the The Bankruptcy Bypass Program In this issue: Web Site: Bankruptcy Bypass Program 1 What You Need To Know If You Lose Your Job 2-5

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1 the ALERT V.25, NO.2 A NEWSLETTER FOR SENIORS APRIL/MAY/JUNE/JULY 2009 The Bankruptcy Bypass Program In this issue: Bankruptcy Bypass Program 1 What You Need To Know If You Lose Your Job 2-5 Your Rights To Minimum Wage, Overtime and Other Pay 5-6 Your Age And Receiving Full Benefits 6-7 Volunteer Attorney Clinics 7 Legal Aid Offices 8 Web Site: The Legal Aid Society of Cleveland has started a new program to help low income elderly and disabled people stop debt collection and stay out of bankruptcy. Developed by William Kohn, Esq. of the law firm of Benesch, Friedlander, Coplan & Aronoff LLP with the assistance of the Cleveland Metropolitan Bar Association, the program is designed to use volunteer lawyers to help low income elderly and disabled deal with creditors. The lawyers will notify creditors when people are judgment proof, meaning their income is protected by law from collection. An attorney will tell creditors that their client cannot pay because their income is protected by law and that the creditor should stop contacting the client. By stopping the collection the client avoids having to file a bankruptcy. Since a Chapter 7 bankruptcy can only be filed once every eight years, it is important not to file unless it is absolutely necessary. Bankruptcy Bypass is designed to keep people from having to pay creditors money that is protected by law and to avoid having to spend money on a needless bankruptcy. If you are elderly or disabled and have creditors harassing you, you might be helped by Legal Aid s Bankruptcy Bypass program. If you qualify, Legal Aid will send you a package of information to fill out about your financial situation (the questions are very similar to ones found in an actual bankruptcy petition). Next, Legal Aid will assign a volunteer attorney to meet with you to further discuss your income. If you are in fact judgment proof the volunteer attorney will ask your creditors to stop contacting you because you are unable to pay. Even if you are not judgment proof, Legal Aid will try to help you in other ways. Contact Legal Aid toll free at This article was written by Michael Attali, Esq., bankruptcy attorney at the Legal Aid Society of Cleveland.

2 What You Need To Know If You Lose Your Job File for Unemployment Compensation Benefits Can I receive unemployment benefits? You can receive unemployment benefits if you lose your job for one of these reasons: LACK OF WORK you can receive benefits if you are LAID OFF by your employer, or if you are getting fewer hours, you may be able to receive partial benefits. DISCHARGED WITHOUT JUST CAUSE you can receive benefits even if the employer has the right to fire you if you can show that you were without fault and did not commit misconduct. QUIT FOR JUST CAUSE you can receive benefits if you can show that a reasonable person who wanted to remain employed would have quit under the circumstances, and you can show that you made reasonable attempts to resolve the problems with your employer before quitting. How do I file for unemployment benefits? You can file for unemployment benefits by calling Or you can apply online at: This site is available 24 hours a day and also contains links to The Workers Guide to Unemployment Compensation, Frequently Asked Questions, and to information about how to find a job. You can also find links to other services available to unemployed workers at: What happens after I file an application for unemployment benefits? You and your former employer will complete fact finding forms about the reason why you are no longer working. The unemployment agency will use these responses to determine if your separation allows you to receive benefits or not. If you do not understand the questions, call the Processing Center that issued the notice and ask for clarification. The agency will evaluate whether you have enough wages in covered employment in your base period or alternate base period to qualify you for benefits. Currently you must have worked 20 weeks and earned an average of $210 per week. Your base period is the first 4 of the last 5 completed calendar quarters The alternate base period is the 4 most recently completed calendar quarters. The unemployment agency will issue a Determination. If your benefits are ALLOWED, the notice will inform you of your weekly benefit amount and the reasons you are no longer working. If your benefits are DENIED, the decision will give the reason for the denial. You may be denied if you do not have high enough wages in covered employment or because of the reason you lost your job. If you disagree with the Determination, you must file your appeal within 21 days from the date the notice was issued. Your former employer also has the right to appeal. How do I receive benefits? 1. File weekly claims by telephone or online. You will receive a New Claim Instruction Sheet and a notice containing a Personal Identification Number number shortly after you file your application. You should read these papers closely. They will explain how you file your weekly claims. The papers will be sent to you by a Processing Center assigned to you. If you have questions, call the phone number on this notice! Story continued on page 3 2

3 What You Need To Know If You Lose Your Job Story continued from page 2 You will only receive benefits for the weeks that you file. You will be asked if you were able, available, and actively seeking work during the week. You will only receive benefits for the weeks that you are able to answer Yes to these questions. If you answer No, you will receive a questionnaire that will ask for more information. 2. Report any earnings or work activity on the weekly claims! You will be asked if you are working and how much money you earned during the week in which you filed your claims. If you work at all during the week, you MUST report the amount you earned! If you fail to report this information correctly, you can be charged with fraud. How many benefits will I receive and how much will I receive? Usually you can receive 26 weeks of unemployment benefits in a benefit year. Currently there is a Federal extension, called Emergency Unemployment Compensation (EUC) available, providing an additional 33 weeks of benefits. Another program, called Extended Benefits may also be available and may provide additional weeks. I receive Social Security benefits; can I receive unemployment as well? Yes. Social Security Benefits are no longer deducted from unemployment benefits. I tried to start a company but it failed; can I get unemployment? If you paid into unemployment benefits, you may be able to receive benefits. Otherwise, you may be able to receive benefits if you still qualify based on your most recent covered employment. How do I receive benefits? Benefits are paid by direct deposit or by debit card. You will be able to choose which option you prefer. The agency no longer issues paper checks. What happens if I am denied benefits? If you are denied, you must file your appeal within the 21-day appeal deadline stated on your notice or you will lose your right to appeal. If you file an appeal, the agency will then send questions to the employer and will issue a Redetermination. If you disagree with the Redetermination, you would file another appeal and you can then have a Hearing. You can contact Legal Aid for assistance with filing appeals and to seek assistance with hearings. Contact our office as soon as you know you have a problem! What happens if my employer appeals my award of benefits? If your employer files an appeal, your benefits continue during the appeal. If the decision is reversed, your benefits will stop and you will have an overpayment of benefits. You would then need to file an appeal. Make sure you do not miss the appeal deadline stated on the notice! Do Not Cash Out Your Retirement Plan When You Lose Your Job! If you lose your job, avoid the temptation to cash out your retirement plan (such as 401(k) or 403(b) or other similar program) benefits or other pension payments! Early distributions to individuals under age 59 1 / 2 are subject to a 10% early distribution tax plus the income tax on the amount you withdraw, unless certain exemptions apply. In addition, if you cash out your retirement plan or other pension payment received from a plan contributed to or maintained by a base period Story continued on page 4 3

4 What You Need To Know If You Lose Your Job Story continued from page 3 employer, this payment will also reduce your unemployment benefits. The amount you receive will be divided by your average weekly wage, and you will not be able to receive unemployment benefits for that time period. For example, if your average weekly wage was $400, and you cash out $4,000 in benefits, you would not be able to receive benefits for the first 10 weeks (400 x 10 = 4,000). If you roll over your 401(k) within 60 days of a distribution, you can avoid the early distribution tax and avoid reducing your unemployment. You can then save this money for your retirement, or use it after your unemployment benefits are exhausted. Use Caution When Offered A Settlement Agreement Many employers are offering settlement packages when employees are being laid off. The packages may ask you to waive [give up] certain rights in exchange for the continuation of benefits and/or certain lump sum payments. You are usually given 45 days to review the offer and to seek advice. If you are offered a settlement package, you may wish to review the package with an attorney before signing it. You can come to one of Legal Aid s Saturday Brief Advice Clinics or you can call our Intake line to determine if a Legal Aid attorney can assist you. If you are offered a lump sum settlement, ask your employer to allocate it to your last day of work or to a time when you were working. Otherwise, the lump sum will be allocated to weeks after your last day of work and will result in you being unable to receive unemployment benefits for the period of allocation. If you have questions about allocation of benefits, contact Legal Aid. Maintain Health Coverage After You Lose Your Job There are several options that you can use to keep employer sponsored medical coverage after you lose your job. These options include: 1. Seek coverage through your spouse or other family member s health plan. If your spouse, parent, or domestic partner s employer offers a health plan that can cover you, you may be able to join that plan now that you have lost coverage through your employer. Under HIPPA (Health Insurance Portability and Accountability Act) you have 30 days to enroll in your family member s plan after your employer stops paying for your insurance. 2. Apply for COBRA the government can now subsidize 65% of the cost. If you lost your job after September 1, 2008 and if you were covered by an employer health plan at the time you lost your job, you and covered family members may be able to continue your health insurance by paying only 35% of the COBRA premium. Each family member who was covered by your health plan can make a separate COBRA election. Your former employer or your former health plan is to provide you Notice of COBRA Rights. You should receive a notice from your former employer or health plan by May 2009 giving you the chance to elect COBRA at the new subsidized rate. You have to elect COBRA coverage within 60 days after you receive this new notice. If you have moved, contact your former employer to provide your current address and to find out when they will be sending out the new COBRA notices. Also be sure to file a change of address notification with the U.S. Post Office so that your mail can be forwarded to you. Story continued on page 5 4

5 What You Need To Know If You Lose Your Job Story continued from page 4 Other resources for unemployed workers: First Call for Help call 211 Connect to an extensive database of services social services, legal, medical and so much more. Save the Dream or For help with foreclosure prevention. Department of Jobs and Family Services Food stamps, Medicaid, OWF cash benefits, etc. This article was written by Anita Myerson, Esq., a senior attorney at the Legal Aid Society of Cleveland. Your Rights To Minimum Wage, Overtime And Other Pay New Minimum Wage On January 1, 2009, Ohio s minimum wage increased from $7.00 to $7.30 per hour. The minimum wage increase comes from the Ohio constitutional amendment passed by voters in November This constitutional amendment requires that Ohio s minimum wage increase every January 1 by the rate of inflation. The minimum wage for tipped workers also increased on January 1 to $3.65 per hour. This is the minimum amount that a tipped employee can earn in a paycheck. The assumption is that the tipped worker will earn the remaining $3.65 in tips. Tipped workers must make at least $3.65 per hour in tips, so that their pay adds up to the minimum wage of $7.30 per hour ($3.65 base pay + $3.65 in tips). If the worker does not make at least $3.65 per hour in tips, his or her employer must make up the difference so the worker receives the minimum wage. Example: If one week a server only made $2.00 an hour in tips, the restaurant must pay her at least $5.30 an hour in base pay so she receives the $7.30 an hour minimum wage. To be considered a tipped worker, the worker must regularly receive more than $30 a month in tips and must be allowed to keep all tips earned, unless he or she is part of a legal tipping pool. A tipping pool is legal when the only staff included in the tipping pool are those that interact with customers. For example, a tipping pool that requires servers and bartenders to share their tips with kitchen staff who have no contact with customers is illegal. Deductions Deductions that cut a worker s pay below the minimum wage are not lawful. When an employee is required to wear a uniform, the employer may deduct from the employee s pay the cost of the uniform, but only the amount in excess of the minimum wage. For example, a worker makes $8 per hour. The employer can only charge the worker $0.70 per hour for uniforms so the worker s wage does not go below $7.30 per hour. Similarly, if the worker is required to purchase the uniform, the employer must reimburse the worker for any amount that would pull the worker s pay below minimum wage. It is also illegal to make deductions from an employee s wages for damaged goods or tools unless the employee has agreed to the deductions in writing. Even in situations Story continued on page 6 5

6 Your Rights to Minimum Wage, Overtime And Other Pay Story continued from page 2 where an employee has signed a contract allowing the deductions, a judge or jury may decide that the contract is not valid and require the employer to pay the full wages. Examples of pay deductions that are generally allowed are income taxes and health care benefits. Overtime Pay It s important to know the facts when it comes to overtime. A worker is entitled to overtime pay of time and a half the regular rate of pay for every hour worked over 40 in a workweek. So, if a child care attendant is receiving the minimum wage of $7.30, she is entitled to $10.95 per hour for every hour over 40 that she works during the workweek. Employers set the workweek for their companies (for example Monday to Sunday or Wednesday to Tuesday), but the workweek cannot go beyond a seven consecutive day period. Many workers mistakenly believe that if they work 80 hours in a two week period, they are not entitled to overtime pay. That is not necessarily true their right to overtime is always based on the number of hours they worked in each workweek. If the worker worked 50 hours in the first workweek and 30 hours in the second workweek, then the worker is entitled to 10 hours of overtime pay for the first workweek. Undocumented Workers A widespread myth exists that undocumented workers do not have the right to be paid. All people who work, regardless of their immigration status, have the right to be paid minimum wage and overtime. How to Protect Yourself The best way to protect yourself from wage theft is to keep your own records. You can use something as simple as a calendar. Each day write the number of hours you worked on a calendar. If you receive pay stubs, save them. If your employer does not give you pay stubs, keep a notebook and write down the date you were paid and how much you received. Make sure to keep a record of your tips in writing too. Keeping your own records puts you ahead of the game. If your employer makes a mistake, you will be able to spot it much easier. You also may be able to get your employer to correct mistakes without having to go to an attorney. If you do have to go to an attorney, he or she will want to know all of this information. You will already have this information if you keep your own records. Remember, if you feel you have not been paid correctly you can call Legal Aid. You can also contact the Ohio Bureau of Wage & Hour ( ) or the U.S. Department of Labor ( ). This article was written by Katie Laskey-Donovan, Esq., Wage Project staff attorney at the Legal Aid Society of Cleveland. Your Age And Receiving Full Social Security Retirement Benefits If your full retirement age is older than 65 (that is, you were born after 1937), you are still able to take your retirement benefits at age 62, but the reduction in your benefit amount will be greater than it is for people retiring now. Here is how it works: If you were born in 1960 or later, 6 your full retirement age is 67. The reduction for starting your benefits earlier is as follows: At 62, benefits are reduced about 30 percent; At 63, about 25 percent; At 64, about 20 percent; At 65, about 13 and 1/3 percent; and Story continued on page 7

7 Receiving Full Social Security Benefits Story continued from page 6 At 65, about 6 and 2/3 percent. As a general rule, early retirement will give you about the same total Social Security benefits as full retirement does over your lifetime, but in smaller amounts. This take into account the longer time period that you will receive benefits because of your lifespan. If you are thinking about starting your retirement benefit before your full retirement age, the amount of the benefit is permanently reduced. You lock yourself into a benefit amount at the time you choose to retire. The following chart indicates the age at which you receive full Social Security benefits based on your year of birth: Year Of Birth Full Retirement Age 1937 or earlier and 2 months and 4 months and 6 months and 8 months and 10 months and 2 months and 4 months and 6 months and 8 months Year Of Birth Full Retirement Age and 10 months 1960 and later 67 Note: The earliest a person can start receiving Social Security retirement benefits remains age 62. Keep in mind that benefit amounts are calculated on your average earnings during a lifetime of work under the Social Security system. For most current and future retirees, the 25 highest years of earnings will be averaged. Finally, you may be concerned as to how a retirement pension from your job may affect the amount of your Social Security benefit. If your pension is from work where you also paid Social Security taxes, it will not affect your Social Security benefit. However, pensions based on work that is not covered by Social Security (for example, the Federal Civil Service and some state, local or foreign government systems) probably will reduce the amount of your Social Security benefit. For more information on receiving Social Security, contact the U.S. Social Security Administration toll-free at (TTY: ) or visit: This article was written by Carol A. Kile, Esq., a staff attorney at the Legal Aid Society of Cleveland. Volunteer Lawyers Program Brief Advice & Referral Clinics All clinics are scheduled on Saturday from 9:45 a.m. to 12 p.m. unless otherwise noted. Clinics will be held: SATURDAY, April 25, 2009, Neighborhood Housing Services, 5700 Broadway Avenue, Cleveland WEDNESDAY, May 20, 2009, SPECIAL TIME: 5:00 p.m. to 7:00 p.m. AIDS Task Force, 3120 Euclid Avenue, Cleveland SATURDAY, June 6, 2009, Spanish American Committee, 4407 Lorain Avenue, Cleveland (Special Focus on wage and employment issues) SATURDAY, June 13, 2009, Maple Heights Senior Center, Libby Road, Maple Heights SATURDAY, June 27, 2009, Thea Bowman Center, Oakfield Avenue, Cleveland SATURDAY, July 11, 2009, Fatima Family Center, 6600 Lexington Avenue, Cleveland THURSDAY, July 16, 2009, SPECIAL TIME: 5:00 p.m. to 7:00 p.m. West Side Community House, 9300 Lorain Avenue, Cleveland *Please call or check our website for information on additional clinics that may be added to the schedule. 7

8 The Legal Aid Society of Cleveland offers free legal services to low-income seniors. In Cuyahoga County, call or call toll free If you qualify for our services and we have the resources to assist you, we will either give you advice or educational information to help you with the next steps in the legal process, refer you to a volunteer attorney, or represent you in your legal matter. If necessary, you may need to meet with an attorney. If you are unable to come to our downtown office at 1223 West Sixth Street, an attorney can arrange to meet you at a senior citizen center or some other office near your home. In other counties served by The Legal Aid Society of Cleveland, please call: ASHTABULA COUNTY 121 East Walnut Jefferson, OH or (toll free) LAKE & GEAUGA COUNTIES 8 North State Street Painesville, OH or (toll free) LORAIN COUNTY 538 West Broad Street Elyria, OH or (toll free) Publication of The Alert is made possible, in part, by a grant from the Ohio Department of Aging through the Western Reserve Area Agency on Aging and District XI Area Agency on Aging West Sixth Street Cleveland, OH Non Profit U.S. Postage PAID Cleveland, OH Permit No. 104 RETURN SERVICE REQUESTED