COBRA

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After more than two weeks, the federal government shutdown finally ended late in the evening on October 16, 2013.  Although the end of the shutdown is great news for federal employees and government contractors, the last three weeks have forced many government contractors to take emergency steps as a result of the economic impact caused by stop-work orders, delays, and temporary work suspension. 

In previous client alerts on October 4 and October 15 Proskauer discussed the legal issues government contractors were facing due to the government shutdown, including FLSA and wage and hour considerations, leave policies, the WARN act, the temporary suspension of the E-Verify system, the closure of the OFCCP, unemployment benefits, COBRA benefits, and the impact of the shutdown on foreign workers.

On March 21, 2013, the House of Representatives approved a spending bill that would provide funding for the federal government through September 30.  The Senate had already passed the bill and President Obama is expected to sign it.  Although the bill locks in the $85 billion in sequester cuts, it provides agencies more flexibility in implementing them.  In response to the bill, the Department of Defense has announced it is delaying furlough notices to approximately 800,000 civilian employees in order to assess its options under the bill.

Notwithstanding the additional flexibility provided by the bill, sequestration will still cause significant uncertainty for government contractors.  In implementing employment decisions, including furloughs, reduced hours programs and terminations, caused by sequestration spending cuts, contractors must engage in careful planning, including considering the federal and state employment law implications of them, including: