Risky Business: The Perils of Independent Contractor Misclassification

freelanceHiring independent contractors instead of employees often has a financial benefit for businesses due to savings in payroll taxes and employment benefits, and avoidance of wage and hour regulations. However, if a state or federal agency discovers that an independent contractor is misclassified, the business faces back pay, fines, interest, civil and criminal litigation costs, and business restructuring costs. All benefits gained from the misclassification are lost and more! If the business does not pay all associated fines and interest, the overflow debt may then be held against the owner’s personal accounts.

Several states and federal agencies monitor independent contractor misclassification; the misclassification identification in one agency often has a domino effect, brings all agencies and formerly misclassified employees pounding on your door, demanding money. The cost associated with this risky mistake can realistically drive you out of business. In case you are still unconvinced of the severity of the misclassification, the following article describes penalties associated with violations in Nevada.

 

The burden of proof rests upon the employer to determining whether an independent contractor relationship exists. The employer needs to demonstrate the existence of three factors.

  • The person has been and will continue to be free from control or direction from the employer regarding the performance of services;
  • The service is either outside the usual course of the business for which the service is performed or that the service is performed outside of all the places of business of the enterprise for which the service is performed; and
  • The service is performed in the course of an independently established trade, occupation, profession or business in which the person is customarily engaged, of the same nature as that involved in the contract of service.

 

They’re Watching You

The following Nevada agencies monitor independent contractor misclassifications:

  • Division of Industrial Relations, Nevada Department of Business and Industry
  • Employment Security Division (“ESD”)
  • Office of the Labor Commissioner
  • Nevada Department of Taxation
  • Department of Labor Standards Enforcement (“DLSE”)

 

The following federal agencies monitor independent contractor misclassifications:

  • Wage and Hour Division of the Department of Labor (“WHD”)
  • Equal Employment Opportunity Commission (“EEOC”)
  • Internal Revenue Service (“IRS”)

 

Agencies choose to investigate when…

  • Your “independent contractor” files an unemployment claim
  • Independent contractor complaints (e.g. By a competitor)
  • You independent contractor’s lawsuit against you
  • Random audits
  • Internet registration process
  • INTERAGENCY REFERRALS

 

Heavy Consequences

  • Employment benefits including health insurance, retirement contribution, stock options, paid vacations, sick days, life insurance, disability insurance, etc.
  • Payroll taxes for each misclassification during each tax period including Social Security and Medicare taxes, federal unemployment insurance taxes, workers’ compensation insurance, etc.
  • Back wages, overtime pay, FMLA leave, and other employment law compliances fines
  • Interests and penalty on everything.
  • Gross misdemeanor criminal charges.
  • Civil action suits by the Nevada Attorney General and class action suits by misclassified workers.
  • Restructuring costs to ensure current and future workers will be properly classified.

 

Remember, these liabilities may pierce the corporate veil, becoming the liability of the owners and corporate officers, if not paid.

 

Learn from Microsoft’s Mistake

The IRS found Microsoft’s employment misclassification in the early 1990s and charged Microsoft millions in fees and penalties and caused Microsoft to restructure its human resources. After the federal government was finished with Microsoft, the company faced a civil suit for employment benefits from eight of the previously misclassified workers. Microsoft lost the suit in the circuit court and settled the case for $97 million.

 

Riskier than Ever!

Since 2011, the federal government has cracked down on employment classification, adding over a hundred monitoring agents and $25 million in funding to catch misclassifications. Specific task forces communicate between agencies to ensure that misclassifications are fully penalized by various agencies. This trend is not changing; in 2013, the federal government budgeted $14 million of grant money to assist states in identifying misclassifications. Now more than ever, business owners should be vigilant in employment classification.

 

Words Don’t Matter

Nevada has a counterintuitive definition for independent contractors. Designating the business relationship in an independent contractor agreement and actually perceiving your worker as an independent contractor is not enough. To proactively ensure that your workers are properly classified, call the lawyers at the Drinkwater Law Office.

Risky Business: The Perils of Independent Contractor Misclassification

freelanceHiring independent contractors instead of employees often has a financial benefit for businesses due to savings in payroll taxes and employment benefits, and avoidance of wage and hour regulations. However, if a state or federal agency discovers that an independent contractor is misclassified, the business faces back pay, fines, interest, civil and criminal litigation costs, and business restructuring costs. All benefits gained from the misclassification are lost and more! If the business does not pay all associated fines and interest, the overflow debt may then be held against the owner’s personal accounts.

Several states and federal agencies monitor independent contractor misclassification; the misclassification identification in one agency often has a domino effect, brings all agencies and formerly misclassified employees pounding on your door, demanding money. The cost associated with this risky mistake can realistically drive you out of business. In case you are still unconvinced of the severity of the misclassification, the following article describes penalties associated with violations in Nevada.

 

The burden of proof rests upon the employer to determining whether an independent contractor relationship exists. The employer needs to demonstrate the existence of three factors.

  • The person has been and will continue to be free from control or direction from the employer regarding the performance of services;
  • The service is either outside the usual course of the business for which the service is performed or that the service is performed outside of all the places of business of the enterprise for which the service is performed; and
  • The service is performed in the course of an independently established trade, occupation, profession or business in which the person is customarily engaged, of the same nature as that involved in the contract of service.

 

They’re Watching You

The following Nevada agencies monitor independent contractor misclassifications:

  • Division of Industrial Relations, Nevada Department of Business and Industry
  • Employment Security Division (“ESD”)
  • Office of the Labor Commissioner
  • Nevada Department of Taxation
  • Department of Labor Standards Enforcement (“DLSE”)

 

The following federal agencies monitor independent contractor misclassifications:

  • Wage and Hour Division of the Department of Labor (“WHD”)
  • Equal Employment Opportunity Commission (“EEOC”)
  • Internal Revenue Service (“IRS”)

 

Agencies choose to investigate when…

  • Your “independent contractor” files an unemployment claim
  • Independent contractor complaints (e.g. By a competitor)
  • You independent contractor’s lawsuit against you
  • Random audits
  • Internet registration process
  • INTERAGENCY REFERRALS

 

Heavy Consequences

  • Employment benefits including health insurance, retirement contribution, stock options, paid vacations, sick days, life insurance, disability insurance, etc.
  • Payroll taxes for each misclassification during each tax period including Social Security and Medicare taxes, federal unemployment insurance taxes, workers’ compensation insurance, etc.
  • Back wages, overtime pay, FMLA leave, and other employment law compliances fines
  • Interests and penalty on everything.
  • Gross misdemeanor criminal charges.
  • Civil action suits by the Nevada Attorney General and class action suits by misclassified workers.
  • Restructuring costs to ensure current and future workers will be properly classified.

 

Remember, these liabilities may pierce the corporate veil, becoming the liability of the owners and corporate officers, if not paid.

 

Learn from Microsoft’s Mistake

The IRS found Microsoft’s employment misclassification in the early 1990s and charged Microsoft millions in fees and penalties and caused Microsoft to restructure its human resources. After the federal government was finished with Microsoft, the company faced a civil suit for employment benefits from eight of the previously misclassified workers. Microsoft lost the suit in the circuit court and settled the case for $97 million.

 

Riskier than Ever!

Since 2011, the federal government has cracked down on employment classification, adding over a hundred monitoring agents and $25 million in funding to catch misclassifications. Specific task forces communicate between agencies to ensure that misclassifications are fully penalized by various agencies. This trend is not changing; in 2013, the federal government budgeted $14 million of grant money to assist states in identifying misclassifications. Now more than ever, business owners should be vigilant in employment classification.

 

Words Don’t Matter

Nevada has a counterintuitive definition for independent contractors. Designating the business relationship in an independent contractor agreement and actually perceiving your worker as an independent contractor is not enough. To proactively ensure that your workers are properly classified, call the lawyers at the Drinkwater Law Office.

Hard-Working Job Descriptions

Hard working job desc.

The next time you sit down to write your employee job description, consider dedicating some time to ensure that the description is clear and comprehensive. A proper job description can increase your business productivity and minimize legal liabilities. Consider the following functions of your job description:

  • Attract your ideal candidate: Job seekers often self-screen through job descriptions, attract the most suitable candidates by providing them with comprehensive descriptions.
  • Organizational Management: Writing a job description can help you think through your organization needs, workload allocation, and division of labor. A clear job description not only helps the prospective applicant, but also your internal management.
  • Expectation & Accountability: Help employees understand their role and your expectation at the onset so they are not surprised during the evaluation. For example a clear job description should place different emphasis on tasks so the employee knows how to prioritize work time.
  • Set the Benchmark: Your job description should set the standard for the position. From a clear standard you will be able to reward employees who excel with minimal accusations of discriminatory pay (Equal Pay Act). You can also defend against unfair hiring claims with your standard. The benchmark also helps you assess your business progress and human resource needs.
  • Documentation: During performance evaluations, disciplinary actions, and termination planning, you should use the job description to document and support your rationale. Consistent documentation can be helpful in wrongful termination suits.
  • Exempt vs. Nonexempt: Under the Fair Labor Standard Act, you must pay nonexempt employees overtime for working over 40 hours a week. Your job description should indicate if the position is exempt or nonexempt.
  • Highlight Essential Functions: Under federal law (American Disability Act, Pregnancy Disability Act, Family Medical Leave Act, etc.) you are required to give reasonable accommodations to employees if they are able to perform the essential functions and to redistribute marginal functions. By identifying essential and non-essential functions in your job description, you avoid these types of law suits.
  • Physical Requirement: At some point, your employee may have to take some time off for medical reasons. A proper job description with the necessary physical requirements will help their doctor determine if they can safely return to work. It will also help you determine if you must place your employee on light duty or make other accommodations.

Your job description can be a useful tool for your business. Be sure to continuously use and update your job descriptions so that they can properly serve you. By incorporating the job description in different aspects of your business, from hiring and orientation to discipline and termination, you optimize the use of the description and give yourself numerous reminders to update it.

Termination Based on a Leave of Absence

leave of absence

Most employers are aware that employees may be eligible for leave under the Family Medical Leave Act (“FMLA”) to receive a maximum of 12 week per year. If the employee on leave wants to file for additional time off, employers should proceed cautiously. While the employee may no longer be entitled for the additional leave under FMLA, employees may be entitled to continued leave as a reasonable accommodation under the Americans with Disabilities Act (ADA).

 

Example: An employee protected under the ADA asks for an additional week off to fully recuperate from a serious illness after already taking 12 weeks off under FMLA.

 

If the employer does not face undue hardship from this additional week, the employer is obligated to…

  1. Allow the employee the additional week off with health insurance, provided that the employee pays her premium.
  2. Return the employee to her original position, assuming they are qualified to perform the essential functions of her job (with or without reasonable accommodation).
  3. If reasonable accommodation to return her to her original position cannot be made, then the employer must still reassign the employee to an available vacant position that the employee is qualified for with or without accommodation.

 

As you may have noticed, the employer’s responsibility under ADA is more extensive than in FMLA and requires a separate analysis. Under FMLA, employers may terminate the employee if they are no longer able to perform the essential functions of their original position after the 12 week period. An ADA analysis is more unpredictable. The employer’s obligations under ADA are primarily dependent upon any undue burden on the business, which includes significant costs, disruptions, and safety concerns that may arise from the employee’s absence.

 

The employer’s ability to prove undue burden can be difficult. In order to better protect themselves, employers should…

  • Confirm their employee handbooks indicate that leave is granted after an individual assessment. Employers may not apply a no-fault termination policy!
  • Maintain updated and (physically) descriptive job descriptions so that the essential functions of the job are clear.
  • Proactively assess an employee’s FMLA and ADA qualification when an employee requests leave.
  • Engage the employee in an interactive process (communicate and document interactions regarding ability and time of return) throughout the employee’s absence. If you do not attempt to engage in conversations, you lose an important defense if the case is litigated.
  • Document the effects of the employee’s absence…
    • Any decrease in productivity from temporary workers or workers assigned the employee’s tasks
    • Lower quality of work
    • Lost sales
    • Customer service issues
    • Deferred projects
    • Management burden increases
    • Co-worker stress increases
    • Decrease in morale

 

Employment termination based on leave requests can be fraught with legal liability. Call us before finalizing these decisions to avoid costly discrimination litigation.

WHAT ARE THE TRUE “SAVINGS” OF TIME CLOCK ROUNDING?

timeclockAlthough there is no Nevada law regarding time clock rounding the Office of the Labor Commissioner recently conducted a thorough review of statutes, regulations and case law. The Nevada Labor Commissioner issued an Advisory Opinion that time clock rounding can be appropriate as long as, over time, the employee is properly compensated for all time actually worked.

The practice of time clock rounding has been around a long time. If you are an employer that currently uses this practice, beware. There has been a significant increase in lawsuits filed by employees under the federal Fair Labor Standards Act (“FSLA”). The federal regulation on time clock rounding states, “It has been found in some industries, particularly when time clocks are used, there has been the practice for many years of recording the employees’ starting time and stopping time to the nearest 5 minutes, or to the nearest one-tenth or quarter hour. Presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually worked. For enforcement purposes this practice in computing work time will be accepted provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” (29 C.F.R. § 785.48(b)) If you are an employer that believes changing its practice of time clock rounding will cost you money, you could be at risk for a lawsuit.

The Department of Labor (“DOL”) does not prevent employees from suing over rounding. It is uncertain during the course of an investigation, the rounding will show in the employee’s or the employer’s favor. If an employer uses a payroll software program or a computerized timekeeping system that can easily track all time with no rounding, the benefit the employer may receive from rounding does not out weight the risk of a lawsuit.

If you are an employer that does round time, do so consistently and in a manner clear in your record-keeping.  Make sure you state the method clearly in your employment policies and apply it equally to all employees. It will make you less vulnerable to a FLSA claim or lawsuit.  Always check with your attorney before changing any time keeping practices to prevent any issues under FLSA’s requirements.

It’s Complicated: Limits of At-Will Employment

employee terminationWhat is at will employment?

At will employment is an employment relationship in which you may fire your employee at any time for any reason and your employee may resign at any time for any reason. This is the default employment relationship in Nevada, absent an employment contract with specific terms.

Beyond the simple definition…

As a practical matter, you should not capriciously fire your employees! At will employment does NOT mean that you face no liability if you fire your employee. Numerous federal and state laws and case law protect your employee from a wrongful termination. For example:

Statutory Protections

As an employer, you deal with numerous federal regulations; failure to meet these regulations can also give rise to wrongful termination claims. Termination based on the following non-exclusive list of federal protections would give rise to wrongful termination claims:

  • FMLA-requesting or taking family leave
  • Equal Pay Act of 1963-gender
  • VII of the Civil Rights Act-protected classes
  • Age Discrimination in employment Act of 1964
  • Rehabilitation Act of 1973-disability status
  • Americans with Disabilities Act (ADA)-disability status
  • National Labor Relations Act (NLRA)-union membership

You should consider the liability of firing during the termination procedure. You may not have even thought about the employee’s protected status when making your termination decision, but it is important to ensure there is no miscommunication.

Public Policy Exception

Various state laws and court decisions also eroded the definition of at-will employment due to public policy considerations like…

  • Not following proper termination procedures.
  • Arbitrary firing though employee handbook indicated for cause termination only.
  • Employee’s refusal to commit an illegal act.
  • Retaliation for filing worker’s compensation.
  • Retaliation for whistle blowing (alerting to employer’s illegal acts).

Covenant of Good Faith and Fair Dealing

In extreme cases when the employee proves that the employer acted in bad faith, Nevada courts have awarded employees large damage sums, for example a Las Vegas Hilton executive was awarded $600,000 for her wrongful termination. An employee may also have other tort claims based on defamation, intentional infliction of emotional distress, invasion of privacy, etc.

Better safe than sorry

At will employment does provide you with some freedom in termination decisions. However, it is important to have a proper termination procedure in place to minimize your exposure to future law suits from your disgruntled employees. For more information, read our blog article on best practice termination procedure.

Small Talk, Big Problems: Unexpectedly Dangerous Interview Questions

Employee LawMost professionals think they know how to do a proper interview without a lawyer telling them what to say. Some interviewers often start out with small talk, attempting to build rapport with the interviewees and make them more comfortable. Seemingly innocuous questions during this interview process may present a dangerous liability for the company. They can lead to discrimination or wrongful-discharge lawsuits. Here are some surprisingly problematic questions to show you the dangers of improperly trained interviewers.

 

Here’s what NOT to ask during a job interview:

  • Is it Ms. or Mrs.?
  • Is that your maiden name?
  • Do you have any childcare/caregiver responsibilities?
  • Are you pregnant?
  • What’s the name and address of a relative we can notify in case of an emergency?
  • When did you graduate from high school/college?
  • Where’s that accent from?
  • Are you a citizen?
  • Why are you in a cast?
  • Have you ever been arrested?
  • When did you graduate from high school?

 

All these questions inadvertently hint at one of the federally protected categories for employment purposes. Can you see how each implicates one of these categories? The categories are:

  • Race
  • Color
  • Religion
  • Gender (including pregnancy)
  • National origin and citizenship
  • Age (40 and over)
  • Disability (including perceived disability)
  • Genetic information
  • Veterans, active-duty or application to the uniformed services

 

While some of these questions just cannot be asked, other can be rephrased appropriately:

  • This position requires long and irregular hours are you able to fulfill this essential function of the job?
  • What’s the name and address of a person we can notify in case of an emergency?
  • What schools have you attended?
  • If you are hired, will you be able to submit verification of your legal right to work in the US?
  • Have you ever been convicted of a crime?

 

Developing a standard set of questions to choose from during interviews is a good practice and ensures consistency. You can make sure that the questions do not violate any laws and eliminate potential discrimination claims. If you are uncertain about the legality of an interview activity, contact Drinkwater Law Offices at (775) 828-0800.

WHAT TO EXPECT FROM YOUR EXPECTING WORKER: NEW EEOC PREGNANCY DISCRIMINATION UPDATE

Sorting out her maternity leaveThe Equal Employment Opportunity Commission (“EEOC”) issued enforcement guidance on pregnancy discrimination in mid-July 2014. This guidance recognized the increase in pregnancy discrimination claims (from 3,900 charges in 1997 to 5,342 in 2013) and expressly incorporated pregnancy discrimination as a form of sex discrimination. The guideline also linked pregnancy discrimination to the American’s with Disabilities Act (“ADA”), after a broader definition of “disability” was added in the 2008 ADA amendment. EEOC considers pregnancy discrimination as its national enforcement priority and this new guideline can have significant implications for EEOC investigations and litigation. In addition, the Supreme Court granted cert to a pregnancy discrimination case concerning light duty for pregnant employees in July and will issue their opinion on the matter by July of 2015. This decision could render the guidance moot. This leaves a quandary for employers about whether to update their policies now or wait for the Supreme Court decision.

Does this law apply to me?

If you have 15 or more employees, the federal Pregnancy Discrimination Act (“PDA”) applies to you. As the Nevada law is less stringent than the federal law, the PDA will set the minimum requirements concerning treatment of pregnant employees. The PDA prohibits all forms of discrimination relating to pregnancy (including past, current, potential, and intended pregnancies and related medical conditions) in all stages of employment.

What do I need to do?

A good starting point is to treat your pregnant employee either as an employee that is temporarily incapacitated or as a disabled employee if she faces any medical impairment relating to her pregnancies (which trigger ADA regulations). In addition, consider the following checklist…

Hiring

  • When hiring, create a detailed job description with the physical requirements of the position. Be sure to include all essential functions of the position.
  • Do not ask any questions or make any comments related to a potential employee’s pregnancy. You may ask if the person believes that she will be able to satisfy all essential functions of the position.
  • Do not refer to any stereotypes associated with pregnancy during the interview or after.

Demotion and Raises

  • You may not discriminate based on pregnancy at any point in employment. Document all performance evaluations and employment decisions with detailed explanations just in case you must justify the termination in a court of law.

Terminations

  • It is illegal to discriminate against past, current, or potential pregnancies. Termination of an employee during a pregnancy or in a period after can be used as evidence for pregnancy discrimination suits. Be aware of your heightened litigation exposure if you terminate during this period.

Benefits

  • Review your insurance policy to be sure pregnant employees receive the same type of insurance care as other employees. The same type of insurance does not mean that you must offer all pregnancy related treatments. For example, you may exclude infertility treatments and abortions (if the life of the mother is not in danger).
  • NOTE: The guidance indicates that you must provide contraceptives if you provide health care of a similar type, such as preventative care. This directive may be modified after the Supreme Court’s decision in Burwell v. Hobby Lobby.
  • Be sure that you calculate vacation accrual and seniority for pregnant and other employees in the same manner. If vacation and seniority accrues during sick, injury, and other types of leave, it should also accrue during pregnancy related leave.

Policies

  • You MAY NOT force your employee to take her leave when she is pregnant even if you are doing so in her best interest. If her position involves an environment or tasks that could be hazardous to the fetus, you may inform your employee of the danger.
  • This is good time to review your leave compliance policy in general to ensure you are in compliance with other laws such as the Family Medical Leave Act (“FMLA”) if it applies to you.
  • Review your parental leave policy (leave for child bonding purposes), to ensure that mothers and fathers are governed by the same policy.
  • Install or incorporate a discrimination complaint procedure in your workplace. Be sure to include strong anti-harassment and anti-retaliation provisions and enforce them.
  • Review your policy for granting light duty. If you provide light duty for those sick or injured on the job you should also provide light duty to accommodate pregnant employees. This does NOT mean that you must always give light duty when it unduly burdens your company. It does mean that if you make exceptions in your light duty capacity for injured workers, you must consider similar exceptions for pregnant workers.
  • Review all policies to ensure that it does not disproportionately affect your pregnant employees.

 

 

Notice and Training

  • Update your supervisors and employees about their rights and responsibilities under PDA.
  • Train your managers to sensitively respond to requests and complaints related to pregnant workers.
  • As required by the Affordable Care Act, designate a private space for breastfeeding and give your employees a reasonable number of break times to use the facility. Notify your employee of her right to use the facility.

Reasonable Accommodation

If your employee experience pregnancy related medical impairments, they may be under the protection of the ADA. You must make additional reasonable accommodations in these situations.

  • Incorporate pregnancy related medical conditions into your preexisting reasonable accommodation request policy and procedures and notify your employees of the change.
  • Ensure your managers are aware of the broader definition of disability and train them to recognize pregnancy related medical conditions that would trigger the ADA.
  • Consider appropriate reasonable accommodations such as: redistributing marginal functions, altering how tasks are completed, modifying policies, purchasing equipment, modifying the work schedule, granting leave, assigning temporary light duty, etc.            Contact Drinkwater Law Offices before you act if you are uncertain about the legal ramifications.

Changes To Employment Law Posters

Employment Law Under both federal and state employment laws, employers are required to post specific employment materials for employees in a conspicuous area (such as a break or lunch room) and in a language employees understand. When there are changes to existing employment laws or new laws are enacted, the mandatory posting requirements also change. Accordingly, employers must be aware of and comply with changes in the mandatory posting requirements.

There have been several recent amendments to both state and federal employment laws and mandatory posting requirements. Effective November 21, 2009, employers with fifteen or more employees must post the updated “Equal Employment Opportunity is the Law” poster which includes information regarding the new Genetic Information Nondiscrimination Act (“GINA”) prohibiting discrimination against applicants and employees on the basis of genetic information. In addition, following are several recent changes to state employment posting requirements: 1) Effective October 20, 2009, the Nevada Unemployment Insurance poster must include a new website address for filing an unemployment claim online; 2) The Nevada Minimum Wage poster was recently updated to reflect an amendment to exemptions that apply to retail or service workers and to reflect the recent increase in the state minimum wage.

We recommend that employers obtain the mandated employment posters from a provider that notifies employers of posting requirement changes and provides updated posters (e.g. www.postercompliance.com).

COBRA Subsidy Extension

COBRA subsidyBy Tracy McKenzie, Esq.

On December 19, 2009, President Obama signed a new law amending the COBRA subsidy provisions of the American Recovery and Reinvestment Act of 2009 (“ARRA”). Under the ARRA, individuals who were involuntarily terminated during the coverage period from September 1, 2008 through December 31, 2009, and were eligible for continuation of health care benefits pursuant to COBRA, could have 65% of their COBRA premium subsidized by the federal government for up to nine months. The Department of Defense Appropriations Act 2010 amends the ARRA to extend the coverage period during which a termination occurs by two months, through February 28, 2010. In addition, the new law also extends the maximum period for receiving the subsidy by an additional six months, for a total of fifteen months. Eligible individuals who had reached the end of the initial nine month COBRA subsidy period before amendment of the law will now have an extension of their grace period to pay the reduced COBRA premium. To continue their coverage, the eligible individual would have to pay 35% of the premium by February 17, 2010, or, if later, within thirty days after notice of the extension is provided by the plan administrator. Similarly, individuals who lost the COBRA subsidy and paid 100% of the premium in December 2009 can contact their plan administrator or employer to seek a credit applied against future months of COBRA payments or a reimbursement of the overpayment.

Plan administrators or employers sponsoring health plans will be required to provide the COBRA subsidy notices required by the ARRA. Employers should determine whether the administrator of their health insurance plan or the employer is responsible for providing notices under the COBRA subsidy extension. More information regarding the COBRA subsidy extension may be found at www.dol.gov/ebsa/cobra.html.