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Monthly Archives

November 2015

The Origin of the Computer Virus

By Cyber Security Awareness

cyber-1511-2The computer virus seems to have spawned into existence in the 1990’s when users started hopping online with AOL. In truth, the history of the computer virus dates back about forty years. The modern virus, which spreads over the internet and across networks, really took off in the 80’s and 90’s, but developers and programmers have been experimenting with viruses in closed environments since the early 1970’s.

The very first virus was the Creeper. The Creeper wasn’t as harmful as today’s viruses, it just displayed a message reading “I’m the creeper, catch me if you can!” The virus was detected on the ARPANET, a sort of proto-Internet. Creeper was written as an experiment by Bob Thomas of BBN Technologies back in 1971. Thomas just wanted to see what would happen with a self-replicating program, infecting the TENEX operating system.

This brings us to the first software security program, the Reaper, designed specifically to kill the Creeper.

Another major forerunner of the modern virus was 1982’s Elk Cloner, the first virus to be released outside of a closed environment. The virus was written in 1981 by Richard Skrenta, attaching to the Apple DOS 3.3 OS via floppy disk. Skrenta wrote this virus while still in high school. It displayed a short poem that began with “Elk Cloner: The program with a personality.”

Neither of these proto-viruses were truly harmful, but they helped to show programmers, white hat and black hat alike, how vulnerable computer systems could be. No doubt, Skrenta and Thomas inspired coders of both viruses and antiviral software.

The modern virus really took off in the 1990’s with America Online and the worldwide web. Here, self-replicating viruses had global access for the first time, and best of all, the average computer user was no longer as computer-savvy as they had been in the 1970’s and 1980’s. It was the perfect breeding ground for viruses.

Today, there are a few hundred specific strains of viruses and malware, with millions of variations. Viruses have come a long way since the Creeper, and so have the counter-measures.

“Helpful” Worms and White Hat Nuisances

By Cyber Security Awareness

cyber-1511-4By definition, there’s nothing really wrong with viruses. They’re just self-replicating, that’s all. If the cash in your wallet was self-replicating, you probably wouldn’t complain. Virus researcher Fred Cohen has even put out a $1,000 bounty for the first developer who can come up with a truly helpful virus. So far, he hasn’t paid out, but theoretically, a good computer virus is possible.

“Helpful” worms, however, may prove that even a “good” virus is a bad idea.

Helpful worms like Welchia, Den_Zuko, Cheeze, Mellenium and CodeGreen were designed in the name of helping the user. Welchia’s design was actually kind of clever, finding and eliminating the Blaster worm by seeking out the same vulnerabilities as the Blaster worm, and then, usually, applying a security patch to keep any other worms from working their way in. The Welchia worm was programmed to automatically remove itself at a set date.

Here’s the problem though: The main thing that worms do is slow down your network by feeding a constant stream of data through it. Whatever else they might do, that’s the main thing people hate about worms. A helpful worm slows down the network just as much as a harmful worm will. Additionally, helpful worms are known to reboot the computer without the user’s consent, which can be a major problem if you’re right in the middle of a project that you haven’t saved recently.

Helpful viruses are an interesting idea in theory, but they still self-replicate without the user’s consent, they still eat up RAM and other resources, they still slow the network down. As technology advances we may see a day when helpful viruses are able to actually improve a computer’s performance without any adverse effects. For the time being, however, there is that old saying about where the road paved with good intentions leads to…

Question of the Month

By Your Employee Matters

em-2-1511Question: We are currently downsizing as part of our company reorganization and are considering redesignating some of our employees as independent contractors. Are there any potential ramifications for making the change?

Answer: It is possible to change a worker’s status from employee to independent contractor provided that the worker meets the legal requirements of an independent contractor. Whether a worker is an employee or independent contractor is determined through a series of legal tests established by state and federal courts and agencies. For example, for federal tax purposes the IRS uses common law rules to determine whether a worker is an independent contractor. The common law rules examine various facts regarding the degree of direction and control the employer has over the worker and the amount of independence the worker has in regards to performing the work. The more direction and control an employer exerts over the worker, the more likely the worker is an employee. Conversely, the more independent the worker is, the more likely the worker is an independent contractor. It is important to note that there is no single factor that is determinative. The determination is based upon the totality of the circumstances.

While there are other tests at both the state and federal levels, most of them look at the same factors contained in the common law rules and focus on the amount of direction and control the employer has over the worker. The major difference is how many factors the court or agency looks at and how much weight is given to particular factors. For comparison, consider the factors used in the economic realities test, which is used by federal courts and the U.S. Department of Labor (DOL) to determine whether a worker is an employee or independent contractor under the federal Fair Labor Standards Act (FLSA).

Employee misclassification is one of the top enforcement issues for the U.S. DOL’s Wage and Hour Division (WHD). This is because under state and federal laws employees are provided protections and benefits that are not provided to independent contractors, such as minimum wage, overtime, family and medical leave, discrimination and harassment protections, unemployment insurance, workers’ compensation, and medical coverage. By misclassifying an employee, the employee is denied access to benefits and protections to which he or she is entitled. In addition, the employer avoids withholding income tax and paying into programs such as Social Security, Medicare, unemployment insurance, and workers’ compensation.

While making sure employees are properly classified can be a huge task, the consequences for misclassifying an employee can be devastating. If the WHD/IRS perform an investigation or audit of an employer, they will examine all employees and independent contractors for a three-year period.

The ramifications for an employer can vary depending on whether or not the WHD and the IRS determine the misclassification was unintentional or intentional, or even fraudulent. With respect to the FLSA, penalties include liquidated damages (i.e., double back wages) and attorneys’ fees and court costs. In regards to federal taxes, if the misclassification was unintentional, the employer faces at least the following penalties based on the fact that all payments to misclassified independent contractors have been reclassified as wages:

  • $50 for each Form W-2 that the employer failed to file because of classifying workers as an independent contractor.
  • Since the employer failed to withhold income taxes, it faces penalties of 1.5 percent of the wages, plus 40 percent of the FICA taxes (Social Security and Medicare) that were not withheld from the employee, and 100 percent of the matching FICA taxes the employer should have paid. Interest is also accrued on these penalties daily from the date they should have been deposited.
  • A failure to pay taxes penalty equal to 0.5 percent of the unpaid tax liability for each month, up to 25 percent of the total tax liability.
  • $50 for each failure to obtain a Social Security number.

If the IRS suspects fraud or intentional misconduct, it can impose additional fines and penalties. For instance, the employer could be subject to penalties that include 20 percent of all of the wages paid, plus 100 percent of the FICA taxes — both the employee’s and employer’s share. Criminal penalties of up to $1,000 per misclassified worker and one year in prison can be imposed as well. In addition, the person responsible for withholding taxes could also be held personally liable for any uncollected tax.

Not to be forgotten, employers may also face tax and other penalties under state laws. For example, in California these penalties include repayment of back payroll taxes, subject to interest and a 10 percent penalty on the unpaid taxes. Failure to withhold and pay payroll taxes can also result in a misdemeanor charge, and the employer can be fined up to $1,000 or sentenced to jail for up to one year, or both. Additionally, Cal. Labor Code § 226.8 imposes penalties of up to $25,000 on employers who misclassify employees.

While employers may choose to navigate the various tests on their own, due to the severity of penalties for misclassification, employers are strongly encouraged to seek counsel when uncertain about the status of certain employees.

DOL to Start Enforcing New Home-Care Rule November 12

By Your Employee Matters

em-4-1511The U.S. Department of Labor has announced that it will start next month enforcing the new“Home-Care” Final Rule, which prohibits third-party employers from taking advantage of the overtime exemption for certain domestic service workers and redefines the term “companionship services” under the Fair Labor Standards Act.

In August the U.S. Court of Appeals for the District of Columbia Circuit found in Home Care Association of America v. Weil that the Final Rule was valid.

The plaintiffs, associations that represent home-care staffing agencies, asked the Supreme Court to stay (suspend) the Final Rule pending their request for Supreme Court review of the D.C. Circuit decision.

This week, the Supreme Court denied the stay, meaning that the DOL is free to begin enforcing the Final Rule. The associations’ challenge to the Final Rule itself will continue.

The DOL announced on Wednesday that it will begin enforcing the Final Rule on November 12. The DOL will exercise its prosecutorial discretion with respect to any violations found between now and the end of the calendar year, taking into consideration (among other things) the employer’s good-faith attempts to comply with the Final Rule.

The Final Rule was originally issued by the DOL in October 2013 with an original effective date of January 1, 2015. It remains open to question whether individual plaintiffs can pursue alleged violations dating all the way back to January 1, 2015.

Article courtesy of Constangy Ellen Kearns, Boston Office and Robin Shea, Winston-Salem Office

Federal Contractors to Receive Paid Sick Leave

By Your Employee Matters

em-3-1511On 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.

Editors Column: Looks Like the Government Has its Own EEOC Problems

By Your Employee Matters

DonPhinEvery once in a while, I amuse myself by reading The DIGEST Of Equal Employment Opportunity Law. If you’re looking for some good bedside material, you can always link here. Here’s what I learned from a perusal of this most recent Digest:

1.  If an employee comes into your work environment with a pre-existing asthmatic condition and you don’t transfer them away from the irritants causing or exacerbating their problems they may get depressed and you may get hit with a disability accommodation claim.

2.  The EEOC awards additional damages when they think an employee has suffered emotional hardship. According to some of the cases, damages were recovered for: hopelessness, depression, anxiety, sleeplessness, hair loss, weight gain, loss of appetite, migraine, a divorce, severe mood changes, isolation, anger, sorrow, loss of self-esteem, crying spells, pain, and muscle spasms. Bottom line: it’s not easy being a federal employee!

3.  I am always amazed at how long people will put up with unfair harassing, hostile intimidating, and otherwise poor conduct. Claimants say they suffer these things for years. Are they so afraid of their ability to get a new job they would rather suffer the pain they know? And just how bad can it really be if they are willing to tolerate it…sometimes for years? I remind folks: it’s called work, not jail.

4.  A number of cases raised the possibility of accommodating employees by allowing them to work from home whether it’s because they can’t physically handle a long commute, they’re being harassed, or suffering some kind of other malady. It matters not that you don’t offer this benefit to your existing employees. If telecommuting would in fact help to accommodate someone they get special treatment.

5.  It seems like there wasn’t a single federal agency that wasn’t named in some type of suit-Department of Veterans, Department of Justice, United States Postal Service, Department of Transportation, Department of Treasury, the Army, Airforce, Navy and Department of Defense, TVA, Homeland Security, Social Security Administration, Department of Commerce, NASA and I’m sure I missed an agency or two. It appears that a number of these agencies breached the settlement agreements they got into with their employees.

And this is the same government that’s trying to tell us how to properly manage our workplaces!

6.  The Digest concluded with a brief discussion surrounding religious expression and harassment. The bottom line is this: keep religion out of the workplace unless you are discussing it on your break or at lunch with somebody who’s willing to participate in the discussion. Do not bring it into performance discussions, and do not harass or act in a hostile manner towards people even if you believe they are possessed by the devil.

In one case against Department of Justice, a Unit Chief commented that complainant had a spiritual disconnect, questioned whether they love Jesus and God, and says she did not think God wanted them to work at the agency. Luckily for the DOJ, the court found that the employee would have been terminated anyway due to their poor performance and that all the Unit Chief needed was some appropriate training. I don’t make this up.

 

 

Group Life Insurance for Your Employees

By Employment Resources

eb-4-1511If you’re looking for a low-cost, high-value benefits product that can help you attract and retain employees, consider offering Group Life insurance coverage.

Here’s how these plans work: Because the overall risk of death among a group – defined as 10 employees or more – is far lower than that of an individual Life policyholder, the insurance company can offer you a far lower premium rate (the overall rate for your company depends on the group’s size and distribution by gender and age, together with the number of claims filed). You’ll pay a fixed premium for every $1,000 in coverage. Because Group Life is usually bundled with other benefits, such as health plans, your administrative costs will be minimal.

What’s more, unlike individual Life policies, coverage is written on a “guaranteed issue” basis, with no need for plan participants to pass a physical exam.

Group Life policies usually pay the beneficiary the employee’s salary for a full year. This provides a valuable short-term financial cushion for the loss of a breadwinner’s income. Some insurance companies offer extended coverage, with a death benefit of two or three years’ salary (and such add-ons as Accidental Death & Dismemberment and/or Travel insurance) to participants – usually managers or supervisors – who pick up part of the premium. This option also includes a portability feature that allows employees to keep their coverage when they change jobs or retire.

If you offer Group Life benefits, your insurance company will review the rates and terms every five years. It makes sense to re-evaluate your program whenever you’re planning significant changes in your workforce (hiring more employees, raising salaries, and so forth). You might well be able to enjoy improved coverage at lower costs.

As employee benefits professionals, we’d be happy to offer our advice on selecting a comprehensive, cost-effective Group Life plan.

Create a Wellness Program for Employees

By Employment Resources

eb-2-1511 (1)According to the forth-quarter 2010 Principal Financial Well-Being Index, 43% of American workers cite the achievement of better overall health as the number one reason they would or do participate in a wellness benefit program. In second place, with 33%, was the reduction of personal health care costs. In third place, with 31%, was the increased chance of living a healthier and extended life.

The Principal Financial Well-Being Index is released by the financial services provider, Principal Financial Group. This is a quarterly survey of American workers from American businesses with between 10 and 1,000 employees. The findings of the fourth-quarter 2010 survey involved data from 528 retirees and 1,159 employees.

Some key points from the survey included:

  • When offered by an employer, blood sugar screenings had an 84% utilization rate. This was an 18 point increase from 2009 statistics.
  • When offered by an employer, weight management programs were utilized by 53% of employees. This was a 25 point increase from 2009 statistics.
  • When offered by an employer, personalized action plans for conditions considered high-risk were utilized by 68% of employees. This was a 21 point increase from 2009 statistics.

Some credit rising health care costs and more public awareness about diseases such as heart disease and diabetes with American workers being more ready to take action toward their own health. None the less, as evidenced by the substantial increase in how many workers are taking advantage of wellness benefits, there is clear indication that there’s a growing element of employees taking more personal responsibility for their health.

Employers Can Benefit From Wellness Programs Too
Personal responsibility might drive employee participation in wellness programs, but employees have much to gain from offering wellness and encouraging its usage. During the index, workers said the following occurred as a direct result of the wellness program offered by their employer:

  • Forty-three percent felt they were motivated to perform better and work harder.
  • Twenty-eight percent said they were absent fewer days from work.
  • Thirty-eight percent said they experienced improved productivity and energy while at work.
  • Forty-eight percent said that the offering of wellness benefits encouraged them to remain with their current employer.

In closing, this research is echoed by countless other studies showing employers that invest in the wellness of their employees by offering them the means and the educational resources they need to control their own wellness not only gain physically healthier employees, but also productivity and cost-saving increases.

Pick the Right Dental Plan

By Employment Resources

eb-1-1511Of the possible group benefits offered by employers, employees often say Dental insurance is one of the most desirable benefits. And, for employers looking into adding to their benefit offerings, the predictable and relatively low premiums associated with Dental insurance makes it an excellent option. Employers should comparison shop for a carrier offering a Dental insurance plan that’s applicable to the needs of their workforce and a good value. Whether planning to pay a portion of the cost of the coverage for employees or provide the coverage as 100% employee-paid, employers should know the answer to some questions before making a plan decision.

1.  What dental service providers will be allowed?

The employer should find out if the plan has a preferred network of dental providers and how the network affects coverage. For example, if the dental care is received outside the preferred network, some plans will pay nothing; some will pay a reduced benefit; and others will pay regardless of the provider, but have discounted network providers available. Plans that have a preferred network should also be scrutinized carefully to make sure they provide the desired amount of provider choice. Employers should know what the turnover rate is for the network provider dentists; if the network includes specialty services, such as pediatric dentistry, orthodontics, periodontistry, and endodontics; and if any network restrictions apply to dental specialty services.

2.  What are the covered and excluded services under the plan?

The employer will want to pay attention to what specific areas of service the plan will cover. For example, some preventive services pay for a teeth cleaning, but exclude fluoride treatments or sealants. If orthodontic services are covered, they might exclude coverage for services that are for cosmetic purposes or adults in general.

3.  Will the plan provide coverage for pre-existing conditions and extended treatments that began before the effective date of the coverage?

4.  What percentage of the cost of the premium goes toward administrative fees and what percentage goes toward the payment of benefits?

5.  Exactly how will service coverage be paid?

Employers definitely need to know what rate services will be covered at. Take a plan that says it pays 100% on dental cleanings as an example. The employer will want to clarify if that means the plan pays 100% of what is charged by the serving dentist or 100% of what the insurance company determines is the usual, customary, and reasonable (UCR) allowance fee. Comparing the UCR allowance fee can make a big difference in the quality of dental coverage, as it often varies per insurance company.

6.  Are communication materials, IVR enrollment, online enrollment, and other forms of enrollment support offered by the Dental insurance provider?

7.  Will the plan require a specific amount or percentage of employees to enroll if the plan is offered as a 100% employee-paid benefit?

With careful consideration, employers can pick a dental plan that meets both employee and company needs. One of our insurance brokers can also be beneficial in helping to come up with a checklist of considerations when comparing dental plans and carriers.

 

Testing for Dementia – New Life Insurance Policies

By Life and Health

lh-4-1511More and more senior citizens and those nearing retirement are buying Life insurance these days. Many of these people are worried that their spouse will run out of money if they die; while others hope to make up for losses suffered in the stock market decline.

An increasing number of Life insurers require testing the cognitive abilities of older applicants, in addition to taking a physical exam. Some companies make it standard practice to test applicants 60 years or older, while others begin testing at age 70 or 80.

The reason: cognitive impairment has a high correlation with early mortality. A study by the Alzheimer’s Association (http://www.alz.org/ ) found than 60% of people with Alzheimer’s at age 70 will probably die before they turn 80, compared to 30% of those who don’t have the disease. Alzheimer’s is the sixth-leading cause of death in the U.S., with fatalities soaring by 66% between 2000 and 2008 – a period during which deaths from other illnesses, such as breast cancer and heart disease, fell.

Because there can be a genetic component to Alzheimer’s, some experts believe that Life insurance applications will soon include questions about the cognitive abilities of family members (as they already do about a family history of cancer or cardiac disease). Bear in mind that the outbreak of the AIDS epidemic resulted in adding questions about HIV/AIDS to Life applications.

This focus on cognitive impairment among senior applicants offers one more reason for consumers to buy Life insurance when they’re young, in good health, and can benefit from lower rates.