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Monthly Archives

April 2014

FMLA Claim Denied Due to Employee Caused Confusion

By Your Employee Matters | No Comments

Maria Escriba worked in a Foster Poultry Farms, Inc. (Foster Farms) processing plant in Turlock, California for 18 years. She was terminated in 2007 for failing to comply with the company’s “three day no-show, no-call rule” after the end of a previously approved period of leave, which she took to care for her ailing father in Guatemala. Escriba subsequently filed suit under the Family and Medical Leave Act (FMLA) and its California equivalent. The parties disputed the characterization of Escriba’s request for a two-week period of leave. Escriba claims that her termination is an unlawful interference with her rights under the FMLA. Foster Farms responds that, although Escriba provided an FMLA-qualifying reason for taking leave, she explicitly declined to have her time off count as FMLA leave. The district court characterized the case as a classic “he said, she said” matter focused on what Escriba told her supervisors. Escriba’s claims therefore proceeded to a jury trial in 2011. The jury returned a verdict in favor of Foster Farms.

In reading the case you get the clear impression that poor communication was involved. To begin with, the employee’s primary language was Spanish. Whether she was confused or was mis-understood, this entire fight could have been easily avoided using an FMLA leave process. This was not a sophisticated worker and she had a legitimate right to use FMLA. My guess is that at the time she was looking for paid leave only because that was all she could afford. When she passed the agreed upon non-FMLA leave of absence period she failed to notify the company about her expected continued absence. Not surprisingly she was terminated under Foster Farms’ “three day no-show, no-call rule”.

Lessons Learned:

  1. Make sure somebody can clearly communicate the legal obligations surrounding any leave request to the employee. Without proper training it is hard for a supervisor or manager to be that person. Language barriers can also get in the way.
  2. Make FMLA and other leaves a process and not an event. Taking a checklist approach is a must (which is why we have an FMLA Checklist on HR That Works).
  3. They could have been compassionate and not fired somebody already stressed about a relative’s health. The FMLA and your policies are only the ground floor of obligation to another human being. Instead of proactively assisting the employee and asking how they can be of help, they fire her prompting a lawsuit; the cost of which I am sure has already exceeded her annual income in expense. If the employer calls that “winning” I disagree with their definition of it.

Make Sure Your Sales Commission Agreements Discuss Post-Termination Compensation

By Your Employee Matters | No Comments

What happens to commissions due a salesperson if they are terminated or quit? That was the question that Mark Dietrich and his former employer Bell, Inc. have been fighting over in Michigan Federal Courts since he was terminated in May of 2011. In the case the court ruled the contract entitled Mr. Dietrich to commissions on accounts he procured for two years from each customer’s contract start date. The case of Dietrich v. Bell identifies many of the issues involved in sales compensation agreements and gives yet one more reason why you should have these agreements reviewed by an attorney.

Here’s a summary of my employer tips gleaned from the case:

  1. Know what laws apply to sales compensation agreements in your state. For example, in this case Michigan’s Sales Representative Commission Act was at issue. Your BNA state law summary can help.
  2. There is a difference between lead generation, customer procurement and a sale. If the salesperson generates a lead are they entitled to all the sales anyone makes from them? Or are they only entitled to a commission on direct sales they have made?
  3. What does it mean to make a sale? Did they do all they needed to do on their part? Is the commission conditioned on actual payment? What about returns or other offsets?
  4. How long are they entitled to commissions? For all subsequent sales or renewals?
  5. How involved are they after the sale? If there is an ongoing service obligation that matters in terms of post-termination compensation.
  6. Make sure you have all the above in a signed agreement. As mentioned by the court “the contract says nothing regarding termination; it provides no express answer to how the parties intended to terminate their relationship.”

Note this was a difficult decision for the court as one of them dissented, agreeing with the underlying decision of the District Court that no wages were due.

People, Robots and Technology

By Your Employee Matters | No Comments

People are losing jobs to robots and technology at an accelerating rate. Have you used one of those self-serve checkout stands lately? One was installed at my local CVS only 3 months ago. Awkward at first but seems like old hat now. The manager there told me the new system allowed him to let two full time clerks go. Two jobs lost to robots and their technology that will never reappear. Here’s just some of the other jobs that are suffering the same fate as retail clerks:

Pharmacists

Soldiers

Reporters

Drivers

Fast food workers

Assembly workers

Bank tellers

Secretaries

Stock traders

Warehouse workers

…and there is more

Technology alone changes the employment landscape. Objects like the iPhone have the consequence of laying off Kodak workers, as well as workers in the mapping, printing, alarm clock and record industry.

I recently listened to an interesting podcast (all Radiolab podcasts are interesting!) about work in a shipping warehouse for online mega-providers, such as Amazon. If you thought stop watches were banned in the workplace at the beginning of the last century, guess what – they’re back! Technology, along with its gamification, is reducing worker output to a competitive logarithm using the most minute of performance indicators.

Years ago Buckminster Fuller (otherwise known as “Bucky”) surmised that the rise of computers and technology would bring use to a place where it is inefficient to have full scale employment. It would actually be cheaper to pay people to stay at home.  And we are getting there. Even in a “good” economy we have 7% unemployment. And we are being asked to pay for those folks who have to stay at home…because there are no jobs. This has more to do with the macro-economics of production than it does anything a politician can influence.

While Bucky believed that less is more, most folks don’t think that way. In their idleness they will want to be serviced, entertained and otherwise cared for, by a growing service class economy. So the fantasy of growing the middle class back to where it was before all these technology changes is a pipe dream. A political football divorced from reality. There will be a continued division between highly paid knowledge workers and low paid service workers. Sooner or later we will end up paying service workers to stay home or do some form of public service.

As we march forward you will either be a highly paid knowledge worker who cannot yet be replaced by a machine or a low paid service worker who cannot yet be replaced by a machine. That’s true for your kids’ future too!

FYI – Looks like John Henry would be out of a job today. Now trains lay their own tracks http://www.wimp.com/traintrack/

Editor’s Column: Mindful HR

By Your Employee Matters | No Comments

Mindfulness is fast becoming a buzzword. Long the bastion of the new agers, it is showing up in everything from the Wall Street Journal to the World Economic Forum. Mindfulness has been championed as a methodology for present moment awareness. Awareness that is neither judgmental nor critical… but simply aware. There is a growing body of evidence that mindfulness lowers stress, combats fatigue, helps address substance-abuse, eating problems, sleep problems, pain and weight problems as well. Bottom line is it can be an antidote either in part or in whole to a wide range of maladies. Mindfulness has an upside to it as well. Many of my most creative and innovative thoughts have come when I’ve rested in the silence of mindfulness. In a sense, the space between the thoughts.

Mindfulness can be practiced in many ways. One of the more traditional ones is meditation. So is yoga, walking, lying down, breathing and other activities. Mindfulness is less about what you are doing than it is who you are in that moment. Hospitals, corporations, wellness programs and coaches are all expanding the use of mindfulness as a valuable practice.

Much of mindfulness has to do with our intention in the moment. It’s very hard to be mindful when you’re running 75 MPH or trying to control a situation. In fact, they are opposites. Mindfulness is about “being” with the situation. If your intention into going into a meeting is to see how much money that prospect can make you then all they will be is a tool in your financial story. However, if your intention when going into a meeting is how can you be of service to another human being the outcomes can be profitable at a whole other level.

If you go to an executive meeting with the intent to see how see how much budget you can get for your team you’ll have a different outcome than if you go into the meeting with the intention to do what is in the best interest the company and its customers.

If I was in HR I would begin to familiarize myself with mindfulness practice, if you haven’t already. I encourage you to use it for yourself first so that you can fully understand its benefits. Then you can champion it to others with integrity. Here are number of resources where you can get additional information about mindfulness:

A final note: mindfulness is not about crystals and New Age foofooness. In fact, it’s been practiced for centuries worldwide. While it might not all have always been labeled as being “mindful” its benefits have been enjoyed by millions.

 

What is a business owners policy (BOP)?

By Business Protection Bulletin | No Comments

Historically, the insurance industry wanted to design a policy for small, typical Main Street businesses. These businesses had some property, maybe their building and stock, and low risk of liability claims. Insurance companies designed the BOP for these businesses whereby the insured bought a package which included property, liability, some crime coverage, and other incidental coverage at one low cost.

From a risk perspective, these Main Street businesses were very similar.

In the modern era of BOPs, many businesses now qualify for specialty industry coverage. Restaurants, small manufacturers, small contractors, and artisans can all qualify for this type of policy.

BOPs cover property similarly to conventional policies. Typical options are extended as part of the package. For example, crime coverage is included in BOPs rather than having to add this coverage on. Investigate the limits of these add-on coverage to be sure they are adequate. We would be happy to discuss the details with you to design a program to meet the specific needs of your business.

Liability coverage follows the general liability format, except again, some extensions of coverage are included. These extensions may have lower liability limits, so again, reveiw these with your insurance professional.

If your business does not own cars or trucks, but you occasionally use your personal auto in your business, consider adding non-owned and hired automobile coverage to your BOP. This coverage pays for your company’s liability while you use your car for your company’s benefit.

Business owners policies began as a one size fits all retail risks insurance form. It has evolved into an important small business, and now not so small business, policy to cover industry typical businesses.

Your business does need to qualify for this coverage. Please call us for a review and suggestions regarding the best fit policy for your business needs.

What is pay as you go workers compensation?

By Business Protection Bulletin | No Comments

Sometimes called pay as you owe, pay as you go workers compensation helps smooth the audit process and provides cash flow to the business.

Workers compensation premiums are calculated by multiplying the rate by each one hundred dollars in payroll. Historically, workers compensation premiums were estimated in the beginning of the policy year; and audited for accuracy at the end of the policy year.

As a result of this estimate and audit process, sometimes a business would tie up capital on overpaid premiums to receive a return months later; and sometimes a firm would receive a large audit bill, followed by an increase in the then current year’s workers compensation.

Unless the business is very predictable, these audits were difficult to budget.

Pay as you go contemplates this issue and offers an option to pay premium based on actual payroll. The business, or more often, their payroll service, sums payrolls in each class and applies the rate, or, sends the payroll figures directly to the company for billing.

The business knows its workers compensation cost for that pay period immediately and with a great deal more accuracy. Budgeting is as easy as payroll budgeting since the two are tied together.

An audit will be conducted at the end of the year, but the effects should be much smaller.

Who should use pay as you go?

* Businesses with seasonal income and payroll so expenses tie to income more easily and
budgeting is easier.

* Businesses with large payrolls which benefit from the cash flow of this system.

* Contractor businesses which assign payroll to different jobs to more easily tie payroll
expenses to specific sites.

Your business needs to qualify for this service, so call us to discuss the possibilities to find the best match for your business. We can help your budgeting and cash flow.

Do umbrella policies broaden my business automobile and general liability coverage?

By Business Protection Bulletin | No Comments

Yes. The most obvious addition is worldwide coverage for automobile liability. Typical business automobile policies cover drivers in the United States, its possessions and Canada. The umbrella policy does not have this restriction.

Umbrellas serve to add layers of liability in one million dollar increments. These layers are written in excess of your general liability and automobile policies. If you have watercraft or aviation policies, the umbrella layer covers in excess of those policies too.

Umbrellas broaden the general liability policy too. Some general liability policies do not cover the peril of sexual harassment, for example. Umbrella policies do. When these claims occur, you would be subject to a retention, similar to a deductible.

A deductible is when you pay the first few dollars of a claim, but claims administration and legal fees are not included as subject to a deductible. With a retention, these administrative and legal costs are subject to your first dollar payment.

So, how does this work?

A business has a $500,000 limit on automobile insurance and $2,000,000 on general liability with a one million dollar umbrella. They have an automobile claim that settles for $1,300,000. Their automobile liability pays $500,000 plus claims and legal costs; and the umbrella pays $800,000. The business pays nothing out of pocket.

The same business suffers an excluded general liability claim in a foreign country and the courts order $250,000 damages. The general liability policy does not pay any of the claim because the act is excluded. The business pays their retention of ten thousand dollars. The umbrella pays $240,000 plus court and claims costs.

The umbrella policy, after the retention amount, pays for all legal defense costs worldwide. Anyone traveling outside the borders of the United States and Canada should seriously consider an umbrella policy.

Umbrellas provide important increases to liability limits at home. Call us for details and a quote.

Can loss control costs be justified? Experience rating sets the cost of losses going into the future.

By Business Protection Bulletin | No Comments

How does experience rating work?

Okay, this discussion will get a bit technical. Price setters in the insurance business, underwriters, assess the risk associated with an account and then calculate a premium. They look at factors such as the types of items covered (the schedule) and past losses.

Schedule credits apply to multiple cars, multiple property locations, or supply-chain management factors. Theoretically, it’s unlikely to lose or total damage items at multiple locations in one incident. For a favorable schedule, less risk equals lower premiums.

Low past losses imply good loss control. So a favorable loss history generates an experience discount. The process is known as experience rating.

Usually, the underwriter has access to research which outlines average losses per type of business. These data also indicate how the losses are generated on average – few severe losses or many small losses.

Underwriters fear the frequency of losses more than the severity of any loss. Frequency demonstrates general carelessness and poor risk management. Severity indicates bad luck. So the underwriter tallies total small losses and discounts major losses. This number indicates expected losses. If these are lower than expected, the underwriter applies a discount.

How can a business earn these discounts?

Solid loss control programs help reduce the frequency of claims. An investment in proper protective gear like hard hats, eyewear and work gloves pays dividends in lower premiums.

Good maintenance of equipment, buildings and tools decrease the odds of property losses occurring.

View your loss control program as an employee benefit funded by reduced insurance premiums. The employee benefit requires a company ethic that every employee should get home safe every day. Personal protection items remind the employee to think safety.

When employees know management treasures safety, work becomes more familial. It usually takes about three years for safety programs to prove cost cutting. Get started today.

FORKLIFT SAFETY: AN OUNCE OF PREVENTION

By Construction Insurance Bulletin | No Comments

Forklifts have revolutionized the construction industry. However, using them creates the risk of serious injury and death for drivers, other employees, and pedestrians.

although following the rules for forklift operation – safety checks, maintenance inspections, and so on –are time consuming, they’re essential for workplace safety.

To help ensure that your construction projects stay productive and accident-free, we’d recommend these guidelines:

·         Designate walking and driving paths. Many accidents happen because a worker was in the wrong place at the wrong time. Help prevent such incidents by clearly marking paths for foot traffic and forklift lanes. Yellow tape is easier to notice than signs, and won’t become covered with dirt or debris like floor marks.

·         Have the right tires. A blowout could cause an accident or halt productivity. The type of tire is perhaps the most important difference between forklifts that only operate indoors and those used indoors. While indoor forklift-tire sizes relate to truck weight, aisle and lift height, tires for outdoor lifts aim to prevent punctures.

·         Identify gradient inconsistencies.  The floor gradient is an important consideration because slight changes can cause a tip-over. This is the number one cause of death and serious injury to forklift operators.

·         Because forklift designs vary significantly, choose the appropriate model. The first factor to consider is the maximum load. Trying to lift a load that exceeds this capacity can damage the arms or cause a tip-over. When possible, assign drivers who have experience with the model you’re using. If this isn’t an option, make sure the driver understands the limitations of this forklift and can do pre- and post-operation maintenance checks.

Our agency’s specialists would be happy to help keep your staff and equipment safe on the job.

WHY YOU NEED POLLUTION LIABILITY INSURANCE

By Construction Insurance Bulletin | No Comments

As an independent contractor, you carry insurance to protect yourself against financial liability from your work. Many jobs require contractors to show that they have a pollution liability policy, which will pay for bodily injury and property damage claims, as well as the expenses of cleaning up toxic waste materials –costs that a standard general liability policy does not cover, and could run into millions.

Any contractor whose business involves risks of hazardous waste exposure, such as asbestos abatement or waste depository, needs pollution liability insurance.  This policy will protect you from liability both during the job and if there’s any problem from hazardous waste materials at a later date (“completed operations” coverage).

Pollution liability insurance could also be valuable if you own an industrial site that you believe is free of hazardous waste. The inspection you had performed on the property before you bought it might have missed some underlying hazardous substance that could create liability exposure down the road.

If you have a pollution-related incident at a job site or from one of your completed operations, it’s is too late to buy pollution liability. You can purchase this coverage from a number of insurance companies. The premium will depend on the amount of the policy, the deductible you choose, and whether you buy it on a stand-alone basis or in combination with other types of commercial insurance.

 

Before deciding whether to purchase pollution liability, be sure that you have the information you need to make the right choice. As always, we’d be happy to offer our advice at any time – just give us a call.