Pennsylvania Labor and Employment Blog : Pennsylvania Labor and Employment Lawyer & Attorney : McNees Wallace & Nurick Law Firm : Human Resources, Workplace and Business Law : Harrisburg, Lancaster, Allentown, Lehigh

This post was contributed by Adam R. Long, Esq., a Member in McNees Wallace & Nurick LLC's Labor and Employment Group.

As a reminder, amendments to the Pennsylvania Unemployment Compensation Law that provide for severance pay offsets against unemployment compensation benefits take effect January 1, 2012. We discussed in a prior post the amendments' definition of "severance pay" and how the severance pay offset will be calculated.

Please note that severance agreements reached between an employer and employee in 2011 should not impact the employee's unemployment compensation benefits, even if the severance pay continues into 2012. The offset will apply, however, to agreements reached on or after January 1, 2012.

Some questions still exist regarding how exactly the offset will be calculated and implemented. For example, it is unclear how the Pennsylvania Department of Labor and Industry will treat payments made by an employer directly to a former employee's attorney as part of a separation or settlement agreement. We expect that some of these questions will be answered in the near future through implementation, the issuance of additional guidance from the Department of Labor and Industry, or litigation. In the meantime, employers and employees alike should be aware of the new rules regarding severance and unemployment compensation benefits when making post-employment plans that include severance.

• Email This
• Print
• Trackbacks
• Share Link

This post was contributed by Adam R. Long, Esq., a Member in McNees Wallace & Nurick LLC's Labor and Employment Group.

Act 6 of 2011, which was signed into law on June 17, 2011, amended the Pennsylvania Unemployment Compensation Law in a number of ways. These changes include for the first time a severance pay offset against unemployment compensation benefits. Under the new law, "severance pay" is defined as:

one or more payments made by an employer to an employe on account of separation from the service of the employer, regardless of whether the employer is legally bound by contract, statute or otherwise to make such payments. The term does not include payments for pension, retirement or accrued leave or payments of supplemental unemployment benefits.

The offset is calculated by subtracting 40 percent of the "average annual wage" under the Unemployment Compensation Law from the total severance amount. Currently, this "40% of the average annual wage" calculation equals $17,853, which means that claimants can receive up to $17,853 in total severance pay before their unemployment compensation benefits are affected. The amount of the severance attributed as an offset in any given week will equal the claimant's full-time daily or weekly wage, and the offset begins with the first week immediately following the claimant's separation from employment.

The effective date of the Act's severance pay provision is January 1, 2012. Severance agreements reached between an employer and employee in 2011 should not impact the employee's unemployment compensation benefits, even if the severance pay continues into 2012. The Act states that its severance pay provisions apply to benefit years that begin on or after the effective date, but will not "apply to severance pay agreements that were agreed to by an employer and employee prior to the effective date."

As we approach 2012, employers and employees should be aware of these new severance pay offset rules and their impact on unemployment compensation benefits when considering severance arrangements.

• Email This
• Print
• Share Link

The Commonwealth Court of Pennsylvania recently concluded that an employee who was found sleeping on the job four (4) times was entitled to unemployment compensation benefits under the Pennsylvania Unemployment Compensation Law ("Law"). Phila. Parking Auth. v. Unemployment Comp. Bd. of Review, 1 A.3d 956 (Pa. Commw. Ct. 2010) (pdf). Under the Law, an employee is not eligible for unemployment benefits if his or her unemployment is due to willful misconduct. Willful misconduct includes, among other things, a deliberate violation of the employer's work rules. In cases involving a work rule violation, the employer has the burden of establishing that: (1) a work rule existed, (2) the former employee was aware of the rule, and (3) the former employee deliberately or intentionally violated the rule. If the employer can establish these three things, then the burden shifts to the employee to show that there was good cause for the rule violation.

In Phila. Parking Auth., the former employee, who worked the 3:30 p.m. to midnight shift in the employer's "money room," fell asleep during her shift on four (4) occasions in January 2009. Prior to these incidents, the former employee complained that there were long periods of time during her work day when she had no work to do. The former employee was diagnosed with sleep apnea and claimed that she needed additional work to keep her from falling asleep. Other than providing additional assignments on two (2) occasions, the employer did not provide her with any additional duties. After she was found sleeping four (4) times, the former employee was terminated under the employer's rule prohibiting sleeping on duty.

The court held that the employer adequately proved it had a work rule prohibiting sleeping on duty, and that the former employee was aware of the rule. However, the court further held that the employer failed to adequately address the former employee's requests for additional work assignments and, for this reason, she did not deliberately violate the rule – and did not commit willful misconduct. For this reason, the court awarded benefits to the terminated employee.

This decision is certainly unusual, and a warning that employers must take appropriate action when an employee complains that she does not have enough work to keep her awake!

• Email This
• Print
• Share Link

In the recent case of Anderson Equip. Co. v. Unemployment Comp. Bd. of Review, 994 A.2d 1192 (Pa. Commw. Ct. 2010) (pdf), the Commonwealth Court of Pennsylvania examined whether an employee engages in willful misconduct when he fails to pay union fees and dues in violation of his employer's collective bargaining agreement (CBA).  The court held that the employee engaged in willful misconduct by failing to pay his union dues and that the employee did not have good cause for his misconduct.  Thus, the court found that the employee was not entitled to unemployment benefits.

The CBA between the employer and the union required all employees to be members of the union, and prohibited the employer from employing non-union members for more than 90 days. The employee in Anderson Equip. Co. failed to join the union because he claimed he did not have the money to pay the union initiation fees and union dues. The employee attempted to work with the union to establish a payment plan, but was unsuccessful. After several months and several warnings, the employer fired the employee for his failure to secure his union membership.

Under the Pennsylvania Unemployment Compensation Law, an employee is not eligible for unemployment compensation benefits if he or she is discharged for willful misconduct. Willful misconduct includes a disregard for the employer's interest, a deliberate violation of work rules, the disregard of standards of behavior expected of employees, or a substantial and intentional disregard for the employer's interest or the employee's duties and responsibilities. If the employer proves that the employee engaged in willful misconduct by deliberately violating a work rule, the employee can attempt to establish good cause for the violation. Good cause is established if the employee acted justifiably and reasonably under the circumstances.

In Anderson Equip. Co., the primary issue was whether the employee's inability to pay the fees and dues was good cause for violating the work rule. The court found that the employee's inability to pay the fees did not constitute good cause because the former employee could have saved the necessary money during his 90 day probationary period. The court held that the employee had advanced notice of the need to pay the fees and dues, but he decided instead to violate the rule by not paying to join union. Because his inability to pay the fees was not justification for his violation of the rule, the employee was not eligible for unemployment benefits.

This case provides a good summary of the rules associated with willful misconduct under the Pennsylvania Unemployment Compensation Law in conjunction with union membership issues. The case also provides some positive news for employers who may find themselves between a rock and a hard place when forced to discharge employees who fail to pay their union fees and dues.
 

• Email This
• Print
• Share Link

The Bureau of Labor Statistics numbers for May show the national unemployment rate reaching a 26 year high to 9.4% up from 8.9% in April.  The number of unemployed persons increased by 787,000 to 14.5 million.  Since the start of the recession in December 2007, the number of unemployed persons has risen by 7.0 million, and the unemployment rate has grown by 4.5 percentage points.

Unemployment rates rose in May for adult men (9.8%), adult women (7.5%), whites (8.6%), and Hispanics (12.7%).  The jobless rates for teenagers (22.7%) and blacks (14.9%) were little changed over the month.  The unemployment rate for Asians was 6.7% in May, not seasonally adjusted, up from 3.8 percent a year earlier.

The BLS statistics by job class and sector continue to show weakness in the construction, manufacturing, wholesale/retail and leisure/hospitality sectors.  All sectors are as follows:

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Department of Labor released unemployment data on April's unemployment rates. The unemployment rate rose to 8.9 percent, and the number of unemployed persons increased by 563,000 to 13.7 million in April. Over the past 12 months, the number of unemployed persons has risen by 6.0 million, and the unemployment rate has grown by 3.9 percentage points. The unemployment rate has steadily risen this year from a rate of 7.6% in January, an 8.1% rate in February and an 8.1% rate in March. The number of long-term unemployed (those jobless for 27 weeks or more) increased by 498,000 to 3.7 million over the month and has risen by 2.4 million since the start of the recession in December 2007.

Pennsylvania's unemployment rate for March was 8.2% which was above the national average. The April unemployment rate for Pennsylvania will not be released until later in the month.

Getting behind the raw numbers shows that certain groups and economic sectors are harder hit by the economic downturn. The national unemployment rates are greater for men than women. Unemployment rates rose in April for adult men (9.4%) but remained relatively stable for adult women (7.1%). The jobless rates for Whites (8.0%)and Hispanics (11.3%) were little changed over the month, but rose for Blacks (15.0%) and Asians (6.6%). The following Bureau of Labor Statistics data shows unemployment levels for construction and manufacturing of 18.7% and 12.4% respectively:

• Email This
• Print
• Comments
• Trackbacks
• Share Link