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Monthly Archives

April 2009


By Your Employee Matters | No Comments

OSHA has ordered Southern Air Inc., a cargo airline headquartered in Norwalk, Conn., to pay more than $400,000 in lost wages, back pay, damages, and legal fees to compensate a flight crew member who was terminated for raising safety concerns protected under the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR21).

The employee was terminated in April 2008 after twice complaining to management about inadequate rest breaks and being required to work hours in excess of those allowed under FAA rules. The employee then filed a whistleblower complaint with OSHA’s Boston Regional Office.

After finding merit to the complaint, OSH issued a Notice of Secretary’s Findings and Preliminary Order directing Southern Air to pay the complainant $300,000 for loss of career wages, $135,240 in compensatory damages, $7,394.65 in attorney’s fees and back pay of $1,485 per week, plus interest, from April 7, 2008, through the date of payment. The company was also ordered to post the FAA whistleblower poster and an OSHA notice to employees about their whistleblower rights.

“Employees have a strong and clear right to raise legitimate safety and health concerns about their working conditions without fear of termination or reprisal,” says OSHA New England Regional Administrator Marthe Kent. “We will pursue the appropriate legal remedies whenever we find that workers have been denied this vital safeguard.”

In addition to AIR21, OSHA administers the whistleblower provisions of the Occupational Safety and Health Act and other statutes protecting employees who report violations of securities, trucking, airline, nuclear power, pipeline, environmental, rail, public transportation and consumer product safety laws. For detailed information on employee whistleblower rights, including fact sheets, go to: http://www.osha.gov/dep/oia/whistleblower/index.html.


By Your Employee Matters | No Comments

It should come as no surprise that a weakening economy, growing unemployment rates and an “employee friendly” Administration have led to a significant jump in claims. As with the EOOC stats below, Jury Verdict Research reports a record level of employee verdicts in 2007 with similar numbers coming in for 2008. Expect more of the same for 2009. Bottom line: Better make sure you have EPLI coverage!


By Your Employee Matters | No Comments

After months of speculation regarding when the Congressional debate over the Employee Free Choice Act (EFCA) would begin, this controversial legislation was reintroduced March 10th in both the United States Senate (S. 560) and the House of Representatives (H. 1409). As reported in previous updates and E-Mail Alerts, EFCA would eliminate secret ballot union elections, dramatically change the process by which a first collective bargaining agreement is negotiated, and significantly increase the penalties employers face for unfair labor practices without imposing stiffer sanctions for labor unions. For more information on EFCA, please contact your local Worklaw Network firm representative. HR That Works users should read the extensive report on the EFCA found in the Special Reports section.

Article courtesy of the Worklaw® Network.


By Your Employee Matters | No Comments

By now everyone should know that sexual harassment is against the law, causes lawsuits, and ruins careers. Nonetheless, managers, employers, and employees continue to engage in it all too often. Roughly $50 million was paid in sexual harassment cases according to the EEOC in 2007 – and that doesn’t include hundreds of state court verdicts. As a reminder, here are the basics of sexual harassment prevention:

  • A publicly articulated policy that’s acknowledged by the entire workforce.
  • A message from the top that sexual harassment will not be tolerated.
  • Training for managers and employees on sexual harassment — what it is and how to prevent it. HR That Works users have these Training Modules available to them 24/7.
  • Don’t assume who can be considered a harasser or a victim. For example, 16% of sexual harassment claims were filed by men last year. Sexual harassment law also includes conduct engaged in by independent contractors, customers, and clients.
  • The definition of sexual harassment continues to broaden. If it has anything to do with sex, you can consider it to be sexual. And since our culture is obsessed with sex, you can rest assured that stupid and misguided conduct in this area will continue.
  • Once you’re notified of sexual harassment, engage in a prompt and thorough investigation. As always, if you have any doubts about how to handle the matter, contact an experienced employment law attorney immediately.
  • Finally, guard against possible retaliation claims. Claimants will be highly sensitive to any criticism and instances of poor performance must be specifically documented. Any termination within three months of a complaint is almost always regarded as retaliatory.

HR That Works members should take advantage of the sexual harassment training videos and other tools to prevent these destructive claims.


By Your Employee Matters | No Comments

Employers send employees to take fitness for duty exams for a number of reasons, including:

  1. A return to light duty or full duty after being out on a Workers Compensation claim.
  2. As a pre-hire medical examination to learn if they’re able to do the job with or without limitations.
  3. To see if they’re fit for duty after returning from family medical leave for a serious medical condition.
  4. To help manage a disability accommodation issue.
  5. If the employer suspects that the employee is unable to perform their job safely or productively, either because they’re under the influence or for some other medical reason.

The employer should pay for this exam, as well as for the employee’s time in taking it. When requesting fitness for duty exams, always provide the physician with a copy of either the employee’s job description or their essential job functions. In general, fitness for duty exams should be limited solely to the medical information necessary to see if the employee is fit for duty. For example, if they’ve had a shoulder injury, no medical information should be forwarded about a family history of diabetes.

Perhaps the most difficult area to define is when you suspect that there’s “something wrong” with an employee and then take the risk of asking them to have a medical examination. As long as the employer is “reasonable” in their concerns or suspicions, the employee would be insubordinate for not taking the exam and be subject to discipline or termination. Courts have ruled that it’s reasonable for employers to request fitness for duty exams when employees engage in outbursts and other erratic behavior, threats of violence, continued insubordination, a history of stress-related absences, appearing hung over, intoxicated, or high on the job, falling asleep at work, complaining of dizziness, and other activities.

To read the DOL’s position on Pre-Hire Exams go to http://www.eeoc.gov/policy/docs/preemp.html

As always, employers should involve legal and medical experts when making these difficult decisions. If HR That Works members have a question about the legitimacy of a fitness for duty exam, don’t hesitate to contact the free attorney Hotline.


By Your Employee Matters | No Comments

Malcolm Gladwell’s third book, Outliers, focuses on the origins of success. Gladwell brings home lessons that should be remembered. Think about how these factors might apply to you or your company:

  1. There’s no substitute for hard work. Although much of the book teaches how circumstance and nurturing have a big impact on success, the one common denominator is willingness to put in the hard work. No athlete, businessperson, musician, or anyone else succeeds without hard work. One of my favorite sayings in the book is an ancient Chinese one, “No man who rises before dawn 365 days a year fails to make his family rich.” (I can honestly say that I do this at least 300 days per year, so I’m getting close!).
  2. The 10,000 Hour Rule. If you want to be great at something, or at least be known as an expert, you need to study this subject for at least 10,000 hours. This holds true whether in business, law, medicine, technology, sports, music, etc. One of the downsides associated with letting more experienced employees go is losing their store of wisdom and expertise. If you’re in a “no choice” situation, at least try to have the departing employees provide you as much of their stored wisdom in writing as possible.
  3. The importance of cultural norms. For example, many Asians are accomplished in math not because of their IQ – but due to their work ethic: how their numbering system works, the precision required to grow rice, and of course, willingness to attend school an extra 50 days a year. What is the work norm at your company? Punching the clock or making sure things get done?
  4. The need for opportunity and encouragement. Many successful people have been in the right place at the right time. Perhaps they were just born at the right time. Perhaps others saw their innate talents and helped to nurture them. The bottom line: no one succeeds alone. We all need encouragement and nurturing. This becomes a real challenge when companies are shutting down on communications and training.
  5. Once you’re smart enough — you’re smart enough. As Daniel Goleman wrote in his book about emotional intelligence, “It’s just not IQ that matters.” An individual’s ability to deal with emotions and have practical insight is just as, if not more, important than IQ. After a certain point (roughly 130 IQ), the additional IQ points don’t make folks any more successful. Same would hold true for skill testing. If they are a top 20% user, chances are that’s good enough to make a difference. The rest depends on personal drive, emotional skills, etc.
  6. Pedigree matters — to a degree. As with IQ, going to good schools matters. Going to top ten schools doesn’t matter nearly as much. Just as opportunity, encouragement, support, and other “external” factors impact on the propensity for success, we should not overlook these factors when assessing someone’s potential. Perhaps there is great potential right under your nose; they just haven’t had the right circumstances to show their true mettle. This is one reason that I stress the importance of character assessment, skill testing, and other tools to get past your initial “impressions” about someone’s potential.
  7. The importance of expressing yourself. This discussion first came up in a risk management context in which Korean airline pilots were causing crashes because subordinates were intimidated about contradicting their superiors – even in the face of a disaster. Based on my litigation experience, CEOs are the last ones to know the truth until they’re in the middle of a trial. Here’s the point: we must “invite” subordinates to bring us their ideas, to break past the Culture of Silence. At the same time, subordinates must have the courage to speak up when appropriate.
  8. Meaningful work. One of my favorite quotes from the Gladwell book is, “Hard work is a prison sentence only if it doesn’t have meaning.” I work hard, but I love the work that I do. It provides me the three factors that Gladwell says are to essential to our work: autonomy, complexity, and meaning.
    • Autonomy gives us a sense of responsibility for the work that we do.
    • Complexity allows us to grow and learn; and
    • Meaning lets us realize the impact of our work.

The lack of opportunity for autonomy, complexity, and meaning will continue to deprive employers of excellent workers who find it more meaningful to work for themselves. To what degree are you allowing your employees autonomy, complexity, and meaning in their day-to-day activities? How can they get that from you greater than by working on their own or for someone else?

In conclusion, there’s no substitute for discovering the formula for success at your company!


By Life and Health | No Comments

Most people try to hedge their bets when it comes to their finances, and planning for retirement is no exception. The goal is usually to earn the maximum return possible on the money we invest. One way to accomplish this is through a concept known as Pension Maximization. You should explore this strategy with your insurance agent if you plan to use pension income to generate your retirement income, because Pension Maximization could allow you to increase your monthly payments.

When a couple decides to start drawing on their company pension, they generally choose a joint and survivor option, which will provide a monthly income until both spouses die. The amount of your monthly income is based on how long an actuary thinks both of you will live based on your current age. The longer both of you are expected to live, the lower the monthly income.

With Pension Maximization, you can reverse this. Instead of opting for a joint and survivor payment, you take the single life, or straight life, option. Since the insurer is only providing income for the life expectancy of one person, the monthly income will be higher than that provided by the joint and survivor option. You also will receive a higher income because you aren’t receiving a term, or period certain, guarantee with this option.

However, if the covered spouse dies suddenly, monthly payments stop. To compensate for this risk, you can use some of the additional income — the difference between the higher monthly income that the straight life option pays and the lower monthly income of the joint and survivor option — to purchase a Life insurance policy on the covered spouse. So, guaranteed ongoing income for the surviving spouse is provided through the Life insurance policy instead of through the deceased spouse’s pension. Even though the survivor loses the pension income, he or she has the death benefit from the Life insurance policy, which can be used to purchase an income annuity that provides a monthly payment. And it’s likely that the survivor is now much older, so he or she might be able to generate a higher income due to a decreased life expectancy.

So far we’ve only discussed what happens if the person covered by the pension dies first. But what if their spouse dies first? With a traditional joint and survivor option even when one spouse dies the other spouse continues to receive the same monthly check. But with the Pension Maximization strategy, the covered spouse now has the option to either keep the Life insurance policy, perhaps for estate liquidity or charitable purposes, or surrender it and receive any cash value. Plus they’ll have the higher income provided by the single life pension option for the rest of their life.

Keep in mind that this Pension Maximization strategy doesn’t work in every instance especially if the covered spouse is not likely to qualify for Life insurance based on their health history. In any case, before you make an irrevocable decision regarding your pension payments, please give us a call to learn if Pension Maximization is right for you.


By Life and Health | No Comments

Although it is difficult to consider, one day you could lose your ability to earn a living. An accident or injury could occur at any time, and cannot be anticipated. According to statistics presented by the Center for Disease Control’s injury research department, an estimated 5.3 million Americans are currently living with a debilitating disability, and each year about 80,000 more become disabled. The CDC concluded that just over half of all non-minor injuries result in some sort of debilitating disability.

Your Medical insurance does not cover all of the costs that accompany a disability, which comes as a surprise to many people. Even if you are covered by a Group policy, you might only be eligible to receive a small percentage (usually 50%-60% of gross income) of your current income if you cannot work, and benefits could last only a short time.

Social security disability will only be approved if you are severely disabled, and payments will not begin until six months after you have applied. Do not expect savings to cover you during this period; you might exhaust them completely within a few months. This could damage your credit if you fall behind on mortgage, insurance, or bill payments: 46% of all home foreclosures are caused by a disability, according to the U.S. Department of Housing and Urban Development. Sudden loss of income is a devastating, unpredictable experience and it pays to be adequately prepared.

A private Disability Income insurance policy can provide monthly benefits to replace a portion of your income in the event you become disabled. This will prevent you from exhausting your retirement savings, which would leave you without money to support yourself later in life.

Although most people understand the importance of Life insurance, it seems many overlook the value of Disability coverage. It seems we anticipate death more fully than we anticipate becoming disabled. Disability insurance could prevent this unanticipated financial strain, by ensuring that you and your family are able to maintain a comfortable standard of living regardless of whether you are able to work.


By Life and Health | No Comments

By now, most consumers understand the critical importance of Life insurance — especially those who have loved ones depending on their income. Life insurance offers financial protection for your dependents should anything happen to you. Without the right coverage, your family might struggle to pay the bills and make ends meet.

However, there is a common misconception about Life insurance: most people assume that Term Life insurance is much more affordable than Whole Life insurance. Although this might be the case for those who are young and healthy, Term insurance can become exorbitantly expensive for older individuals who might no longer be the picture of health.

Term vs. Whole

As you probably know, Term Life insurance covers you for a specific amount of time — anywhere from one to 30 years. These policies are less expensive because they are designed solely for protection. Many people choose Term insurance because they figure the need for Life insurance will decrease as they get older. Term insurance is also a useful option for those who want to protect their children until they are able to support themselves.

On the other hand, Whole Life insurance is permanent — it offers protection for your entire life. This insurance is ideal for individuals who still have someone depending on their income, whether it’s a spouse, grandchild or a special needs son or daughter. It’s also a good option for individuals who want to ensure there’s enough money to pay off their debts or provide a tax-advantaged inheritance for their heirs after they die.

Making the switch

Let’s say you fall into that second category — you think you might have a need for Life insurance protection for the rest of your life. However, your Term policy is about to expire. What should you do?

You might consider renewing your current Term policy. However, your premiums will most likely skyrocket now that you’re older. Alternatively, you could convert your Term policy to Whole Life. This will ensure that you are covered for the rest of your lifetime — which means your dependents will be protected when you die, whether that happens one or 20 years from now.

Whole-some benefits

One advantage to Whole Life insurance is that the premiums generally remain constant over one’s lifetime.

Another benefit to Whole Life is that you can borrow from the accumulated cash value of your policy. However, it’s important to realize that like any loan, interest will accrue on the money you borrow from your policy. If you do not pay back the loan during your lifetime, this amount will be deducted from the death benefit before it’s paid out to your heirs.

The loan feature is particularly beneficial to older policyholders who have built up a significant cash value. After all, as we grow older, we often run into some financial “surprises” — from medical emergencies to dwindling retirement income. The cash value from a Whole Life policy could help you deal with these unexpected events. For example, you could borrow from your Whole Life policy’s cash value to supplement your income, pay off your mortgage or fund long-term care expenses. You could even use the money to help pay for a grandchild’s college education.

Are you a good candidate?

As with any type of insurance, whether or not you qualify for Whole Life and the price you’ll pay depends on your age, health and the specific type and amount of insurance you plan to purchase. Meet with our financial professionals to determine whether or not Whole Life insurance is right for you. An expert can assess your unique situation and find the best policy to meet your needs.


By Personal Perspective | No Comments

Late for an early morning business meeting, you grab a cup a coffee and rush out the door — only to discover your car’s windshield has been smashed to bits. Your heart immediately plummets and your hands begin to shake with anger. Now what? Although you might be tempted to burst into tears or launch into a fit of rage, it’s important to take a few deep breaths and focus.

Fortunately, if you have comprehensive coverage, your Auto insurance should cover the damage to your car. However, to ensure you receive the money you need for repairs, you will need to follow a few specific steps:

Notify the police

If your car has been vandalized, you should contact the police within 24 hours of the vandalism. It’s important to file a police report so that you have an official record of the incident. This record will help your Auto insurance company resolve your claim.

Call your insurance company

You should also contact your auto insurance company to file a claim. Don’t delay — most insurance companies say you must file your claim as soon as possible in order to receive benefits.

Your insurance company may request a police report, personal statements and other documentation. Additionally, if any items that are protected under comprehensive coverage were stolen from your car (such as an aftermarket car stereo), they may ask for receipts for these items. Try to provide your insurance company with as much documentation as possible because this will help them resolve your claim more quickly.

Prevent further damage

Some insurance policies require you to take measures to protect your car from additional damage after vandalism. For example, if your window has been broken, you will need to cover it with plastic or another protective material as soon possible. This will ensure that the interior of your car is not further damaged by rain, snow, wind or other elements. Your insurance company might reimburse you for the materials you buy to protect your car, as long as the expenses are within reason.

If you knowingly leave a broken car window uncovered, and your car interior or electrical systems are damaged by weather, your insurance company will not cover this damage. This is why it’s so important to take measures to protect your car as quickly as possible.

Generally, once the police have taken any evidence they might need from your car and say you can move your vehicle, you should immediately take steps to protect your car from further damage. You do not need to wait for your claims adjuster to assess the damage before taking these steps.

Let your insurance company resolve the claim

Once your insurance company assesses the damage to your car, they will tell you whether or not the damage will be covered. If it is covered, they will give you a few options for repairing your car to its pre-vandalism condition. If your window was broken and your dashboard was damaged, they will be repaired. If your car stereo was stolen, the insurance company will give you a new one comparable to the one you had.

If you have any questions or concerns about your claim, do not hesitate to contact your insurance company. They understand having your car vandalized is an invasion of privacy, and they want to help you through this difficult time.