First Quarter 2010

 

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In this issue:

Legislative Update

COBRA premium subsidy extended

Mental Health Parity and Addiction Equity Act of 2008 takes effect

In the News

Recent verdicts and settlements

Employee theft on the rise

Job satisfaction surveys identify challenges for business owners

US Supreme Court to re-examine employee privacy rights in the digital age

The Strangest Thing We’ve Heard of Late

New Web Site

Published elsewhere:

Hiring in the New Economy

(SBDC Front Page)

Understanding and Bridging
the Generational Gap

(WORK Spring, 2009)

What is the Role of an Attorney
on the Board?

(Compasspoint Board Café - February 28, 2008)

Also published in Blueavocado.org - June 17, 2008

How Do I Handle an
Underperforming Staff Person?

(Wisconsin Lawyer - Vol. 81,
No. 2, February 2008)

Legislative Update

COBRA premium subsidy extended

The Federal COBRA premium subsidy, originally set to expire in late 2009, has been extended. As you may know, the COBRA premium subsidy means that an individual who qualifies for COBRA pays 35% of the COBRA premium, with the balance being paid by his/her former employer (who is subsequently reimbursed by the federal government). The new law:

  • extends the COBRA eligibility period to February 28, 2010 -- meaning that anyone qualifying for COBRA before February 28, 2010 qualifies for the premium subsidy.
  • extends the amount of time qualifying individuals can receive the subsidy from nine months to 15 months.
  • requires employers to ensure that individuals currently under, or eligible for, COBRA are notified of the change in the law.

Mental Health Parity and Addiction Equity Act
of 2008 takes effect

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), signed by President Bush in October 2008, is now law. The MHPAEA does not require that employers offer mental health or substance abuse benefits. However, if such benefits are offered, MHPAEA requires that they must be equal to other medical benefits offered under the employer’s health insurance plan, both in terms of financial requirements (e.g. deductibles, copayments, coinsurance, out-of-pocket expenses) and treatment limitations (e.g. limits on frequency of treatment, number of visits, days of coverage).

Wisconsin-based grocery retailer Woodman’s Food Market, acting in anticipation of the MPHAEA, dropped mental health benefits from its plan on the claim that it cannot afford to comply with the new federal law. (Madison.com – 12/21/09)

In the News

Recent verdicts and settlements

  • A verdict against the former owners of a Racine IHOP in the amount of $105,000, related to sexual harassment of two teenage waitresses. (MJS 11/24/09)
  • A settlement in the amount of $85,000, payable by CG Schmidt, Inc., related to a retaliatory termination claim. The former employee had filed a racial discrimination claim against the company prior to his termination. (MJS 1/9/10)
  • A settlement in the amount of $175,000, payable by Kohler Co., related to a pregnancy discrimination claim filed by a sales executive who was first placed on probation and later fired (one month before her delivery date). (EEOC 11/09)
  • A verdict against McDonalds in the amount of $6.6 million, related to a “phone hoax” that prompted one of its restaurant managers to strip search a female subordinate. Although McDonalds’ handbook includes a policy prohibiting strip searches (yes, you read that correctly), the plaintiffs demonstrated that: (1) the “no strip search” policy was not well-known among McDonalds employees (it was buried in McDonalds’ 1,000-page manual, and not part of any training); and (2) this was not the first time McDonalds had been victimized by this type of hoax, such that it should have taken affirmative steps to notify its restaurants of such hoaxes and how to counter-act them. (ABA Journal 11/25/09)

Employee theft on the rise

Recent news accounts suggest that employee theft is commonplace, and on the rise.

In a survey of 600 financial sector employees, over 41% of those employees surveyed admitted to downloading sensitive corporate data (most commonly customer contact information). A staggering 85% of employees surveyed said they had little fear of getting caught because their employers had no system in place for tracking illegal downloads, while at the same time admitting that they know such conduct is illegal. (Survey conducted by Cyber-Ark)

The gift card industry has created a whole new avenue for employee theft. Gift cards are inherently portable and hard to track. Schemes include giving a customer purchasing a gift card a blank card and putting the credit on the employee’s own gift card, and faking a refund by placing the refund amount on the employee’s own gift card. (NYT 12/30/09)

For years, companies have focused on theft prevention. This data reminds that the focus must be on employees as much as customers and, more specifically, to combating the sentiment that electronic information can be taken with impunity.

Job satisfaction surveys identify challenges
for business owners

Job satisfaction surveys taken in the past few months suggest that between 55% and 80% of employees are dissatisfied with their current positions, and that as many as 60% of those surveyed intend to leave their current position when the economy improves. (MBJ 12/25/09, Marketplace Money 1/5/10)

  1. Dissatisfaction appears to be the greatest among employees under 25 who perceive (rightly or wrongly) low wages and few opportunities for growth.
  2. Employees who feel unappreciated or are otherwise dissatisfied are not productive or contributing to a healthy corporate culture.
  3. Conventional wisdom is that the cost to hire a new employee is anywhere between 40% and 200% of the employee’s salary.

Your initial response may be “good riddance,” and for obvious reasons. That said, this data supports the argument that employees who seem less than fully engaged with the company vision, mission and culture create real (financial and other) exposure for their employers.

US Supreme Court to re-examine employee privacy rights in the digital age

The United States Supreme Court recently agreed to hear a case highlighting the complexity of employee privacy rights in the 21st Century. The issue in the case is whether a California police department violated the privacy rights of a police sergeant (and his colleagues) when it inspected personal text messages sent and received on his work-issued pager. This case raises important questions about the already muddy concept of employee privacy, now complicated further by the ease and prevalence with which employees e-mail, IM, blog and tweet via company-issued computers and phones. The case is Ontario, CA v. Quon (Docket No. 08-1332, cert. issued 12/14/09). Stay tuned.

The Strangest Thing We’ve Heard of Late

In November, a Chicago judge ruled that former Chicago Fire Department Lieutenant Jeffrey Boyle is entitled to his $50,000 annual pension even though he pleaded guilty in 2006 to eight counts of arson (and confessed to 12 more), ultimately serving two years in prison on a six-year sentence.

Boyle is known in the area as "Matches,” distinguishing him from his brother, John "Quarters" Boyle, who is currently serving time in federal prison for bribery (a second stint in the big house for “Quarters.” His first was for the theft of millions of dollars from the state tollway authority – hence his nickname “Quarters”).

The judge reasoned that Matches' arsons were wholly separate from his firefighting and, accordingly, he was not ineligible for the pension. (Chicago Tribune, 11-11-09)

New Web Site

If you haven't had the chance to visit our new and improved Web site, check it out here and bookmark it for your future reference. The site features our new logo as well as useful information and resources.

We'd love to hear your feedback. Send comments to Mark Goldstein.

Upcoming events

2/18/10

Legislative Update

SRKA


3/4/10

Employment: Hiring & Firing

UW-Milwaukee School of Continuing Education


3/11/10

The ADA, harassment and other key HR issues

UW-Milwaukee School of Continuing Education


3/12/10

Analyzing Exempt & Non-Exempt Status

Marquette University Law School


3/18/10

The Employee Handbook

UW-Milwaukee School of Continuing Education


3/23/10

Revisiting Your Employee Handbook

Workforce Development Center at MATC-Mequon


3/26/10

Revisiting Your Employee Handbook

Workforce Development Center at WCTC-Pewaukee


3/31/10

Revisiting Your Employee Handbook

MPTC-West Bend

For more information on upcoming events, click here.