevent actual instances of unlawful discrimination, but they will open the floodgates to unwarranted litigation against employers at a time when businesses are struggling to retain and create jobs,” Jen Kubicki, vice president for human resource policy at the National Association of Manufacturers, wrote in a letter to House members.

The business community will have more time to make its arguments about the bills to the Senate.

“They’re collectively so far over the top, we have a shot to defeat them in the Senate,” said Randel Johnson, vice president for labor, immigration and employee benefits at the U.S. Chamber of Commerce.

Only the Ledbetter bill came up for a Senate vote last year. Republicans blocked it with a filibuster, which requires at least 41 votes. After GOP losses in the 2008 election, Senate Republicans are currently at 41, pending a final decision on a recount in Minnesota.

Nonetheless, Republicans are ready to fight the pay measures. Senate Minority Leader Mitch McConnell, R-Kentucky, said at a press conference Wednesday that most difficult bills have had to meet the filibuster threshold.

“I cannot imagine that the Ledbetter legislation would not be subject to 60 votes,” he said. “But that’s routine, not controversial. It’s not unusual for a senator on either side to have a problem with a bill.”

—Mark Schoeff Jr.

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Your company wants to promote health and well-being among employees with a comprehensive program. It could include disease prevention, exercise equipment and stress management. But how do you decide what to include? The Wellness Council of America, whose mission is to help organizations develop wellness programs, suggests: Ask.

Ask your employees what they want. The council has on its site a sample survey that can be used as a guide in devising your own instrument as a first step in either developing or changing your company’s program. The survey includes among its choices employee assistance programs, educational programs, screening programs and nutrition programs.

Seeking detailed information about retirement plans? The Internal Revenue Service offers content that can answer questions about the types of retirement plans, their features and how they work. The IRS Web site covers these topics and more, and also provides a list of published guidance; newsletter Retirement News for Employers; and a section called “Tax Information for Plan Participate/Employee,” to which employers can link from their intranets. Find out more by clicking here.

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n its goal to inform about retirement issues, the Center for Retirement Research at Boston College has produced “The Financial Crisis and State/Local Defined Benefit Plans.” The paper offers information on how the decline in DB assets affects plan participants, how the economic downturn has affected plan sponsors, and more. The information may help managers help employees sort through their concerns about how the recession, which economists say started in December 2007, may affect their retirement.

Hammered by the crash in the equities markets, pension plans sponsored by large companies suffered a dramatic reversal of fortune in 2008, with the average funding level sinking to 75 percent at year-end, down from 104 percent a year earlier, according to an analysis released Wednesday, January 7.
 
That unprecedented drop was the result of a huge decline in the value of assets held in pension plans sponsored by the 772 companies in the S&P 1,500 that offer defined-benefit plans.

New York-based consultancy Mercer estimates that the pension plans lost $469 billion in 2008, converting a $60 billion surplus at the end of 2007 to a $409 billion shortfall at the end of last year.

“This is a very difficult time for pension funds,” said Adrian Hartshorn, a Mercer principal in New York.

The decline in funding levels “will reduce balance-sheet strength, which leads to consequences for several areas of the business, including capital-expenditure decisions, loan covenants and credit rating decisions,” Hartshorn said.

To meet funding requirements set by federal law, employers will have to pump in tens of billions of dollars in new contributions to shore up their plans, while some companies may decide to freeze their plans.

More employers will take a step back and ask if their plans still are viable, Hartshorn said.

The release of the Mercer analysis comes as business groups are expected to renew their push to persuade federal legislators to temporarily ease funding rules. Last month, Congress approved legislation that provides a modest relaxation of funding requirements.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Workforce Management’s online news feed is now available via Twitter.

 

The number of jobs posted online is shrinking, the market for temporary jobs even more uncertain, and services are sliding.

Welcome to 2009.

The number of U.S. jobs posted online dropped by 507,000 in December, to 3.9 million, according to the Conference Board’s measure of online help-wanted ads released Wednesday, January 7. This is the first time since the summer of 2006 that the measure has fallen below 4 million.

“The sharp December drop in online advertised vacancies is another indication that the economy has not reached bottom,” said Gad Levanon, senior economist at the Conference Board. “The widespread nature of the decline in employers’ demand for workers—both across geographies and across occupations—does not bode well for an employment upturn in the first half of 2009.”

The American Staffing Association’s index measuring temporary employment fell to a reading of 81 in the week of December 15-21 from 90 in the week of November 10-16. The drop in the index indicates a decline in temporary staffing. The index was at 87 in the third week of December 2007.

“The increase in demand for temporary and contract employees that typically occurs throughout the calendar year has not been seen in 2008; however, a decline is typical the third week in December,” according to the ASA.

The index measures changes in the number of temporary and contract employees weekly and monthly. The index’s baseline value of 100 was set in June 2006.

Economic activity in the U.S. service sector declined in December compared with November, but the rate of decline slowed, the Institute for Supply Management also reported Wednesday. Its nonmanufacturing index rose to a reading of 40.6 in December from 37.3 in November. The nonmanufacturing index was expected to slip further, The Wall Street Journal reported.

Index readings above 50 indicate expansion.

Employment in the service sector also contracted in December, but at a slower rate than in November, according to the institute’s nonmanufacturing employment index, which is used to make up the larger nonmanufacturing index. The employment index rose to 34.7 in December from 31.3 in November.

—Reports compiled by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.

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Dear Objecting:

In my experience, and in speaking with a number of recruiters, an objective on a résumé is not only outdated, but usually unnecessary. Unless the candidate is a recent graduate, changing careers or going in a new direction that necessitates some explanation, most recruiters bypass any stated objectives to focus instead on a person’s experience. Their main interest is in determining whether a person is a viable candidate for the job.

Most recruiters only look at an objective to answer things that don’t make sense in the résumé itself. This might occur if someone applies for a sales position but lists no sales experience.

This candidate might include an objective as to why they are interested and/or qualified for this position, even though their background is in something that appears unrelated to the sales position.

SOURCE: Kelly A. Hamm,Futurestep, Los Angeles, December 4, 2008

LEARN MORE: There’s a lot of talk about video résumés, but the jury is still debating their effectiveness.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Dear Pressed by Pay:

The reasons that people accept positions with a company vary widely, with pay being one factor as a candidate evaluates an offer. Alternatives to higher starting salaries are numerous, but at their essence should be determined in light of your company’s business strategy and human resources philosophy.

Are you a firm that can recruit and retain based on your corporate mission and vision (innovative, philanthropic, community service, religious, etc.)?

Does your firm have a reputation for providing employees with intrinsic benefits on which you can build a brand image?

How important is work/life balance, and do you walk the talk?

Can you provide employees with highly competitive noncash benefits instead of cash?

Are you able to provide a wealth of technical or other training and developmental opportunities?

Is your company a fun place to work?

The point: Don’t attempt to replace high starting salaries for recruits with something that will not fit with your company’s culture. The result will not be that which your management is expecting.

Also, don’t interpret the current “buyer’s market” in labor for some jobs as an excuse to make lowball offers to all candidates. Although this may work to hold down costs in the short run, it could be detrimental to long-term business performance. In this type of labor market, experienced candidates may accept any offer—even one involving pay cuts—yet won’t be content until your company addresses this imbalance in some other meaningful way.

Before embarking upon this strategy, it is appropriate to analyze why it is important to management to reduce starting salaries. What are the important considerations in this decision? Once your company has outlined the business reasons for changing its pay policy, your human resources department then needs to communicate it to managers, as well as adjust your recruitment strategy. In these difficult times, it is critical to not to be “penny-wise and pound-foolish” with pay. Experienced candidates, as well as high-performing employees, should be identified and compensated appropriately.

SOURCE: Bob Fulton, the Pathfinder’s Group Inc., Glenview, Illinois, November 19, 2008

LEARN MORE: Changing of pay practices is a hot topic amid the financial crisis. Some companies are slashing raises and planning layoffs, perhaps to weed out low performers.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Cigna Corp. said Monday that it will cut 1,100 jobs worldwide, or 4 percent of its workforce, and consolidate some operations amid the ongoing recession.

The Philadelphia-based insurer said the actions will result in after-tax restructuring charges of $30 million to $40 million in the fourth quarter of 2008.

The layoffs are expected to be completed by mid-2009. The company said it will provide more details on cost-cutting measures at its first-quarter earnings conference call February 5.

“Given the unprecedented economic situation we and our customers are facing, these actions are essential to ensure we can meet their needs for high value, cost-effective products and services,” Cigna chairman and CEO H. Edward Hanway said in a statement.

Cigna told investors in the fall fall that it would likely reduce expenditures because of falling enrollment and investment losses.

Filed by Rebecca Vesely of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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