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COMMUNICATE CLEARLY WITH EMPLOYEES TO HELP CONTROL HEALTH PLAN SPENDING

By Employment Resources

Implementing cost-sharing increases or cutting benefits in an effort to bring health plan costs under control can be unpleasant for employers, with concerns about how the news will impact employee productivity and morale. The better employees understand the reasons such plan changes are necessary, however, the greater the chance that the changes will have a positive impact. According to the 2009 UBA Employer Benefit Perspectives survey from United Benefit Advisors, more than 80% of employers felt employees are at least aware of the health care crisis and the reasons for increased cost sharing or benefit reductions; a little less than 20% of employees themselves said they were upset about the benefit reductions or cost increases that their employers implemented. Since communications can play an important role in bringing employees on board with health plan changes, what steps can employers take to make implementation as smooth as possible?

Here are a few ideas, both for plan-change-targeted and ongoing health plan communications:

  • Make sure employees are aware of the reality of health care costs. Research and publicize to employees national health care cost data and cost trends. Be specific: For example, contrast the average cost of a hospital stay or doctor’s office visit today with that of five or 10 years ago. Do the same for the average cost of coverage under various types of health plans.
  • Share specific cost data from your company’s health plans. Employees frequently think of the cost of the health plan only in terms of what they pay in premiums, and overlook the employer’s contribution. This narrow view hides the true cost of health care coverage, as well as what the employer pays toward the cost of coverage (which, ideally, employees should see as part of their total compensation package).
  • Use concrete examples to illustrate how health plan spending can cut into the ability of the company to make outlays in other areas. For example, determine the approximate dollar amount increase in the company’s health plan contribution one year to the next, and compare it to some other company expense. Is the amount of the increase equal to an employee salary? Stated differently, has health plan spending growth prevented a needed hiring? Use this process to show how health plan cost increases can eliminate raises and bonuses, result in the cancellation of company events, delay the purchase of new equipment, and the like.
  • Help employees see that when they use their health benefits astutely, they not only save themselves money, but also keep plan costs down as well. For example, when employees use preferred providers, they receive the highest plan benefit, and the plan pays the lower, negotiated preferred provider rate. When employees understand how health plan spending can impact salary increases, staffing, and other investments, this can motivate them to use the plan more wisely.
  • Use statistical data to show employees how, generally, unhealthy people use more health care, resulting in higher plan costs. If employees accept this, they’re more likely to try to follow recommended preventive care schedules, attempt to change unhealthy behaviors, and aim to become more physically fit overall.

Employers want employees to be active participants in controlling rising health care costs. To-the-point communications can bring employees on board in this effort, resulting in more manageable costs for employer and employee alike.

BUSINESS INTERRUPTION: BI = T x Q x V

By Risk Management Bulletin

It’s easy to express some of the most important business concepts in clear terms: “Buy low, sell high.” “The devil is in the details.” “Time is money.” However, implementing such familiar phrases often requires complex thought processes, calculations, assumptions, expertise, and creativity.

When a business is interrupted, the owner makes a seemingly clear request to an insurance company: Pay me for the sales I would have had. Yet, a complex reality can underlie this reality. When the owner has to prove the sales that they would have had, the projected or estimated amount is often a challenge. And because insurers often hear “We were having our best year yet …” from claimants, it’s no surprise that they often view Business Interruption claims with a measure of skepticism.

These claims can become more difficult and even contentious if differences of interpretation arise. A successful claim might require maneuvering through such inherently gray areas as financial projections, consumer demand, and policy interpretation, to reach a number that’s reasonable, credible, defensible, and well supported.

This equation summarizes the formula for determining Business Interruption losses:

BI = T x Q x V

where:

BI = Business interruption looses

and:

T = The number of time units (hours, days) that operations are shut down
Q = The quantity of good or services normally produced, or sold, per unit of time used in T
V = The value of each unit of production or service, usually expressed as profit.

When you file a Business Interruption claim, we stand ready to help you implement this equation. Feel fee to get in touch with us.

HOW FIREPROOF IS YOUR WORKPLACE?

By Risk Management Bulletin

On an average day, there are more than 200 workplace fires in the U.S. These fires kill hundreds of workers a year, injure thousands more, and cost American businesses billions in damage and lost productivity.

An effective workplace fire prevention program should include these 10 essential elements:

  1. Inspect all areas of your workplace for fire hazards on a regular basis. Pay particular attention to areas where fires are most likely to occur. More than half of all industrial fires break out in everyday workspaces, while a high percentage start in storage areas.
  2. Educate employees about fire hazards. Use bulletin boards, memos, and safety meetings to distribute fire prevention information. Update your training whenever new equipment or processes introduce new hazards.
  3. Have the right fire extinguishers. Have maintenance check extinguishers throughout your facility regularly to make sure they’re charged properly. If you expect employees to use extinguishers, OSHA requires that you train them to handle an extinguisher effectively.
  4. Store materials safely. Keep storage areas well ventilated and free of ignition sources. Be particularly careful with flammables
  5. Dispose of wastes promptly and correctly. Don’t allow combustible waste materials to build up. When disposing of other materials, consider the ease of ignition; For example, oily rags should be disposed of in closed metal containers.
  6. Emphasize good housekeeping. Ensure that all work areas are clean and free of fire hazards.
  7. Make sure ventilation systems operate effectively to remove flammable vapors, gases, and combustible dust.
  8. Service machines regularly. Set up and enforce an effective maintenance schedule.
  9. Pay attention to electrical safety. Check circuits, outlets, wires, and plugs regularly. If you allow employees to use coffeemakers, fans, and other appliances, require them to be used safely and turned off at the end of the shift.
  10. Enforce fire safety rules, to make sure that all employees follow these precautions.

EMPLOYMENT DISCRIMINATION: IT’S A JUNGLE OUT THERE!

By Risk Management Bulletin

Recent economic, cultural, and legislative developments have left businesses increasingly vulnerable to employment-related litigation. The recession has led to massive layoffs and pay cuts, fostering the spread of discrimination claims. The Equal Employment Opportunities Commission reported a 15% year-to-year increase in filings from in 2008 – and the rate of increase has been growing throughout 2009. Experts see the trend intensifying this year, as the EEOC greenlights litigation based on claims filed during the past two years. Employment law attorney Paul Siegel expects a “tsunami of discharges and therefore claims and threatened claims [leading to] a renaissance of lawsuits.”

Recent accusations of affairs in the workplace by such high-profile personalities as David Letterman, and ESPN commentator Steve Phillips, have highlighted the prevalence of sexual harassment on the job – and the incentive for plaintiffs attorneys to file harassment litigation.

What’s more, two federal laws that took effect last year make it easier for disgruntled employees to sue employers. Under the Lily Ledbetter Fair Pay Restoration Act, discriminatory pay decisions occur with each pay period, making every paycheck a potential start point for a wage discrimination suit. The Americans with Disabilities Act Amendments Act of 2008 makes it more difficult for employers to define such terms as “reasonable accommodation,” “undue hardship,” and “essential job functions.”

To help cushion your business against the impact of discrimination-related litigation in this threatening environment, risk managers recommend these guidelines:

  • Maintain, enforce, and update an effective anti-discrimination policy.
  • Communicate this policy to all employees.
  • Consult with outside counsel before making any significant employment-related decisions (such as pay cuts or layoffs).
  • Carry comprehensive Employment Practices Liability Insurance (EPLI).

Our risk management professionals would be happy to help. Just give us a call.

FORM OF THE MONTH

By Your Employee Matters

OSHA’S GUIDE ON HOW TO PROTECT YOURSELF IN THE WORKPLACE DURING A PANDEMIC
(PDF)

It’s hard to ignore the potential exposure of the H1N1 flu. What would you do if it struck the employees at your workplace? HR That Works Members should also look at the Disaster Planning materials on the site.

RECENT FEDERAL ACTIVITY REGARDING HIRING REQUIREMENTS

By Your Employee Matters

The federal government has taken three actions recently that affect all employers regarding their hiring processes. Employers must be aware of these requirements as the failure to take appropriate action could result in civil and/or criminal penalties.

First, the U.S. Citizenship and Immigration Services (USCIS) revised the Form I-9 used to verify employment eligibility effective April 3, 2009. Generally, the revised Form I-9 regulation narrows the list of acceptable documents and requires that only unexpired documents be used. List A expanded with the addition of two documents that are acceptable for identity verification (specially-marked machine-readable visas and documentation for certain citizens of the Federated States of Micronesia and the Republic of the Marshall Islands) and eliminated three documents that are no longer issued and have expired (Forms I-688, I-688A and I-688B). The revised I-9 contains other technical changes, including clarification that the only Social Security account number cards acceptable for List C are those that do not specify on the face that the “issuance of the card does not authorize employment in the United States.”

Second, the U.S. Department of Homeland Security (DHS) recently announced that the current administration intends to rescind regulations and procedures for employers that receive employee “no-match” letters from the Social Security Administration. The administration continues to support the use by federal contractors and subcontractors of E-Verify- the electronic employment verification system operated by the USCIS.

Seemingly, these announcements reflect a new immigration enforcement approach to target employers who hire illegal immigrants rather than individual employees who do not have the right to work in the United States.

Third, and ostensibly in support of the apparent shift in focus, the U.S. Immigration and Customs Enforcement (ICE) issued notices of inspection for a Form I-9 audit to 652 businesses nationwide on July 1, 2009. In issuing those notices, ICE stated that they were “a direct result” of its new strategy to build criminal cases against businesses suspected of hiring undocumented immigrants before they raid workplaces. With this one action, ICE issued more notices of inspection than it did during the entirety of 2008, and more notices are expected to come this year. In particular, ICE appears to be targeting industries and areas of the country that traditionally use undocumented workers, and employers who in the past have been flagged as potentially non-compliant (i.e., received no-match letters in recent years).

When conducting an audit, ICE may seek information including:

  • Original I-9s, which must be retained for three years after the date of hire or one year after the date of termination, whichever period is longer.
  • An alphabetical list of all current and former employees with the hire and termination dates in electronic format.
  • Copies of quarterly wage and hour reports and/or payroll data for all employees (current and terminated) covering the period of inspection, and quarterly tax statements.
  • Business documentation (contact information, employee numbers, Social Security numbers, articles of incorporation, licenses, etc.).
  • Copies of Social Security no-match letters.
  • A copy of any I-9 policy.
  • The name and responsibility of those who complete I-9s.
  • The date the business was established, form of the business, where it is incorporated and its revenue.
  • The department or job titles of employees.
  • Quarterly unemployment insurance reports with the state or quarterly returns for Federal Income Contributions Act taxes.

Practical Advice

In light of the government’s increased focus in this area, be prepared for an audit. Be sure to use the current Form I-9 for new employees. Check employment files to ensure a Form I-9 is completed for all employees (new, existing and former) within the required timeframes. Maintain the I-9 documents in a separate file for ease in compiling the required information in case of an audit (and to avoid any violation of various federal and state discrimination laws). Finally, be responsive to any indication that information an employee provided as part of the Form I-9 is inaccurate.

Contributed by Worklaw Member Millisor & Nobil.

ADA DISABILITY DEFINITION REMINDERS

By Your Employee Matters

Last month the EEOC issued regulations to help enforce the ADAA. You can anticipate that most of these regs will become final. They remind us of these important ADAA distinctions, including the fact that the definition of “disability” shall be interpreted broadly:

  • A limitation need not “significantly” or “severely” restrict a major life activity in order to meet the disability standard.
  • “Major life activities” is defined in two “non-exhaustive” lists:
    • One which includes “activities such as caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working”
    • One which includes “major bodily functions, such as functions of the immune system, special sense organs and skin; normal cell growth; and digestive, genitourinary, bowel, bladder, neurological, brain, respiratory, circulatory, cardiovascular, endocrine, hemolytic, lymphatic, musculoskeletal, and reproductive functions.”
  • Mitigating measures other than “ordinary eyeglasses or contact lenses” shall not be considered in assessing whether an individual has a disability.
  • An impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active.
  • Individuals covered under the “regarded as” prong are not entitled to reasonable accommodation (this is still required in California!).

Remember, our favorite ADA resource is the Job Accommodation Network.

EEOC WINS RECORD $6.2 MILLION ADA SETTLEMENT

By Your Employee Matters

On September 29, 2009 the EEOC entered a $6.2 million consent decree with Sears Roebuck and Company covering ADA violations that involved more than 400 employees. The decree requires Sears to notify each employee who is on leave for job-related injuries 45 days before their leave ends that they may request reasonable accommodation to return to work upon completion of the leave. The company must also list forms of reasonable accommodation that might be available to the employee, such as modified duty, transfer to another job, or a continuation of leave. Sears is required to establish a central management team to administer the leave requests and reasonable accommodation analysis.

This case began when a former service technician attempted to return to work when his Workers Compensation leave expired and while he still had limiting effects due to the job-related injury. Sears neither discussed reasonable accommodation with the technician nor offered him reasonable accommodation. The employee filed a discrimination charge and the EEOC sued Sears. During the discovery process, the EEOC learned that Sears did not provide reasonable accommodation for those who had completed Workers Compensation leave but were still disabled.

This consent decree illustrates a frequent problem with employer treatment of Workers Compensation claims under the ADA and FMLA. If an employee has a job-related injury or illness, the employer should assess whether it qualifies as a serious health condition. If so, the employee’s FMLA rights run concurrently with their Workers Compensation rights. If an employee seeks to return to work upon the expiration of FMLA or more generous leave for job-related injuries or illnesses and has limitations due to the injury or illness, the employer should engage the employee in a reasonable accommodation dialogue. Remember that under the new ADA, the definition of disability is interpreted broadly in favor of concluding that an individual has a disability. The ADA requires a case-by-case reasonable accommodation analysis. For example, in one situation, the employer might be able to accommodate the injured employee by extending leave with the opportunity to return to the same or an equivalent position; in another situation, perhaps accommodation is possible by transferring the employee to a different job which the employee can perform within his or her restrictions, even if that job pays less.

Article courtesy of Worklaw® firm Lehr Middlebrooks and Vreeland (www.lehrmiddlebrooks.com).

EEOC SUES EMPLOYER OVER BACKGROUND CHECKS

By Your Employee Matters

The June 2009 Employment Law Bulletin alerted readers to the EEOC’s focus on criminal background checks. On September 30, 2009, the EEOC sued an employer for using criminal background checks. In EEOC v. Freeman (D. MD), the commission alleged that the Freeman Companies disqualified applicants based on either their credit history or arrest or conviction records. The EEOC claims that the use of these background checks has a discriminatory impact based on race, national origin, and gender, because they tended to disqualify African-American, Hispanic, and male applicants at a substantially higher rate than other classes. The commission also argues that the credit and background checks “are not job related and consistent with business necessity” and that “appropriate, less discriminatory alternative selection procedures” are available to the employer. Finally, the EEOC claims that the use of the background check and credit histories deprive “African-American, Hispanic, and male job applicants of equal employment opportunities and otherwise adversely affect their status as applicants because of their race, national origin and sex,” by discouraging them from even applying for jobs.

Note that the EEOC’s case is not based on whether an employer has the legal right to use credit and criminal history checks. Rather, it argues that the use of such information has a discriminatory impact based on race, national origin, and gender, and thus violates Title VII of the Equal Employment Opportunity Act unless the employer can show the business necessity of using this information and that less discriminatory alternatives are unavailable. This lawsuit could have a substantial impact on employer hiring practices nationwide. We’ll monitor the case and apprise you of any developments.

Article courtesy of Worklaw® firm Lehr Middlebrooks and Vreeland (www.lehrmiddlebrooks.com).

MAKE YOUR EMPLOYEES MORE PRODUCTIVE NOW

By Your Employee Matters

Here are five powerful, proven ways to increase employee productivity today.

  1. Set a goal for productivity improvement. When business leaders and managers are asked about their specific goals for improving employee performance, they usually have none! Most companies don’t have a goal or a plan for improving employee performance. They remain in a reactive mode, providing performance reviews with no specific goals. You should also set a goal for personal improvement. For example, if you want to become 10% more productive in the next 12 months, or even 90 days, what are your plans for reaching this goal?
  2. Test and train people. There’s no substitute for being very clear about people’s skill sets, no matter what the position. Lawyers, architects, nurses, administrative assistants, HR executives, and everyone else in the workplace has a particular skill set they rely on daily. These skills can either be tested online by companies such as BrainBench.com, or by creating a test yourself. Once you understand where your employees might have a weakness, you can begin a training process.
  3. Create a suggestion system that works. No voluntary suggestion system works that well. Dr. Edward Deming realized this when he helped the Japanese create the kaizen process, otherwise known as Total Quality Management. The Japanese saw improvement as an event, not a process – and so should you! Require every employee to provide a least one recommendation a month about how they can do their jobs better, or how you can run the business better. Reward each suggestion with a token gift such as a dollar, a raffle ticket, a lottery ticket, etc. Make the process fun. If you get a good “aha!” from some of these ideas, add them to your standard operating procedures, so that that everybody performs these functions in the same way.
  4. Look outside your company. How are other companies, maybe even your competitors, improving their employee performance? What tools are they using? What can you learn from disparate industries that you can apply to yours? For example, how can you use technology more effectively to improve performance?
  5. Publicize your goals. Once you state your goals, you or anyone else in your organization are far more likely to follow up with them. This is a fundamental part of creating commitment. As a lawyer, I can tell you that an agreement isn’t a commitment unless it’s in writing. If you have an overall company goal, put it in writing, blow it up on a poster, and have everybody sign it so there’s a public declaration of the goal.

If you’d like to provide any suggestions on how you’ve improved your employees’ productivity, please feel free to share them with us.