by Patrick Mortimer

Employee Rights Attorney

Mission Viejo, California

Q: I’ve been getting medical and dental insurance through COBRA with 8 months of eligibility left. My former employer is going or has gone out of business. Will this affect my COBRA? Is he obligated to provide it regardless of going out of business?

A: “Employers providing health care insurance coverage may be governed by laws beyond COBRA, like ERISA Health Insurance Portability and Accountability Act, Small Business Job Protection Act, and California’s version of COBRA,” says attorney Patrick Mortimer, Don D. Sessions Law Corp., Mission Viejo.

“With few exceptions, most employers are required to provide continued access to the employer’s group health care insurance coverage to qualified individuals no longer working for them, and qualified family members at their expense. Once you accept these benefits, you’re covered by the employer’s group policy at no more than 102 percent of the group rate and generally without cancellation worry.

“Generally, the right to participate in the employer’s group health care insurance coverage to qualified individuals no longer working for them, and qualified family members at their expense. Once you accept these benefits, you’re covered by the employer’s group policy at no more than 102 percent of the group rate and generally with cancellation worry.

“Should the former employer go out of business and the group policy be terminated, you still have the option for continued health care insurance coverage, but the cost and coverage may differ. Under California law, you probably have the right to convert the group policy into an individual and/or family policy without evidence of insurability. Unlike Participation in the employer’s group policy, you will be subject to prevailing rates for your age and class of risk.”

Employee Rights Attorney

Mission Viejo, California

Q: My employer announced a few weeks ago that the number of vacation days we earned per year has been reduced, retroactive to 1999. As a result, many employees who had a couple of days vacation in the bank are now in the hole several days. Can they do this?

A: “It is illegal for an employer to retroactively change compensation or benefit commitments.

“It is unethical and illegal to induce you to work according to certain promises of compensation or benefits and then to retroactively reduce or eliminate them. It’s the same concept as inducing you to work for a certain salary, then cutting your pay after you have completed your workweek.

“This could constitute a breach of your employer’s contract with you. Bit if the company never intended to comply, its actions could be considered fraud.

“An employer could change benefits in the future, however if it doesn’t violate its contractual commitments. It also would be appropriate for the employer to give adequate advance notice of these changes in benefits.

“You could raise your concerns with your employer-either individually or by joining with other employees. If you are unsuccessful, you could contact the California Division of Labor Standards Enforcement, which should provide assistance without charge.

“Although it would be illegal for the company to retaliate against you, it can be difficult to prove subtle forms of retaliation that might affect future opportunities there.”

by Patrick E. Turner

Employee Rights Attorney

Mission Viejo, California

Q: If a salaried employee with the same company for 18 years has earned three weeks of paid vacation, received for the past 8 to 10 years, can the employer suddenly cut a week of this paid vacation?

A: “In California, vacation is considered to be deferred compensation in most circumstances,” says employee rights attorney Patrick E. Turner, Don D. Sessions Law Corp., Mission Viejo. “‘Use it or lost it’ vacation policies are generally disapproved; once vacation is earned by an employee, it cannot be forfeited.

“According to the fundamental tenets of fairness, employers are prohibited from retroactively reducing employees’ benefits or pay but can change the terms and conditions of employment in the future. Raising an employee’s salary is common practice, but no laws prohibit an employer form reducing it.

“The courts consider an employer’s proposed salary or benefits reduction as a ‘new offer’ of employment an employee is free to accept or reject. Consistent with California’s statutory ‘at will’ practices, an employee is also free to leave.

“In practical terms, employees can become accustomed to the long standing policies of their employers to provide certain benefits, so courts have concluded that policies of employers can only be changed with ‘reasonable notice.’ However, the courts have yet to provide a bright line rule as to what ‘reasonable notice’ is required of an employer to change a long held policy or practice.

“It’s important to note that salary and benefits negotiated as part of an express employment relationship may be locked in for a period of time pursuant to the contract. Failing to abide by the contract terms, an employer may be liable for breach of contract.”