Archive for April, 2017

Getting Buy-in from Managers on Workplace Safety Programs

Inspections at commercial transport dock

One of the keys to instituting a good safety program is to get management and supervisor buy-in.

You need their support and belief in the system if you are to convince your employees to embrace your safety regimen. If your managers don’t believe in the safety plans you have put together, it will show through when they try to sell them to your staff.

If you don’t have buy-in from your managers, the chances are slim to none that your employees will embrace the changes you are proposing. Managers play a crucial role in getting employees on board with safety.

If you are serious about preventing injuries and want to keep your workers’ comp X-Mod low, the role of your management team is crucial.

You will often encounter a few different personality types among your managers and they need to be convinced of the importance of workplace safety in different ways.

  • The excuse-makers: They are the ones that blame external factors that are out of their control for safety lapses, and they may pooh-pooh the harm that a high X-Mod has. They may talk the talk on safety, but they don’t walk the walk.
  • Half-hearted bosses: These managers may actually buy into the safety program, but they are unable to show their commitment in ways that make an impression on the rank and file.
  • Committed: These managers are fully committed and enthusiastically embrace your safety plans and discuss them with staff with exuberance.


You’ll need a different approach with each personality type to get them to embrace the concept. Once they do, they can effectively convey the urgency and importance of workplace safety to the rank and file.

Constructor Magazine recently had these recommendations for getting management buy-in:

Select the right leaders – Choose managers who are firm, yet fair with a passion for the safety of the workforce. They should have a track record of success so that they can be an inspiration to their teams. Also, they should not be afraid to get their hands dirty to make a point or demonstrate how something is done.


Talk about risk management holistically – Every facet of your operation needs to be addressed if you want a comprehensive global risk management culture to exist.

Executives can influence this by extending discussions of risk management beyond the worksite to help managers see the bigger picture of why safety matters.

Assessing the risk associated with every task, purchase order, estimate or piece of equipment used will reinforce the notion that risk management is a company-wide function and not only in the sphere that the manager is responsible for.


Make periodic site visits – Top leadership should make a point to get on the floor and visit various departments to watch the workflow and reinforce the importance of safety to the workers. They should make these visits with the manager who has been put in charge of safety for that department.

At the same time, they should not arrive and start nitpicking and being enforcers of safety policy. Instead, their role should be to start conversations with the workers about safety challenges and asking for advice and ideas to make the operation safer.

They can use these visits to also celebrate successes and challenge the team to do better and always look for issues that could lead to injuries.

Employee Texting Blows Holes in Your Company Communications Policy

Mature businessman with his younger team using smart phones and digital tablet inside modern office building.

If you are not aware, your employees are most likely communicating with each other and clients using texting or instant messaging.

While the immediacy of texting and instant messaging is great for business as it allows faster communications, better collaboration and more responsiveness, the downside is that your organization likely can’t track and retrieve those communications.

It becomes even harder if the communications are via instant messaging apps like Whatsapp! and Facebook’s Messenger.

As an employer, it’s important that you understand the issue and that you have clear rules for communications among employees in order to protect your company’s interests.

You’ll need a policy in place when something goes wrong and you need to track the thread of communications to see what was said or promised by whom, and when. These details can be crucial to resolving problems with clients, or if you are ever sued and your communications are subpoenaed for discovery.

Plaintiff-side lawyers in employment cases are already started demanding the production of text messages and e-mails during discovery. And if litigation ensues on an issue, you may have a duty to preserve text messages.



There are a few issues that you need to consider, especially in light of the fact that many companies are allowing staff to use their own devices for company communications, including giving them access to the business’s e-mail system on their phone.

If your employees are exchanging texts and instant messages on company phones, the history of communications would be preserved and you would be able to access the content by asking for the phone.

But, if your employees are sending and receiving work texts and instant messages on their personal devices, the issue gets murkier, particularly if you don’t have a bring-your-own-device (BYOD) policy. Accessing messages about company business on an employee’s smartphone may raise privacy issues.

The problem especially arises in the case of wrongdoing by an employee. If they are using their phones for communications that could provide insight into their behavior, they can erase those messages before you ask to see them.

In other words, you cannot rifle through their phone without first obtaining it, meaning you can’t look at it without them knowing as you could if you looked at their e-mail on your company server.

There are also privacy issues that arise if you are trying to access an employee’s personal phone to view texts and messages.

The big issue is: how do you capture those communications? After all, it will not be done over your network, unlike your company’s e-mail system that preserves all communications which are available to you. The messages reside on the phone instead.


What you should do

Obviously texting and instant messaging are a potential minefield for employers who want to be able to access all company communications among employees and between your staff and clients, vendors or partner organizations.

To ensure you have a handle on it, you should set rules outlining what method of communication employees may use for business purposes.

If you don’t want texting or instant messaging of any kind for company business, that needs to be spelled out – including ramifications for breaking the rule.

If you decide to allow texting and instant messaging, your policy should be clear on what kind of communications are okay.

You will need to amend your policy related to employee communications and record retention to make sure texts and instant messages are included.

If you have a BYOD policy, at a minimum it should include allowing you to take custody of the employee’s phone for legitimate purposes like a dispute with a client, or discovery for litigation.

As you can see, it’s important that you initiate a policy on employee communications that takes into account texting and messaging.

If you haven’t done so, you should do it now as this faster method of communication is becoming the new normal, particular as Generation Y continues filtering into the workforce.


Rating Bureau Recommends Benchmark Rate Decrease for California Employers

abacus chinese

IN A SURPISE move, the Workers’ Compensation Insurance Rating Bureau of California has filed a recommendation to reduce average baseline rates on policies by 7.8% at the mid-year mark.

The mid-year reduction to the baseline rate is largely the result of reforms that were introduced in 2013 that have sped up the settlement process for claims (including many long-term claims), in addition to reducing medical costs.

Also, because of these reforms the cost of adjusting workers’ comp claims in California has dropped over the past few years.

Insurance carriers use the benchmark rate – also known as the pure premium rate – as a starting point for pricing their policies.

The benchmark rate is an average across all industries and employers may or may not see decreases in their workers’ comp premium come renewal as many other factors are at play, not the least of which is the employer’s own safety history.

Region is also important and insurers are pricing policies for Southern California employers higher than for the rest of the state due to the continuing problem of cumulative trauma claims being filed by workers post-termination, mostly in the greater Los Angeles area.

“Cumulative injury claims often involve multiple injuries [that have developed over time], are very frequently litigated, are filed disproportionately in the Los Angeles Basin and often are filed on a post-termination basis,” the Rating Bureau stated in a report on the state of the market as of Dec. 31, 2016.

Indeed, while cumulative trauma claims accounted for just 8% of all claims in 2005, in 2015 they comprised 18% of all claims, according to the Bureau.

The state insurance commissioner sets the benchmark rate with guidance from the Rating Bureau. A hearing will be held in June, after which the commissioner can choose to approve the rate filing, reject it or set another rate that’s either higher or lower than that recommended by the Bureau.

The rate filing is 7.8% less than the approved pure premium rate for policies incepting on or after Jan. 1, 2017. It recommends an average advisory pure premium rate of $2.02 per $100 of payroll. That’s compared with $2.19 per $100 of payroll as of Jan. 1.

The pure premium rate is a reflection of an overall decline in the total cost of claims thanks to SB 869, legislation that was signed into law in 2013.

By addressing numerous cost drivers it has helped reduce medical costs, expedite claims settlements, and reduced the frequency of workers’ compensation claims. The legislation also increased benefits for some injured workers.

As a result, the average projected ultimate cost of a claim increased to $82,234 at the end of 2016, compared to $74,699 in 2013.

Rising average payouts for wage losses and medical costs per claim are both contributing to average claim cost increases, according to Rating Bureau data.

Trump Hints at Withholding Exchange Subsidies to Prompt ACA’s Decline

Questions yai

Following the House of Representatives’ failed effort to repeal the Affordable Care Act, President Trump has promised that the repealing and replacing law is still one of his top priorities, and also hinted at hastening its demise by withholding the premium subsidies the government pays to health exchanges.

Essentially, if he follows through and creates the regulatory environment to make withholding the subsidies possible, the health care exchanges would collapse under their own weight as insurers pull out en masse.

In addition, already it’s unclear how serious the IRS under Trump will be about collecting penalties from applicable large employers who are required under the ACA to cover their full-time workers.

The President made the announcement on Fox Business, saying that the health insurance bill will get done because it is essential for freeing up money to fund his second target: tax reform.

What Trump said during his interview on Fox was that the marketplaces would fail if the government didn’t continue making payments to insurers that participate in the exchanges. Subsidies are paid to the health exchanges to help lower-income individuals and families purchase coverage on them.

The subsidies – totaling about $7 billion a year – are also the subject of a lawsuit that challenges their validity. House Republicans sued to block the payments in 2014.

A judge sided with the Republicans in a decision nearly a year ago, but did not enforce the decision while the Obama administration appealed. The appeal is still underway, and if it wanted to do so, the Trump administration could drop the appeal and stop making the payments.

That would spell the end of the ACA really in terms of the individual mandate, but doing so could send severe shockwaves through the entire health insurance system with a number of unforeseen consequences.

Fox has forecast that their elimination would lead to an immediate 19% increase in premiums on exchanges if insurers were to stick around.

After the ACA replacement – the American Health Care Act – failed, Republican leaders in Congress said they would support continuing the subsidies. Shortly thereafter, the Trump administration said that payments would continue while the lawsuit is being litigated.

As stated above, it’s unclear also whether the administration will continue enforcing the employer mandate by not collecting penalties from applicable large employers that are required to cover their workers.




Companies Struggle with Benefits Compliance

More and more employers are being overwhelmed by all of the compliance requirements associated with managing employee benefits.

The Guardian Life Insurance Company of America’s “Benefits Balancing Act” study found that 60% of employers are feeling overwhelmed with the increased complexity of managing their benefits programs. One of the main reasons for the additional burden is the Affordable Care Act, with its myriad of compliance and reporting requirements.

The employer mandate and the documentation and new filing requirements with the IRS are high on the list of compliance issues, as are evolving Family Medical Leave Act (FMLA) and ERISA requirements.

Interestingly, larger firms with 100 or more employees are having the hardest time, with 70% saying they are especially challenged by installing new coverages, changing carriers and employee communications and enrollment.

The shackles of compliance are so great that it’s the number one benefits-related concern for nearly 30 % of employers, the study found. In fact, 70% said that their firms are not equipped to keep up with the steady changes in federal and state laws governing employee benefits.

The top areas of compliance concern are:

  • The ACA excise tax (“Cadillac tax”)
  • Changes to paid parental leave laws
  • ACA employer mandate
  • ERISA requirements
  • State and local FMLA requirements


In terms of administration the top concerns are:

  • Employee communications and education
  • Adding new benefits or changing plans and insurers
  • Establishing electronic data interchanges
  • Account management and service delivery
  • Claims and employee customer service
  • Enrolling employees


What companies are doing

As the regulatory landscape has shifted so dramatically over the last seven years, many employers have opted for outsourcing their benefits compliance.

This may be an especially smart move for smaller employers, which often do not have in-house benefits administration resources.


Among employers outsourcing at least some benefits activities, the study found that:

  • 50% use the services of a broker
  • 25% use an insurance company
  • 25% use a third-party vendor (enrollment firm, HR services firm or a private exchange)

Venturing Abroad? Your Liability Policy May Not Cover You


There may be the occasion when you have to send executives or a team overseas for work. And depending on the destination, the risks will vary – more in some countries and less in others.

Other factors that come into play include the number and age of your staff working overseas and what type of activities they will engage in when they are on their work assignment.

First off, your current liability insurance may cover the basics if your staff are there on a short-term assignment. For example, if one of them injures someone while driving a car in the country, your liability policy would likely cover the damages.

But if you are selling your service and products there of if you have a representative office there, you may need the enhanced coverage of a foreign liability insurance policy.

According to International Risk Management Institute, foreign liability insurance is:

“A specialty policy for an insured’s liability for foreign operations arising out of a permanent branch office, manufacturing facility, or other operation located in another country. The commercial general liability (CGL) policy provides coverage for incidental exposures – for example, when an executive (or group of employees)… occasionally travels overseas for business trips. For permanent operations in foreign countries, a separate foreign liability policy is required.”


Why purchase foreign general liability coverage

Your existing corporate liability plan may not cover you for legal expenses and lawsuits brought in overseas courts. Travel to foreign countries brings with it a number of challenges, including corrupt officials, crime, and unfamiliar laws, languages and customs.

Organizations from the U.S. have no protection if they are taken to international court, so protect yours with a good foreign liability plan.



Who needs the coverage?

You may want to consider foreign liability insurance if you:

  • Have employees or volunteers who travel outside the U.S.
  • Own or lease vehicles outside the U.S./Canada.
  • Export goods or services.
  • Have or transport property outside the U.S. or Canada, including at foreign trade shows.
  • Outsource work to subcontractors who are domiciled outside the U.S. and Canada.
  • Own or operate locations, such as sales offices or call centers, outside the U.S. and Canada.
  • Station American workers at foreign offices and/or employ third-country or local nationals.


What is covered in a foreign liability policy?

Such policies provide coverage for:

  • Legal expenses for lawsuits brought against your organization in overseas courts.
  • Criminal charges brought against your staff by foreign officials.
  • General liability brought against your company for injuries or damages resulting from the use of your product or service.
  • Emergency assistance services.
  • Automobile liability.
  • Directors & officers liability.
  • Accident and health.
  • Fiduciary liability.
  • Excess liability.
  • Professional errors and omissions liability.
  • Environmental impairment liability.
  • Aircraft/watercraft liability.
  • Patent infringement.


EEOC Says Use of Service Dog is ‘Reasonable Accommodation’ under ADA

Close-up on the vest of a service dog

The Equal Employment Opportunity Commission has sued an employer for refusing to hire a job applicant because he used a service dog.

In the complaint filed in March, the EEOC accused the employer of failing to accommodate, refusing to hire and retaliating against the man who’d applied for a truck driver position.

The action illustrates just how broadly the EEOC construes the Americans with Disabilities Act when it comes to individuals who rely on service or comfort animals to cope with their disabilities.

In the case at hand, the applicant had been admitted to driver training with the trucking firm’s partner training company. Before starting the training the applicant told the company that he is a veteran who uses a trained service dog to help control anxiety and to wake him from nightmares caused by post-traumatic stress disorder.

After he successfully completed the training program, the trucking firm refused to advance him to its driver-orientation additional training on the road, which required staying overnight from home. Moreover, the company had a “no pet” policy and never hired him.

Incidentally, the EEOC noted that at the same time the company had denied the applicant’s request to accommodate his service dog, it developed a new service dog process to address requests seeking the use of such animals.

The EEOC has asked the court to order the company to hire the applicant and pay him back pay as well as compensatory and punitive damages.

The agency notes that using a trained service dog can be a reasonable accommodation for a disability and that employers must consider requests to use a service dog seriously.

April Is Distracted Driving Awareness Month: Educate Your Staff

A truck driver texts while behind the wheel

As accidents skyrocket in part due to people using their smartphones while behind the wheel, April has been designated Distracted Driving Awareness Month – a great time for you as an employer to further promote safe driving among your staff.

Hammering home the importance of safe driving can keep your employees from causing serious damage or worse to a third party, and also help keep your insurance costs in check.

That’s especially important now as commercial auto insurance rates are rising due to a combination of factors, including:

  • More traffic – The number of total miles driven has increased 50% faster in California than in the rest of the country since the start of 2015, and more vehicles and mileage equals a higher frequency of accidents.
  • Distracted drivers – 25% of accidents now involve at least one driver talking on a phone, texting or using some smartphone feature.
  • Escalating medical costs – Medical care costs are increasing at a significantly higher rate than other costs, like repairs.
  • More fatalities and other severe accidents – Accident rates per person and per mile of driving are rising.
  • Inexperienced or poor commercial drivers – There is a general shortage of skilled commercial drivers with good driving records.
  • Rising auto repair costs – Record U.S. auto sales mean garages are often servicing newer cars, many of which are equipped with more expensive parts.


While you are likely to see an increase in your insurance rates even if you’ve had no accidents, you’ll want to make sure that you continue focusing on safety to reduce the chances of future accidents.


Liberty Mutual Insurance Company recommends that employers who have driving employees:

Implement a fleet safety program

This should include:

  • A questionnaire to weed out employees and job applicants with poor driving records,
  • Requiring road tests for new driving employees,
  • Training them in post-crash procedures and reporting,
  • Carrying out continuing driver training and education,
  • A policy on mobile devices by drivers,
  • Having a list of sample safe-driving performance expectations, and
  • Conducting regular vehicle maintenance and inspections.


Enforce company policy for use of vehicles

Use standard operating procedures like limiting personal use of company vehicles and monitoring who can use them.


Hire qualified drivers

Create a form for each applicant to document their driving history, employer references, medical certificates, and more.


Use a company fleet

There are extra risks involved when drivers use personal vehicles on the job.


Train your drivers

Some topics you can cover in your safety training include breakdowns, distracted driving, driving under the influence (DUI), the importance of resting when tired, negotiating heavy traffic conditions, and the dangers of speeding.


Regularly check driving records

Set a schedule for checking an employee’s driving records to ferret out any deterioration in their experience, particularly if they’ve been cited for a DUI.


Review every accident

Your insurer will often be able to supply you with a vehicle accident form for your employees to fill out and follow in case of an accident, including witness names, circumstances, and the other driver’s information, including insurance.


You should have contact information for the person in your office that they should contact in case of an accident.


Also, urge your drivers to take photos of the accident scene.