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Monthly Archives

May 2010

May 01
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EMPLOYEE TESTING NOW EASIER THANKS TO SUPREME COURT RULING

By Construction Insurance Bulletin

Many organizations use tests to help them evaluate prospective employees or candidates for promotions. The tests help employers measure a person’s aptitude for a job or how well the person will fit within the organization. Some small businesses have job candidates take personality tests. A chain of video rental stores requires prospective employees to take a long multiple-choice exam similar in format to the Scholastic Aptitude Test.

Employers like to use these tests because they theoretically provide objective measures of a candidate, shielding the employer from accusations of illegal discrimination or favoritism and giving them a handy way to compare multiple candidates for the same job. However, the use of employee tests carries risks, though a 2009 U.S. Supreme Court decision lowered those risks for employers.

Title VII of the federal Civil Rights Act of 1964 requires employers to meet standards that, in this case, conflicted with one another. It prohibits employers from intentionally discriminating in employment decisions on the basis of race, color, religion, sex, or national origin. It refers to such discrimination as “disparate treatment.”� It also forbids some employment practices that, while appearing to be neutral, have a disproportionate effect on members of minority groups (what the law calls “disparate impact”).

The city of New Haven, Connecticut ran into this conflict when it administered tests to measure the readiness of city firefighters for promotions to officer status. Though the city took great pains to design and administer a fair test, almost twice as many whites passed as did blacks, and Hispanics fared even worse. Fearing a lawsuit based on the disparate impact of the test, the city decided to throw out all the results. This decision led a (mostly white) group of firefighters who had passed the test but not received promotions to sue the city, claiming that the city discriminated against them because of their race. The trial court and a federal appellate court sided with the city, but the U.S. Supreme Court ruled in favor of the firefighters.

The court acknowledged that an employer could be liable for the disparate impact of a promotional exam. However, this would be the case only if the exam was not related to the job and necessary for the business, or if the employer had the option of using a different, non-discriminatory exam and chose not to use it. The court further said that the city was wrong to throw out the test results merely because it did not like them. To justify throwing out the results, the city had to show that the test’s construction and content discriminated against minorities. Noting the efforts the city made to ensure a fair test, the court concluded that the exam was not disparate treatment. The decision set a standard for discrimination claims: Title VII allows corrective action for racial discrimination only when strong evidence exists that the employer would have been liable for disparate impact even if it had not taken the particular action.

The federal Equal Employment Opportunity Commission advises employers who use tests to do the following:

  • Administer tests without regard to race, color, national origin, religion, sex, disability, or age.
  • Ensure that the tests are validated properly for the particular positions and purposes to which they apply.
  • Identify and use alternative selection procedures when a test screens out a protected employee group.
  • Update tests so that they reflect changing job requirements.
  • Ensure that hiring managers understand a test’s effectiveness and limitations for predicting future job performance.

Used properly, tests can be a useful tool for evaluating job candidates, but employers must recognize the pitfalls into which tests can lead them.

May 01
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UNDERSTANDING THE WORDS “PRIMARY AND NONCONTRIBUTORY” IN A GENERAL LIABILITY POLICY

By Construction Insurance Bulletin

Construction contracts often require a subcontractor’s General Liability insurance policy to name the owner or general contractor as an additional insured on a “primary and noncontributory” basis. This seemingly simple requirement can cause a lot of difficulty and might hamper the sub’s ability to start the project. The International Risk Management Institute recommends that risk managers not include this requirement in contracts. Insurance agents can add wording to a certificate of insurance only if the insurance company approves it. Insurance companies tend to resist adding this language to their policies and certificates. Why are the words “primary and noncontributory” such a problem?

In liability insurance claims, when two policies cover the same loss, one usually applies on a primary basis and the other on an excess basis. This means that one will pay first (the primary policy), and the other will pay only if the primary policy either does not cover the loss at all or if the amount of insurance is not enough to pay for the entire loss. For example, if the primary policy has a limit of $1 million for each occurrence and the amount of the loss is $1.5 million, the primary will pay its limit of $1 million and the other policy, which applies on an excess basis, pays the remaining $500,000.

If both the general contractor and the subcontractor have bought modern editions of the Insurance Services Office’s Commercial General Liability Coverage Form, the subcontractor’s policy is primary automatically. The form’s wording makes the insured’s coverage excess over any policy that has added the insured as an additional insured by endorsement. Therefore, the “primary” part of the requirement is a minor issue.

The “noncontributory” requirement is more of a problem. Most contracts do not define the term’s meaning, and most insurance policies and endorsements do not include it at all. The GC may believe it means that its policy will not pay even on excess basis; if the sub’s limit of insurance is not large enough to cover the loss, the GC may expect the sub to pay the remainder out of pocket.

The standard additional insured endorsement to a general liability policy covers the additional insured with respect to liability for injury or damage caused at least in part by the sub’s acts or omissions. It also covers liability for acts or omissions of those working for the sub. Coverage lasts as long as the sub has ongoing operations for the additional insured. It does not say anything about the additional insured’s coverage being noncontributory. This is the problem: It is not standard insurance industry practice to cover additional insureds on a noncontributory basis. Insurance companies are reluctant to change that, as they want the additional insured’s coverage to contribute toward paying for the loss. A GC has less incentive to prevent losses when it knows that its own insurance will not be needed.

If you run into this requirement, notify one of our agents immediately and ask the insurance company to provide the coverage. If it won’t, you must notify the GC and negotiate alternative terms in order to avoid breaching the contract. The GC may agree to accept the standard endorsement with a promise not to reduce its coverage. You should also consider asking about seeking this coverage at the next policy renewal. Most importantly, understand what the contract requires and ask questions about provisions that are unclear. No one wants to find out after an insured loss that you must pay part of it out of pocket.

May 01
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CONDUCT INSPECTIONS AND TRAIN EMPLOYEES TO PROMOTE SAFETY WHEN USING HEAVY EQUIPMENT

By Workplace Safety

Safety is a concern in every workplace. It might come as a surprise to some employees that their own safety, as well as the safety of their coworkers, is not reliant on the mechanical health of company equipment alone. In fact, the way you handle the training your company provides to you, as well as the safety guidelines of the workplace, go just as far to ensure safety as properly working equipment does. Let’s examine the three main components of workplace safety and the conservative guidelines that should be followed in each.

Safety Component One: Equipment Safety

  • Make sure that equipment is inspected each day before it is used. Some of the items to look for include:
    • Are the headlights and taillights functioning properly?
    • Do the reverse lights and sounds work?
    • Do the brakes (including the emergency brake) work?
    • Is the windshield free from any obstruction?
  • Ensure that the equipment is maintained on a regular schedule. Your company should have a routine maintenance schedule for all heavy equipment. Be certain to adhere to the schedule.
  • Be aware of new problems. If you are the normal operator of a piece of equipment and notice that it is not behaving as efficiently or it’s in a state of disrepair, bring your concerns to the attention of your supervisor immediately.
  • Always use the equipment as you were trained to and in a manner consistent with what the equipment was developed for.

Safety Component Two: Training

  • If you use heavy equipment, make sure you fully understand how to use it and inspect it. If you believe your prior training is insufficient, make sure to mention that and ask for additional resources.
  • Stay up-to-date with the various hand signals that OSHA requires crane operators and signal men to utilize. Realizing that you’ve forgotten some of the signals right as you need to use them is extremely dangerous. If you were to communicate the wrong message, you could be putting yourself and others at serious risk.
  • Take all workplace training seriously and always pay attention to the task at hand.
May 01
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CLEAN AND TIDY WORKPLACE MAY BE MORE CRITICAL THAN YOU THINK

By Workplace Safety

Good housekeeping is the first step to a safe workplace. Although vehicular maintenance and equipment safety are important issues, it is also necessary to pay attention to the little things that are often overlooked, like general workplace cleanliness. General cleanliness encompasses the day-to-day duties that every employee handles during the work hours — from keeping the sink clear of sharp knives to putting away materials that are no longer in use. Although you might chalk up many of these actions as common sense, you would be surprised by how many accidents are caused by a general lack of cleanliness.

Step 1: Pay Attention to the Floors

Employee trips and falls are painful, expensive and can result in a loss of mobility that impacts the employee’s life both on and off the job. Basic guidelines should be followed for workplace cleanliness and organization, to minimize the possibility of accidents:

  • Keep floors clean so that they do not become slippery. Make sure to clean up tracked in water and mud, spilled chemicals and oil.
  • Place “Wet Floor”� signs on the floors when necessary. And when you observe these signs, avoid walking in that area by taking another route.
  • Clear all debris or piles from paths in your workplace. Stacks of paper, piles of loose tools, and anything that does not belong in a walkway should not be in a walkway.
  • Make sure equipment and materials used in your workplace have safe and proper storage places. The storage areas should not block walkways or impede travel throughout the building.
  • If you notice any loose floor tiles or carpeting, or protruding nails and screws, notify your maintenance department.
  • Walk in designated walkways. In factories, machine shops and other workplaces, taking shortcuts by walking in between machines and assembly lines can be perilous. Instead, use the designated walkways in your area.

Step 2: Prevent Potential Hazards

From chemical spills to falling objects, the potential hazards in any workplace are staggering. Safety is everyone’s responsibility. Keep these simple tips in mind each day, and you can help reduce the likelihood of injuries.

  • Do not stack or put away objects and materials so they overhang or stick out of the place in which they are kept.
  • Never pile papers or stack other objects so high that they become unstable.
  • Make sure pallets are always stacked in a neat pile with no pallets sticking out.
  • Keep a clear route to sprinklers, lights, electrical equipment, vents, fire alarms, and fire extinguishers.
  • Make certain hazardous chemicals are stored properly and in the correct, clearly labeled containers. Always keep them sealed according to factory instructions, and never leave them out where they can be tripped over or accidentally spilled.
  • Be sure to keep oil away from other debris.
  • Dispose of all chemicals and trash properly.

By practicing these good habits on a daily basis, you not only reduce the likelihood of an accident or injury, but you also create a cleaner, more efficient workplace that improves the attitude and energy level of everyone at the job site.

May 01
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LEARN TO DRIVE SAFELY ON RAIN-SOAKED ROADS

By Workplace Safety

As a truck driver, there are many things you can control. You can control your steering and where you stop for the night. One thing that is out of your hands is the weather. Rain, sleet, hail and wind will all present themselves on different days to make your job more hazardous. The most often encountered adverse weather condition is rain, so learning how to drive safely in it, and prepare your vehicle for it, is vital.

Take Preventative Measures before the Rain

Your vehicle should be prepared for all kinds of weather, before you actually encounter that weather.

Here are some tips for readying your vehicle for rain:

  • Keep your windshield wipers in good working condition. Old windshield wipers do not provide you with a clean windshield that you can safely see through.
  • Make sure your tires are properly maintained. Tires that are properly filled and have deep tread will make rainy day driving much safer.
  • Test your headlights, turn signals and brake lights, and make certain all are working as they should. A non-functioning headlight is dangerous both at night and when it rains. The same applies to your brake lights and turn signals.

How to Drive Safely in the Rain

At the onset of rainy conditions, you should immediately change your driving style. Follow these guidelines to keep yourself and those around you safe:

  • Slow down and follow the three-second rule. Wet roads can impair the speed with which your vehicle comes to a stop. Take the extra time to slow down, and don’t follow the car ahead of you too closely. To begin slowing down, try taking your foot off the gas pedal rather than braking.
  • Choose the middle lane to avoid puddles in the left and right lanes.
  • Never drive through a puddle unless you can see the ground beneath it. If you have no choice but to go through a puddle without knowing how deep it is, make sure you go slowly and never go through a puddle deeper than the bottom of your doors. After driving through the puddle check your brakes before you begin traveling at faster speeds to make sure they were not adversely affected by the water.
  • If the rain becomes heavy and your visibility is severely limited, pull over and wait until conditions are better.
  • Try to drive in the tracks of the vehicle in front of you.
  • Always use your headlights and windshield wipers. If your visibility is restricted due to windows fogging inside the cab, turn up your defroster. You should also open your windows to improve the air circulation.
  • Use extra caution when driving through oil patches in the road since these can be especially slick.

How to React to Hydroplaning

There are times when the amount of water on the road accumulates and your vehicle can’ push it away from the tires. When this occurs, you lose connection with the pavement and end up riding on top of the water. This dangerous situation is called hydroplaning. Since you are driving on water there is no traction to be gained and you are simply gliding. This is extremely hazardous and requires immediate action:

  • Slow down by taking your foot off the gas. If you are driving slowly enough, the chance of hydroplaning is reduced. If you end up hydroplaning, further speed reduction is necessary.
  • Avoid using your brakes when hydroplaning since that could force your vehicle to skid and possibly jackknife.
  • Avoid turning your steering wheel. This too can cause a skid.
  • As you begin to slow down, your vehicle should come back into contact with the road. When this happens, you will feel more firmness in the steering wheel. At that point you can start pumping your brakes gently to slow down and you can also begin steering your vehicle to gain control.
May 01
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SMALL BUSINESSES CAN BENEFIT FROM NEW IRS HEALTH CARE TAX CREDIT

By Employment Resources

The recent health care legislation signed into law by President Barack Obama contains a Small Business Health Care Tax Credit that will help small businesses with the cost of providing their employees with health care. The tax credit’s benefits are available immediately for the 2010 tax year.

According to the Congressional Budget Office, small businesses are expected to save an estimated $40 billion by 2019, due to the Small Business Health Care Tax Credit. The tax credit is effective retroactive to January 1st, 2010 and covers up to 35% of a small business’s premiums, with the rate increasing to 50% on January 1st, 2014.

Although non-profit organizations are eligible for the credit, they will receive a lower percentage. Tax exempt organizations will be able to receive up to a 25% tax credit in 2010, which will be raised to 35% in 2014.

The tax credit has broad eligibility, covering 4 million small businesses. Any business that pays at least 50% of employee health care costs, employs the equivalent of 25 or fewer fulltime workers (allowing eligibility for companies with 50 part-time workers), and pays an average employee salary of $50,000 or less (not including owners and their family members) will be eligible for the Small Business Health Care Tax Credit.

The maximum credit of 35% is available for small businesses with 10 or fewer fulltime workers and an average salary of $25,000 or less. For businesses that pay employees between an average of $25,000 and $50,000, the tax credit gradually phases out. The gradual phase out also applies to businesses that employ an equivalent of 10 to 25 full time workers (20 to 50 part time workers).

Businesses are able to claim the credit for a total of six years. They will be eligible to claim the credit for four years, from 2010 to 2013, and then any two years after the 2013 date.

To keep businesses from abusing the system by picking a high-cost plan, the Small Business Health Care Tax Credit will only be eligible for the average health insurance cost of the state where the business is located. This information will be provided by the IRS at a later date.

For more information, refer to the IRS website.

May 01
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UNDERSTANDING COBRA COVERAGE: WHEN TO OFFER, AND WHEN NOT TO

By Employment Resources

Employers with 20 or more employees and offering group health coverage must offer a continuation of that coverage under COBRA, to covered individuals who lose that coverage upon the occurrence of a qualifying event. Most employers are well aware of the importance of offering COBRA when required to do so, and of the penalties for not complying with the law. However, it is also important to understand the circumstances under which COBRA need not be offered, because offering COBRA when it is not required can result in unnecessary expense. When an individual is covered under an employer’s group health care plan, and then loses that coverage due to the occurrence of a qualifying event specified in the COBRA statute, COBRA coverage must be offered. Qualifying events include:

For covered employees

  • Voluntary or involuntary termination of employment, for reasons other than gross misconduct.
  • Reduction in the number of hours of employment.

For spouses covered under the group health plan-

  • Divorce or legal separation.
  • Death of the covered employee.
  • The covered employee becoming entitled to Medicare.
  • Plus, the voluntary or involuntary termination of the covered employee’s employment, for reasons other than gross misconduct; or a reduction in the number of hours of the covered employee’s employment.

For dependent children covered under the group health plan-

  • Loss of dependent child status under the rules of the group health plan.
  • Divorce or legal separation of the covered employee.
  • Plus, the voluntary or involuntary termination of the covered employee’s employment, for reasons other than gross misconduct; a reduction in the number of hours of the covered employee’s employment; the covered employee becoming entitled to Medicare; and the death of the covered employee.

Review this list of qualifying events and the other conditions for COBRA eligibility (for example, that coverage loss is a result of the qualifying event, and not from some other reason). It’s clear to see that there are numerous situations under which COBRA coverage need not be offered. For example:

  • An employee tenders his or her resignation from employment. Because no termination of employment has yet occurred, an offer of COBRA would be premature.
  • The employer changes health plans or insurance carriers, and the new coverage is less generous than before. Though the plan coverage may not be as good, coverage has not been lost, which is one of the requirements for COBRA eligibility.
  • The employee voluntarily drops coverage, but does not terminate employment or reduce hours. Later, the employee terminates employment. Though the termination of employment is a qualifying event under the COBRA statute, it did not lead to the loss of coverage. Therefore, this is not a situation for which an offer of COBRA coverage need be made.
  • The employee and spouse split up, but do not divorce or legally separate. A divorce or legal separation that results in a loss of coverage under the group health plan is a COBRA qualifying event. If spouses only physically separate, it is not a COBRA qualifying event.
  • A COBRA-triggering event occurs that requires notification to the administrator by a covered individual (e.g., divorce/legal separation, loss of child dependent status), and no notification is given within 60 days of the qualifying event. The employer is not required to extend an offer of COBRA coverage.

COBRA is a complex law, and compliance is critical. In the quest to be compliant, it is important not to “over offer”� COBRA, because the potential cost is too high. Review COBRA’s requirements periodically with one of our benefits professionals, to ensure your company is complying, while not offering COBRA in unnecessary situations.

May 01
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HELP DISABLED WORKERS GET BACK INTO THE WORKFORCE AS SEAMLESSLY AS POSSIBLE

By Employment Resources

When it’s time to welcome an employee back into the office after an unexpected disabling accident, illness, or disease it can be uncomfortable for everyone without the benefit of knowing these basic tips. Preparing your staff and making a few accommodating adjustments to the work environment will go a long way toward maintaining a professional, productive, and positive work environment for everyone.

Initial Steps – The feelings of isolation are high in someone who has been a victim of a disabling experience. You as an employer can aid in the healing process by keeping your office staff connected.

  1. Stay in touch with your employee. Encourage co-workers to keep in contact with their fellow employee by designating a member of your staff to coordinate a volunteer team of meal delivery, rides to medical appointments, or whatever support need might arise. E-mails and phone calls should also be encouraged.
  2. As their employer, educate yourself on the insurance coverage your business offers. Consult with the representative of your insurance company and with the EAPs (Employee Assistants Programs) to understand the benefits that are currently available. Work as an advocate to ensure your disabled employee is getting their full benefits for as long as they can, especially the Health and Disability insurance. Create a packet of information that addresses expected questions and needs the employee may have during this difficult time. Include Web sites, contact phone numbers for support, and insurance clarification assistance.
  3. As they recover at home, before they return to the office, offer some sort of limited responsibility opportunity, providing a light at-home work schedule with flexible hours and low pressure terms. Have another member of your staff, with similar job responsibilities help with their work load, so when they return there is not an overwhelming pile of papers to sift through.

Transitional Steps – Assuming your employee will be returning to the office, there are some preparatory steps that you can take to make the transition easier on everyone that will be affected directly by their return.

  1. Based on the injury or disability, evaluate the individuals work station to determine if adjustments need to be made in respect to accommodating a wheel chair or other adaptive furnishings. Address the technology of the job to determine if adjustments need to be made, such as a phone headset or raised or lowered keyboard.
  2. If possible, provide a reserved parking space for your returning employee as close to the building as possible. You might need a ramp or some other assistance for ease of entry into the building.
  3. Brainstorm with the rest of your staff to determine other ways to help everyone feel more relaxed about the team member’s return. This could include a “Welcome Backâ€� banner, a potluck lunch, and a generous amount of flowers, balloons, or cards collected in the cubicle.

Final Phase Steps – Alleviate unnecessary stress by implementing these final steps when your employee returns to work.

  1. Designate an escort to greet the returning employee into the building. Introduce them to the provisionary changes that have been made in the building to accommodate their special needs.
  2. Provide a debriefing with all the new business information needed to bring the employee up to date. Things to include could be staff promotions and changes, schedule and responsibility changes, and a benefits update.
  3. Allow the employee the “space” they need in the first week to make personal adjustments to their schedule. Part time work might be appropriate or at least some sort of rest period during the day. Check in personally with the returning team member to offer support and evaluate how the transition is working.
May 01
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HEAR YE! HEAR YE! FIVE STEPS TO A SUCCESSFUL HEARING CONSERVATION PROGRAM

By Risk Management Bulletin

Noise isn’t a new hazard in the workplace, but it sometimes doesn’t get the attention it deserves. Repeated, unprotected exposure of your employees to loud noise can lead to permanent hearing loss. When information (such as noise monitoring) indicates that any employee’s exposure might equal or exceed an eight-hour average of 85 decibels (dB), OSHA requires you to implement a “hearing conservation program.”

An effective program should concentrate on five key areas:

  1. A noise-monitoring program. Monitor noise in work areas to identify employees subjected to noise at or above 85. Make sure to have the instruments used for this checked and calibrated carefully before each survey. Keep records of noise monitoring for two years.
  2. Engineering and administrative controls. If monitoring identifies work areas with exposure levels of 100 dB, determine the engineering or environmental changes needed to reduce noise levels. Consult with your safety committee to set up appropriate administrative controls, such as rotating employees in and out of high-noise areas.
  3. Personal protective equipment (PPE). Provide employees exposed to noise levels of 85dB or more with appropriate hearing protectors, free of charge. Use a PPE hazard assessment to select the type of PPE that provides the best protection.
  4. Audiometric testing. All employees exposed to noise levels of 85 dB or greater must have a baseline audiogram within six months of the first exposure, and every year thereafter. If an audiogram shows hearing loss has occurred compared with the baseline, inform the employee, reevaluate hearing protection, retrain the employee if necessary, and refer them for clinical audiological evaluation. Record any threshold shift (hearing loss) of 10 dB or more that results in an overall hearing level of 25 dB on the OSHA Form 300 under “Hearing Loss.”
  5. Employee training. Supervisors must conduct annual training sessions for affected employees on the elements of your hearing conservation program. These sessions should include the effects of noise on hearing; the purpose of hearing protectors and how to use and maintain them, and the reasons for audiometric testing and an explanation of test procedures. Be sure to document this training.
May 01
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DRIVE HOME THESE DEFENSIVE DRIVING TIPS

By Risk Management Bulletin

Motor vehicle accidents are the most common cause of accidental death and of workplace deaths representing about one in four fatal work injuries. Whether your employees drive on the job or commute to work by car, they need defensive driving training. An effective plan should include these basic rules:

  • Buckle up for safety.
  • Follow traffic rules, signs, and signals.
  • Don’t speed.
  • Maintain a two to four second gap behind the vehicle in front of you, but don’t fixate on it. Scan ahead as far as possible to watch and plan for emerging traffic situations.
  • Keep your eyes on the road, your hands on the wheel, and your attention on traffic.
  • Check your rearview and side mirrors frequently.
  • Adjust your speed and driving to changing weather and traffic conditions.
  • Expect the unexpected and be especially alert in heavy traffic for sudden stops, vehicles passing or moving in and out of lanes, road debris, and work zones.
  • Keep cool, yield right of way, and avoid disputes with other drivers.
  • Pull over to make or receive phone calls.
  • Don’t drink or take drugs and drive.

Be sure to stress vehicle maintenance. A safe, roadworthy vehicle is an indispensable part of driving safely. If the vehicle is unsafe, the driver and others on the road are at risk. Teach your employees to keep their vehicles maintained properly and follow the manufacturer’s recommendations for oil changes, tune-ups, and so on. Also, remind them to inspect their vehicles frequently between service checkups.

Our risk management professionals would be happy to help you implement a comprehensive safe driving program for your employees. Just call or send us an e-mail.

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