Archive for May, 2015

Reduce Chance of Lawsuits with Strong Employee Handbook

The legal threat is constantly growing for businesses, not only from outside the organization by business partners or customers, but also from within – by employees.

Currently the bigger threat is being sued by your own staff for running afoul of a smorgasbord of statutes like labor, wage and hour, worker classification, discrimination and harassment laws.

As an employer you need to be aware of the many threats errant policies may pose to your organization’s financial wellbeing. One lawsuit by a disgruntled or wronged employee with a large award or hefty attorney fees can sink a small business.

Part of protecting your organization is implementing strong workplace policies and enforcing them. But you also need to communicate them to your staff, including via your employee handbook.

To best protect your business, your handbook should cover the following:

  • ‘At-will’ employment. This policy basically states that either you or the worker can terminate the employment relationship at any time and for any reason (as long as it is legal). This needs to be clearly understood by employees.
  • Discrimination and harassment.  Make it clear that your organization has a zero-tolerance discrimination and harassment policy and that you will always take a complaint seriously.

The handbook should include information about who to contact with a complaint, and how to file a complaint. The policy should state that the accuser will be protected against retaliation, as well.

Finally, spell out the steps you will take against employees that violate the policy.

  • Employment classification. Make sure that you outline clearly how your employees are categorized (full-time or part-time, exempt or non-exempt). Spell out which employees are eligible for company benefits, such as sick leave, vacation time and employer-sponsored health insurance.
  • Time off and employee leave.  Describe the rules for accruing and using vacation time and sick time. List any holidays for which your employees will receive pay. Clearly outline the steps your workers need to take to request time off, as well as note whether unused time will carry over from year to year.
  • Meal and break. Every state has meal and rest break laws. In California, non-exempt employees must be provided with no less than a 30-minute meal period when their work period is more than five hours.

In addition, non-exempt employees are entitled to a 10-minute break for every fours hours worked.

  • Timekeeping and payday. Your employee handbook should describe the rules and methods for recording time worked. It should also cover paydays, ways in which employees can receive their pay (check, direct deposit, etc.), and how final pay will be handled should you need to terminate an employee.
  • Workplace safety. Regardless of your work setting, your employee handbook should cover safety and emergency procedures. Even if your operation is mostly office workers, there are still hazards they should be made aware of.
    As part of the safety policy, you should also include information on what an employee should do if they are injured on the job, including who to report to.
  • Attendance. This is an important one, and employees must understand that their jobs could be at risk if they fail to come to work on time, leave early often or miss too many days. You need to have rules in place that your staff understand, so that you can enforce policies on attendance punctuality.
    Make sure that you outline what you consider excessive absenteeism and what employees need to do and who to contact if they are going to arrive late or need to take time off.
  • Employee conduct. Outline the standard of conduct you expect from your workers when it comes to drug and alcohol use, workplace violence, confidentiality, conflicts of interest and other common issues.

 

Make sure that your policies are conveyed to new hires by going over the handbook with them page by page, asking them to take it home and read it and having them sign off that they have read it when they are finished.

It is also a good idea to hold a yearly refresher for all existing staff, as well.

 

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Six Ways to Get Cited by OSHA

There are few things worse for an employer than to receive a letter or phone call from OSHA requesting information about the company’s compliance with workplace safety regulations.

But many employers either don’t handle their encounters with OSHA well or they fail to properly report serious injuries that have taken place on their worksites. Whatever the case, there is a right way and a wrong way to deal with occupational safety and health authorities.

The right way can make the process easier on the employer, while the wrong way can set them up for frustration, confrontation and heavier fines.

The head of Cal/OSHA’s heat illness prevention unit recently gave an employer outreach presentation on the steps to take if you want to get cited by Cal/OSHA.

Follow the advice at your own risk:

  1. Don’t answer If OSHA contacts you by letter, a complaint referral or by phone, don’t respond. Of course if you do respond, the matter can often be dealt with over the phone or by submitting a written response.
    Respond to inquiries promptly and courteously if you want fair treatment. But if you simply fail to respond, it is a sure-fire way to receive an inspection.
    Sometimes, however, if OSHA has received a complaint, it will likely want to conduct an inspection of your workplace to verify if the alleged conditions exist.
  1. Don’t reportor file a report late for a fatality or serious injury. Doing that results in an automatic penalty of $5,000. Remember, you have eight hours to report a workplace fatality or serious injury to Cal/OSHA after learning of the incident.
    The Cal/OSHA Appeals Board may reduce that penalty if an employer files late, depending on how late they are. But if an employer fails to report at all, it can expect to pay the full amount. Remember: a serious injury is one that requires hospitalization for more than 24 hours other than for medical observation, or if an employee “suffers a loss of any member of the body or suffers any serious degree of permanent disfigurement.”
  1. Fail to comply with document requests. Don’t think that ignoring a document request by OSHA will make the problem disappear. If you can promptly produce the documents requested, including your Injury and Illness Prevention Program (IIPP), it will go a long way to making smooth an encounter with OSHA.
    To make sure that all of your supervisors and managers are on board, put in place transparent procedures to follow if contacted by OSHA. Top priority is informing top management about correspondence with the authorities.
    And don’t worry: you don’t have to keep all of your documents on site. If you have locations in the field, you can keep your workplace safety documents in your office and e-mail them to the OSHA officer.
    One exception is your heat illness prevention program, copies of which must be located on site.
  1. Be unaware of the IIPP requirement. This also includes having employees who are not aware of your workplace safety program.
    Express bewilderment about an IIPP and you can bet that OSHA will want to look at your safety training records and talk to your employees about specific parts of your IIPP.
  2. Provide a generic IIPP. If you want to get dinged, download a generic version of an IIPP from the Internet and present it as your own when asked by OSHA. Even better, don’t include your company name anywhere in the document.
    Another way to land in hot water is to produce another employer’s IIPP, even if you are in a dual-employer situation.
  1. Ignore OSHA regulations for your industry. During a site visit, OSHA will look for hazards, employee exposure, “process flow” and the presence of required elements of relevant regulations. The Division of Occupational Safety and Health will document both compliance and non-compliance, take samples and lots of photos. The division will cite an employer that isn’t evaluating the hazards specific to its worksites.

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NLRB Acts against Firm that Fired Employee for Posting Disparaging Comments on Facebook

In a disturbing move for employers, the National Labor Relations Board has issued a complaint against an employer that allegedly terminated an employee for posting negative comments about her supervisor on her Facebook page.

The NLRB complaint alleges that the woman’s Facebook posts were “protected concerted activity” within the meaning of the National Labor Relations Act and that the employer’s Internet posting policies contained unlawful provisions, including one that prohibited employees from making disparaging remarks about their supervisors. The NLRB concluded that such provisions constitute interference with an employee’s exercise of his or her right to engage in protected concerted activity.

If the case sticks, it removes yet another method at an employer’s disposal to protect the company reputation and keep intact civility in the workplace. Worse yet, it could open up employers to another form of litigation. The case at a minimum should put you as an employer on notice that the federal government may initiate charges against you if it receives a complaint from an employee and your Internet posting policies don’t jibe with the NLRB’s interpretation of the law.

In the case, the NLRB Hartford regional office accused American Medical Response of Connecticut, Inc., of unlawfully terminated an employee, Dawnmarie Souza, for posting negative comments about a supervisor on her Facebook page. After she made the posting, several of her co-workers posted responses supportive of her posting and then Souza followed up with more negative comments about the supervisor. The employer first suspended and then terminated her for violating its Internet posting policies.

Employment law defense attorneys disagree with the NLRB’s interpretation of what constitutes “protected concerted activity” in this case, since the woman acted alone when she made her post. They say that the decision appears to contravene the long-standing principle under legal precedent that an employee, whose termination was based on activity solely on behalf of themselves, does not engage in “concerted” activity when the action was not “engaged in with or on the authority of other employees.”

Second, attorneys say, Souza’s conduct, even if concerted, does not qualify as “protected” under another legal precedent. In that case, the Fourth Circuit U.S. Court of Appeal wrote: “[Such] … expression of criticism about management . . . is not a condition of employment that employees have a protected right to seek to improve.”

Typically, a company can’t fire someone for making work-related criticism of or complaints about a supervisor if made among other workers or brought up to management. But under the NLRB’s interpretation of the law, it’s not okay for an employee to post defamatory or highly personal comments about a supervisor outside of the workplace on the Internet – essentially a public forum.

The employer in this case will certainly go to court to defend against the NLRB action, and the resulting case could set an important legal precedent. In the meantime, the agency’s actions have an effect on all employers, whether unionized or not. It also creates uncertainty in the emerging area of workplace social media policies.

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Why You Lost Your X-Mod and Your Rates Climbed

The threshold for employers to qualify for experience rating (an X-mod) almost doubled in the last four years, meaning that fewer employers are qualifying and those that may have had one once, don’t qualify any longer.

Additionally, many employers since the recession have been reducing their payroll, which also reduces the workers’ compensation premium level below the X-Mod threshold.

These two trends have resulted in many employers that once had low X-Mods (below 100) having seen their rates go up.

We’ve received calls from some of our customers about this issue, so we want to explain what’s going on.

 

How an X-Mod works

When an employer receives an X-Mod, it is a numerical value that explains how your claims experience measures up against others in your industry and the premium you pay. An X-Mod of 100 is the average, meaning that your claims come out to be average for your class code.

If you have a better safety record than your peers and your claims costs are lower than average, you would typically have an X-Mod below 100.

The inverse is also true. If your claims are more costly, then your X-Mod will be more than 100.

 

X-Mod threshold

The X-Mod threshold has been climbing over the last several years at an increasing rate. The new annual premium threshold for being eligible for an experience modifier was raised at the start of this year to $33,300, up 98% from the $16,700 threshold that was set in 2011.

Once an employer no longer qualifies for an X-Mod, their X-Mod is essentially set back to 100, regardless of their claims history. The insurer will still look at the overall cost of your claims, but your X-Mod no longer matters at that point.

In other words, scheduled credits and debits will still apply, depending on your claims costs and claims experience.

For non-X-Mod employers, all companies are grouped according to their business operation or classification code. So if you have a printing shop, your claims costs will be bundled up with all other printing shops in the state for calculation purposes.

The estimated losses of the group are added together and an average cost is obtained, which is then applied to the entire class. The rates determined are averages reflecting the normal conditions found in each classification.

An employer is assigned to a classification to ensure that the rates reflect the costs of all employers with similar characteristics. Although each classification contains “similar” risks, each individual risk in a class is different to some extent (the X-Mod is designed to reflect these individual differences in loss potential).

So if you had an X-Mod higher than 100, you may see a slight downtick in the amount of workers’ comp premium you pay, but for those employers whose last X-Mod was below 100, the opposite could happen.

 

The takeaway
The best course of action if you no longer qualify for an X-Mod is to continue focusing on workplace safety and keeping your employees from getting injured on the job and filing claims.

And if you do have claims, you should work with us and the insurance company to manage those claims so that you can get the worker back on the job as soon as is feasible and safe for them.

 

If you have questions about your workers’ comp policy, contact Wright & Kimbrough.

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Make Sure Driving Staff Have Proper Car Insurance

When you pay your employees the IRS-set mileage rate of 57.5 cents per mile, you are not only reimbursing them for the gas they use, as well as wear and tear on their car, but also for insurance.

If you have employees that drive as part of their job, or even those that run errands to the bank or the office supply store, you need to make sure they are insured. If you anticipate that any of your employees will be driving on the job, even if it’s infrequently, you should set insurance requirements for them so that your company is not held liable in case of an accident.

The state minimum insurance requirement is 15/30/5, which translates to:

  • $15,000 for injury/death to one person,
  • $30,000 for injury/death to more than one person (if more than one passenger is in the car), and
  • $5,000 for damage to property (such as another vehicle).

 

Those are the maximums that the insurance will cover. But they are not enough to cover most accidents today – imagine if your employee rams into a late-model Mercedes.

Worse, if one of your employees is in an auto accident while on the job and hospital costs or damage costs to the other person’s vehicle exceed the maximums, your company will be responsible for covering the rest.

To best protect your business financially, if you have employees that you expect will be driving while on duty, you should require them to carry a higher maximum of 100/300/50. That is:

  • $100,000 for injury/death to one person,
  • $300,000 for injury/death to more than one person (if more than one passenger is in the car), and
  • $50,000 for damage to property (such as another vehicle).

 

Workers’ Comp Applies

If your worker is hurt in a collision while carrying out duties for you, your workers’ comp policy will

cover their injury.

 

For more information contact Wright & Kimbrough to get details on the extent of your liability.

 

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More Employers Use Return-to-work Programs for Injuries Not Suffered on Job

More employers are starting to use return-to-work programs for injured workers even if they were not injured on the job, according to a study by Prudential Insurance Co. of America.

Many employers have a return-to-work program for their injured workers because it cuts down on workers’ comp claims costs, and also on the costs of a key employee missing work. It also keeps injured workers from becoming disaffected from the workplace, which makes it harder for them to re-enter later.

But more employers have discovered the value of also returning employees to work who may have to be off work from a number of non-job-related ailments, including, but not limited to:

  • Cancer,
  • Heart disease,
  • Diabetes,
  • Mental health conditions,
  • Back pain, and
  • Injuries incurred outside the workplace.

The survey found that 49% of large employers have a return-to-work program for workers who filed for disability not from work injuries, and another 22% of employers plan to add such programs in the near future.

Prudential noted that workers’ comp and non-occupational disability return-to-work programs should be similar in approach, and that both can save a company money. While the cost/benefit numbers are more readily apparent in the workers’ comp arena, they may not be as easily identified in programs for non-work-related injuries or disabilities.

However, if you have an experienced staff member that is out of action, and work is not getting done or it’s being performed by someone with less experience and skill, it can hurt your operations and bottom line.

Return-to-work strategies and programs have traditionally been used to reduce workers’ compensation costs. But they can also:

  • Improve productivity,
  • Improve morale across an organization,
  • Save organizations time and money, and
  • Protect you from losing talent.

Examples of effective return-to-work strategies include offering the opportunity to work part time, telecommuting, modifying work duties, modifying schedules, and implementing reasonable accommodations to provide employees with the tools and resources they need to carry out their responsibilities.

Efforts such as these can help employees return to work sooner, even while still recovering. This allows the employee to protect their earning power while at the same time boosting the organization’s productivity. Furthermore, in many instances, the ability to return to work after injury or illness plays an important role in the employee’s recovery process.

Return-to-work basics

  • The injured worker and the physician should discuss time frames for recovery, expected duration of pain, the potential need for medication and options for returning to work.
  • The worker should resume, if possible, some form of work that meets the restrictions and requirements outlined by the treating physician. Such modified work is the cornerstone of job rehabilitation.
  • The treating physician should be included in determining whether the physical demands of a modified job are appropriate for the recovering worker.
  • Workplace guidelines should be written out and provided to the employee and employer.
  • The treating physician needs to understand the patient’s work environment and occupational tasks. In difficult cases, a videotape of the job, formal job analysis or an ergonomic report may be helpful to assist in establishing workplace guidelines.
  • Workplace guidelines should be considered flexible and should be updated to reflect the improving medical condition.
  • Work hardening, functional capacity evaluations and other forms of physical therapy can be used to simulate specific job demands so that the worker can eventually resume previous duties without re-injury during the return-to-work phase.
  • An injured worker must be taught to recognize cause and effect related to symptoms, and accept responsibility for symptom control through strategies such as pacing, energy conservation and proper body mechanics.
  • If the treating physician and employer believe there are no suitable duties in the present workplace, it may be necessary to refer the injured worker to a vocational rehabilitation professional.

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Prepare Now for New Sick Leave Law

 

California’s paid sick leave law takes effect July 1 and if you haven’t begun preparing for this change, you should start now.

Did you know that parts of the law have already taken effect? Do you know what they are?

There are actions you should take now to prepare for the law, and you should also have policies in place before the law takes effect. The California Chamber of Commerce recommends the following.

 

What you should be doing now

  • Post the new paid sick leave notice in a place where employees can easily see it.
  • Provide the updated Wage Theft notice to nonexempt employees.
  • Know that anti-discrimination and anti-retaliation provisions already apply, even before employees being accruing benefits on July 1.
  • Check if there’s a local ordinance for paid sick leave that applies to your workers.

 

Before July 1

  • Review your existing policies for sick leave and paid time off.
  • Choose which method you’ll use to provide paid sick leave benefits to employees – accrual, lump sum or existing policy.
  • Ensure your policies cover all eligible employees, and for all permissible uses.
  • Communicate your paid sick leave policy to your staff.
  • Train supervisors and managers about specific paid sick leave rights for employees.
  • Update your payroll systems to track sick leave.

 

On July 1 and after

  • Begin providing paid sick leave benefits on July 1 to employees who have worked in California for more than 30 days within a year from their start date.
  • Allow employees to start using accrued paid sick days on the 90th day of employment, and upon reasonable request.
  • Follow the law’s requirements regarding usage, record-keeping and timely payment.
  • Track paid sick leave and update record-keeping systems as required.
  • Show how many days of paid sick leave an employee has available, either on a pay stub or on a written document issued the same day as the paycheck.
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Covered California Struggles to Grow, Keep Policyholders

The Golden State’s public health insurance exchange, Covered California, is struggling to keep up its enrollment as only 66% of the individuals who enrolled for 2014, re-enrolled for this year.

And overall enrollment for the 2015 policy year nudged up just 1% for Covered California, ranking the state in the bottom five on overall growth during open enrollment this year, according to an analysis by Avalere Health.

California’s re-enrollment and overall policy growth compares poorly with the rest of the country. State exchanges run by the federal government re-enrolled 78% of their policyholders, while also growing their enrollment by an average of 65%.

One problem that Covered California also faced in 2014 was that it lost many of the people who had signed up at the start of the year. By December, enrollment had fallen 10% from the beginning of the year to 1.1 million individuals.

Covered California has said that it lost more enrollees than expected to non-payment of monthly premiums.

Meanwhile, Covered California had projected enrollment of 1.7 million for the 2015 policy year. But, by the cut-off date for enrollment, Feb. 15, it had 1.4 million individuals enrolled.

California’s enrollment ranks poorly with state exchanges run by the federal government via its HealthCare.govwebsite.

Overall, enrollment on the federal exchange jumped 61% in 2015 to 8.8 million. The state-run exchanges, cumulatively, increased enrollment by 12% to 2.8 million.

The bottom five states in terms of overall growth this year are:

  • Vermont, -17%.
  • Washington, -2%.
  • California +1%.
  • Rhode Island and New York, tied at +10%.

 

To boost its numbers, Covered California launched a special enrollment period that ended on April 30. Through April 22, it had added an additional 22,000 people, still putting it far below its target.

To make matters worse, the poor showing may not bode well for Covered California in light of the nearly $80 million budget deficit it faces for its 2015-16 fiscal year.

Although the exchange is setting aside $200 million to cover its near-term deficit, Covered California executive director Peter Lee said in December that there are questions about the “long-term sustainability of the organization.”

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