American Recovery and Reinvestment Act of 2009

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The American Recovery and Reinvestment Act of 2009 (Recovery Act) was signed into law by President Obama on February 17th, 2009. It is an unprecedented effort to jumpstart our economy, create or save millions of jobs, and put a down payment on addressing long-neglected challenges so our country can thrive in the 21st century. The Act is an extraordinary response to a crisis unlike any since the Great Depression, and includes measures to modernize our nation's infrastructure, enhance energy independence, expand educational opportunities, preserve and improve affordable health care, provide tax relief, and protect those in greatest need.

This package is the first crucial step in a concerted effort to create and save 3 to 4 million jobs, jumpstart our economy, and begin the process of transforming it for the 21st century with $275 billion in economic recovery tax cuts and $550 billion in thoughtful and carefully targeted priority investments with unprecedented accountability measures built in.

ARRA seeks to create jobs, encourage new forms of energy and conservation, and fund programs that will aid middle-class Americans.

HR professionals need to be knowledgeable about the new law’s workplace initiatives.These provisions include:

  • Expansion of theConsolidated Omnibus Budget Reconciliation Act (COBRA) to provide health coverage to individuals who have lost their jobs. This includes a 65% subsidy toward a qualified individual’s health care coverage premium for up to 9 months. Additionally, employees who had initially declined coverage would have an additional 60 days to elect to receive the subsidy.



  • Creation of a Health Information Technology Network to accelerate the adoption and use of health information technology (IT) by doctors and hospitals. Under ARRA, the federal government will develop standards by 2010 that allow for the secure nationwide electronic exchange of health information.Also, it will expand current federal privacy and security protections for health information.



  • Expansion of theWork Opportunity Tax Credit (WOTC) that is currently available on an elective basis for employers hiring individuals from one or more of nine targeted groups. ARRA expands the WOTC by creating two new categories of individuals eligible for the credit- 1) unemployed veterans; and 2) disconnected youth who begin work for an employer in 2009 or 2010.



  • Modifications to the Unemployment Compensation Program through a variety of measures such as extension of benefits, increased dollar amount of benefits per week ($25), and incentives for states to modernize their unemployment compensation programs. Workers will now have until December 31, 2009 to receive benefits, as opposed to the old cut-off date of March 31. To receive modernization funds, states would have to comply with a variety of measures including: 1) adopting an “alternative base period” allowing workers to meet eligibility requirements by counting their most recent wages; 2) granting unemployment compensation to workers for “family related needs,” including domestic violence, the illness of a family member and relocation of a spouse; and 3) granting unemployment compensation for those seeking part-time work.



  • Extension of Trade Adjustment Assistance (TAA) for two years for employees who lose their jobs as a result of increased imports or off-shoring to foreign countries.



  • Limitations on Executive Compensation for the highest paid individuals at companies that receive financial assistance from the Troubled Asset Relief Program (TARP).



  • Limitations on H-1B visas for organizations that receive funds under the TARP or certain federal loans.These employers would be prohibited from obtaining H-1B visas for two years unless they have first taken good faith steps to recruit U.S. workers for the jobs in which the H-1B visas are sought. TARP beneficiaries would be required to offer such jobs first to any equally or better qualified U.S. workers who have applied.

Click here to download full text of the statutes.

Click here to download full text of regulations.

Source: U.S. Department of Labor

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