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Monthly Archives

January 2017

Understanding Pension Plans

By Employment Resources
er-1701-4Attracting and keeping good staff is essential to the longevity of your business. Understandably, the availability of retirement benefits ranks high on the list of employee concerns. Creating a pension plan that’s guaranteed by the federal government adds credibility to your retirement offerings and helps protects your employees.

Under “defined benefit plans,” the employer pays the retired employee a fixed amount for a given period. The amount varies, depending on the employee’s length of service, income earned, and age. Because employers fund these plans by contributing to investment funds controlled by money managers, it’s essential to choose highly qualified and reputable fund managers.

Under the increasingly common “defined-contribution plans,” employees contribute to their own retirement accounts, assuming part of the investment risk. In some cases — ideal for employees — employers also contribute to the plan by matching the employee’s contribution up to a certain percentage. The most common type of defined-contribution plan is a 401(k). Even though employees take an active investment role in defined-contribution plans, your company’s advisors and the money managers you use are still fiduciaries with significant liability risk.

Both types of plan are “qualified” pension plans backed by the federal Pension Benefit Guaranty Corporation (PBGC).

For more information about qualified pension plans and how to insure them and their fiduciaries, call our service team today.

Work-Life Benefit Options

By Employment Resources

Voluntary benefits have been gaining traction with employers and employees as valuable supplemental coverage to a core benefits package. For example, in today’s age of skyrocketing medical costs, programs such as Disability, Accident, and Critical Illness insurance are increasingly popular with workers concerned about paying for health care.

Although these primary plans have been garnering most of the attention, a number of voluntary “work-life plans” are also important in employees’ daily lives, yet are often overlooked. These benefits are easy to implement and are generally available to employees at special group discounted rates through payroll deduction.

Popular work-life plans include:

    • Identity Theft protection. This coverage help victims manage the cost and hassle involved with clearing their good name and credit.
    • Auto and Homeowners insurance: These basic policies are usually available at group rates.
    • Legal Services. Helps employees pay for the services of licensed attorneys for such matters such as will preparation and real estate purchases.
    • Pet insurance: Assists workers in picking up the tab for the veterinary care that their beloved animal companions need.
    • Discount purchase program: Easier credit qualification requirements and payroll-deduction payments can save money for employees on essential household purchases.

Work-life benefits not only provide helpful coverages at affordable rates, but can also serve as a conversation starter help raise employee participation among other voluntary benefits.

What’s not to like?

Our agency’s professionals would be happy to analyze your benefits program and recommend the work-life options best suited to your employees. That’s what we’re here for!

Choosing the Right Benefits

By Employment Resources

Choosing-a-PR-Agency-photoWith open enrollment season in full swing, now’s the perfect time to evaluate your employee health insurance benefits. Unfortunately, a recent Aflac survey reveals that most employees don’t spend enough time evaluating their benefits packages.

*Two out of five, or 41 percent, of American employees spend under 15 minutes choosing health benefits for the upcoming year.
*Twenty-four percent spend less than five minutes selecting benefits.
*These same employees will research new cars for 10 hours, family vacations for five hours and new computers for four hours.

You owe it to yourself and your future health to invest time in choosing the right health insurance benefits.

Understand Your Benefits

Technical jargon on insurance papers can be confusing, but would you rather wade through it now or miss out on important benefits when you’re sick? Take time now to figure out which procedures are covered, where you can get treatment and how much deductible you’ll owe. Don’t be like 73 percent of employees who don’t understand their health insurance benefits.

Know What’s Changing

Maybe your employer now offers Health Savings Accounts or dental insurance. These benefit changes could help you stay healthy. Unlike 64 percent of employees who don’t take time to understand their benefit changes, you can ask about changes and understand them.

Select Partners for Long-Term Health

Now’s the time to switch coverage options if you want to switch doctors or pharmacies. While you’re inspecting your benefits package, make sure your preferred hospital and lab is covered, too. Your healthcare team partner with you for long-term health, so take time to ensure you can see your preferred partners.

Save Money

When you don’t make a careful decision about your benefits, you could be throwing away $750 a year on wasted premiums and lost benefits, which is what 42 percent of Americans do. Save that money when you invest time in choosing your health benefits.

Choose Premiums You Can Afford

Employers increasingly push rising insurance costs onto employees. By picking and choosing the benefit package options you want, you also select the premium you can afford. A few hours now prevents insurance premiums from straining your family’s budget in the new year.

Although nine out of 10 Americans auto-enroll and keep the same benefits every year, take time to ask your employer or insurance agent questions and verify the exact coverage you want. You’ll be glad you did.

Take a Look at Your Employee’s Financial Health

By Employment Resources

eb-dec-2The financial well-being of your employees affects their health, their productivity and your bottom line!

A recent nationwide survey by Purchasing Power, Inc. found that:

  • A high percentage of employees suffer significant financial stress. More than one in four workers surveyed (28%) find it hard to meet monthly household expenses and nearly half (44%) have less than $2,000 in emergency savings.
  • They bring these concerns to the job. More than four in ten (44%) worry about personal finances during work hours.
  • This stress leaves them less engaged at work and reduces productivity. Nearly three in ten employees (29%) deal with personal finances during work hours and almost half of these (46%) average two to three hours a week on money issues.

Purchasing Power Chief Revenue Officer Elizabeth Halkos offers some recommendations to help your workers maintain their engagement and productivity at the office:

  1. Help them reduce debt by offering education, either in groups (through webinars or with a live speaker) or individually so that workers can learn about topics such as budgeting, intelligent use of credit and savings programs. A referral to a qualified credit counseling agency can provide a useful follow-up.
  2. Give them access to responsible budgeting tools. Offering non-traditional voluntary benefits, such as employee purchase programs ( which allow workers to acquire high-ticket items and educational services on a “forced saving” basis through payroll deduction) can help reduce their financial stress significantly.
  3. Encourage employees to participate in retirement programs such as a 401(k) plan. However, before workers do this, advise them to deal with debt and budgeting issues and tuck away a nest egg.

Our Benefits experts stand ready to help you ensure financial peace of mind for your workers. Just give us a call.

Are You (and Your Employees) Happy?

By Your Employee Matters

phin_don_1309-9Do any of these sentences pop up into your head when you’re arriving at the workplace?

  • I really dread coming in here today
  • I’m afraid of that __________ today
  • I feel tired just walking into this place
  • This place is a disaster waiting to happen
  • I wish it was Friday
  • I wish I was anywhere but here
  • I’m ready for the fight because I know I’m right
  • I don’t care if they fire me today, they’re going to learn how I feel about it
  • I have to get so much done and I don’t know when I’m going to be able to do it.

Guess what? These thoughts pop up in the heads of your employees too. My question is what will you do to turn it around?

Many folks will wallow in a horrible complacency. Others will realize that if it’s going to change, they have to create this change. It’s both an inside and outside job.

Look at your situation like a new employee excited about the opportunity!

Wage Claims: Protect Your Business

By Your Employee Matters

em-1701-3Wage claims keep rising. According to the Seyfarth Shaw law firm, there were 7,764 federal lawsuits alleging the failure to pay overtime and other wages in the year ended March 31, 2013 –a record high, up 10% from the previous year.

An article in Corporate Counsel magazine discussing the Seyfarth Shaw report, state that these claims usually fall into one of three categories:

  1. Salaried employees who believe they are owed overtime pay
  2. Hourly workers who contend that they weren’t paid for all hours worked
  3. Restaurant workers who claim that they received no additional pay under the FLSA “tip credit” provision

According to Seyfarth Shaw partner Noah Finkel, DOL investigators have been focusing on hospitals and restaurants. Finkel points out that although these cases have been traditionally filed in California and Florida, states such as New York, Missouri, Georgia, and others are experiencing more and more claims. He and other attorneys suggest that you conduct an audit or assessment of your wage and hour practices.

Here are some additional recommendations:

    • If you’re uncertain whether employees are exempt or nonexempt, treat them as if they were nonexempt. They can end up getting paid the same amount at the end of the year as long as you calculate the appropriate wage rate when including overtime payments.
    • Use a tool such as the Employee Compliance Survey to find out if there are in fact any concerns about wage payment and follow-up on any “yes” answers.
    • Consider the hours worked by employees both before and after work. For example, in a recent case, a warehouse that required all its employees to go through a security search before they left had been required to pay wages for employees going through that screening.
    • Know the rest and meal period requirements in your state. Because federal law doesn’t govern this, make sure you that you know your state provisions Check out your BNA State Law Summary on HR That Works.

Benefits and the FMLA Leave

By Your Employee Matters

health_it_costs___benefits_database_5dThis question was recently asked of the ThinkHR Hotline team: What benefits must be continued while an employee is on Family and Medical Leave Act (FMLA) leave? What should we do with an employee who is not making his share of the copayments while out on leave?

Their expert answer: Family and Medical Leave Act (FMLA) regulations require that employers continue to provide group health benefits under the same terms and conditions as if the employee was actively at work. There is no requirement under the FMLA to continue other types of benefits offered by the employer. Whether or not an employee’s other benefits continue depend on an employer’s established policy. Any benefits that would be maintained if the employee was on another form of leave should be maintained while the employee is on FMLA leave.

Part of the requirement to continue health insurance benefits “under the same terms” means that both the employer and employee must continue to pay their portions of the group health insurance premium, unless the employer has a different policy for managing premium payments during leaves. The employer is required to notify the employee of the payment requirements while on leave, including the amount of the payment, date due, and where the payment should sent. If the employee fails to pay his or her portion of the premium, the employer may be able to suspend group health benefits for the remainder of the FMLA leave.

In order to suspend benefits for someone on FMLA leave, the employer must allow the employee a 30-day grace period to make payment after the original payment due date. The employee must receive written notice at least 15 days prior to the actual suspension, and the best employer practice is to send a pending suspension notice once the employee is 15 days past the payment date. One important item to note is that even if an employer suspends an employee’s health coverage under these terms, the employer is required to restore coverage without penalty or delay once the employee returns from FMLA leave to a level of coverage that is equal to what the employee had prior to the leave and had not missed premium payments. If the employee does not return from FMLA, the employee whose coverage was suspended for failure to pay premiums during the leave would be eligible for COBRA continuation coverage.

Don Phin, Esq. is VP of Strategic Business Solutions at ThinkHR, which helps companies resolve urgent workforce issues, mitigate risk and ensure HR compliance. Phin has more than three decades of experience as an HR expert, published author and speaker, and spent 17 years in employment practices litigation. For more information, visit www.ThinkHR.com.

Sick Leave Requirement for Contractors

By Your Employee Matters

em-1701-1On September 7, 2015, President Obama issued Executive Order (EO) 13706, which requires federal contractors and subcontractors to provide paid sick leave to their employees. The EO applies to contracts entered into after January 1, 2017 that are procurement contracts for services or construction; contracts for services covered by the Service Contract Act (SCA); contracts for concessions; or contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public. The EO adds to the small patchwork of state and local paid sick leave laws scattered across the nation.

Accrual of Sick Leave

Pursuant to the EO, sick leave accrues at a rate of one hour for every 30 hours worked. Employers may cap accrual at 56 hours (seven days) per year. Unused sick leave will carry over from one year to the next and must be reinstated for employees rehired by a covered contractor within 12 months after a job separation.

Unused accrued sick leave does not have to be paid out upon termination.

Use of Sick Leave

Employees may use paid sick leave:

  1. For the employee’s own illness, injury, medical condition, or when an employee needs to obtain diagnosis, care, or preventative care.
  2. To care for a child, parent, spouse, domestic partner, or “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship” who has an illness, injury, medical condition, or who needs to obtain diagnosis, care, or preventative care.
  3. For domestic violence, assault, or stalking situations resulting in an illness, injury, or medical condition or the need for obtaining diagnosis, care, or preventative care.
  4. To obtain additional counseling, seek relocation, seek assistance from a victim services organization, take related legal action for the employee or one of the above-listed individuals in domestic violence, assault, or stalking situations.

Employers are prohibited from interfering with or discriminating against an employee for taking or attempting to take paid sick leave, or for assisting any other employee in asserting his or her rights to sick leave.

Requests for Leave

Requests for sick leave may be made orally or in writing and must include the expected duration of the leave. If the need for leave is foreseeable, employees must provide at least seven calendar days’ advance notice. If the need for leave is not foreseeable, notice must be provided as soon as practicable. Paid sick leave cannot be made contingent on the requesting employee finding a replacement to cover any work time to be missed.

If an employee is absent for three or more consecutive days on paid sick leave, the contractor is permitted to request a certification from a health care provider (if the absence is related to a medical condition) or from an appropriate individual or organization (if the absence is related to domestic violence, sexual assault, or stalking). The certification must be provided no later than 30 days from the first day of leave.

Going Forward

The EO mandates that the Department of Labor issue regulations concerning the paid sick leave requirements by September 30, 2016. ThinkHR will continue to monitor and report on developments on this issue.

Understand and Deal with Risk

By Construction Insurance Bulletin

con-1701-4There will always be a risk that something will go awry during construction projects. When something does go wrong, the result is usually costly time delays and mild to devastating additional material, labor, and damage costs.

As far as risk goes, most construction business owners view insurance as their first line of defense. Not that insurance isn’t an appropriate risk prevention tool, but it’s not always economically feasible or efficient to try and cover each and every possible risk with insurance. There are actually many risks that can be dealt with thorough the concepts of risk transfer, risk sharing, risk retention, risk control, risk prevention, and risk avoidance. Let’s look at some key points about each:

    • Transfer of Risk.

      There are parties, aside from your own insurance, to which you might transfer the risk. The two most common risk transfers are through being named as an insured person on an alternative insurance contract, and through express indemnification clauses. When you’re named on another party’s insurance, their coverage extends to you.

      If you’re a general contractor, for example, then you might require the electrical contractor to name you on their liability policy. As long as the other party’s insurance covers the loss, your portion of any loss would be paid by the other party’s insurance policy.

      The second common method of transferring risk is through an express indemnification clause in a contract. This is also referred to as a hold harmless clause. There are three varying degrees of risk transfer. The type one indemnity clause, also called a broad form, states that the indemnitor (party that will be responsible for the loss) will hold the indemnitee (party that will be protected) harmless regardless of whether the loss was caused by the indemnitee.

      A type three clause, also called comparative fault, holds the indemnitor responsible for only the loss that they caused. The most common type of indemnification clause is the type two, also called the intermediate form. The indemnitor assumes all the risk unless the sole cause of the loss is fully attributable to the indemnitee. An example of a type two clause would be a general contractor agreeing to hold an owner harmless (regardless of whether the loss was partly caused by the owner) if the loss was caused in part or entirely by the contractor.

    • Risk Sharing.

      There are often opportunities to share the risk with the other parties involved with the construction project. The contract should have a clause that stipulates each of the involved parties would be liable for those losses caused by his/her actions or inaction.

    • Risk Retention.

      Whether they want to or not, all construction businesses are going to retain some of the more minor risks. It’s simply not monetarily feasible to cover every single risk with insurance. These minor retained risks, such as errors that cause a couple of days of redoing work, are funded from the operating budget. Insurance deductibles are another way that risk is retained. Just be sure that whatever risk is retained has a value and can be funded should a loss actually occur.

    • Risk Avoidance.

      Although risks are often tempting, such as a supplier offering a cheaper material, most risks are best avoided. If you suspect that the cheaper material could be defective, then it simply makes better sense for you to put the longevity and reputation of your business first and avoid the risk.

    • Risk Prevention.

      Risk prevention is a very broad topic with many elements, but the premise of the concept is taking action to avoid negative events from occurring in the first place. It’s usually very simple carelessness that causes accidents. So, risk prevention may include simple things like keeping passages free of debris and idle tools secure. Risk prevention should be an ongoing training program for employees, supervisors, and managers.

    • Risk Control.

      Like risk prevention, risk control is a very broad topic with many elements, but the premise of the concept is reducing the amount of loss incurred during a negative event. A good example would be posting emergency response phone numbers so that immediate help can be called during an accident. Risk control should also be an ongoing training program for employees, supervisors, and managers.

Don’t Start Work without Construction Liability Insurance

By Construction Insurance Bulletin

con-1701-3Unfortunately, mishaps on construction sites are all too frequent. The combination of multiple activities with dozens or hundreds of people operating complex and dangerous equipment, often in poor or threatening weather, can easily result in accidental injuries to workers, clients, visitors, and onlookers, leading to litigation that could cost you millions – or even put you out of business.

Construction Liability insurance will pay for legal damages (and legal costs) for worksite accidents that cause; 1) loss, damage or destruction of property, and 2) physical injuries to third parties. Thanks to the explosive growth of lawsuits in the business world, almost all building contractors will need to show that they carry a Construction Liability policy before they’ll be allowed to bid for a job.

Contractors sometimes buy this coverage on a General Liability basis, up to the amount of the policy. However, they often prefer a policy that covers an individual project over a set time at a fixed dollar value, based on such factors as the number of workers or contract employees, and the size and nature of the operation. Some types of construction jobs – such as roofing, foundation work, and high- rise or large scale commercial projects with more workers per site – are more risky than others.

Your Construction Liability policy will probably set maximum amounts both on a “per incident” basis and for “umbrella” coverage. It should also include Personal and Professional liability for acts by company owners and managers, and cover damages from fire and medical-related claims from incidents on the job site that don’t fall under a standard Workers Compensation policy.

We’d be happy to review your firm’s exposure to the construction-related liability risks you face and recommend a comprehensive protection package that can help give you peace of mind on the job.