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NEWSLETTERS
NEWSLETTERS
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In this issue
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Demolition company knocks down $36,000 on its annual premium
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Surviving the Tidal Wave of Demographic Pressure
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Things you should know
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Demolition company knocks down $36,000 on its annual premium
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Insured
The insured is a demolition company specializing in interior non-structural demolition. It employs 100 workers.
Situation
The company, which performed work in three statesMaryland, Virginia and the District of Columbiawas given a premium that appeared to the client to be higher than usual.
Assessment
Certified WorkComp Advisors (CWCAs), upon reviewing all documents provided by the states Injured Workers Insurance Fund (IWIF), determined that although the company had separate payroll premiums in three states, Maryland was charging a premium for all the companys workers, regardless of where they worked. This led to unnecessary overcharges of $36,000.
Solution
The CWCAs collected all payroll and supporting documentation from each state, including copies of each states policies and job records from each project. After careful review, they appealed to the audit department of the Injured Workers Insurance Fund. The findings were revised in favor of the client.
Result
As a result of the work by the CWCAs, the company saw a $36,000 reduction in its annual premiums.
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Surviving the Tidal Wave of Demographic Pressure
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Quickly rising and about to strike, the tidal wave of demographic pressure in the United States is a formidable threat to the health of American business. Employers are already passing up opportunities to expand their businesses because they do not have and cannot find workers who can handle what is required.
The challenges are well documented, but remain daunting:
In the U.S., someone turns 60 every 10 seconds. Yet, few have sufficient savings for retirement and must stay in the workforce longer, although they may have difficulty keeping pace with the job demands.
Up to 75% of those 18 24 years old are not eligible for the military due to obesity, illiteracy or substance abuse. Yet, jobs that once were available to workers with limited skills now require competency in reading, math, communication and the use of computers.
Trends show that this is the first generation to be less healthy than their parents with epidemic incidents of obesity and rising rates of adult onset diabetes in children. Yet, employers are hard pressed to meet todays costs of health insurance and while wellness programs are as accepted as Mom and American Pie, employers continually struggle with incentivizing participation.
Although this demographic tidal wave has been stirring for some time, few employers have strategies to deal with it. Not surprising, when Whartons Director of Human Resources, Peter Cappelli points out that about two-thirds of companies do no planning for workforce issues at all.
The confluence of these challenges means that there is a decreasing number of available fit, educated, trained employees with a strong work ethic. While knowing how to best attract, manage and retain employees has always been a key component of sustaining growth and high productivity, this is the only way to grow profitably in times of scarcity.
A good example is automobile technicians, jobs that will never be outsourced. The rapidly changing nature of the job, coupled with the need for highly technical skills and a negative stigma associated with this career choice have resulted in a shortage of 35,000 to 60,000 technicians per year depending on the source, according to Richard White, senior vice president, marketing and member relations, Automotive Aftermarket Industry Association (AAIA). The situation will only be exacerbated in the next decade when boomer-generation technicians enter retirement, with over one-half of the top technicians expected to retire in the next ten years.
White strongly believes the solution is local and not national according to "The Growing Scarcity of Qualified Auto Technicians" on search-autoparts.com. "The quality repair shops are involved with schools in their community and are willing to mentor young people. They pay their employees fairly and run a clean, professional business. They treat their employees with respect, and in turn, their employees have a positive self-image that is portrayed to colleagues and customers."
Employers need to ask some serious questions: Are they the employer of choice in their area the one that everyone wants to work for? Do their top employees regularly refer qualified candidates for hire? With rigorous hiring standards and high performance expectations, can they select and retain the best employees for the job? Which employees do they want to attract and retain and how are they going to develop them?
While the parameters defining "employer of choice" will vary by industry and location, there are commonalities. Clearly, attractive salaries and wages, job security, advancement opportunities, rich benefits, flexibility, desirable perks, managers who treat their employees well and ethical practices are all on the list.
Each year, Fortune partners with Great Place to Work Institute® to pick the 100 Best Large Companies to Work for in America and the Society for Human Resource Management to pick the 50 Best Small and Medium Companies. Selections are made based on management's credibility, job satisfaction, respect, fairness and camaraderie and to a lesser degree demographic makeup, pay and benefit programs, the company's management philosophy, methods of internal communications, opportunities, compensation practices, and diversity efforts, etc.
Taking steps, such as employee surveys, retention and exit interviews, to understand what motivates and drives employees and potential employees is key to becoming an employer of choice. For two consecutive years, Google has topped the list of large employers and while financial security and flexibility are key attractions, the "opportunity to get things done" is at the top of the list as well.
Many companies might respond, indicating they cannot afford to be among this group; but, in truth, they need to recognize that they must structure their budgets, priorities and cultures so that they become an employer of choice. They cannot afford the alternative - it is only those employers that can be very selective and attract, retain and motivate the best employees that will grow profitably.
An engaged employee has a vested interest in an employers success; creating career paths is often identified as a way to keep people interested in their jobs. While younger employees with high potential are the focus of career development opportunities, extending and redefining career paths to all employees enhances retention strategies and strengthens productivity. For example, the older automobile technician may move on to service writing or be paired with new employees as a mentor.
Creating an environment people want to be a part of that motivates employees will drive performance. The dramatic turnaround of the Boston Celtics from the worst team to NBA champions offers a valuable lesson. Arguably, the leagues top trio of players sacrificed their personal glory and focused on a singular goal winning the NBA championship and did everything they could to speed up the teams learning curve and solidify chemistry.
Complementing this was the addition of savvy veterans who not only contributed meaningful minutes but also mentored young players to help them maximize their capabilities. The leadership of the Celtics was agile, attracting the talent they needed, fostering chemistry among young and veteran players and focusing on a common goal.
Employers need to be agile and responsive as they face the challenge of maintaining a healthy, trained, productive workforce. As Workers Comp professionals, we often see Workers Compensation used as an exit strategy. Pushing their physical capabilities, some older workers are injured, take longer to recover and many never return to the workforce. Not only does this drive up an employer's Workers Compensation costs, but it also leads to a loss of capable employees with critical legacy knowledge.
Constantly threatened with a double-edged sword younger employees entering the workforce are less healthy than previous generations and older employees are often working beyond their physical abilities to perform their jobs employers need a strategy. While EAP and Wellness programs are valuable and necessary tools, the best solution is to be the employer of the choice. With ample job applicants and rigorous hiring practices, employers can hire the best and secure a lasting competitive advantage. |
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Things you should know
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Federal Minimum Wage effective July 24, 2008. Posters available online.
The federal minimum wage became $6.55 per hour on July 24, 2008.
To comply with the U.S. Department of Labor (DOL) regulations governing the wage increase, all employers that hire workers subject to minimum wage provisions of the Fair Labor Standards Act must display posters explaining the wage increase. The posters are available online and must be hung in a conspicuous place.
New I-9 Forms available
While the form has not changed from last years version, the OMB expiration has been updated to June 30, 2009. I-9 inspections are on the rise, with the U.S. Immigrations and Customs Enforcement (ICE) targeting employers suspected of employing unauthorized workers. The law requires that employers retain completed forms for three years after the date of hire or one year after the date employment ends, whichever is later.
Department of Transportation issues final rules aimed at controlling manipulation of commercial driver drug tests
The Department of Transportation published a final rule in the June 25 Federal Register that amends provisions of the department's drug and alcohol testing procedures to require mandatory validity testing for urine specimens. The rule intends to help detect specimens that may have been adulterated, diluted or substituted. The final rule, which goes into effect August 25, also aims to thwart manufacturers of adulterate specimens by no longer disseminating information on which adulterants laboratories are testing for and the scientific cutoff levels at which laboratories are testing them.
New EPA pesticide safety requirements
New EPA safety requirements, intended to protect agricultural workers and others against certain pesticides used in crop fields, affect the soil fumigants methyl bromide, chloropicrin, dazomet, metam sodium and metam potassium.
Some of the requirements in the new measures are;
Fumigant users must submit fumigant-management plans.
Buffer zones must be established around treated fields.
Information regarding the location and timing of fumigations, and associated buffer zones,
must be posted.
All soil fumigants will now be classified as restricted-use pesticides requiring specially trained personnel to apply and oversee fumigant operations.
OSHA issues guidance directive on tree trimming, removal
In a guidance directive for its regional and area offices, OSHA clarifies the appropriate application of OSHA general industry standards to tree trimming and tree removal, and includes new definitions and practical examples.
Louisiana restricts employers right to limit guns on company property
Effective August 15, a new law will prohibit most Louisiana employers from restricting concealed permit holders from storing a firearm in their vehicle on company property. Earlier this year, Georgia and Florida enacted similar laws.
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Q & A: Medical appointments during working hours; lump sum payments
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Q. "Our insurance carrier has set up physical therapy appointments during working hours for an employee who was injured on the job. Do we have to pay him for the time he is at his appointment?"
A. Yes. Department of Labor regulations state "[t]ime spent by an employee in waiting for and receiving medical attention on the premises or at the direction of the employer during the employee's normal work hours on a day when he is working constitutes hours worked." 29 C.F.R. § 785.43 (2007)
A U.S. Department of Labor opinion letter further supports the conclusion that companies should be bound by the actions of their Workers Compensation administrator. According to the opinion letter, an entity acting on behalf of an employer can bind the employer for purposes of directing medical appointments. The letter explains that "[i]f the employer or the employer's agent (insurance carrier) arranged for the employee to see a doctor during the employee's normal working hours, the time spent traveling to and from and visiting the doctor's office would be compensable hours of work."
Q. "We are considering a lump sum settlement with an employee. Can she come back for money in the future?"
A. Lump sum settlements are common in our industry. They should not create any negative issues for you, if the Carrier and the Attorney craft the Settlement Stipulation properly. Settlement Stipulations should clearly state that the injured employee has no right to come back for more that the settlement is final.
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