The economic recovery and stimulus bill President Obama signed Feb. 17 features several provisions affecting HR. Most require federal agencies to write new administrative rules, so it’s difficult to predict now exactly how they will work on an everyday basis.
The American Recovery and Reinvestment Act:
- Provides COBRA subsidies covering 65% of the cost of continuation of health insurance for laid-off workers. Note: Employers will have to absorb the added cost and then apply for a credit against payroll taxes to offset the subsidy. Ask your health insurer for more information. Also, the law requires you to include information about the subsidy in COBRA notices.
- Gives most single taxpayers $400 more in annual take-home pay ($800 for couples) by reducing the federal tax withheld from paychecks. Note: The IRS will soon issue new withholding schedules reflecting the change.
- Increases weekly unemployment benefits by $25 and extends a temporary emergency unemployment compensation program through December 2009. Financial incentives encourage states to offer unemployment comp to certain part-time workers and to workers who leave a job for a "compelling family reason," such as domestic violence or illness of an immediate family member.
- Places tight caps on executive compensation for companies that accept funds from the federal Troubled Assets Relief Program.
For more information on fast-changing compliance issues, see our regularly updated stimulus page at www.theHRSpecialist.com/stimulus.