Risk Management Bulletin

As a small business owner, you need help to run your business. You can hire someone, but you have to be careful that he or she is classified properly. Otherwise, you could face hefty fines from the IRS. Learn the difference between employees and independent contractors before your next hire.

What is an Employee?

Employees are workers you hire for a specific job. They are an integral part of your business and receive most of their income from you.

You determine the employees’ work hours and schedule. If they do not show up for work at their assigned times, they could be fired.

When paying employees, you must take out taxes and any insurance coverages. They receive a regular paycheck from you.

Employees use your tools, equipment and materials. In most cases, they are not required to provide any of these items for their job.

What is an Independent Contractor?

Independent contractors are self-employed. They use their skills to help business owners like you meet temporary needs. Examples include plumbers, freelance writers and office cleaners.

When hiring independent contractors, remember that they work for whomever they want and do not rely solely on you for their income. They also bring their own tools and pay their own taxes and insurance costs.

You do still need to write, review and sign a contract that verifies the pay rate and project completion date. However, you do not micromanage the work. Independent contractors cannot be fired for not showing up one day as long as they are completing the work according to the contract.

Use this checklist to determine if the workers you hire are employees or independent contractors:

• Do you or the workers provide the tools, supplies, equipment and materials?

• Do you or the workers set their schedule?

• Is the work permanent or temporary?

• Are the workers micromanaged or allowed to do the project on the timeline they prefer?

• Do the workers rely solely on your for their income or have multiple jobs going at once?

• Do you pay taxes and insurance for the workers or are they responsible for those financial obligations?

• Are the workers an integral part of your business or needed only occasionally?

Employees and independent contractors are different. Protect yourself and your workers when you understand the differences before you hire anyone. For more information, talk to your financial advisor or attorney. Make sure you have adequate insurance for your business, too, as you grow your team.

Cloud storage lets you manage client data, project details and employee records. There are several options available to you, so consider this checklist as you choose one that’s right for your small business.

Is it Secure?

You have an obligation to keep your client’s information and employee data safe. File Transfer Protocol, or FTP, is a common way to transfer files, but consider Managed File Transfer instead. It’s encrypted and allows you to share one or multiple files with specific users. Look for this option and other safety precautions that ensure your business’s valuable information remains secure.

Does it Follow Compliance Regulations?

Several federal and industry standards regulate data storage. Be sure the cloud storage company you choose follows all the rules, including the Payment Card Industry Data Security Standard (PCI DSS) that specifically handles security of credit and debit card numbers. By using compliant storage, you lower your liability risk.

Is it Easy to Share?

Your small business operates successfully because your employees and customers can share data easily. The cloud storage provider you choose should give you the same flexibility. Look for a “Drag and Drop” option that doesn’t’ overload your email system or compromise safety.

Does it Transfer Files Fast?

Transferring large files can be challenging if your connection is slow. You can’t keep your clients waiting, though. Your cloud storage should support fast file transfer, including files with videos, tables and large amounts of data.

Is it Compatible With Your Devices?

Certain cloud storage options don’t work with certain devices. Check to see that your cloud storage option is compliant with your phones, computers and other devices. Also, make sure it will operate with the Mac, Windows, Android or another system you and your clients and employees use.

Does it Stay Turned On?

Power outages or a server shut down erases any data that’s not saved. Protect your work with cloud storage that never turns off. Users can still access the data even if your internet or server is down temporarily.

Does it Improve Collaboration?

Whether your employees work in the office, at home or at the client’s location, they need to collaborate. A quality cloud storage option lets different authorized users make notes and changes as needed.

Is it Affordable?

Some cloud storage options charge monthly fees, others charge annually, and there are some that offer free services up to a certain number of files. Research the costs before signing up for a service. Consider how much your business will expand, too, to ensure you have enough space to grow.

Managing your data is an important task for your small business. Carefully choose a cloud storage option as you manage your small business.

Sexual harassment complaints can be prosecuted under the same laws that prevent race, gender and religious discrimination. As a small business owner, you cannot afford to break the law. Protect your business, employees and clients when you prevent sexual harassment.

What Is Sexual Harassment?

Any unwelcome sexual conduct or advance that’s intimidating or offensive is considered sexual harassment. It can include derogatory comments, explicit jokes, suggestive emails, demeaning remarks, sexual threats or physical touch.

Both men and women can be victims of sexual harassment. However, it is more common for women to file sexual harassment complaints.

How Can You Prevent Sexual Harassment?

As an employer, you have a responsibility to prevent sexual harassment. If you don’t, you put your employees and clients at risk, could face severe liability and potentially destroy your business. Take these steps as you ensure your workplace remains safe.

• Write a concise and clear sexual harassment policy. It defines sexual harassment, clearly clarifies that it is not acceptable or tolerated, explains consequences and outlines the reporting and investigating process. Update it regularly with any changes.

• Train employees. Some states require annual sexual harassment training. Whether or not yours does, everyone who works for you should understand the seriousness of sexual harassment. They should undergo regular training that provides any policy updates and shares examples of unacceptable sexual harassment. They should also know the procedure for recognizing and reporting any claims.

• Monitor your workplace. Check in regularly with your staff as you make sure sexual harassment isn’t an issue. You don’t have to be “big brother”, but you should be aware of anything that seems off. You also should not allow any actions that appear remotely close to sexual harassment. Jokes, groping or derogatory remarks should all be unacceptable.

• Cultivate an open door policy. Your employees are more likely to share sexual harassment concerns if they know that you are always open to listen. They also need to know that their jobs are not in jeopardy if they share something with you.

• Take complaints seriously. Your employees must know that you take sexual harassment complaints seriously and will not ignore or brush them aside. That includes investigating every complaint no matter who is involved.

• Respect everyone. Model the behavior you wish to see in your employees when you respect your employees, clients, vendors and everyone who walks into your workplace.

Sexual harassment is a serious thing you want to prevent in your workplace. Protect your employees, clients and your business. For more information about how to create a workplace that’s safe for everyone, talk to your attorney.

Keeping your building secure is important for your business. You can’t afford to lose valuable inventory, equipment or data. When choosing a security system, your options vary, so consider several tips as you select the system that works for your business.

Employ Security Guards

During the day and overnight, you could hire security guards to patrol your property and look for suspicious behavior. They can use a mixture of physical patrols and virtual monitoring depending on the size of your property, its location and your business type. You may contract with a security company or hire guards directly.

Erect a Perimeter Fence

A large fence keeps unwanted snoopers out and protects your employees, customers and inventory. Select one with visual appeal that does not inhibit visibility for security personnel, and choose an entry access, such as lock and key or electronic keypad, that’s convenient for everyone.

Install a Lighting System

Be sure all areas of your property, including doors, windows and gates, are well lit. A lighting system protects visitors and employees from tripping and allows you to see intruders. Remember to use vandal-proof covers over the lights and power sources.

Choose an Alarm System

A variety of alarms protect your property from different threats. Consider installing burglar alarms and fire alarms as well as a surveillance system. Talk to industry professionals as you customize the alarms that work best for your business.

Protect Data

Sensitive data, including customer information and sales data, must be protected or you could face hefty fines and even jail time. Store hard copies of important papers in a fireproof safe. Other information should be stored in a secure network off premises.

Write a Security Policy

Your business should have a security policy that details the security measures your business takes and how you plan to keep information, inventory, employees and customers safe. The policy also addresses topics like who is welcome on the property and how to report a theft.

Promote Responsibility and a Safety Culture With Employees

Every person on your team should support safety awareness and be responsible to do his or her part. That includes locking doors, protecting client data and notifying the safety manager about potential threats.

Update Your Insurance Coverage

After your security system is in place, contact your insurance agent. Be sure your property is covered with general liability, Workers’ Compensation and other protective coverage. Your agent will assist you in selecting the right types and amounts of insurance for your specific business as you prioritize security.

Do your employees expect you or a manager to take care of all the safety details? As the CEO of a small business, you are 100 percent responsible for workplace safety, but safety has to be everyone’s priority. Get your employees on board in several ways.

1. Make safety part of your employee contract.New employees should understand from the beginning that they are responsible to follow safety protocols and precautions. This way, everyone is on the same page, understands their role in safety compliance and doesn’t feel called out if they fail to follow the safety rules.

2. Share safety statistics and facts.Employees may take safety more seriously when they understand the risks they face. Share injury and illness statistics regularly, and be honest about the risks associated with unsafe practices.

3. Offer training.Unsafe acts of workers cause 88 percent of all accidents. Make sure your employees know how to do their jobs safely, and maintain training records. Offer ongoing training when an employee changes jobs, if you update procedures, as required by law, after an employee’s extended leave and as needed.

4. Add safety inspections to job descriptions.Employees who perform safety inspections in their workstations every day are more likely to prioritize safety. Remind your staff that you and all the managers are monitoring employees and safety precautions daily, too.

5. Establish a reporting system.When employees see potential hazards, close calls, injuries or illnesses, they should report them. Be sure everyone knows the procedure for keeping the workplace safe and healthy.

6. Inform employees of safety inspections.You and your safety manger should not be the only people who know the details of safety inspections. Everyone should help to prepare for OSHA inspections and regular inspections you perform.

7. Hold employees accountable.Chances are high that your employees will pay more attention to safety if they know that they’re accountable. Set up a rewards system to encourage employees to follow safety precautions, and recognize workers who achieve so many accident-free days on the job. Make safety part of the performance reviews, too. If necessary, discipline employees who behave in a manner that’s harmful to themselves or others.

8. Take employee feedback seriously.If your employees share a safety hazard or concern, don’t brush it off. Inspect the concern and find a solution no matter what the cost. Your favorable response to complaints shows that you value your employees and encourages ongoing cooperation.

Safety comes first, and your employees can partner with you to create a safe workplace environment. Use these tips and talk to your insurance agent for more information on keeping your business safe for everyone.

The success of your retail store requires a variety of crime prevention strategies. You can’t afford to lose inventory or customers because your store is a popular target for thieves. Protect your store, employees and inventory with these tips.

Analyze Your Problems

Every business faces different crime risks. Analyze your property, employee training and community crime statistics as you determine which crime prevention strategies you need.

Train Employees

Your employees are on the front line of crime prevention. They should know basic emergency procedures and understand the importance of greeting customers, maintaining eye contact, moving away from the cash register whenever possible and confronting loiterers.

Make Friends With the Local Police

Law enforcement can partner with you to prevent crime as they perform regular patrols near or in your business. They can also train your staff how to notice details of crimes and respond to crime emergencies and evaluate security weaknesses on your premises.

Clear the Clutter

An unobstructed view of your store’s entrance allows employees to see who comes in and goes out. Clear the clutter from your store aisles, too, to improve visibility at all times.

Use Natural Surveillance

Instead of covering your front windows, keep them clear. This strategy allows passers-by and police to see inside your store and note any suspicious activity.

Install Lighting

Indoor and outdoor lighting prevents crime. Remember to install vandal-proof bulbs and power covers, too.

Control Access

Criminals are lazy and want to get in and out of a business quickly. Consider the number of doors and their locations and material plus your interior design as you seek to prevent crime. Install fencing or bushes by alleys, too, as you limit a criminal’s escape route.

Limit Cash

By limiting the cash you have on hand, you can cut robberies by 80 percent. Empty the cash register often, use a drop box and post signs about limited cash to deter robberies.

Prohibit Loitering

This strategy reduces the potential for robberies in your store.

Install Cameras

Improve your ability to catch criminals when you install surveillance cameras. They can monitor the front door, cash register and other high traffic areas.

Implement Security Strategies ASAP

Research shows that incarcerated robbers doubt that victimized businesses install crime preventive measures. Prove them wrong when you implement security strategies immediately.

Reevaluate Regularly

Crime statistics change regularly, and your crime prevention strategies should too. At least once a year, evaluate your neighborhood and threats as you continuously protect your business.
Purchase Adequate Insurance

Insurance won’t prevent crime, but it will help you recover your losses after a crime. It also gives you peace of mind that you have done your part in protecting your inventory and staff.

A fire in your business can quickly destroy your inventory, computer equipment and other assets. A fire also threatens your employees’ lives. Reduce your fire risk and be sure everyone gets out safely when you follow several fire safety tips.

Provide Two Exits

Your business should provide at least two exits. They must unobstructed and clearly marked and labeled at all times.

Create a Detailed Evacuation Plan

It’s not enough to tell employees that they should escape from a burning building. You also need a detailed evacuation plan. It clearly marks the exact escape routes from anywhere on your property, including the number of steps to each exit, an important safety precaution if visibility is limited. Post the plan in prominent places around your building.

Practice Escaping the Building

Even the most detailed evacuation plan is worthless if you don’t practice it. Schedule frequent drills to ensure all your staff can escape safely no matter where they happen to be when a fire starts. Remember to make provisions for rescuing disabled workers and visitors, too, and assign someone to perform a headcount after the evacuation.

Install a Fire Suppression System

Many businesses need a fire suppression system in place before they can open. If your business doesn’t have this safety measure, consider implementing it. The system will activate and release fire-suppressing chemicals when the temperature rises, and they will also turn on if the emergency switch is turned on. Be sure to test your fire suppression system regularly to ensure it works properly.

Purchase Fire Extinguishers

Purchase and strategically place fire extinguishers throughout your building. Provide training to employees so that everyone knows how to operate an extinguisher if necessary.

Reduce Fire Hazards

There are several things you can do to reduce your fire hazards.

• Designate a smoking area away from flammable objects. Provide proper cigarette butt disposals.
• Remove paper, trash and other flammable items.
• Give electrical equipment, including computers and other office equipment, adequate breathing room so they do not overheat.
• Do not overload circuits.
• Limit the use of extension cords.
• Don’t bend or crush electrical cords.
• Unplug appliances when they’re not being used.
• Use, store and dispose of hazardous materials, including cleaning chemicals, safely.
• Report all fire hazards to maintenance immediately and encourage your staff members to do the same.

Never Ignore a Fire Alarm

Even if you suspect that the alarm is false, treat it as a real fire. Be sure your staff takes alarms seriously, too.

Fire safety is important. Follow these tips and discuss other safety strategies with your insurance agent. He or she will ensure you have adequate insurance coverage and assist you in maintaining a safe work environment.

Construction sites are some of the most dangerous worksites in the United States. Workers can be injured from falls, run overs, loose debris, fires, cave ins, repetitive motions, electrical shocks and other causes. If you supervise construction sites, safety rules are imperative. Achieve a safe environment and minimize risks when you prioritize safety, train your employees and follow construction workplace safety rules.

Wear Protective Equipment

The Federal Occupational Safety and Health Act (OSHA) mandates certain safety rules for the workplace. Protective equipment is included in OSHA rules, and all construction workers must be given access to and use the right clothing and equipment for their duties. Examples include hard hats, gloves, safety boots, coveralls, goggles, safety masks and protection harnesses. Lab coats, paper face masks and plastic gloves may be required, too, depending on the job.

Pay Attention to Height

OSHA regulations require different rules for work that’s done at different heights. Constriction site supervisors should know the rules and perform an on-site risk assessment, planning, organization and supervision to make sure they’re implemented.

In general, anyone who works at high elevations must be protected from falling any distance that will cause an injury. Scaffolds with a double guard rail can be used to meet this rule. Another safety guideline requires equipment to be in place that reduces the distance and impact of any falls that do occur. Harnesses and safety nets can meet this construction site requirement.

Provide Amenities

Several amenities are required on construction worksites. First, construction workers must have access to a steady supply of clean water and the proper first aid equipment.

Construction sites must also provide workers with a sheltered space where they can take breaks and enjoy meals. That break room has to be hygienic and pose no safety or health risks. If more than 15 workers are at the site, it also must have space for them to sit down, wash dishes, boil water and store food and utensils.

All sites must provide toilet access, too. It has to be private in a cubicle or room with a door, and ventilation and toilet paper are required.

Keep your workers safe and comply with OSHA regulations when you implement these safety rules on your construction sites. Train your employees and independent contractors to follow the rules and prioritize safety, too. You have adequate Workers’ Compensation insurance, but work together to prevent accidents and promote a hazard-free worksite that’s efficient and productive.

The next time your small business needs a virtual assistant, a copywriter or someone to remodel your office space, consider hiring an independent contractor. Almost one-third of Americans consider themselves to be independent contractors, and they stand ready to help you and your business meet deadlines, perform specialized services or work in another professional capacity. Here are a few things to look for when you hire independent contractors.

Professionalism

Your employees and their actions, appearance and work reflect on your company. Even though independent contractors aren’t full-time employees, they should be completely professional. Look for this characteristic as you interview and assess potential independent contractors.

Responsiveness

From the time you schedule an initial meeting to the moment when you receive a proposal, look at an independent contractor’s responsiveness. You need to hire someone who is dependable and able to keep you in the loop about project progress. An independent contractor who takes days to return communications or one who isn’t on time to meetings will probably not respond better after the work begins.

Attitude

You expect independent contractors to display a proactive, decisive and determined person, but are they also team players, willing to take constructive criticism and able to compromise? The independent contractors you hire should have an attitude that fits with your company’s culture and values as you all work together toward achieving a common goal.

Experience

As you would inspect the resume of any potential employee, give your independent contractors’ resumes the same attention. Check references, ask to see completed projects and feel free to ask them to perform a test project to make sure the skills they claim to have are accurate.

Flexibility

Despite your best intentions, projects sometimes fall behind, the wrong products are ordered or other things go wrong. The independent contractors you hire should be flexible and able to go with the flow and adjust to get the job done.

Honesty

You wouldn’t dream of hiring an employee who lies, so don’t hire dishonest independent contractors. Anyone who wants paid under the table, asks you to fudge the books or lies about damages is not a good candidate for your company.

Before you advertise for another employee, stretch your existing staff thin or let important project go undone, check out independent contractors. They’re skilled professionals who can help your small business finish projects on time or fill temporary voids in your staff. These listed traits assist you in finding the independent contractors who are right for your business.

Writing a good help wanted ad can help you fill open positions with the right people. Overall, it should be written to attract new employees rather than weed people out. Take a few tips into consideration as you write your company’s next help wanted ad.

Begin With a Headline That Grabs Attention

Use action verbs and positive language that encourages potential applicants to keep reading your ad. The headline should also mention something about the job and employer. Instead of saying, “Architect needed,” try, “Architect with a passion for detail, organization and customer service wanted for a busy downtown firm.”

Mention the Basics

Now that you’ve grabbed their attention, give readers more details about the basics of your open position. Include:

*Company name and location.
*Job title
*Specifics like full/part time, day/night shift, salary range and start date

Summarize Employee Skills

Include formal training requirement, certification, industry expertise, proficiency and other skills qualified applicants should possess. Try to avoid writing a laundry list in this section. That turns away candidates since it signals that you’re rigid and unbending. Plus, formal training, licensing and other professional training can be learned after the candidate is hired. Qualifications like flexibility, outgoing personality or sense of humor cannot be learned but are just as valuable.

Describe What Your Company Offers Employees

Sell yourself and your culture. In this section, you could include:

*Your company’s history or a link to your website where applicants can learn more
*Details about the culture, such as the flexible schedule, collaborative spirit or open-door management policy
*Benefits package details including insurance, 401K, incentive plans, advancement opportunities and monthly golf outings
*A standard equal-opportunity employer disclaimer that reminds applicants of your company’s commitment to non-discrimination

Close With a Call to Action

End the help wanted ad with instructions for how applicants can contact you. Include a phone number, email address or fax number.

As a caution, you should never mention legally protected statuses. That means you cannot mention that you have a candidate preference based on race, color, national origin, sex, sexual orientation, gender identity, age, religion, disability or veteran status. Also, avoid gender-specific language. As an example, use server rather than waitress.

A good help wanted ad attracts qualified candidates for the open positions in your company. Use these tips as you create your next help wanted ad.