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Top Employment Issues for States in 2009: Part 1 – WARN Acts, Immigration, ADA, and Unemployment Insurance

The nation’s economy and its impact on state budgets will be the overriding factor state legislatures address in 2009. Many states have already attacked their budget shortfalls by delaying projects, implementing hiring freezes, eliminating positions, and cutting programs. With predictions of continued shortfalls in 2009, state budgets will be first on the agenda for lawmakers. Every issue, every piece of legislation, and every policy consideration will be impacted by the economy.

In the midst of this atmosphere, an array of employment law changes on both the federal and state level will be considered. It is thought that 2009 will bring some of the biggest changes we’ve seen in federal labor and employment law in decades. As a result, states will be carefully monitoring these bills in Congress and addressing many of the same issues on the state level as well.

We have put together a list of some issues likely to be seen on state legislative agendas in 2009, several of which will depend on the outcome of key federal issues.

Monthly update on employment law changes from all 50 states – Employers State Law Alert

Worker layoff notification (WARN acts)
Nineteen states have enacted their own Worker Adjustment and Retraining Notification (WARN) acts. New York was the most recent to adopt one in 2008. Like many of the other states’ acts, the New York law is far more expansive than the federal law. Many of these state “baby” WARN acts contain more severe penalties, require more notice, and apply when smaller numbers of workers are laid off.

In light of increased worker layoffs predicted for 2009, it is likely we will see state legislatures considering the adoption of their own WARN acts or expanding those already on the books. The proposed federal FOREWARN act will most likely be considered again, but since it requires more advanced notice of layoffs, it may not be viable in an environment where employers are unable to predict potential layoffs.

State-by-state comparison of 50 employment laws in all 50 states, including WARN acts

In 2008, about 41 states took legislative action to address the impact of immigrants in their communities. Many of these new laws relate to immigrant employment and the economic and fiscal impacts of immigration.

Several states created study committees to specifically investigate these impacts. With state fiscal conditions worsening, it is anticipated that these issues will continue to have a high profile in 2009. Among these issues, the federal E-Verify program remains a hot issue for states heading into 2009.

The E-Verify system is an Internet-based system that allows employers to electronically verify the employment eligibility of newly hired employees. The system is operated by the Department of Homeland Security (DHS) in cooperation with the Department of Social Security Administration (SSA).

Although not federally mandated for private employers (though federal contractors and subcontractors will be required to begin using the E-Verify system starting Feb. 20, 2009), many states have required employers to participate in the federal E-Verify program to some extent.

About 13 states have adopted some form of E-verify legislation. These state laws vary from requiring all employers to participate to limiting participation to only state contractors or public employers. Some of these laws require a phase-in of the use of the program over a specified time period. Ten other states have laws encouraging use of the E-Verify program.

Beyond the states, one city in California has passed an ordinance requiring that certain employers use the E-Verify program and one county in Oregon has also proposed an ordinance to require use of the program. We will most likely see more state and local activity on this issue in 2009.

Audio Conference: New Immigration Compliance Pressure: How HR Can Reduce the Heat

Americans with Disabilities Act (ADA)
The ADA Amendments Act of 2008 took effect on January 1, 2009. The new law expands the definition of “disability” under the Act and, in doing so, reverses a number of U.S. Supreme court rulings that narrowly interpreted the reach of the law. The new law is now construed more heavily in favor of employees. Federal regulations clarifying the enforcement of the new law are expected to be coming out over the next few months, so some state laws may be revised to implement, or even go beyond, these changes through legislation in 2009.

ADA Compliance Manual: Practical Solutions for HR

Unemployment insurance
The federal Unemployment Compensation Extension Act, signed into law in November, does just what the name implies, extending unemployment compensation coverage for those whose benefits have expired. This extension, combined with the worsening economy, has created shortfalls in many states’ unemployment compensation trust funds. A number of states may have to impose additional unemployment taxes in 2009 in order to keep state trust funds in the black.

Another issue we will be seeing more states address is unemployment compensation for the spouses of military personnel. Currently, 18 states provide that a spouse accompanying a reassigned member of the military can receive unemployment benefits without penalty. Four other states require “good cause” for the termination, but will evaluate the claim on a case-by-case basis. The remaining states also require “good cause,” but do not consider terminating employment to accompany a relocated spouse to fall within the scope of good cause.

Four more employment law issues
Next week, we’ll examine four more employment law issues that states will be grappling with in 2009 and what they mean for employers.

For the latest updates on state legislation related to employment law, subscribe to the Employers State Law Alert, a monthly newsletter and online searchable database.

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