Archive for June, 2014

OSHA Launches Workplace Safety Video Game

Federal OSHA has introduced a new interactive training tool designed to help small businesses identify safety hazards in the workplace.

Through the new tool, employers and workers can virtually explore how to identify common workplace hazards in the manufacturing and construction industries. In addition to hazard identification, users also can learn about hazard abatement and control, according to OSHA.

While the tool focuses on manufacturing and construction, it can also be of use in other industries that use manual labor, tools and machinery.

The website is designed to open people’s eyes to the various hazards that may exist in a workplace and instill the importance of inspecting work areas, watching work processes, talking to employees who perform the work and consulting machinery user manuals.

The game has three scenarios to choose from:

  • Manufacturing – In this module you can choose to play the owner of a manufacturing facility or a worker. As the owner you get penalized for slacking on your risk management duties.
    The amount of detail in terms of different work areas is good and it should provide a reference point for managers looking for safety issues in their shops. Many of the work areas could apply to warehouse operations and order fulfillment.
    If too many of your workers get injured or have close calls, you’ll hear from them with a resounding “boo.”

The module also allows for an accident to happen, so you can conduct an inspection to see what caused it. The game gives you the opportunity to remedy the problem as well.

The key is to spend money fixing various safety issues and investigate and remedy the causes of any accidents. Once someone gets injured, the costs increase drastically and may make it difficult to turn a profit. The goal is to finish the game with a strong safety climate and the largest profit you can muster.

It also has a “worker” mode, but it’s impossible to mess up in that game.

  • Construction – In this module you play the operator of a construction site who must balance turning a profit while also focusing on safety. The exercise starts with a construction site with various work areas that have their own inherent hazards, as well as hazards that are unique to the worksite at hand.
    The idea is to inspect each area, identify hazards and remedy them before they result in a workplace injury. Be careful, if you do too little, you’ll have an accident that will eat into your profit.
    Fortunately, the game lets you learn from your mistake and remedy the issue that caused the accident. If you do too little, your workers will boo you.
  • Visual inspection training – This exercise has general information for other industries. The player is put through a series of scenarios, where they must inspect the workplace, observe the worker in action to detect any hazards and “talk” to the worker to learn his concerns.
    There are four settings: a saw inspection, a mixer inspection, a scaffolding inspection and a fall protection inspection. The basic drill is to identify hazards, and the three-pronged approach of inspecting, watching the worker in action and talking to the worker drives home the essence of visual inspections.

 

California Tries to Reduce Opioid Misuse among Injured Workers

California’s Division of Workers’ Compensation has drafted new guidelines to curb use and misuse of opioids by workers’ compensation claimants.

The guidance is in response to a number of studies that have noted the ill-effects of increased opioid prescriptions on injured workers, including addiction, disaffection from the workforce, staying out longer on disability and increased claims costs.

The proposed guidelines were written to provide a roadmap for the best practices for using opioids to manage pain in work-related injuries.

It’s hoped that the proposed guidelines, when codified into regulations, will pare down the misuse of these drugs, which are essentially synthetic forms of opium. Anytime a worker is injured and they are having trouble dealing with the resulting pain, the likelihood is strong that they will be prescribed an opioid, which in turn can increase the cost of a claim fourfold, according to the National Council on Compensation Insurance.

The proposed guidelines recommend that:

  • Opioids should not be the first line of treatment for pain and should not in general be used for mild injuries. Other therapies, such as non-opioid medication, appropriate physical activity and complimentary/alternative modalities, should be used first.
  • Opioids should only be used for treatment of acute pain when the severity of the pain warrants that choice, and after determining that other non-opioid pain medications or other therapies will not provide adequate pain relief or are contraindicated for medical reasons.
  • They should only be prescribed at the lowest dose that provides pain relief, for a limited time, and with no refill, prior to re-assessment.
  • Opioids for acute pain treatment should be tapered to zero within two weeks whenever possible.
  • If opioids are prescribed, doctors should access the Controlled Substance Utilization Review and Evaluation System, a state drug-monitoring program that tracks prescriptions of addictive prescription drugs. If the system indicates the simultaneous use of other narcotic medication, or if the worker is getting the same prescriptions from other doctors, opioid use may be contraindicated.

 

In cases of patients with chronic pain, when the doctor is considering prescribing opioids, they should only prescribe them after a comprehensive evaluation is performed and alternative treatments are considered.
Screening identifies patients with high risk of addiction or serious adverse events, substance misuse, and psychosocial factors that may contribute to misuse.

  • Patients are informed about risks, benefits and alternatives for opioids, and a treatment agreement/informed consent is completed.
  • Patients undergo urine drug testing prior to initiating an opioid trial.
  • A trial is conducted prior to committing to chronic opioid treatment.
  • CURES is queried.
  • Carefully manage chronic-pain patients who have been prescribed an opioid.
  • Periodically and randomly conduct urine tests to check for misuse, abuse or diversion (giving the drugs to others or selling them).

 

The guidelines also spell out steps doctors should take if they suspect misuse, abuse, addiction or diversion of the drugs.

This is good news for employers, particularly if you end up having a worker out with an injury that is causing them moderate to severe pain.

Outside of these guidelines, some insurers have started instituting controls that work closely with treating physicians to intercede if addiction or misuse is suspected. As an employer, you too can get involved by calling the claims adjuster if you suspect the same.

Include Workplace Violence in Your IIPP

AFTER A Long Beach Memorial Medical Center pharmacy technician  shot and killed the pharmacy’s executive director and supervisor, then killed himself, Cal/OSHA cited the hospital for failing to address potential violence in the workplace in its Injury and Illness Prevention Program (IIPP).

The agency cited Long Beach Memorial for two alleged general violations of the IIPP and Emergency Action Plan standards. Cal/OSHA investigators found several deficiencies in the hospital’s IIPP (General Industry Safety Orders §3203), including failure to have procedures for identifying and evaluating potential threats.

While this kind of workplace violence is rare, it does happen on occasion. To ensure you can best protect your employees, comply with OSHA standards and also reduce the economic fallout of a violent incident, you need to make sure your IIPP addresses potential violence.

This program should include procedures for handling a potentially violent situation, in addition to prevention.

Some of the fallout from workplace violence can include physical injuries, destruction of property, substantial potential liability and an immense impact on the morale and continuing operation of the workplace. In addition, OSHA inspectors will show up on your doorstep.

Research has shown that following an incident of workplace violence, a measurable loss of productivity will occur. This will affect every department, and not be limited to those directly impacted. Productivity may decline in the wake of an incident, and workers’ compensation claims and litigation may also follow.

The key to avoiding a crisis is good leadership. This means maintaining open communication with employees, setting clear standards, enforcing consistent personnel practices and promptly addressing employee concerns while they are manageable and before they can become major problems.

Employees should be encouraged to recognize that a problem is present. If someone overhears a co-worker talking about suicide, violence or vandalism, or empathizing with individuals who commit acts of violence or destruction of property, repeatedly talking about weapons, or expressing unreasonable fears or resentments, red flags should go up.

 

Injury and Illness Prevention Plan

All California employers are required to adopt an IIPP that includes workplace violence prevention.

A documented company policy must include:

•             Definitions that clearly indicate what behaviors constitute workplace violence, including threatening or abusive physical and verbal behavior. Specify exactly what prohibited actions are and spell out the consequences of those actions.

•             A review and response system for all reported violent incidents, along with guidelines to assist those with the responsibility to review and respond. (Sometimes this is best accomplished via a team approach.)

•             Establishment of a process for reporting workplace violence or threats of violence.

•             Specific procedures for reviewing each reported incident, and mechanisms to support and protect all affected persons. Require that reports are comprehensive.

•             Effective follow-up procedures. Remember that poor follow-up can lead to negative worker perception of management commitment. Victims and recipients of threats or harassment expect a firm response.

Programs that discourage reporting or blame the victim will not likely be successful. At a minimum, the policy should be reviewed annually. Good communication, confidentiality, teamwork and accountability are musts.

Communication must flow vertically (management to staff, and vice-versa) and horizontally (i.e., across organizational divisions or departments). Communication can take many forms, and organizations should think outside the box when communicating information about workplace violence policies. For example, information about company policy can be communicated via inserts with pay stubs or on stickers for telephones.

 

Training

Training for both managers and workers is a key element in any workplace violence prevention program. The presence of management at training sessions can increase the visibility of the organization’s top-level commitment to prevention.

In general, training (initially and on a recurring basis) should be provided on the hazards found in the organization’s workplaces and in the organization’s prevention policies and procedures, with emphasis on reporting requirements and the companys’ review, response and evaluation procedures.

Training can be implemented from the top down, with managers and supervisors trained first. A train-the-trainer approach can be used in larger organizations, with supervisors responsible for training and evaluating training for their own staff. Specialized training on creating a positive work environment and developing effective teams could be useful, as well as training to improve awareness of cultural differences (diversity) and to enable the development of workers’ cultural competence.

Electrical Risks High in Agricultural Industry

Over the years, electrically powered farm equipment has become an indispensable element of modern farming.

With the widespread use of electricity on the farm, more emphasis needs to be placed on using electricity and electrical equipment safely. Nationally, approximately 100 people a year are electrocuted on farms. A better understanding of the principles, uses and hazards associated with electricity could have prevented many of these deaths.

This article will identify some of these hazards and help you to remember the importance of electrical maintenance.

 

Electrical distribution system

Electricity is brought to a farm from a power company’s supply lines through the main service entrance. Normally, all power to the farm is metered at this point. The main disconnect should be located here, so that all power to the farm can be manually turned off at one point.

From the main service entrance, wires lead to each building or area service entrance through buried or overhead wires. These service entrances should also be equipped with disconnects, so that power can be shut off to one site without affecting other areas.

The main distribution system on a farmstead should always be large enough to accommodate present demand and future expansion. Proper installation of the electrical system is essential for safety.

Local codes should always be followed because their main purpose is to provide users with safe systems. If no electric code exists for your area, the National Electric Code (NEC) is the minimum standard to follow.

Only qualified electricians should install electrical systems.

 

Dangers

Below are some examples of mistakes and preventive solutions that highlight some of the electrical safety issues that can be encountered while working on a farm or ranch.

Mistake: Not checking electrical panels, lighting, equipment, connections and outlets.
Solution: On the farm, there may be mice, bugs, spider webs and dust that can destroy connections and electrical boxes. Check for wires that have been chewed by mice, or covered in dust and spider webs. Be sure to turn off the power, repair all chewed wires, and blow off any dust or webs with an air hose before energizing any equipment.

 

Mistake: Not checking all wiring, connections and electrical motors on tractors, combines and trucks.
Solution: Check all flashers, slow-moving vehicle signs, and battery and light connections. Before you leave, be sure everything is in proper working order.

 

Mistake: Underestimating the distance between the equipment and the power lines.
Solution: Be aware of the total height of your equipment when loading, towing or transporting larger equipment. Make sure contact is not made with power lines or transformers. Finally, make sure that irrigation pipes are not lifted vertically near overhead power lines.

 

Mistake: Not properly training employees on lockout/blockout methods or sequence.
Solution: Only trained employees should be authorized to lock out electrical machinery. Ensure that the energy source is properly disconnected and locked.

 

Mistake: Not wearing the correct personal protective equipment for the job.
Solution: Every job is different and the PPE should be, as well. Some jobs require protective shields or barriers, and others need insulated gloves and/or rubber-soled shoes. Know the job and the equipment so you can prepare to do the job safely.

 

Mistake: Letting wiring or cables get wet.
Solution: Many agricultural facilities have severe environments that require special attention when installing and maintaining electrical systems. Threats to the system come from a number of sources. The vapors from animal waste in confinement housing can corrode electrical components. High humidity in milking facilities can rapidly deteriorate conventional metal electrical boxes. Livestock, equipment and people can cause physical damage to wiring, boxes and light fixtures.

To minimize your risk:

  • Use underground feeder (UF) electric cable.
  • Make sure all control boxes, light fixtures, switches and receptacles are made of corrosion-resistant materials.
  • Install watertight covers on receptacles and switches and over light bulbs.
  • Locate the distribution panel away from severe environments. If a clean, dry area, such as an office, is not available, mount the distribution panel outside.
  • Make sure that every electrical system component or piece of equipment located outside is watertight.
  • Run conductors through horizontal conduit and seal the conduit ends so moisture cannot enter the distribution panel. When conductors run from a warm, moist environment to a cold location, condensation can form and enter the distribution panel.
  • Inside farm buildings, mount wiring outside of walls to allow continuous inspection.

 

Finally, to avoid tragic accidents on the farm, make note of activities that take place around power lines and electrical equipment, and remember your checklists and safety precautions. Electrical safety is a serious matter, so always be on guard.

 

 

Protect yourself: Check your Subcontractors for Workers’ Comp Policies

Can you as a primary contractor be held liable under your own workers’ comp policy should an employee of one of your subcontractors be injured, even if it’s a subcontractor that’s way down on the chain of subs? Courts have on numerous occasions said you are.

Many times the injured worker may even be a third of fourth level contractor, but if none of your subcontractors are carrying workers’ comp coverage, you, as the main contractor will see the claim hit your own policy.

This scenario is even more likely if the main contractor has substantial control over the sub’s employees. South Carolina’s Supreme Court made such a ruling recently.

Courts generally start with the subcontractor whose employee was injured and move up the chain until they can find a valid workers’ comp policy. Sometimes that could mean going through a series of subcontractors until a policy is found.

The best way to protect yourself as a main contractor (or even if you are a subcontractor that hires other subs) is to require that all of your subcontractors have a certificate of insurance. But don’t stop there; you should call the insurance carrier to see if the certificate is valid or if the policy has lapsed.

Another option is to build insurance coverage costs into the contract with your sub and then purchase the necessary insurance yourself.

In California you also have the option of checking with the State Contractors Licensing Board (www. cslb.ca.gov) to see if your sub has workers’ compensation coverage.

Cal/OSHA Mulls New Rules for Agricultural Night Work

California’s Division of Occupational Safety recently held a special hearing on a proposal that would institute new safety rules for night agricultural work.

Some agricultural operations occasionally conduct night work such as the grape harvesting and tree crops among others.

Working at night also can reduce the chance of heat-related illness among workers, however working at night can create its own unique hazards. And safety inspectors told the meeting that the majority of night work injuries are the result of poor lighting and visibility.

The proposal would:

  • Require that tractors, self-propelled equipment and trucks used between sunset and sunrise to have at least one headlight that casts light in front of the machines for at least 50 feet.
  • Require employers to provide additional lighting in the form of 10 foot-candles “for field adjustment or the operator’s attention” within 25 of equipment. (A foot-candle is a unit of light measurement, defined as the amount of illumination the inside surface of a one-foot-radius sphere would be receiving if there were a uniform point source of one light in the exact center of the sphere.) This lighting would be for the sake of safety for workers on the ground.
  • Require employers to provide high-visibility garments such as reflective vests.
  • Require 3 foot-candles of lighting in meeting areas, rest areas and other non-work areas.
  • Require 5 foot-candles of lighting along pathways leading to restrooms and drinking water and inside restrooms.
  • Require 10 foot-candles for workers near stationary agricultural equipment, harvesting and irrigation work
  • Require 20 foot-candles when workers are conducting maintenance work on equipment.
  •    Maintenance on equipment: 20 foot-candles

The proposal is not yet on the books and stakeholders have weighed with additional measures, such are requiring a written night safety plan, traffic plans for mobile equipment, safe areas, a system to account for workers, marking water hazards, pest and wildlife awareness, and personal lighting when needed.

 

 

Workers’ Comp Audit Threshold Could Increase for 2015

The Workers’ Compensation Insurance Rating Bureau is considering raising the premium threshold for the annual physical audits of employers’ payrolls conducted to ensure they are correctly reporting their employee counts.

Currently the trigger is $10,000 in annual premium, but the Rating Bureau’s Classification and Rating Committee has recommended to the organization’s governing committee that the threshold be raised to $13,000 in light of recent premium increases and because the level has remained the same since 2007.

If the Rating Bureau recommends the change and the state insurance commissioner approves it, the adjustment would take effect for policies incepting on or after Jan. 1, 2015.

That would be good news for many smaller employers in the state, especially those that have been on the cusp of the $10,000 premium mark.

 

Premium audits explained

A workers’ compensation premium audit is a review of your records and operations to ensure that your coverage information is accurate. The goal is to assess and collect a premium that accurately represents your risk exposure, particularly in terms of employee numbers as well as the types of employees you have. The audit is compared to what you reported to your insurer when the policy was written.

Your premium is calculated based on the projected payroll information your insurer receives from you at the inception of your policy. To make sure that your premium is priced accurately and fairly, the insurer will compare your payroll estimates to your actual payroll at the end of your term. Each policy term may have a physical audit or a mail audit, based on the size of the policy, the nature of your business and other circumstances.

An audit is usually performed shortly after your policy expiration, but the insurer can also perform it earlier to verify the accuracy of your estimated exposures.

Audits are also conducted after a policy cancellation, in order to determine the final earned premium for the shortened policy period.

Audits are typically performed on an annual basis, but can be performed at any time during or after your policy period.

If necessary, a premium auditor will contact you to make an appointment for a physical (on-site) audit. They will examine your records to determine the correct exposure, or risk. This may include: payroll records, journals, tax reports, individual earnings cards, cash disbursements, etc. The various operations of your company may be observed to help better categorize the risk classes.

 

Preparing for an audit

Once you know an audit is pending, you should prepare as well as possible to ensure it goes smoothly and that there are no surprises. This entails at least the following:

  • Have all of your necessary records ready.
  • If possible, your payroll should be organized by: policy period, classification code (list each job type separately), regular pay vs. overtime.
  • Report your “total gross” payroll.
  • If the insurer mails your audit materials, complete all the forms and return them promptly.
  • If you have subcontractors, ask them to provide a copy of their Certificate of Insurance to keep with your records.
  • Be available in case the auditor has questions.

 

Audit checklist

To assist you in gathering the necessary records for your premium audit, refer to this checklist. Make sure that records are available from the previous calendar year. These records include:

Federal Form 941

Federal Form 940

Federal Form W-2

Federal Form W-3

Federal Form 1099

Federal tax return

Unemployment returns

Time cards

Individual payroll records, with overtime broken out

List of clerical employees and corporate officers

General ledger, check register, and any cash disbursements

Verifiable payroll breakdown as applicable

Sales journal and cash receipts

Certificates of Insurance for subcontractors used

Job cost records, contracts, work invoices, type of work performed.

ACA Common Ownership Rules Explained

One of the vagaries of the Affordable Care Act is the notion of common ownership, or “controlled group” – a group of companies considered as one under a single owner.

The rules on common ownership were created specifically to keep businesses from splitting up their employees into different organizations in order to evade the mandate that employers provide health insurance coverage to their employees.

Under the ACA, if a company has 50 or more full-time employees it will be required to provide health insurance to its employees. If there is collective ownership or an individual or individuals own multiple companies with an aggregate total of 50 or more employees, they would still be required to provide coverage.

A controlled group refers to a collection of companies owned by the same person or persons (five or fewer) that collectively own 80% or more of the equity in two separate trades or businesses. Or, taking into account the level of ownership each of those five persons holds in each of the two organizations, they must collectively own more than 50% of the equity in both of the trades or businesses.

As an employer if you own or are a partner in multiple businesses (including multiple franchise outlets), you need to be aware of this part of the law as it relates to your obligation to secure coverage for your employees.

Companies that have between 50 and 99 employees will not be required to provide coverage to their employees until 2016, while those with more than 100 will need to cover up to 70% of their workers starting 2015.

You’ll have to count up your full-time employees at each entity in addition to fractional employees. A full-time employee under the law is one who works 30 hours or more per week.

If you don’t tally them up properly, you could be subject to fines and penalties.

The definition of “controlled group” is contained in IRS Code Sections 414(b) and (c). A controlled group exists if two or more corporations, trades or businesses (including partnerships and proprietorships) have one of the following relationships:

  • Parent-subsidiary;
  • Brother-sister organizations; or
  • A combination of parent-subsidiary and brother-sister.

In addition, constructive ownership, or attribution, rules apply for purposes of determining whether a group of organizations is a controlled group. These rules treat a person as owning an interest in an organization that is not actually owned by that person. Attribution may result from family or business relationships.

 

Parent-subsidiary controlled group

A parent-subsidiary controlled group exists when one or more chains of organizations are connected through ownership of a “controlling interest” with a common parent organization if:

  • A controlling interest in each of the organizations (except the common parent) is owned by one or more of the other organizations in the group; and
  • The common parent organization owns a controlling interest in at least one of the other organizations.

 

For a corporation, a controlling interest means ownership of stock having at least 80% of total combined voting power of all classes of stock entitled to vote, or at least 80% of the total value of shares of all classes of stock.

For a partnership, a controlling interest means ownership of at least 80% of the profits interest or capital interest of the partnership.

Here is a good example: Ess Corp. owns 90% of the stock of Dee Corp and 80 % of the stock of Cee Corp. Dee Corp. owns 85% of the profits of Em Partnership.

In this case, Ess Corp. is the common parent of a parent-subsidiary controlled group consisting of Ess Corp., Dee Corp., Cee Corp and Em Partnership.

 

Brother-sister controlled group

A brother-sister controlled group exists when five or fewer individuals, estates or trusts own a controlling interest (80%) in each organization and have effective control.

“Effective control” generally means more than 50% of the organization’s stock or profits, but only to the extent the ownership is identical with respect to each such organization.

 

Combined controlled group

A combined controlled group exists of three or more organizations that are structured in the following way:

  • Each organization is a member of either a parent-subsidiary or brother-sister controlled group; and
  • At least one organization is the common parent organization of a parent-subsidiary controlled group and is also a member of a brother-sister controlled group.

 

Constructive ownership

Constructive ownership principles apply to the controlled group rules that treat an individual as owning an interest in an organization based on a family or business relationship. These rules are complex.

For example, an individual will be considered to own an interest, owned directly or indirectly, by his or her children under age 21 or by his or her spouse, unless legally separated or divorced.

An exception applies if there is no direct ownership, no participation in the organization (for example, as a director, officer or employee) and if no more than 50% of the organization’s gross income is from passive investments.

In addition, an interest owned, directly or indirectly, by or for a partnership, corporation or trust is treated as owned by any individual having an interest of 5% or more in the organization, in proportion to the individual’s interest in the organization.

For example, if an individual owns 60% of the stock of ABC Corp. and ABC Corp. owns 50 shares of XYZ Corp., the individual is considered to own 30 shares of XYZ Corp. (60% x 50).

 

Still confused?

We’ve thrown a lot of numbers at you in this article and, if you are still confused, you are not alone. Fortunately, we are here to help.

To make sure you are accounting for all of your employees in your various entities, don’t go it alone. Schedule a meeting with us so we can review your businesses and make sure that you aren’t making any mistakes.