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Monthly Archives

June 2014

Jun 03
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Fundamentals of ADA Accommodation

By Your Employee Matters

Given the ever expanded concept of what constitutes a disability, employers will continue to face an ever growing compliance challenge. Here are some basics to be remembered:

  1. Knowledge of the need to accommodate an employee can come from numerous sources including a work comp claims manager, a company supervisor or manager, HR, the employee themselves, a union rep, a doctor, poor performance, simple observation, or some kind of hotline call.
  2. To have a good process, it must be laid out step-by-step with supporting documentation.
  3. Be interactive. Remember the rule that the first to give up on the dialogue process generally loses.
  4. Have appropriate education and training. For example, HR could create a simple video to help employees with the accommodation process.
  5. Allow managers to engage in simple, easy and quick accommodations.
  6. Proper documentation of all steps in the process.
  7. Ongoing communication, monitoring, feedback, and improvement.

The accommodation process begins with a needs assessment. This means a thorough review of the job description and duties and a clear understanding of the employee’s limitations including potential absences etc. Remember you can accommodate an employee by the following means:

  • Changing facilities or equipment
  • Job restrictions
  • Modifying schedules
  • Modifying a test, training, or policies
  • Offering vacant positions within their skill range
  • Offering temporary positions (the ADA does not require you to create a new position for an employee)
  • Support including readers, interpreters, or even dogs
  • A leave of absence
  • Any other idea that would generate a reasonable accommodation

Proper documentation of any undue burden

One of the biggest mistakes an employer makes is to assume in advance that an accommodation would create an undue burden. If the request is reasonable, the best approach is to let them try it and to be clear about performance standards. Document any shortcomings their accommodations may be causing and continue to communicate about ways to elevate them.

There is extensive material on the ADA on HR That Works including flow charts, checklists, forms, and policies to use. There is also training you can provide your managers (a good idea). Also remember if you have over 50 employees the FMLA may allow an employee who has serious medical condition up to 12 weeks of leave which they may use instead of accepting an accommodation.

Jun 03
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So Who Will Get the Raise?

By Your Employee Matters

Last year the consumer price index increase was 1.6%. It is scheduled to be closer to 2% in 2014. Therefore if an employee wants to get ahead in life they need to get a raise of at least 2%

According to a survey by Towers Watson Data Services employers are planning to increase wages an average of 2.9% in 2014. These increases won’t be distributed evenly. Those employees considered to be top performers or in top demand will receive the lions share.

Employers can make a big mistake by looking at their historical compensation patterns. Perhaps the most important question to ask is “what would you have to pay to hire that employee today?” It is the marketplace, not your compensation scheme, which defines a fair day’s pay.

Before anyone gets a raise they should be asked to explain how they’ve added more value to the company. One reason we designed the form Why I Deserve a Raise. When you think about it, a raise should be given any time an employee has added new value and you’ve got the cash flow to afford it. Waiting around for an annual comp discussion is yesterday’s thinking.

Jun 03
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General Safety Obligations for Employers

By Your Employee Matters

OSHA laws apply to every workplace. Here are the primary employer responsibilities according to OSHA:

Employers must provide their employees with a workplace that does not have serious hazards and follow all OSHA safety and health standards. Employers must find and correct safety and health problems. OSHA further requires employers to eliminate or reduce hazards first by changing working conditions rather than just relying on masks, gloves, ear plugs or other types of personal protective equipment (PPE). Switching to safer chemicals, enclosing processes to trap harmful fumes, or using ventilation systems to clean the air are examples of effective ways to get rid of or minimize risks.

Employers must also:

  • Inform employees about hazards through training, labels, alarms, color-coded systems, chemical information sheets and other methods.
  • Keep accurate records of work-related injuries and illnesses.
  • Perform tests in the workplace, such as air sampling required by some OSHA standards.
  • Provide hearing exams or other medical tests required by OSHA standards.
  • Post OSHA citations, injury and illness data, and the OSHA poster in the workplace where workers will see them.
  • Notify OSHA within 8 hours of a workplace incident in which there is a death or when three or more workers go to a hospital.
  • Not discriminate or retaliate against a worker for using their rights.

Note that if you are in the states below there are state laws and regulations you must also comply with. To get more info go to OSHA, your state OSHA site or the BNA State Laws Summaries on HR That Works

Jun 03
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EDITOR’S COLUMN: Growing Concerns about Employee Retention

By Your Employee Matters

Over the years we surveyed the thousands of companies that use HR That Works. Hiring somebody they can trust has been the number one concern of most companies. The second and third concerns have everything to do with the economy. Prior to the 2009 recession, employee retention was the second greatest concern with employee productivity being the third. Once the recession hit and everybody is hanging on for their dear lives, retention slipped into third place with productivity being the second greatest concern in the squeeze economy.

In last year’s survey retention climbed back into second place, once again indicating its bellwether position. Not only are employers concerned about retention, it’s hiding behind the fact they are having difficulty finding quality employees despite continued high unemployment levels.

More than ever, employers must do a good job of employee retention. The greatest factors in retaining your experienced employees are the opportunity for advancement and the relationship they have with their immediate boss. What it takes to advance an employee’s career should not be a mystery at your company. I encourage our members to go to O*NET and consider looking at their career ladder tools and modifying them for your organization. Don’t force employees to either guess about what the career ladder is or have ask you to find out. Tell them. Let them know what the opportunities are and what skills and experience will be required for them to reach the next level. If you are at a smaller company don’t let the lack of advanced job titles hinder career growth. Perhaps making up a new job title is better than telling an employee there is no room for advancement. There should always be room for advancement for excellent employees.

When it comes to the relationship with the boss, the question is simple: Does the boss spend any time showing the employee they care about them? Most bosses are running for their lives and spend more time dealing with the dramas created by the 20% non-producers than nurturing their top talent. There can be no greater mistake. All of your managers should have a plan for how they will help increase the quality of relationship between them and their top performers. That plan should include discussing job performance, career advancement and compensation opportunities.

HR That Works Members should use the Now That I Got Them How Do I Keep Them Training Module with its related forms, audits, videos, and more. Look at this month’s Form of the Month, The Employee Retention Program Possibilities Spreadsheet which will provide plenty of ideas for a retention programs.

Jun 03
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Personal Pick-up Use in Business

By Business Protection Bulletin

The personal automobile policy does not anticipate primary business use of a pick-up truck. Does it allow infrequent use of pick-ups to haul business supplies or furnishings? Arguably yes for every form of personal automobile. Does it anticipate a pick-up truck wrapped in corporate logos and phone numbers? No.

As a business owner, you are better off using a commercial insurance form to cover your personal trucks if you use them in business regularly.

But what about your employees using theirs?

Typically, and this is a point of debate among insurance professionals, personal pick-up trucks have a business use exclusion built into the policy. The test is whether the truck is used primarily or incidentally for business use. So if the employee’s insurance doesn’t cover a claim, who gets sued next?

The company should buy non-owned automobile coverage for this purpose. Non-owned coverage protects the business from lawsuits brought by injured parties involved in accidents with employee, rental, or borrowed vehicles used in the course of business.

What happens if the business owner borrows and drives an employee’s pick-up for business purposes?

If neither personal policy covers business use of trucks, where is the coverage for the business owner himself?

Non-owned auto coverage is a commercial automobile policy extension for the business, not the business owner personally. The business owner should endorse the commercial policy with a “Drive other cars” endorsement. This endorsement extends the commercial policy to include personal coverage for designated drivers listed while driving other vehicles on behalf of the business.

Companies make a distinction between commuting to work or school or just pleasure. This distinction is not because they believe all you do is commute back and forth; it’s because that limited use is higher risk. Companies may list a pick-up truck for business use on a personal policy, but they anticipate limited use. The debate among risk managers is where this line is drawn.

Rather than accept that risk, place all business use trucks on a commercial policy. Add to that policy a non-owned and drive other cars endorsement to be personally protected and to properly protect your business.

Jun 03
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Do you know if you’re providing a service or product?

By Business Protection Bulletin

Sounds like a simple question, right? It’s not. Yet, it’s fundamental to insuring your business.

Consider a software developer. If they develop an application or program that widely applies and it’s sold to the general public, it’s a product. If it’s developed for a unique user, it’s a service.

The difference from an insurance perspective is whether you need products liability or professional liability.

Professional liability implies a consultation, advice, or design like medicine or law or architecture. But how about hair styling, data management or decorating. Interior decorators earn commissions on furnishings, but isn’t it the design people are buying?

When you review your company operations, think about the amount of design that goes into your finished product, and how specific it is to one client. Every product or completed operation requires some design. The insurance professional can help determine when a professional liability exposure occurs.

Let’s look at a construction management company. They value engineer a project, review plans, manage time-lines, draw and review plan specifications and coordinate sub-contractors. All of these duties are service in nature and are covered by professional liability.

Site supervision is a service. Now the site supervisor picks up a hammer and helps finish framing a concrete form. The super just crossed into completed operations, a general liability coverage.

Professional liability suggests a more personal element – professional reputation. Products and completed operations (general liability) resolves claims by assessing damages to people or property as a result of defective products or finished processes. The insurance company acts on the company behalf to settle the claims.

Professional liability settles disputes similarly except the professional can deny the claim theirself. If they choose this path, whatever the insurance company could have closed the case for becomes the maximum limit. Obviously, this course of action is risky.

Legal and claims costs are separate and in addition to the general liability limit but cost toward the professional liability limit. If you provide a service, keep those legal costs in mind when selecting a limit of liability. Professional liability requires higher limits.

Jun 03
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How are your products protected from hazards while being shipped?

By Business Protection Bulletin

Once your goods have left your store, who protects the value of the product while being shipped, stored, loaded and unloaded, and delivered?

Shippers have very limited liability for the packages they deliver. Trucking lines may have limits of one dollar per pound; ships as low as five hundred dollars per container. Your property policy usually lists transportation limits as an extension of coverage of a few thousand dollars.

Obviously, inventory, machinery or products can far exceed these limits in value.

The most inclusive way to cover your property in transit is with a cargo policy which covers loading, transportation, unloading for storage or final destination, storage, loading, transport (on land or sea), unloading and delivery.

Yes, each of these steps can be an exclusion, and often are, in some policy forms.

These policies go back to when shipping by water was the only choice. Ocean Marine coverage begins and ends at the dock with some extensions possible for limited land transport. Inland Marine coverage technically ends or begins at the dock.

Loading and unloading cargo was a dangerous and damaging enterprise, so it was excluded from both forms.

Ships crossing oceans did not have the advantages of weather radar and were at the whims of the winds. When storms were encountered, the ship often lightened its load by throwing cargo overboard. Marine law limited the shippers liability because the act of jettison saved the ship and the other cargo. As a fellow customer, though, your liability to pay your share of the losses was essentially limitless.

The modern cargo policy acknowledges the passage of time and the development of containerized storage and transport. The policy is designed to cover the chain of events that is shipping, including the liability of jettison.

Review your supply chain and customer shipping options. Ask your insurance professional to help design a cargo policy that covers these possibilities.

Jun 03
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Fire Extinguishers – when to replace them and how to locate them

By Business Protection Bulletin

Your maintenance schedule should include annual fire extinguisher checks and replacements. Since you check your smoke detectors monthly, you can split the building into four fire zones and service one zone per quarter if budgeting is an issue.

Contract a professional service to check and recharge fire extinguishers. Currently, the market for new units is very low and replacement can be very cost effective.

Obviously, you want to place fire extinguishers near and handy to likely ignition sources, for example cooking tops or welding areas. Here’s a few more tips to make your work space safer:

1. Think in terms of space. A fire extinguisher every 40 feet means that each extinguisher covers about one thousand two hundred square feet of space and you never need to move more than twenty feet to get one. Most codes require no more than either fifty or seventy five feet travel distance.

2. Fire extinguishers have two main uses. Either putting out small fires before they spread (trash can fires), or opening a pathway to an exit. The latter reason implies you don’t want to exhaust the supply of extinguishers.

3. Many spaces place fire extinguishers next to exit doors. Use the door instead and get out. Place the fire extinguisher on a wall within ten feet of the door to allow for use on debris blocking the door.

4. Hang arrow signs above the fire extinguishers to locate them easily. There’s no time to search when you need one.

5. Install the extinguishers at chest height for easy handling and lifting. Do not force people to bend to retrieve a fire extinguisher. Build your system for quick and easy response.

6. If you can’t fight the fire with one fire extinguisher, leave the building.

Remember, emergency equipment must be easy to find and in good working order. When you need it, it’s too late for maintenance. And, do yourself a favor, have too many fire extinguishers rather than too few.

Jun 03
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Cost Containment: how experience rating values safety

By Construction Insurance Bulletin

Workers’ compensation cost containment begins with loss control and safety fundamentals. The frequency of accidents – how many per hours worked/payroll/days – is a much better safety indicator than the severity – extent of injury – of the injury.

Theoretically, if the company has many accidents, it’s a function of time before they have a bad, or even catastrophic, one. It may just be bad luck to have one injury, and it’s a bad one.

Personal protective equipment is designed to reduce the severity of injuries while safety training tends to reduce the frequency. Therefore, safety training, job ergonomics, and awareness reduce injuries, and workers’ compensation costs, most.

The experience rating formula reflects these philosophies. The rating system compares expected losses to actual losses and sets a modification as a variance from that norm.

The “exposure unit” for workers’ compensation is payroll in one hundred dollar increments. Historical losses for an industry are compared to historical payrolls to determine a rate of loss per hundred dollars of payroll. A severity discount is applied to the expected losses. This rate is not your premium rate, just the rate of expected losses. The difference in the two rates includes the cost of claims service, loss control, administrative costs, sales commissions and taxes.

Actual losses below a certain severity threshold, and that varies state to state, are added together. In addition, severe claims are individually discounted on a scale from the threshold rate to a state maximum. These claims are added to the undiscounted frequency claims value. The resulting number is compared to the theoretical average expected losses as actual over expected. A three year historical period is used.

The resulting ratio is the experience rating. Poor experience will result in a number greater than one. Good experience, below one. For example, a company has an experience modification of 1.15. That company is paying fifteen percent more for workers’ compensation than his average competitor and forty three percent more than a competitor with a .8 modification.

That’s additional cost of labor. That’s a more satisfied worker who isn’t at risk of injury. That’s a competitive edge that safety provides by reducing the frequency of injuries first.

Jun 03
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Site Safety: watch the other contractors too.

By Construction Insurance Bulletin

Not everybody reveres safety as we do. Keep an eye out for those contractors on your site. If you spot them, avoid them like the plague.

When the masonry contractor throws his mud pan off a scaffolding without looking, or an electrician is standing in a puddle, it’s time to clear the area.

But less dramatic concerns include spreading bad habits, distractions, and job shut downs.

Somehow bad habits spread quicker than good ones. If the crew next to you operates outside your comfort zone, speak directly to the on-site supervisor and request corrective actions. Be sure your crew sees this interaction. If this confrontation does not result in safer conditions, move your crew to an alternate work area if at all possible. Demonstrate safety as the number one priority.

Suppose the other crew is not wearing protective eyewear. Maybe your crew is unlikely to get injured as a result, but how about your liability exposure? Your shard lands in their eye, and you’re paying regardless of their lack of diligence. Get the general contractor involved if necessary.

Your well-trained crew may be distracted by another group acting unsafely. Distractions create potential injury scenarios. The site moves ahead more productively when people work without a sideshow.

Severe infractions that can bring OSHA regulators or local officials in to close a site. Without being in the wrong, site closure costs you money. Report poor work conditions to the site supervisor immediately. Of course, document reasons and requests whenever you demand safer operations.

Remember: you are responsible for the safety of your employees and the profit of your company. Unchallenged unsafe conditions leading to site closure does not protect either employees or profit.

Take in the big picture when assessing your own site safety. Your crew works within a system. If one part of that system is unsafe, the site is unsafe. Do what you can to fix those situations.

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