Today, President Barack Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA) into law. The bill, aimed at creating and saving up to 3.5 million U.S. jobs, contains various employment provisions, including the expansion of emergency unemployment compensation and trade adjustment assistance programs and incentives to hire unemployed veterans and disconnected youth.

Extension of Emergency Unemployment Compensation

ARRA continues the emergency unemployment compensation program through December 31, 2009, providing up to 33 weeks of extended unemployment benefits to workers exhausting their regular benefits. Weekly unemployment benefits are increased by an additional $25 through December 31, 2009. For taxable year 2009, the first $2,400 of unemployment benefits received by an individual in 2009 will not be subject to taxation. Funding for these extended benefits is through the U.S. Treasury with no need for the states to repay these amounts.

Expansion of Trade Adjustment Assistance Programs

Existing Trade Adjustment Assistance (TAA) programs are expanded under this law. All TAA programs are reauthorized through December 31, 2010. Assistance will be extended to trade-affected service sector workers and workers affected by offshoring or outsourcing to all countries, including countries that do not have a trade agreement with the United States.

The law also expands TAA benefits to workers who supply services at public agencies, increases the number of weeks a worker can receive additional benefits for being enrolled and participating in training, increases training funds available to states to $575 million per fiscal year (a 130 percent increase), and makes health care and reemployment TAA benefits more accessible and flexible.

Service sector firms potentially will be eligible for benefits under the existing TAA for firms program. The bill also expands the period of time that a firm can "look back" to show that increased imports have created a decrease in sales, production, or both, from one year to one, two, or three years.

Incentives to Hire Unemployed Veterans and Disconnected Youth

Businesses will be allowed to claim a work opportunity tax credit equal to 40 percent of the first $6,000 of wages paid to "unemployed veterans" and "disconnected youth." An individual is an "unemployed veteran" if he or she was discharged or released from active duty from the Armed Forces during the five-year period prior to hiring and received unemployment compensation for more than four weeks during the year before being hired. An individual is a "disconnected youth" if he or she is between ages 16 and 25, has not been regularly employed or attended school in the six months before being hired, and is not "readily employable by reason of lacking a sufficient number of basic skills." It is intended that a low level of formal education may satisfy this requirement.

Other Provisions: COBRA, HIPAA, and Executive Compensation

ARRA also contains significant changes with respect to COBRA, executive compensation, and HIPAA. The new legislation creates a temporary subsidy for COBRA recipients who were involuntarily terminated from employment; places stricter limits on executive compensation for recipients of funds under the U.S. Treasury's Troubled Asset Relief Program (TARP); and makes sweeping and unexpected changes to HIPAA's privacy and security requirements. To view Ballard Spahr legal alerts addressing these subjects, please see:

Stricter Executive Compensation Limits for TARP Recipients

Stimulus Package Modifies COBRA, HIPAA, And Other Welfare Benefit Provisions

For more information, please contact Brian D. Pedrow at pedrow@ballardspahr.com or 215.864.8108.


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This newsletter is a periodic publication of Ballard Spahr LLP and is intended to alert the recipients to new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and specific legal questions you have.

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