Labor Laws Since Their Inceptions

Labor Laws

Since their inceptions both COBRA and the FLSA have served an important purpose in the employment world. Throughout the nation employees work hard and help the companies that employ them to build empires of wealth, however, if there are bumps in the road either on the part of the employee or employer the company often goes on to continue growing while the employee, who helped build that company is left out in the cold. COBRA and FLSA both help reduce the stress and anxiety that can go with the loss of a job for reasons other than Gross Misconduct.

COBRA

To understand the purpose they each serve it is important to have an understanding about what each program actually provides.

COBRA provides the opportunity for employees who no longer qualify for coverage, either through job separation or loss of full time status to maintain the same level of health, dental or vision benefits that they enjoyed while fully employed by that company (COBRA, 2005).

COBRA coverage time frames vary depending on what the qualifying event is but it is primarily offered for 18 months or 36 months (Bikoff, 2004).

The person using the COBRA benefit must pay a premium that can be up to 102% of the applicable premium under the group plan. In layman terms this means that the former employer will begin paying for the portion that his/her company used to pay, plus what the employee used to pay plus two percent administration or other fees to equal 102% (COBRA, 2005). While this is not a mandatory percentage to pay, many employees are required to pay this amount to maintain their coverage unless the company has a provision to maintain some or all of the previous worker's premiums. A rare event to be sure.

COBRA plan can be terminated when the life of the mandated time frame expires, 18, 29 or36 months depending on the plan. It can also be terminated if the former employee fails to pay the premium as long as he or she receives a written notice letting them know it did not get paid and after a 30 day grace period it is not caught up (COBRA, 2005).

FLSA

Another protection for employees in the United States is the Fair Labor Standards Act (FLSA).

FLSA mandates the requirements for non-exempt and exempt wage compensation. Workers who are paid hourly are always non-exempt while salaried workers can be exempt or non-exempt depending on several factors.

Generally employees making less than $455 a week salary are entitled to overtime pay any week that they work more than 40 hours (FLSA).

Another method for being classified exempt is a standard duty test. If the employee regularly supervises two or more employees it qualifies as exempt status. In addition there is an exemption status for those positions requiring advanced degrees in education as well as administrative duties in which the employee has independent decision making power, in significant areas of the general business management (Bonnecaze, 2005).

Changes were instituted in 2004 that set new and additional guidelines for employers to follow. At that time employers were advised not to suddenly change and reclassify employees from non-exempt to exempt for the purpose of avoiding overtime mandates. This could not only anger employees but could also bring authorities to the company for an FLSA examination (FLSA 2004).

My Opinion

In my opinion the laws today are as effective as they were on the day they were passed, however, I believe that they now have less of an impact, in particular the FLSA rules as they did than at the time they were passed.

Before the FLSA and COBRA laws were passed, there were many employers who were taking advantage of their workforce in several ways.

It was not uncommon to call an employee exempt who really did not qualify for an exempt status. The company would do this for the purpose of avoiding overtime pay. At the same time, the same employers were docking their workers if they called out sick or had to take time off for personal or doctor appointments. Essentially the workers were providing many hours of free labor but not being compensated with the ability to call out sick or go to appointments without a financial punishment. The employers practicing this method of supervision were getting the best of both worlds while the employees were getting the worst of both worlds.

Once the FLSA laws went into effect there was an immediate and significant changes across the nation in the way employees were classified from the beginning and this made it a significant change from the way things had been done before the law went into affect.

Today the law is still effective but because of its existence, most companies in the U.S. already comply from the moment the employee is hired therefore the impact is less significant.

The COBRA laws are still every bit as effective today, as they were when first mandated if not more so. This is due to the rising cost of health care and the public mandate to reduce those costs.

If I were to make recommendations to update and improve the laws I would do one thing for each law.