Archive | June 2015

FMLA & Workers’ Compensation Working Together

fmlaThe Family and Medical Leave Act (FMLA) and workers’ compensation serve different purposes, but the job leave provided by the two may overlap in some cases, affecting employment decisions on issues such as light duty.

FMLA provides employees with unpaid, job-protected leave for certain qualifying reasons, such as a serious health condition that makes the employee unable to perform the functions of his or her job. FMLA generally applies to employees of businesses with at least 50 employees, and, under FMLA, employees are entitled to 12 weeks of job-protected leave for qualifying circumstances.

Workers’ compensation offers medical coverage and income replacement following a work-related injury. Workers’ comp laws often vary from state to state. If an injury that qualifies for workers’ compensation also fall under FMLA-protected health conditions, leave for the two can overlap.

If an employer is covered by FMLA, it should take the time to determine if workers’ compensation leave would also qualify under FMLA as leave for a serious health condition. If it does, the employer should begin the FMLA process immediately and run the FMLA and workers’ comp leave concurrently.

If the employer does not begin the FMLA leave immediately, the employee may end up entitled to more leave than he or she otherwise would have been if the two had run concurrently. In addition, if the employee is away from work for more than 12 weeks under workers’ comp, he or she no longer has job-protected leave after the 12 weeks of FMLA leave end. However, the Americans with Disabilities Act (ADA) may apply, so employers should be careful about automatic termination after 12 weeks of leave.

Another issue that is affected by FMLA and workers’ comp overlap is the possibility of the employee returning to light duty. If an employee who has both leaves running concurrently declines light duty under workers’ comp, he or she may lose those benefits, but the employee would continue to have job-protected leave under FMLA.

When an employee suffers a serious health condition that qualifies him or her for both workers’ compensation and FMLA leave, employers should make sure to consider requirements under both to avoid potential problems.

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6 Steps to Minimize Business Interruptions

business interruptionAccording to the Federal Emergency Management Agency, 40 percent of businesses never reopen after a disaster. Implementing steps to prepare for and respond to disasters can help to reduce loss. In order to protect your business from unavoidable interruptions, it is recommended that you have a plan in place. Having a plan in place serves the following purposes:

·       To protect employees and personnel

·       To prevent environmental contamination

·       To protect revenue, assets and information

·       To prevent loss and to contain loss that occurs

·       To protect your reputation

How to Minimize Business Interruptions

Here are six steps you can take to help minimize business interruptions:

1.     Determine the Risk

When determining the potential risks for business interruptions, consider both environmental risks and human risks. Additionally, consider which risks are preventable and which are not.

Once the risks are identified, you can begin to understand all elements involved, such as the hazard itself, the assets at risk, vulnerability to the risk and the ultimate impact of the risk. In order to be best prepared, rank each risk according to the likelihood of occurrence and the severity of impact.

2.     Calculating the Cost of Interruptions

After the risks have been ranked, analyze the impact of each risk. In calculating cost containment, the following should be considered:

·        Lost sales or income

·        Increased expenses

·        Regulatory fines or contractual penalties

·       Delay of business

3.     Understand Your Insurance Coverage

The next step would be to review your insurance coverage. Business interruption insurance generally comes into effect in the case of one of three circumstances:

·       Physical damage to the premises that cause suspended operations;

·       Damage to property that is covered by the insurance policy and prevents customers or employees from accessing the business; or

·       The government closes an area due to property damage that is covered by the insurance policy and prevents the customers or employees from accessing the business.

Since business interruption coverage can differ significantly, it is important to understand the policy terms, such as exclusions, coverage limits and waiting periods. Coverage is provided for lost net income only for the duration of regaining operation.

4.      Implementing Steps for Prevention and Mitigation

There are three different approaches for controlling and containing potential hazards:

·       Prevention: This method identifies preventable hazards and implements steps to avoid occurrence of the hazards.

·       Deterrence: This method identifies potential criminal activities that create business hazards. Steps are taken to prevent the criminal activities.

·       Mitigation: This method identifies hazards that cannot be prevented. Steps are taken to control and contain the hazards in case of an occurrence.

5.     Create a Crisis Communication Plan

Create a crisis communication plan in order to provide employees and customers with updates and critical information. The communication plan should have the following:

·       Chain of command: A chain of command allows for information to be shared efficiently and ensures that all personnel receive information.

·       Pre-scripted messages: Eliminate confusion by pre-scripting messages that will be shared with customers, employees and the public.

·       Bi-directional communication network: Allow for communication to occur in multiple directions in order to efficiently pass information.

6.     Preparing an Emergency Plan

An emergency plan should be prepared and in place before a hazard occurs. The plan should be practiced and reviewed to insure the effectiveness of the plan. The plan should include the following elements:

·       IT and data recovery: Implement a data backup program to protect and recover important and sensitive information. Create a technology policy that assists in preventing data leaks in the case of telecommuting employees.

·       Contracts: Pre-arrange written contracts with other businesses and external suppliers in order to continue fulfilling commitments to customers.

·       Resources: Prepare an inventory of resources that are essential to regaining the ability to operate as a business.

·       Test: Run a test of the plan to ensure the plan’s success.

By taking these six steps, it is possible to minimize potential hazards and to limit the impact of hazards. In order to be completely prepared, contact Tower Insurance Agency today for assistance reviewing and updating your emergency plan.

Did Your Grad Receive a BB (Bachelor of Boomerang) Degree?

College graduation! The pictures, the gown, the caps in the air, the world awaits!

Yet many recent graduates will find themselves awaiting that world after returning to live in their parents’ home. Whether due to lifestyle changes, generational preferences or simply the economy, today’s graduates often find themselves wondering how their parents’ generation ever survived striking out on their own during and after college.

Those nostalgic times of “gone to look for America” via small apartments, shared houses, trailers or tents seem more fairy tale than reality to today’s often student-loan laden graduates and young adults. And it is not just recent graduates that return. Often adult children who have previously established separate residences find themselves returning to the nest following economic trial, divorce or illness, sometimes with their children in tow. This phenomenon of adult children returning home to live has become so common it has garnered its own name: the boomerang generation.

Regardless of the motivation or reason, Tower Insurance Agency reminds you that wherever your adult children choose to live, proper personal insurance protection is crucial. And not just the obvious health and auto coverages. Even those living in their parents’ home may have accumulated significant personal possessions requiring protection in case of fire, storm or theft. Add in children, pets, hobbies, possible home-based businesses and visiting guests, and your boomerangers are also subject to allegations of liability for injury or property damage to others.

There may be options to provide some of the needed protection under the parents’ current insurance. But there are often complications, limitations and other considerations in play, based upon myriad factors — such as your child’s age, marital status, and medical condition.

The best solution? Once you are aware your child will be moving back in (or staying after a previously assumed move-out date), schedule a time with your agent for a complete review of your current personal insurance program. At that time, your key coverage considerations can be reviewed and options discussed. Armed with the proper information and counsel, you can then adapt your program to your revised circumstances. In those areas best addressed by your child purchasing his or her own coverage, your agent will be glad not only to arrange those policies, but also to be sure they coordinate properly with yours to avoid needless gaps or overlaps.

We also recommend you consult with your financial and tax advisors as to any changes or impact your new situation may have on your personal financial planning and retirement savings, especially if your resident adult children are in need of significant financial assistance.

Want to Lower Your Risk of Cyber Attack? What Can We Do Together?

cyberThe IT staffing firm, Robert Half Technology, recently surveyed over 2,000 chief information officers from across the U.S. about their cybersecurity plans for 2015. A majority of the CIOs are planning to improve the security of their information in the next year and plan to use several methods to do so.

Topping the list of security strategies is enhanced employee education, with 54 percent of the CIOs reporting their intention to increase training. Other popular strategies include closer scrutiny of firms that have access to company data (45 percent), and hiring additional IT staff members who specialize in security issues (41 percent).

Although a comprehensive approach to system security requires that organizations tackle the issue from multiple fronts, this survey shows a clear focus on employee-centered strategies.

IT experts suggest organizations look for specific skills when hiring system security staff. Quality candidates should have security certifications as well as evidence of how those have contributed to their success. They should be focused on establishing a culture of security within the organization and possess the strong communication skills necessary to effectively implement security measures at all levels of the organization. “Survey: Employee training top priority for CIOs in protecting company information,” www.centralvalleybusinesstimes.com (Feb. 13, 2015).

A report released by Symantec and the Ponemon Institute found that two-thirds of the data breaches in 2012 were caused by human error and system glitches.

Education and training is the best offense against human error. The more loss prevention education and training an organization can provide to its employees and contractors, the lower the security risk to the organization. This simple formula holds true for sexual harassment, and it holds true for cyber risks as well.

This is why IT executives are making employee-driven security measures a top priority this year.

Keeping employees up-to-date on the latest risks, and accountable for their actions, will help to decrease human error. This site provides consistent education on cybersecurity issues. Please use this education for yourself, but also for your employees.

Moving the Goalposts: How Wage & Hour Litigation is Reshaping the American Workforce

By: Jack McCalmon

wage-and-hourAnother day, another wage and hour class action lawsuit filed against another employer …

One New York publication headline reads:

“Lawsuit: Four Central New York companies cheated workers out of ‘hard-earned’ pay.”

No trial, verdict or settlement yet … just a filed claim, but one that reflects the latest trend of some of the media painting employers as stealing from their employees. Rick Moriarty “Lawsuit: Four Central New York companies cheated workers out of ‘hard-earned’ pay,” www.syracuse.com (Apr. 13, 2015).

Flower Foods, Inc. faces a potential class action lawsuit by 200 workers in North Carolina, who allege Flowers Food’s has a long-standing, illegal practice of classifying distributors of its bakery items as independent contractors.

The plaintiffs’ trial attorneys argue that by misclassifying the workers, the employer avoids paying wages, including overtime, pensions, and other benefits of employment.

Flower Foods argues that the workers should be classified as independent contractors because they are engaged in other activities, like sales and promotions.

Flower Foods is just one of many, misclassifications cases the trial bar and the DOL are filing against employers in every state and against employers in all industries. The case is just one among other lawsuits against similar employers that use contractors to distribute their goods. Through litigation and regulation, the trial bar and federal and state governments are reshaping how employers classify and pay their employees and view contractors. James McCarthy “Lepage Bakeries’ parent firm faces class-action lawsuit over ‘independent contractors,'” www.mainebiz.biz (Apr. 8, 2015)

Although headlines “dumb down” and sensationalize the issue, reports often omit that many of the practices now demonized, like using independent contractors as distributors, have occurred for decades and were deemed a compliant and normal industry practice in the past.

In fact, the law that enforces these practices has been in place for over 75 years, but only in the last six years, have the government and the trial bar chosen to interpret them in the manner we see today.

Talk about moving the goal posts … But why now?

Obviously, all workers want the additional wages and benefit from the new interpretation (or recent enforcement) of the rules now allows. But, the “real money” does not go to the workers, it goes to the trial attorneys and the government.

Although workers may receive a few hundred dollars or even a thousand or more in back pay if they are successful, trial attorneys receive multi-millions in fees, literally taking half or more of the fees due to the workers. For that reason, wage and hour class actions are the fastest growing workplace-related litigation type in our courts today.

For the government, the reason is also money, but in the form of taxes. The more employee wages are paid, the more payroll taxes are collected.

Although the DOL and the trial bar argue that they are doing this for workers, in the end, it is workers and consumers who take the hit when employers raise prices to pay for the increased wages, taxes, and benefits.

Services will take a blow as well, and entire industries will go away, like the person who delivers your newspaper or delivers them to vending machines … most are independent contractors paid by the publisher to deliver the paper. Ironically, the same media, that accuses employers of stealing, is, based on the legal theory proposed under the Flowers case, doing the same missteps other employers are.

Like it or not, employers have to reevaluate how they pay and classify their employees and contractors. Eventually, all employers will be targeted. Arguing that this is how it has always been done for decades will not persuade plaintiffs or regulators today.

Summertime HR Checklist

Summer 03Employers and HR departments that take time to prepare for the summer months may be able to enjoy them a bit more. Now is a good time to start considering the employee management areas outlined below to ensure a smooth summer. Think about how each area impacts your organization and whether any action should be taken.

PTO/Vacation Requests – Do managers and supervisors know how to administer employee requests to make sure appropriate staffing levels are maintained and employees are treated fairly?

Summer Hours – Will your company begin or continue a “summer hours” policy? Will it be company-wide?

Dress Code – Does your company allow for a more relaxed dress code during the summer? How long does this last?

Staffing – Are you a seasonal employer who should start hiring for the summer? Are there layoffs to be administered prior to summer? Will you be hiring interns?

Of course, the above is not an all-inclusive list and each organization is unique. Think about what the summertime season means for your organization and get prepared.