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Monthly Archives

November 2014


By Your Employee Matters | No Comments

Now that we are hitting winter hours and get even less sunlight…it’s time to light it up! Employees who work in buildings without windows or in cubicles in the middle of a floor are susceptible to light deprivation disorder (LDD). Study after study has shown the benefit of increasing employee’s exposure to sunlight and non-fluorescent lighting. LDD symptoms can include insomnia, napping, depression, and lethargy. Even a corner office is still unlikely to get the 2,500 lux (the level of light the sun emits during daytime hours) that your body needs to be fully functional.

For more information about LDD or Seasonal Affective Disorder (SAD), go to www.nlm.nih.gov/medlineplus/seasonalaffectivedisorder.html andwww.lighttherapyproducts.com/articles.html. To learn how you can improve lighting at a computer workstation, click on www.nih.gov/od/ors/ds/ergonomics/lighting.html.

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.


By Your Employee Matters | No Comments

In today’s knowledge economy, you need well-trained workers to leverage your bottom line. Training can be either technically or emotionally based. Although it’s relatively easy to provide technical instruction through written or computer-based resources, emotional training often requires people to communicate with each other directly, often in conjunction with online training.

To develop and maintain effective training programs, we recommend these guidelines:

1.     Create a training system. Commit to training as a process, rather than an event. Set clear standards for your hard and soft skill-set needs. Create a strategic plan, budget, and schedule.

2.     Provide the right tools. Not all training resources are created equal. You want to examine the user experience of the training platform (Learning Management System) as well as the content available.

3.     Follow up. If one-time training worked, you could ride a bike after reading a single book on bicycling. Provide a continuing process to help employees incorporate what they learn during the training experience.

4.     Offer incentives. Give your employees rewards or payoffs for their participation in training programs. These incentives can be either financial or non-monetary perks (dinners, entertainment tickets, and so forth). Reward and reinforce the learning experience so that the employee wants to repeat it.

5.     Leverage training. Whenever an employee gains a valuable insight during a training session, encourage them to share this information with co-workers who it might affect. Multiply the impact of training by having workers immediately use what they’ve learned to help the company run more effectively.

6.     Know who pays. It can be hard to determine whether a worker or their company should pick up the tab for third-party employee training. Here are some brief pointers on the legal obligations involved:

  • An employer must compensate for mandatory training time unless it’s directly related to professional licensing;
  • Time spent on voluntary training is not compensable if it’s outside normal working hours and not directly related to the employee’s job. For example, training a programmer on using a current application is compensable; paying for an MBA program so the employee can become a future manager is not;
  • Training that directly benefits an employer is always compensable. For example, new-hire training on welding procedures on an object eventually purchased by a client is compensable; voluntary welding training that results in no end product is not.
  • Training expenses can be reimbursed on a pro-rata basis if an employee agrees to do so beforehand and leaves the company a short time afterwards. So, if the employee goes through a year-long training program that costs the company $10,000 and they take another job a month later, it’s appropriate to demand reimbursement for most, if not all, of this expense;
  • An employer that operates a for-fee training program cannot use completion of the program as a condition of hire.

7.     Sell it to all stakeholders. Know that you have a sales job to do so that you have the full support of executives, managers and employees. This means you must show the benefit to each group that exceeds the value of the time and money commitment.

There you have it. The basic, yet powerful, formula for training success!

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.


By Your Employee Matters | No Comments

Demographic studies reinforce our daily experience: it’s getting harder and harder to find good employees — but not for everyone! Whether you’re a local contractor or national airline, there’s an employer of choice in every market; these companies find good people knocking on their door because they enjoy a high Attractiveness Factor. For example, Southwest Airlines is probably getting far more qualified candidates than United, American, and Delta because they have a business model and culture that attracts employees, rather than repels them.

Survey after survey reveals that one third to one half of the employees in any industry are looking for a better employer — a far higher figure than the 5% to 15% unemployment rate in those industries. Why would these people, who already have jobs, leave to come work for you? Your Attractiveness Factor is related directly to the job satisfaction of your existing employees. Great Places to Work Institute Award winners have an 82% satisfaction level. You can bet that the recruiting offices in these companies have a far easier time than their competitors.

To improve your Attractiveness Factor, we’d recommend these steps:

  • Put the right people on every seat of the bus. No excuses. Nothing upsets team members more than management placing the wrong employee on their team — especially without their input. Have the discipline required to hire only the best.
  • Have your employees market on your behalf. Referrals from existing employees are a great source of leads. Also, get employees involved in the hiring process by using such tools as group interviews.
  • Show employees that you care by asking them what they need to be successful and take pride in their work. This applies even when they’re leaving. On average, one dissatisfied customer will tell seven people about their grievance — and it’s no different with a dissatisfied employee. When you terminate someone, do it with grace and understanding. Conduct exit interviews to address any potential resentment that might fester into a lawsuit or negative social media campaign.
  • Brand your company as a great place to work. Southwest Airlines brands the fact that their employees Love the Work They Do Every Day. Zappos states on its hiring page “Sure, we know that Zappos is a phenomenal place to work but it’s pretty cool when others recognize how great our company is too. Learn more about the awards, news features, benefits and incredible perks that set our company apart.” Now that’s branding! What’s your brand? How do you show and tell it?
  • Lighten up. Whether you label it fun, joy, love, or nonsense, find a way to whistle while you work! Many of us are looking for that something extra out of our daily grinds. Tap into that opportunity and you’ll increase your Attractiveness Factor!

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.


By Your Employee Matters | No Comments

Recruitment bonuses can be a powerful tool for growing your workforce. To set an effective price point for employee referral bonuses, consider:

  • The cost of using recruiters (up to 25% of the employee’s first-year salary)
  • The rate of turnover in the position
  • The income generated by the position
  • How strong the need is to find the employee
  • How much your competitors’ referral programs are paying

Now that you have a referral amount in mind:

  • Define the skills, experience, and personality desired on a one-page sheet that employees can use to describe the job opportunity. This reduces the variance in describing the opportunity.
  • On a separate sheet, give them a place to fill in follow up contact information for job prospects.
  • Consider paying the bonus in installments (for example, 1/6 every 30 days). Make it clear that the total award will be paid only if the new employee works the full six months.
  • Some companies include vendors, customers, clients, and others in this process using the same approach. The only caveat here is to watch potential conflicts of interest.

One company that hires predominately customer service reps gives every CSR a stack of business cards so that when they interact with someone who offers good service, they can hand them a card. The back of the card says something to the effect of, “You’ve given me good service today. Our company is always looking for people who can provide good service. If you’re interested, contact us at (123) 456-5678 or go to company.com.” It’s important to provide guidelines for avoiding conflicts of interest. The last thing you want your employees to do is hand those cards out at a client’s office!

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.

Independent Contractors and Certificates of Insurance

By Business Protection Bulletin | No Comments

More former employee status jobs are becoming independent contractor assignments. Companies have various reasons for this transition, liability is the main reason. Whether liability for the employer’s share of social security or completed operations, employers decrease risks through changing employee status to independent contractor.

Liability, however, flows upstream. If the contractor has insufficient funds or insurance, the liability transfers to the engaging company.

The engaging company must require certificates of insurance (proof of insurance) from the independent contractor. Workers’ compensation, automobile liability and general liability are often required.

Some companies charge a percentage of the contract if insurance is not in place. This policy is flawed.

1. Injuries incurred under workers’ compensation affect your experience modification for three
years. You will pay for your contractors claim for three years.
2. General liability and automobile coverage use experience rating as well.
3. Your capacity to obtain insurance may be limited with the use of under- or un-insured.

What can you do to cure some of these issues?

Ask for a certificate of insurance for umbrella liability. Umbrella broadens underlying coverage, assures primary limits which are adequate, and acts as primary insurance for unusual claims.

Require contractor principles to be insured by workers’ compensation – have them opt in.

Verify all information with a phone call to the agent’s office or insurance company. This technique may sound a bit untrusting, but the financial health and ability to obtain insurance of your company demands thorough verification.

Independent contractors by definition are independent. You cannot control their employees or them. Demand verifiable certificates of insurance or do not allow the contractor to work for you.

Do not accept the transfer of risks from your subcontractors or independents to you. The long-term costs to your company can be devastating.

Company Pets

By Business Protection Bulletin | No Comments

In the modern, younger, more relaxed era of office life, company pets are becoming more popular. And why not? Hotels have dog concierges and rent a pet.

Homeowners’ policies have used canine exclusions for years, particularly after the dog’s first bite victim claims bodily injuries.

General liability policies follow suit.

What are the concerns with company pets?

1. Too enthusiastic welcoming.
2. Employee and visitor health concerns – allergies for example.
3. Trip hazards.
4. Hygiene.

Company pets, like the homebound varieties, enjoy a good enthusiastic welcoming for friends and new visitors alike. The average medical claim for people injured by these excited demonstrations is $30,000. The animal does not want to harm anyone, but accidents do occur.

Employees and visitors can have allergic reactions to different pets. Animal phobias are relatively common. Animals can carry human pathogens and transmit through various vectors. Agreed, pets are a calming and fun addition to the company family, but employee health trumps that need.

Smaller pets contribute to trips and falls, the most common workers compensation cause of loss. Visitors or customers may be more apt to trip over a small pet since they may not be aware of the risk.

Of course, your pet may go to the bathroom inside or bring in ticks, fleas or other bugs. Hair can become a hygiene issue, or even a curse to your electronic equipment.

Company pets do increase risks to health and injury as well as property. Risk management is the first step. Different pets offer different risk profiles. Large, friendly, shedding dogs obviously carry risks. Highly territorial animals can be dangerous. Avoidance may be the best path – simply do not have a company pet.

Liability insurance for your company pet should be discussed in advance with your agent or company representative to assure proper controls, risk management and coverage.

Environmental Liability and the Start-up Company

By Business Protection Bulletin | No Comments

Why should every start-up company consider environmental liability coverage?

The harmless products and processes of the past have emerged as dangerous long-term pathogens of the present many times – lead-based paint, asbestos, even cigarettes.

Start-ups begin with a new idea, product or service which cannot, by the nature of business, be thoroughly time-tested. As an entrepreneur, you must decide, with sparse data, to go forward.

Unfortunately, injured parties have the advantage of hindsight and long-term studies.

The period of uncertainty after new launches creates a long-term liability for environmental liability as well as products liability. Think about:

1. What are the byproducts?
2. What is our waste stream?
3. Can our components be recycled?
4. What will be the result of employee exposures?
5. Are there any known potential issues.

Review the history of products liability. Caveat emptor morphed into warning labels which soon became punch lines. “Do not use your lawn mower as a hedge trimmer” or “Do not dive into two feet of water” seem like unnecessary warnings, but the legal cases were lost and money changed hands.

Environmental liability is likely to evolve along this same pathway.

The late seventies brought government interventions like EPA and an environmental Cabinet Post. Since then, public consciousness has risen dramatically and sensitivity towards environmental issues has grown.

Unfortunately for business owners, even the most green-minded, environmental impacts are still not well defined and responsibility not settled.

Unable to reduce or modify the environmental risk, the best solution is transferring the risk by insuring it.

No matter how benign you believe your company’s product, process or service to be, you cannot adequately predict the environmental issues twenty years in the future. Certainly asbestos, a natural mineral, was considered safe by its promoters.

Look into environmental liability insurance for your start-up, or your mature company.

Employee Benefits Communications

By Business Protection Bulletin | No Comments

Do you communicate company benefits to your employees? Life, health, 401K, dental, paid vacations, days off or holidays? You should communicate, in writing, these benefits to your employees at least annually so they understand the cost of these benefits.

Many companies already explain costs and benefits to employees.

How about these benefits?

1. Company share of Social Security and Medicare.
2. Unemployment insurance.
3. Workers’ compensation and employee safety costs.
4. Company automobile insurance
5. Company general liability insurance

the first two points concern government insurance programs. Include these benefits because employees tend to be dismissive of the company expense involved.

Workers’ compensation insurance covers on the job injuries and illnesses for employees. It is a benefit. Simply multiply the individuals’ payroll by the rate. Explain why this is a benefit and how much it costs. Most employees do not give workers’ compensation a second thought, but largely because they are never told.

Company automobile insurance is a benefit for drivers or employees who ride in company transportation. Drivers benefit from the company assuming liability for all accidents and covering the individual driver. This protection is often overlooked as an employee benefit.

Consider common carriers. You pay for a driver and their insurance. You can avoid the risk of trucking accident by not using employees. You can avoid the risk of trucking by requiring your employee to provide insurance. When you choose to provide the insurance, you pay for your employee’s liability as well. That’s a benefit.

General liability insurance has similar impacts on employee liabilities as does the company automobile liability policy. The company assumes responsibility for employee errors in maintaining premises or manufacturing products.

Absent company risk management programs, employees might be held responsible for their liabilities. The independent contracting driver and the employee both face risks of road travel, but the employee has the benefit of company supplied insurance.

Communicate these benefits every year for two reasons:

1. Inform the employee of the costs of these benefits.
2. Remind the employee of these risks, and their responsibility to operate safely.

Obesity and the Construction Trades

By Construction Insurance Bulletin | No Comments

Obesity has just become a disease. But how is obesity defined?

The current definition is twenty percent more weight than the ideal weight for an individual’s height and weight. A six-foot one-inch man weighing 216 pounds is considered obese.

Typically, some big people who are muscled from labor are on sites. This definition will almost certainly paint the construction industry labor force as obese.

As a disease, obesity and its affects must be dealt with the Americans with Disabilities Act in mind. What accommodations will be required?

What will be the effect on workers’ compensation work related disease coverage?

Safety personnel should consider these issues. Perhaps some site humor can be expected, but worker body mass index (BMI) might be a future consideration when hiring.

Employees who appear obese by the old definition probably need to be educated on the risks of weightiness. The physical stresses of the construction industry added to true body fat content is not a joke, it is dangerous. Even some safety equipment is not available to fit certain body types.

Consider adopting a physical fitness culture for onsite workers which includes maintaining a body mass index of below 30. This number may result in technically obese employees, but the BMI does not consider muscle mass or conditioning.

Visual inspection of the crew will indicate relative obesity which can be addressed individually. Begin to move in that direction, and then when the clarifying regulations promulgate new standards, you’ll be in a position to correct any deficiencies.

The secondary issue is whether this disease is work related; therefore treatment is covered by workers, compensation, or is it an individual issue which means Affordable Health Care Act or group coverage.

The lines blur with this issue. Good risk management suggests watching this issue carefully for future regulations, but in the meanwhile, begin informing employees about preventative healthcare.

What is OCP coverage?

By Construction Insurance Bulletin | No Comments

Owners and Contractors Protective Liability (OCP) coverage form addresses the vicarious nature of some liability issues. When an owner orders a subcontractor to complete work, and property damage or bodily injury to a non-employee occurs, the subcontractor is liable. But suppose the injured party sues the owner too. The owner will not have liability coverage for the acts of the subcontractor – vicarious liability.

OCP is designed for the subcontractor to insure the owner under these circumstances.

Suppose a contractor is acid washing a building. Traffic lanes near the curb are blocked, it’s a windless day. The crew is acid washing while a car pulls into the barricades and parks. The crew continues doing the job.

The driver complains to the owner and the contractor about damage to the paint job. The contractor turns the claim in and awaits denial since the driver ignored all the warning signs. The building owner can only respond to the claim through the OCP policy since it was within the scope of the work of the subcontractor at his direction.

Now suppose under the same scenario, the workers stopped and yelled at the driver to move his car. The building owner comes out and directs the workers to keep going regardless of the car or its paint job. The subcontractor would be covered under his liability policy, but the building owner would be excluded under the OCP because the damage was a result of his direct instructions, in effect, he became the workers supervisor.

OCP extends coverage to owners who rely on the subcontractor to supervise and complete operations. When the owner crosses the line to take control of the work, OCP no longer applies.

OCP also excludes the usual exclusions under a general liability policy. You cannot be the building owner and the contractor.