| |
|
|
|
|
|
| WILL THE STIMULUS PACKAGE HELP YOU? |
|
Updates as it relates to employment law.
|
WILL THE STIMULUS PACKAGE HELP YOU?
By
Vikita Poindexter
What a year! The economic mess that began in December of 2007 shows little signs of letting up if you’re one of the unfortunate souls standing in the unemployment line. When this recession bottoms out is anybody’s guess. Some say the last quarter of 2009, others say mid-summer of 2010. The stock market in recent weeks has begun to show a pulse, but even that barometer does not accurately foreshadow an improving employment future. So how do you get through this rough patch?
Earlier this year, President Obama signed the American Recovery and Reinvestment Act. This was the first part of a larger strategy to give the nation’s economy a boost. While it’s too earlier to gauge the Act’s impact, the Obama Administration and several state governor’s are optimistic this package will give the economy a much need shot in the arm. Part of this stimulus has provisions employers and employees should be aware of.
For starters, most middle class taxpayers should be receiving reduced federal withholding---meaning less taxes and higher paychecks. This provision is set to go into effect in June 2009, but many employers have already made the adjustments. Workers making less than $75,000 a year ($150,000 for couples) will receive $400 per individual or $800 per couple. This amounts to approximately $13 per week in additional income per worker.
For those making between $75,000 and $95,000 you will be receiving a prorated tax deduction. While all of this may not seem like much, every extra dollar counts in a tight economy.
Anyone who has suffered the indignity of a layoff knows the cost of medical benefits under the Cobra program is like getting a second punch in the gut. Cobra is simply the most expensive healthcare on planet earth. The Obama administration and members of Congress recognize the problem and have addressed it as part of the stimulus. Certain employees affected by involuntary termination or layoff between September 1, 2008 and January 1, 2010 will be eligible to receive a 65 percent subsidy on Cobra premiums. This 65 percent subsidy will be paid directly to the employer in the form of a payroll tax credit.
Employees who lose their jobs to foreign competition will also be eligible for the Cobra subsidy if their former employer has applied for relief under the Trade Act of 2002. This subsidy is available until the employee becomes eligible for another employer-sponsored health plan or for a period of nine months, whichever comes first. Employees who earn more than $145,000 a year ($250,000 for couples) are not eligible for this subsidy.
Ok, confused yet, well let’s move on to unemployment benefits.
The stimulus package extends unemployment insurance benefits for nine months. That’s an additional seven weeks of unemployment. The stimulus package also increases by $25 a week the amount paid out in benefits. It’s important to note that federal involvement in the funding of unemployment benefits ends March 10, 2010. That could mean more changes to the program next year to include losing the extra $25 a week increase in the current stimulus package. While nothing has been decided on that front just yet, stay tuned for further announcements as we approach the termination for federal involvement.
I have heard complaints for years from unemployment recipients about being taxed for receiving these benefits. I can hear it now. “I paid into the system while I worked and was taxed then, now when I’m most desperate they want to tax me again.” Well, here’s a little good news, unemployment recipients will not be taxed on the first $2,400 of unemployment insurance funds they receive. While it’s not much, any extra dollars in your wallet helps.
And finally, the stimulus package includes something called the Employ American Workers Act. This program forbids employers who receive funds under the Troubled Asset Relief Program (TARP) from hiring additional H1-B foreign workers unless the employer has complied with the H1-B dependent employer rules. What is TARP you ask? It’s the $700 billion program passed by Congress last year to bailout mainly troubled financial institutions. The easiest way to remember TARP---think bank bailouts. For those of you unfamiliar with H1-B visas, it’s a program whereby U.S. employers are allowed to temporarily employ foreign workers in specialty occupations. Employers have 90-days to certify that no laid off U.S. worker can fill the position of a person hired under the H1-B program. It’s meant as a safeguard to hire Americans first.
Vikita Poindexter, SPHR is a certified Human Resources Consultant the CEO of Poindexter Consulting Group, Inc. For more information, contact Vikita at vikita@pcghr.net or visit them on the web at www.pcghr.net.
|
Posted on Oct 03, 2009 14:38pm by Vikita
(Return to Articles)
|
|
Copyright 2010, BlackYellowPagesOnline.com
|
|
|
|
Promote Your Business!
|
|
|
|
|
