1500 Lake Shore Drive, Suite 400, Columbus, OH 43204
Monthly Archives

July 2014

Mandatory Tip Charges Will Be Disappearing in 2014

By Your Employee Matters | No Comments

We have all had the experience of going to a restaurant with a large party and finding that 18% tip charge on our bill. We can also find them on meals delivered to our hotel rooms. Any company that opposes those charges must be on notice that beginning in 2014 automatic gratuities are classified as service charges rather than tips. This means that while the employee will be taxed the same, the employer will lose a special tax credit available for paying its share of payroll taxes on the gratuities. For the rest of us the impact means there will be no more automatic gratuities created but rather suggestions to pay a gratuity.

To see the IRS ruling click here.

HR Success

By Your Employee Matters | No Comments

We love Success Magazine. If you don’t subscribe to it, you should. It comes with a great monthly magazine focused on a basic theme per month along with a great audio CD you can listen to in your car. The December issue had an article titled “Taking Care: Panda Express Nurtures Employees So They in Turn Treat Customers Well.” This is not rocket science. I remember a Southwest executive telling me once that if we take care of our people they will take care of our customers and that will take care of our profits. Since their inception this has held to be true. The Success article was an interview with the CEO of the $1.8 billion company, Andrew Cherng. Here are some pointers that he made to help nurture your workforce:

  1. “The environment here is about personal growth, personal well-being. When you are healthy mentally, physically, emotionally, spiritually—when you’re doing well, you’re likely to do good things in your life and that’s what we advocate.”

Tell me you wouldn’t want to work for a boss like this!

  1. “The environment is a way you see the future. One person at a time.”

Cherng realizes your environment and culture is a choice. As he stated, you can only build a culture through individuals; one person at a time.

  1. “People who are successful tend to take care of those little things very well. And then they accumulate credit, resources, and do whatever it is that you need in life—that’s the preparation for success.”

 Do you take care of the little things very well? Have you accumulated credit, resources, and do whatever it takes to prepare for success? As the saying goes, when you take care of the little things the big things tend to take care of themselves.

  1. “We can all do a better job. And when we do we all get rewarded. The reward may come in just being happy or in other people being happy. When you do your job well, your customer feels that and your business blossoms”

How motivated are you and your fellow employees to not do just an average job or a comfortable one but an extraordinary, awesome one? Are they doing tasks in a way that make them feel happy?

  1. Cherng suggests that management should ask employees: “Are you being mindful? Are you putting your heart into the work? Are you passionate about your work? Are you loving your environment? Our job is to raise everyone’s levels of understanding and caring. When you raise the level of caring, you see a good result.”

While we think of ourselves as good people and have good intentions we often times don’t manifest that. An excellent book was written about it “Leadership and Self Deception.” The essential theme being that we deceive ourselves; that we in fact manifest caring. What have you done lately to show employees that you care?

Lastly, we love the Panda Mission Statement. “Deliver exceptional Asian dining experiences by building an organization where people are inspired to better their lives” What can really be more important than this statement? We live in an experience economy and the whole purpose of any business is to increase human well-being. What a wonderful opportunity for every one of us!

Fighting Work Comp Fraud

By Your Employee Matters | No Comments

What do these people have in common? Answer: they are work comp frauds. Want to see a few more mug shots? https://www.flickr.com/photos/ca_dept_insurance/

There’s no doubt that where there’s money to be had, there will be fraud. Employers nationwide have been subject to a growing abuse of those learning to “work the system.”  While it is an easy story to paint the boss as a bad guy, there are plenty of stories where it is the employee who is playing the villain role. California has been stepping up its fraud prevention efforts.  It has made over 500 arrests in the past three years http://www.insurance.ca.gov/0400-news/0100-press-releases/2014/release040-14.cfm

If you suspect fraud, speak up about it. Contact your broker and, if necessary, your department of insurance fraud division. Fact is, most injured workers are not frauds. They want to resolve their injuries and get back to work. Most employers genuinely care about their employees. It’s the bad apples—be it the employer or employee—who ruin it for the rest of us.

Editor’s Column: HR Subjects

By Your Employee Matters | No Comments

Here’s a quick look at 26 subjects (there were more) discussed in the dozens of HR magazines, blogs, and newsletters reviewed over the last few months. This should help wake up anyone who doubts the complexity and value of the HR function.

  1. Measuring telework productivity
  2. Problems caused by pay disparities
  3. Hiring the over-qualified
  4. Which recruiting tool should I use?
  5. One-third of HR execs seek greener pasture
  6. Gender disparities causing resentment and claims
  7. Mobile recruiting
  8. Talent and succession management
  9. Dumping spousal coverage pros and cons
  10. Breaking past employee disengagement
  11. EEOC and legality of background checks
  12. Bringing mindfulness to work
  13. High stress
  14. Benefits management and DOMA
  15. ACA, ACA, ACA
  16. Hiring, hiring, hiring
  17. Weed at work – what to do?
  18. EEOC collects a record $372 million in 2013
  19. Measuring meaningful HR outcomes
  20. Using big data
  21. Gen X, Millennials, and Gen Z
  22. Workers working longer, foregoing retirement
  23. Banishing the bullies
  24. Work/life balance and career success
  25. Building cultural muscle
  26. Employer branding initiatives

Audits: make it easy on yourself

By Business Protection Bulletin | No Comments

Dread insurance audits? Maybe they stand out because the audit period is inconvenient.

Let’s take a look at payroll oriented audits like workers’ compensation.

The easiest audit will cover a period defined by four quarterly employee tax filings, a calendar quarter expiration date. Why? Because you must internally audit these periods already.

The second suggestion is a financial quarter. If for some compelling reason your financial year is not a calendar quarter, chose your financial year or quarter for these audits for the same reason as above.
Separate overtime payroll. Workers’ compensation premium is based on straight time payroll. Overtime earnings are discounted, thus premiums are reduced.

Keep Certificates of Insurance (COI) on all your subcontractors. Technically, even a clerical operation must request a COI for their air conditioning repairman to avoid potential workers’ compensation exposure.

Keep a record of any subcontractor payments made since, even if a COI is not available, the auditor will discount the gross payment and reduce the premium charged. And keep a thorough record of the scope of work performed – there are half a dozen carpentry class codes – so you get charged the correct premium.

General liability insurance uses many “exposure units”. An exposure unit is a statistical devise used to measure average risk to a given type of operation. Some risks are better measured against sales, some by payroll – like workers’ compensation.

Some policies allow square footage as an exposure unit. Of course, this unit is unlikely to change or vary as often as sales or payroll. Ask your agent to shop exposure units that decrease the effects of audits for your company.

Audits assure the insurance does not over or under charge for the risk that your company represents. Sometimes, you’ll receive money back if you over-estimated your exposure units. Cooperate with your auditor, but make it easier on yourself but choosing the right policy period, keeping the correct records, and choosing a compatible exposure unit.

Professional Liability Coverage – can you protect your reputation

By Business Protection Bulletin | No Comments

What distinguishes products, completed operations and professional liability?

A product is a good sold to consumers. Think about “things” when you think about products. Products liability covers the business which manufactures the product against injuries, illnesses or property damage caused by the product.

Completed operations are usually contracted building services which have a beginning point and an end point, like installing a heating, ventilation and air conditioning (HVAC) system. Since it is part of a greater system of insulation, walls, floors, ceilings and lights, HVAC is not a stand alone product. The outdoor compressor is. The installation is an operation.

Professional liability insurance covers service oriented business: designers, architects, dentists, doctors, or hair stylists. The key distinction is service versus a product or an installation operation.

So, how does this distinction affect claims negotiations?

Professional liability claims imply poor professionalism which directly affects your reputation. The paid claim implies dereliction of duty or incompetence.

The insurance company’s response to any claim is a business decision – determine the long-term cost of settling and benefit of not paying the claim, pay accordingly. Your reputation does not fit into this decision matrix.

The buying public saw this decision as a conflict of interest. The insurance company did not have to live with a loss of reputation, the professional did. Now the companies offer this solution:

The professional can veto the claims payment.

If the professional chooses to do so, the insurance company is limited to the agreed upon claim amount as their new maximum limit, including legal and claims costs to that point in time.

An architect, with a $1,000,000 professional liability policy, inspects a property and determines the structure is unsafe for renovation. The contractor talks the owner into going forward anyway. The building collapses. The owner sues the architect for “allowing” the contractor to start work before the structural issues are addressed. The insurance company offers a settlement of $100,000 after spending $25,000 on legal fees.

The architect can either endorse the settlement and pay the client or he can refuse, but now his coverage limit drops to $125,000 inclusive of legal fees. It is a much more difficult reputation decision than a business decision.

Mold Intruding on Your Completed Work?

By Business Protection Bulletin | No Comments

Let’s walk through the evolution of a mold claim due to roofing repairs or interior restorations.

The building owner calls and reports the leak or damage. Implied in this request is water damage and the intrusion of outdoor elements, like mold, mildew or other various spores.

The roofer assesses damages and fixes the roof. Perhaps other contractors are called in to repair sheetrock walls or ceilings. Everything looks back to normal if not better, and the roof does not leak during the next storm event.

A few weeks later, visible black mold is present in the repaired area. What went wrong and why is the contractor to blame?

Part of the repair process is drying out the dampened area. Mold needs over 15% moisture content to thrive. That level feels very dry to the touch; dry soil is about 17% normally. Wood members need to be that dry because wood is mold food, and it is very difficult if not impossible to remove a colony of mold from a porous surface.

Use a moisture meter to measure the dryness of the repair area before covering up wood with insulation or plastic. Do not encapsulate wood greater than 15% moisture content. Treat any wood exposed to the elements with a biocide before covering it up. This includes new building materials.

Advise the building owner to positively pressure the building to avoid mold infiltration. In other words, circulate filtered air and let the building exhale normally.

If you use these preventative actions, environmental claims will be reduced. Look into Contractors Pollution Liability to cover these occurrences.

To answer the opening question: it is not the roofer’s fault. All the conditions existed for mold growth before they arrived on the scene. However, as a completed operation, roof repairs assume the wood members and other roof materials have been returned to fully functioning condition. Wet wood does not meet this definition because rot and mold is likely to grow on it.

Dry thoroughly – and test the moisture content to verify dryness.

Loading and Unloading Claims: Blurred Lines of Coverage

By Business Protection Bulletin | No Comments

Losses while loading and unloading vehicles, whether it is property of others in your care, custody and control or your own, can be a tangled web of policy language.

The business automobile policy anticipates the risk of loading and unloading vehicles by manpower. Goods delivered to a specific location, whether that location is a loading dock or a fourth floor apartment bedroom, is covered for liability under business automobile as long as the goods are delivered by non-motorized means – think forklifts.

So if your delivery professional dents a car in the parking lot or a hallway wall in the building while using a hand truck to deliver, the business automobile policy pays for the damage. Unloading is defined by the final destination, not just literally off the vehicle.

Delivery by motorized device is subject to general liability rules. Loading a truck on a loading dock using a pallet jack would be subject to business automobile; using a fork lift, general liability would cover damages.

Damage to your own property is subject to property coverage, specifically inland marine during transportation. Property belonging to other people while in your care, custody or control is treated exactly the same way. You need property coverage to pay for damages while in transport, including loading and unloading.

General liability and business automobile policies assure there is no double coverage by defining through exclusions which policy covers which event. Even if you use your employees vehicles in business, buy business automobile non-owned coverage to protect the business.

Ten years ago, the insurance industry adopted new provisions to differentiate mobile equipment and automobiles. These technical definitions exceed the complexity limits of this discussion, but if you have mobile equipment that ever enters a public roadway, talk to your agent or insurance professional.

Remember: manpower is business automobile, motorized loading and unloading is general liability. The cargo must be covered by a property form, probably inland marine.

Proper Equipment Maintenance and Loss Control

By Construction Insurance Bulletin | No Comments

How does proper maintenance help reduce liability and workers compensation claims?

The obvious maintenance issues, like brakes on trucks or a proper source of electricity, are usually attended to on a schedule. People are aware of their importance.

Extend this awareness to the smaller items which should be checked daily. If these safety items go unchecked, major injuries and property loss will occur.

Of course, each employee should check their safety equipment and personal protection for fit.

Assign someone to walk the perimeter of the site to assure safety fences, silt fences and security measures are in place and undamaged. Visually inspect any areas where fuel is supplied to assure no leaks have occurred and secondary containment is in place.

Regular maintenance as a daily pre-check list on any mobile equipment pays dividends. Check all fluids, greases, electrical connections, fuel supply, battery charge, brakes, tires, tracks and hydraulic systems. Failures in any of these items can cause catastrophic losses.

Power tools should be inspected daily. Are plugs properly grounded? How about the extension cords? Any cuts or nicks in any electrical cord? Are blades sharp and unbent?

Even hand tools need an inspection. Look for stress cracks in metals like hammers, chisels or screwdrivers. Check the grips for wear and slipperiness. Recheck the daily activity list and assure all tools, supplies, equipment and labor are on site.

Fix or replace defective items. Now work can begin and continue safely and uninterrupted.

Equipment suddenly shutting down or tools breaking during work can be avoided with inspections and maintenance. These incidents create unsafe work places. Loads shift and fall, shrapnel flies, saws lurch. All avoidable.

Consider these issues occurring while working around other people and their property, as is often the case on construction sites. Liability is quickly assigned to people who work with defective equipment and tools. Daily pre-work maintenance checks are essential to reducing liability and workers’ compensation claims.

Get the Most from Your Insurance Company Safety Engineer

By Construction Insurance Bulletin | No Comments

They have a reputation for being a bit dogmatic, but if you embrace this quality, loss control engineers from the insurance company can be great resources. And why should they compromise when it comes to employee safety.

Safety involves properly planning and preparing to do each job correctly. Isn’t this goal shared by your production team?

Safety planning, like any standard operating procedure, begins with defining the task at hand, just taking a moment to think through the process. Consider the risk associated with the job.

Your loss control representative probably has safety procedures, equipment and personal protection requirements written for most tasks. Request these and incorporate them into your processes.

Create a safety culture for your business. Safety is and should be provided as the number one employee benefit. Ask your insurance company representative to provide lunch pail topics or handouts, OSHA bulletins, or safety posters.

Executives should embrace the safety messages and be part of the prevention and investigation team. Learn from the labor force – they have more time to consider safety issues, and more incentive.

For example, if a specific safety procedure is a constant source of complaints, work with the staff affected and the safety engineer. Some procedures or protective equipment can be modified if bottom line safety is not compromised.

Take responsibility for the on-the-job safety of your employees. Don’t blame the insurance guy for requiring hardhats or keeping the public out of your garage area. Own that responsibility. Require proper personal protection, restrict the public from dangerous work zones.

When the safety inspector makes an appointment, embrace their knowledge and bring up any concerns you have about your operations. Let them know in advance, and you’ll get a few good, useful tips.

If you have in house safety staff, instruct them to listen, safety is a collaboration of good ideas.