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"Involuntary Termination" finally defined!


Guest JavaJitterz
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Guest JavaJitterz

FINALLY a definition of "involuntary termination"!!!

"Involuntary termination is a termination that is at the direction of the employer."

"while death of an employee can be a qualifying event for that person's beneficiaries to be eligible for COBRA coverage, death is not an involuntary termination of employment."

House Ways & Means Committee

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So Ways and Means thinks the economy is so dire the only people dying are suicides?

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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Guest George Chimento

<<FINALLY a definition of "involuntary termination"!!! "Involuntary termination is a termination that is at the direction of the employer.">>

It's a start. So, with that clear guidance, you be the 15 day judge:

1. Employee stops showing up for work. Employer gives up and terminates employee.

2. Employer announces a window and makes clear that lay-offs will follow if not enough takers. Employee takes the window.

3. Employer creates a horrible environment, downgrades employee's job, and employee quits out of desperation.

Voluntary or involuntary? You be the judge!

George

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<<FINALLY a definition of "involuntary termination"!!! "Involuntary termination is a termination that is at the direction of the employer.">>

It's a start. So, with that clear guidance, you be the 15 day judge:

1. Employee stops showing up for work. Employer gives up and terminates employee.

2. Employer announces a window and makes clear that lay-offs will follow if not enough takers. Employee takes the window.

3. Employer creates a horrible environment, downgrades employee's job, and employee quits out of desperation.

Voluntary or involuntary? You be the judge!

George

4. Employee is terminated when employee doesn't/can't return from short-term disability.

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Agreed that these can be tough cases.

In general, I read it that if the employee has a real choice to stay or go at the time the employment ends, then it is not involuntary.

In some cases it may help to have wording in policies to the effect that 'if you do not return after the end of the approved leave period, (or if you are absent without notifying the employer for N consecutive work days,) your employment will end as if you had voluntarily resigned.'

But where will the government draw the line in Mr. Chimento's case number 3)?

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I think it will be interesting to see how much deference the Feds give to employer discretion as to what is an involuntary termination.

For example, if an employer can make a policy that "if you are absent and don't notify the employer within N days, you are deemed to have voluntarily terminated," can the employer make a determination that, for instance, "if you come into work late N days" or "if you don't successfully produce N widgets, you are deemed to have voluntarily terminated."

Ridiculous examples, I know, but what will be the standard?

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I think there's a difference. If you show up, you haven't quit.

If you don't show up and don't phone in a reason for your absence, after a while it looks like you quit. That's how some folks roll.

But in the end, I agree that what the Feds say is what's important here. Let's hope they say enough to clear it all up.

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  • 2 weeks later...

This is a tough issue for the DOL. I spoke with a Dept. of Labor representative Friday on the meaning of "involuntary" termination. The example I gave was an employee who voluntarily accepts an early retirement package offered by the employer, knowing that involuntary workforce reduction is possible if there are not enough voluntary retirements. The Ways and Means Committee website says that involuntary is a termination at the "direction of the employer." The agent agreed that in some situations facts like this would be enough to show that the termination was at the direction of the employer, even though the individuals made an election to leave. He noted that they are getting this question frequently and that the legal staff is working hard to develop a policy that can be applied consistently.

He called this a "grey" area and noted that the employer may have some latitude in determining how to characterize a termination in this kind of situation. However, the DOL is hesitant to issue a policy statement too quickly, as smaller employers would have too much difficulty providing health insurance if access to the subsidy becomes too easy.

The agent seemed very interested in the input I provided as an attorney and took a note when I said that this topic is being blogged. He gave me a web address where you can register to receive updates on the COBRA subsidy as they become available. I'll try to post the address if it works.

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Guest Eric.

OP:

<<FINALLY a definition of "involuntary termination"!!! "Involuntary termination is a termination that is at the direction of the employer.">>

It's a start. So, with that clear guidance, you be the 15 day judge:

3. Employer creates a horrible environment, downgrades employee's job, and employee quits out of desperation.

Voluntary or involuntary? You be the judge!

Reply:

I'll have to come back to this when I get a chance to look up a source, but I *believe* that an employment downgrade that substantially changes one's job qualifies as a termination for these purposes.

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The link to subscribe to DoL's COBRA supplement updates can be accessed here and then click on Subscribe to this Page.

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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James B: If the employee accepted a voluntary early retirement package, even if there was looming fear of getting fired later, why should the employer stick its neck out and risk being accused of perjury and attempting to defraud the Federal gov't? If the employee's claim to the subsidy is denied, he can then appeal to the DOL, and if the DOL concludes that it was involuntary, the employer is off the hook!

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I don't see a perjury risk. It is such a facts and circumstances inquiry and reasonable minds can easily differ. The law is intended to be remedial. The subsidy is for the employee, not the employer. So I don't see why an employer should not make a call that helps the employee. The biggest concern to me - out of employee fairness - is how in the world the DOL can possibly process zillions of appeals. The agent I spoke to is a little worried about it. And very worried about how they will end up handling the grey areas. Some will be close calls. It seems to me that letting the DOL have all of these appeals may create more work in the long-run for the employer, and cause a lot of anxiety for the employee who just "voluntarily" took a pre-layoff package.

There are financial reasons for the employer to be less than generous. It has to provide an advance on the premium subsidy and wait for the credit when filing the 941. There will still be some level of adverse selection by those who elect COBRA. I don't see employers being motivated to enter into collusion with their employees and pretend a voluntary quit is involuntary.

The situations we've seen so far under the new law have been clear-cut workforce reductions. We'll have to deal with the grey area case when it comes.

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