Guideline on Creating an Infectious Disease Outbreak Plan

Published by Rebecca Abercrombie on February 20, 2020

The below was shared with us last week while attending Markel’s EPL and Cyber Summit in Tampa. Interesting recommendations for Coronavirus and beyond….

Interim Guidance for Businesses and Employers to Plan and Respond to 2019 Novel Coronavirus (2019-nCoV), February 2020

This interim guidance is based on what is currently known about the 2019 novel coronavirus (2019-nCoV). The Centers for Disease Control and Prevention (CDC) will update this interim guidance as needed and as additional information becomes available.

CDC is working across the Department of Health and Human Services and across the U.S. government in the public health response to 2019-nCoV. Much is unknown about how the 2019-nCoV spreads. Current knowledge is largely based on what is known about similar coronaviruses.

Coronaviruses are a large family of viruses that are common in humans and many different species of animals, including camels, cattle, cats, and bats. Rarely, animal coronaviruses can infect people and then spread between people, such as with MERS and SARS. 2019-nCoV is spreading person-to-person in China and some limited person-to-person transmission has been reported in countries outside China, including the United States. However, respiratory illnesses like seasonal influenza, are currently widespread in many US communities.

The following interim guidance may help prevent workplace exposures to acute respiratory illnesses, including nCoV, in non-healthcare settings. The guidance also provides planning considerations if there are more widespread, community outbreaks of 2019-nCoV.

To prevent stigma and discrimination in the workplace, use only the guidance described below to determine risk of nCoV infection. Do not make determinations of risk based on race or country of origin, and be sure to maintain confidentiality of people with confirmed coronavirus infection. There is much more to learn about the transmissibility, severity, and other features of 2019-nCoV and investigations are ongoing. Updates are available on CDC’s web page at www.cdc.gov/coronavirus/2019-nCoV.

Recommended strategies for employers to use now:

Actively encourage sick employees to stay home:
- Employees who have symptoms of acute respiratory illness are recommended to stay home and not come to work until they are free of fever (100.4° F [37.8° C] or greater using an oral thermometer), signs of a fever, and any other symptoms for at least 24 hours, without the use of fever-reducing or other symptom-altering medicines (e.g. cough suppressants). Employees should notify their supervisor and stay home if they are sick.
- Ensure that your sick leave policies are flexible and consistent with public health guidance and that employees are aware of these policies.
- Talk with companies that provide your business with contract or temporary employees about the importance of sick employees staying home and encourage them to develop non-punitive leave policies.
- Do not require a healthcare provider’s note for employees who are sick with acute respiratory illness to validate their illness or to return to work, as healthcare provider offices and medical facilities may be extremely busy and not able to provide such documentation in a timely way.
- Employers should maintain flexible policies that permit employees to stay home to care for a sick family member. Employers should be aware that more employees may need to stay at home to care for sick children or other sick family members than is usual.
Separate sick employees:
- CDC recommends that employees who appear to have acute respiratory illness symptoms (i.e. cough, shortness of breath) upon arrival to work or become sick during the day should be separated from other employees and be sent home immediately. Sick employees should cover their noses and mouths with a tissue when coughing or sneezing (or an elbow or shoulder if no tissue is available).
Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees:
- Place posters that encourage staying home when sick, cough and sneeze etiquette, and hand hygiene at the entrance to your workplace and in other workplace areas where they are likely to be seen.
- Provide tissues and no-touch disposal receptacles for use by employees.
- Instruct employees to clean their hands often with an alcohol-based hand sanitizer that contains at least 60-95% alcohol, or wash their hands with soap and water for at least 20 seconds. Soap and water should be used preferentially if hands are visibly dirty.
- Provide soap and water and alcohol-based hand rubs in the workplace. Ensure that adequate supplies are maintained. Place hand rubs in multiple locations or in conference rooms to encourage hand hygiene.
- Visit the coughing and sneezing etiquette and clean hand webpage for more information.
Perform routine environmental cleaning:
- Routinely clean all frequently touched surfaces in the workplace, such as workstations, counter tops, and doorknobs. Use the cleaning agents that are usually used in these areas and follow the directions on the label.
- No additional disinfection beyond routine cleaning is recommended at this time.
- Provide disposable wipes so that commonly used surfaces (for example, doorknobs, keyboards, remote controls, desks) can be wiped down by employees before each use.
Advise employees before traveling to take certain steps:
- Check the CDC’s Traveler’s Health Notices for the latest guidance and recommendations for each country to which you will travel. Specific travel information for travelers going to and returning from China, and information for aircrew, can be found at on the CDC website.
- Advise employees to check themselves for symptoms of acute respiratory illness before starting travel and notify their supervisor and stay home if they are sick.
- Ensure employees who become sick while traveling or on temporary assignment understand that they should notify their supervisor and should promptly call a healthcare provider for advice if needed.
- If outside the United States, sick employees should follow your company’s policy for obtaining medical care or contact a healthcare provider or overseas medical assistance company to assist them with finding an appropriate healthcare provider in that country. A U.S. consular officer can help locate healthcare services. However, U.S. embassies, consulates, and military facilities do not have the legal authority, capability, and resources to evacuate or give medicines, vaccines, or medical care to private U.S. citizens overseas.
Additional Measures in Response to Currently Occurring Sporadic Importations of the 2019-nCoV:
- Employees who are well but who have a sick family member at home with 2019-nCoV should notify their supervisor and refer to CDC guidance for how to conduct a risk assessment of their potential exposure.
- If an employee is confirmed to have 2019-nCov infection, employers should inform fellow employees of their possible exposure to 2019-nCoV in the workplace but maintain confidentiality as required by the Americans with Disabilities Act (ADA). Employees exposed to a co-worker with confirmed 2019-nCoV should refer to CDC guidance for how to conduct a risk assessment of their potential exposure.

Planning for a Possible 2019-nCoV Outbreak in the US

The severity of illness or how many people will fall ill from 2019-nCoV is unknown at this time. If there is evidence of a 2019-nCoV outbreak in the U.S., employers should plan to be able to respond in a flexible way to varying levels of severity and be prepared to refine their business response plans as needed. For the general American public, such as workers in non-healthcare settings and where it is unlikely that work tasks create an increased risk of exposures to 2019-nCoV, the immediate health risk from 2019-nCoV is considered low. The CDC and its partners will continue to monitor national and international data on the severity of illness caused by 2019-nCoV, will disseminate the results of these ongoing surveillance assessments, and will make additional recommendations as needed.

Planning Considerations

All employers need to consider how best to decrease the spread of acute respiratory illness and lower the impact of 2019-nCoV in their workplace in the event of an outbreak in the US. They should identify and communicate their objectives, which may include one or more of the following: (a) reducing transmission among staff, (b) protecting people who are at higher risk for adverse health complications, (c) maintaining business operations, and (d) minimizing adverse effects on other entities in their supply chains. Some of the key considerations when making decisions on appropriate responses are:

Disease severity (i.e., number of people who are sick, hospitalization and death rates) in the community where the business is located;
Impact of disease on employees that are vulnerable and may be at higher risk for 2019-nCoV adverse health complications. Inform employees that some people may be at higher risk for severe illness, such as older adults and those with chronic medical conditions.
Prepare for possible increased numbers of employee absences due to illness in employees and their family members, dismissals of early childhood programs and K-12 schools due to high levels of absenteeism or illness:

- Employers should plan to monitor and respond to absenteeism at the workplace. Implement plans to continue your essential business functions in case you experience higher than usual absenteeism.
- Cross-train personnel to perform essential functions so that the workplace is able to operate even if key staff members are absent.
- Assess your essential functions and the reliance that others and the community have on your services or products. Be prepared to change your business practices if needed to maintain critical operations (e.g., identify alternative suppliers, prioritize customers, or temporarily suspend some of your operations if needed).

Employers with more than one business location are encouraged to provide local managers with the authority to take appropriate actions outlined in their business infectious disease outbreak response plan based on the condition in each locality.
Coordination with state and local health officials is strongly encouraged for all businesses so that timely and accurate information can guide appropriate responses in each location where their operations reside. Since the intensity of an outbreak may differ according to geographic location, local health officials will be issuing guidance specific to their communities.

Important Considerations for Creating an Infectious Disease Outbreak Response Plan

All employers should be ready to implement strategies to protect their workforce from 2019-nCoV while ensuring continuity of operations. During a 2019-nCoV outbreak, all sick employees should stay home and away from the workplace, respiratory etiquette and hand hygiene should be encouraged, and routine cleaning of commonly touched surfaces should be performed regularly.

Employers should:

Ensure the plan is flexible and involve your employees in developing and reviewing your plan.
Conduct a focused discussion or exercise using your plan, to find out ahead of time whether the plan has gaps or problems that need to be corrected.
Share your plan with employees and explain what human resources policies, workplace and leave flexibilities, and pay and benefits will be available to them.
Share best practices with other businesses in your communities (especially those in your supply chain), chambers of commerce, and associations to improve community response efforts.

Recommendations for an Infectious Disease Outbreak Response Plan:

Identify possible work-related exposure and health risks to your employees. OSHA has more information on how to protect workers from potential exposures to 2019-nCoV.
Review human resources policies to make sure that policies and practices are consistent with public health recommendations and are consistent with existing state and federal workplace laws (for more information on employer responsibilities, visit the Department of Labor’s and the Equal Employment Opportunity Commission’s websites).
Explore whether you can establish policies and practices, such as flexible worksites (e.g., telecommuting) and flexible work hours (e.g., staggered shifts), to increase the physical distance among employees and between employees and others if state and local health authorities recommend the use of social distancing strategies. For employees who are able to telework, supervisors should encourage employees to telework instead of coming into the workplace until symptoms are completely resolved. Ensure that you have the information technology and infrastructure needed to support multiple employees who may be able to work from home.
Identify essential business functions, essential jobs or roles, and critical elements within your supply chains (e.g., raw materials, suppliers, subcontractor services/products, and logistics) required to maintain business operations. Plan for how your business will operate if there is increasing absenteeism or these supply chains are interrupted.
Set up authorities, triggers, and procedures for activating and terminating the company’s infectious disease outbreak response plan, altering business operations (e.g., possibly changing or closing operations in affected areas), and transferring business knowledge to key employees. Work closely with your local health officials to identify these triggers.
Plan to minimize exposure between employees and also between employees and the public, if public health officials call for social distancing.
Establish a process to communicate information to employees and business partners on your infectious disease outbreak response plans and latest 2019-nCoV information. Anticipate employee fear, anxiety, rumors, and misinformation, and plan communications accordingly.
In some communities, early childhood programs and K-12 schools may be dismissed, particularly if 2019-nCoV worsens. Determine how you will operate if absenteeism spikes from increases in sick employees, those who stay home to care for sick family members, and those who must stay home to watch their children if dismissed from school. Businesses and other employers should prepare to institute flexible workplace and leave policies for these employees.
Local conditions will influence the decisions that public health officials make regarding community-level strategies; employers should take the time now to learn about plans in place in each community where they have a business.
If there is evidence of a 2019-nCoV outbreak in the US, consider canceling non-essential business travel to additional countries per travel guidance on the CDC website.
- Travel restrictions may be enacted by other countries which may limit the ability of employees to return home if they become sick while on travel status.
- Consider cancelling large work-related meetings or events.

https://www.cdc.gov/coronavirus/2019-ncov/guidance-business-response.html

Weekly Earnings Growth Continues to Increase as Jobs Growth Holds Steady

Published by Victoria Downs on February 12, 2020

ROCHESTER, N.Y., Feb. 4, 2020 /PRNewswire/ — The latest Paychex | IHS Markit Small Business Employment Watch reflects a continuation of the tight labor market to start 2020. Weekly earnings growth improved for the 13^th consecutive month, reaching 3.59 percent in January. Weekly hours worked were up 0.83 percent from last year, contributing to the growth in weekly earnings. The pace of small business employment growth remains consistent, with the national jobs index increasing slightly (0.01 percent) in January to 98.18.

At 98.18, the Paychex | IHS Markit Small Business Jobs Index is up 0.04 percent during the past quarter, but down 0.76 percent from last year. • At 2.89 percent, hourly earnings growth dipped below the three percent mark to begin 2020.

“The national index has been flat since mid-year 2019, signaling a continued tight labor market for small businesses,” said James Diffley, chief regional economist at IHS Markit.

“With election season heating up and the economy top of mind for business owners, this month’s Small Business Employment Watch demonstrates the continuing stability of jobs growth recently, as well as weekly earnings improvement,” said Martin Mucci, Paychex president and CEO. “The data shows consistent employment growth and yet another month of encouraging wage growth, two key indicators that the economy is off to a solid start in 2020.”

Broken down further, the January report showed:

The South continues to top regions for small business employment growth; the West remains the leading region for hourly earnings growth.
Tennessee ranks first among states in small business job growth; New York leads in hourly earnings growth.
Phoenix became the top metro for small business job growth; San Francisco leads metros in hourly earnings growth.
At 5.12 percent, Leisure and Hospitality leads hourly earnings growth among industry sectors.

The complete results for January, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at www.paychex.com/employment-watch. Highlights are available below.

National Jobs Index

The decline seen in small business employment growth during the first half of 2019 has given way to hiring stability over the past two quarters.
Up a modest 0.01 percent in January, the national index continues to show very little change in job gains.
At 98.18, the Paychex | IHS Markit Small Business Jobs Index is up 0.04 percent during the past quarter, but down 0.76 percent from last year.

National Wage Report

Weekly earnings growth reached 3.59 percent, improving for the 13th straight month.
At 2.89 percent, hourly earnings growth dipped below the three percent mark to begin 2020.
Weekly hours worked are up 0.83 percent from last year.

Regional Jobs Index

Above 98, the Northeast is reporting positive year-over-year growth for the first time in nearly three years. Strong performance in the Leisure and Hospitality sector is a contributor to that growth, up 2.60 percent since last year in the Northeast.
Led by California, the West fell sharply in January (down 0.69 percent), and is now the weakest region for small business job gains.
At 99.13, the South is the strongest region for job gains, up 0.26 percent in January.

Regional Wage Report

The West leads in hourly earnings and hours worked growth, with weekly earnings accelerating for the 12th consecutive month to 4.35 percent in January.
Due to an increase in hours worked, weekly earnings are on the rise in the Midwest, up to 2.81 percent this January compared to 1.97 percent in January 2019.

State Jobs Index

Fourteen of the 20 states reported an increase in the pace of employment growth in January.
Down 1.13 percent from the previous month and 2.47 percent from last year, California now has the lowest index among states at 96.67.
Tennessee and Arizona are the only states above 100.

Note: Analysis is provided for the 20 largest states based on U.S. population.

State Wage Report

New York, California, and Tennessee lead wage growth among states.
Paired with a significant decline in job growth, California is the top state for weekly hours worked and weekly earnings growth.
Texas trails all states in hourly and weekly earnings growth, 1.50 percent and 2.18 percent, respectively.

Note: Analysis is provided for the 20 largest states based on U.S. population.

Metropolitan Jobs Index

Phoenix became the top metro for small business job growth in January as Dallas slowed for the sixth consecutive month.
The Southern California metros of Los Angeles, Riverside, and San Diego had the three weakest one-month growth rates among metros.

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Metropolitan Wage Report

San Francisco (4.25 percent) and Los Angeles (4.23 percent) are the only metros with hourly earnings growth above four percent.
At 3.77 percent, hourly earnings growth is surging in Baltimore.
Houston (1.16 percent) and Tampa (1.26 percent) trail significantly in hourly earnings growth.

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Industry Jobs Index

All industry sectors saw growth in January, except Leisure and Hospitality, down 0.53 percent.
Trade, Transportation, and Utilities and Manufacturing remain below 97, though both reported positive gains during the past three months.

Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The Other Services (excluding Public Administration) industry category includes religious, civic, and social organizations, as well as personal services, including automotive and household repair, salons, drycleaners, and other businesses.

Industry Wage Report

At 5.12 percent, Leisure and Hospitality leads hourly earnings growth among sectors, with Manufacturing a distant second at 3.61 percent.
Education and Health Services trails all other sectors in hourly earnings growth at 1.56 percent.
Construction slowed below three percent hourly earnings growth in December for the first time in 2019, and fell further in January to 2.71 percent.

For more information about the Paychex | IHS Markit Small Business Employment Watch, visit www.paychex.com/employment-watch and sign up to receive monthly Employment Watch alerts.

*Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website.

About the Paychex | IHS Markit Small Business Employment Watch
The Paychex | IHS Markit Small Business Employment Watch is released each month by Paychex, Inc., a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small-to medium-sized businesses, and IHS Markit, a world leader in critical information, analytics, and expertise. Focused exclusively on small business, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity. Drawing from the payroll data of approximately 350,000 Paychex clients, this powerful tool delivers real-time insights into the small business trends driving the U.S. economy.

About Paychex
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of integrated human capital management solutions for human resources, payroll, benefits, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers small- and medium-sized business owners to focus on the growth and management of their business. Backed by more than 45 years of industry expertise, Paychex serves approximately 670,000 payroll clients as of May 31, 2019 across more than 100 locations in the U.S. and Europe, and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting www.paychex.com, and stay connected on Twitter and LinkedIn.

About IHS Markit (www.ihsmarkit.com)
IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2020 IHS Markit Ltd. All rights reserved.

The decline seen in small business employment growth during the first half of 2019 has given way to hiring stability over the past two quarters.

Weekly earnings growth reached 3.59 percent, improving for the 13th straight month.

Paychex Logo (PRNewsfoto/Paychex, Inc.)

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View original content to download multimedia:http://www.prnewswire.com/news-releases/weekly-earnings-growth-continues-to-increase-as-jobs-growth-holds-steady-300998302.html

SOURCE Paychex, Inc.

Data Driven Business Models in Insurance

Published by Paul Hughes on February 10, 2020

Every day that goes by, more data is accumulated, the systems to organize it become more dynamic and the predictive qualities as a result more precise. Where the future goes in this realm will be interesting to watch –

A report by SwissRE hosted by Insurancejournal.com

Data Driven Business Models to Affect Entire Insurance Value Chain: Swiss Re Report

February 3, 2020

Digital transformation empowers consumers to be more informed and independent, and equips insurers with the tools to develop new tailored products and services and refine existing ones, said the latest sigma report published by Swiss Re.

This is leading to the development of new data-driven business models, which will affect the entire insurance value chain, said the report titled “Data-driven insurance: ready for the next frontier?” “True leverage will come from partnerships with key data suppliers.”

Insurers increasingly will operate in an environment where they have continuous access to different data sources including from connected objects (such as connected cars, homes or wearables) and platform providers. They also will gain behavioral insights from consumer and environmental data, the report indicated. “This will see the evolution of new-data driven business models taking insurers beyond their existing value chain,” sigma continued.

“The availability of internet-enabled devices and universal connectivity has changed consumer behaviors and expectations, particularly among younger generations,” said the report, explaining that customers now expect rapid access to information, transparency and more personalized products.

Although consumer-supplier touchpoints will become predominantly digital, human interaction will continue to play a role, said the report, which explained that consumer feedback and analysis will help insurers identify where in-person engagement is most effective.

Digital and Targeted Human Touch

“With the growing granularity of insights into customer behaviors,” the report said, “the role of insurance is evolving from indemnification of losses to a broader consultative service on risk prevention and mitigation covering both private and commercial clients’ changing needs over time.”

The sigma report cited the example of changes in an individual’s life circumstances such as marriage, a new home or job, signaled by digital data sources.

“In response, insurers can direct personalized guidance to the client on predictive and prescriptive next-step risk mitigation actions,” it continued. “The direct relationship with customers will evolve as new touchpoints and channels become normalized, and back-office processes like marketing/sales, underwriting and claims administration are increasingly automated.”

Insurers will be able to target human engagement to circumstances where consumers expect an empathetic response, such as a health crisis or death in the family, the report said. “The personal touch in sensitive areas will bring a human face to insurance.”

Emerging Markets Lead the Way

At this point, insurers in emerging markets lead the way in optimizing the potential offered by digitalization because the starting point is digital rather than analogue in many of these markets, the report added.

“[Emerging market insurers] are partnering with established digital platforms and ecosystems to combine features typically offered by standalone incumbent firms into a one-stop-shop service,” said sigma. “Insurers bring underwriting expertise, while platforms and ecosystems offer access to customers through their ability to target specific segments and mine user behavior, as well as offer multiple touchpoints to capture user attention.”

Successful Insurers

Successful insurers in the long term will be those that leverage insights from their investments and partnerships in data and analytics, while developing risk protection products aligned with evolving regulations, sigma said.

“Regulation will play an important role in supporting the integration of new technology and data into insurance business across different jurisdictions,” the report noted. “In monetizing the potential of digitalization, insurers will need to manage local data protection and privacy requirements.”

Source: Swiss Re/sigma

G&A Partners Celebrates 25 Years!

Published by Sharlie Reynolds on February 4, 2020

Congrats to G&A Partners who celebrates 25 years in business this year!

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January 30, 2020 08:30 AM Eastern Standard Time

HOUSTON–(BUSINESS WIRE)–G&A Partners, a national professional employer organization (PEO) and human resources services provider, is celebrating its 25^th anniversary this year. The company is one of the largest and fastest-growing privately owned PEOs in the U.S., boasting a 93% client-retention rate and a Net Promoter Score that is 30-times higher than PEO industry standards.

Founded in 1995 by Chairman and CEO Antonio “Tony” Grijalva and President and COO John W. Allen, G&A Partners is a world-class HR services company that helps its clients build and maintain thriving businesses as they pursue their dreams and passions.

“We put people first at G&A and treat them like family,” Allen said. “Our employees are a cut above and they love what they do. Their energy and their joy are contagious, and that is what provides a phenomenal experience for our clients.”

The company has big plans to further expand over the next quarter-century, with the short-term goal to double in size over the next few years through organic growth and acquisitions.

“Everybody needs to employ good people,” Grijalva said. “Everybody needs to create an inviting culture that attracts and retains top talent. We offer our clients the tools and services to accomplish that goal, which also helps them grow and succeed.”

Grijalva and Allen discovered the need for outsourced HR not long after they formed their own CPA firm in the early 1990s. Their clients with small- and medium-sized businesses came to them asking whether they would consider expanding their services to payroll, employee benefits, and other HR functions.

Enough of a demand was present that Grijalva and Allen decided to purchase a temporary staffing agency and create G&A Partners (originally called G&A StaffSourcing) in 1995.

The business venture paid off and today G&A has evolved into a full-service PEO with nearly 400 employees that serve more than 2,000 companies comprising around 56,000 employees. G&A Partners has been consistently recognized as one of the best places to work in several of the markets where it operates.

About G&A Partners

G&A Partners, one of the nation’s leading professional employer organizations (PEO), has been helping entrepreneurs grow their businesses, take better care of their employees and enjoy a higher quality of life for more than 25 years. By providing proven solutions and technology in the areas of human resources, employee benefits and payroll administration, G&A Partners alleviates the burden of tedious administrative tasks and allows business owners to focus their time, talent and energy on growing their companies. Headquartered in Houston, G&A Partners has offices throughout Texas, as well as in Arizona, California, Colorado, Idaho, Illinois, Minnesota, Nevada, Utah, and Latin America.

Department of Labor Issues Final Rule to Allow Associations and PEOs to Sponsor Retirement Plans

Published by David Burgess on January 28, 2020

Final rule defines a PEO as an employer under ERISA and clarifies rules for PEOs to offer retirement benefits

On July 29, 2019, the Department of Labor (the “Department”) issued a final rule to facilitate and expand the availability of multiple employer defined contribution plans (“MEPs”). The final rule provides clarity regarding the types of “bona fide” groups or associations of employers as well as professional employer organizations (“PEOs”) that are permitted to sponsor retirement plans.

NAPEO supports the rule, as it is another step in in formalizing the legal framework for PEOs to provide benefits for their client’s shared employees. This action, along with the passage of the Small Business Efficiency Act contained in the Tax Increase Prevention Act (H.R. 5771, Public Law 113‐295) which created the voluntary IRS PEO Certification Program, demonstrates the federal government’s recognition of the PEO industry and the important role it plays in supporting our nation’s small businesses.

With respect to PEOs, the final rule does two things. First, it states that a “bona fide” PEO is capable of establishing a MEP. The rule then creates a safe harbor criteria for determining whether a PEO that sponsors a MEP is performing essential employment functions.

A copy of the final rule can be found here.

A summary of the final rule can be found here.

A detailed analysis on this issue from the Groom Law Group can be found here.

A recording of a NAPEO-sponsored webinar on this issue can be found here.

A copy of NAPEO’s comments on the proposed rule can be found here.

NAPEO Article can be found:

https://www.napeo.org/advocacy/what-we-advocate/federal-government-affairs/peos-retirement-regulation/dol-meps-finalrule

Top 10 Judicial Hell Holes

Published by Paul Hughes on January 21, 2020

My mother used to say, “you need a Philadelphia lawyer to figure this out”… seems you might. #1 on the list –

From our friends at insurancejournal.com

The 2019-2020 top Judicial Hellholes are:

https://www.insurancejournal.com/news/national/2020/01/21/555106.htm

Potential Wage and Hour Claims Due to New Overtime Rule

Published by Rebecca Abercrombie on January 20, 2020

This article was originally published on InsuranceJournal.com.

Time is running out for employers to familiarize themselves with new federal rules on overtime pay.

Starting January 1, the threshold for who is entitled to overtime pay — and who is not — changes. It’s the first change since 2004.

The new rule raises the income threshold that employees must reach to $684 per week, or $35,568 per year, to qualify as exempt from overtime. Employers are allowed to count up to 10% (or $3,556.80 per year) in bonuses or commissions towards the threshold.

Workers making less than the threshold are entitled to earn one and one-half times their regular rate of pay for all hours over 40 during a work week.

Failure to properly implement the new regulations could expose employers to wage-and-hour type claims under the Fair Labor Standards Act (FLSA).

For some employers, that could mean employment practices liability insurance claims.

That’s one reason Chris Williams is trying to raise awareness. Williams is employment practices liability product manager for Travelers. He is responsible for employment practices underwriting strategy, including policy language, target markets, overall profitability of the book, marketing, and serving as a general resource for underwriters on employment practices.

In a recent talk with Insurance Journal, Williams discussed the overtime rule change and what it means for employers, employees and insurance.

There’s so much else going on in the area of employment practices, the overtime pay issue hasn’t gotten much attention.

“That is a concern because the law’s already fairly complicated for employers to comply with,” Williams said. “Then, anytime you have a change in a complex law, you’re likely to see one, compliance challenges, and two, potential litigation coming out of that.”

Williams said the starting point is understanding the basics of the current rule compared to the new rule that starts in January.

Under the FSLA, employees that satisfy three requirements — they are paid on a salary basis, they are paid more than $23,660 per year, and they perform certain functions considered executive, administrative, or professional duties — are currently not entitled to overtime wages.

“For example, if you’re an executive, you’re a manager in an organization, you’re managing folks, you have the ability to hire, to fire people, and you make more than $23,660 per year, you are not entitled to overtime,” he explained.

Exempt executive, administrative and professional employees include teachers and academic administrators in elementary and secondary schools, outside sales employees and employees in certain technology occupations, according to the Department of Labor. Certain casual, seasonal and farm workers are also exempt from the overtime requirement.

For the new year, while the definitions and exemptions for those doing executive, administrative, professional and other work remain, the key change for employers to be aware of is that the salary threshold is going up from $23,660 to $35,568 per year.

“As a result of that, you’re going to have folks that are now within that pay band that are going to be entitled to overtime that previously weren’t entitled to overtime,” Williams said.

“Employers are going to have to one, figure out who those individuals are. And two, they’re going to have to make sure they’re tracking their time, and if those folks are working more than 40 hours per week, they’re going to have to make sure that they’re compensated on a time-and-a-half basis for that time in excess of 40 hours per week.”

While $35,568 is the threshold and where the primary impact is felt, there is also an upper limit as well. The high threshold under what is called the highly-compensated employee rule is going from $100,000 to $107,432.

“In other words, if you make more than $107,000, you have some administrative or executive functions within the organization, and you’re doing non-manual work, you’re not going to be entitled to overtime,” he explained.

The upper limit rarely is an issue. “We don’t see very much claim activity arising out of those individuals. It’s much more on the lower spectrum,” Williams noted.

In addition to the federal rule, depending on the state they are in, employers may have state laws on overtime pay they must follow as well. California is one such state.

“Employers in those situations are obligated to comply with both the state and the federal law. For example, in California, most of our overtime wage claims that we see pertain to state law as opposed to claims under the Fair Labor Standards Act,” he said.

Williams sees a few potential trouble spots for employers.

“One of the things we see today is employers, and I don’t think a lot if it is malicious, I just think it’s a misunderstanding of what their obligations are, but they may not pay their employees overtime.

“They may not correctly classify individuals as exempt or not exempt, meaning they’re entitled to overtime. They may not track their time correctly.”

Another area is claims for not compensating workers for time they spend putting on their gear to prepare for work. “If you work in a meat processing plant or something like that, you have to put on protective gear, and then you weren’t compensated for that time,” he said.

There are things employers should do to prepare for the new overtime situation, according to Williams.

“Employers will want to go back and make sure that they’ve correctly identified who is now entitled to overtime and are they, in fact, tracking their time and making sure those individuals are compensated correctly.

“It’s probably a good idea, given this change in the law, to review all your employees and make sure that you classify them correctly and you’re tracking their time properly and that you’re compensating them appropriately.”

Williams also noted that some employers may decide to raise the salary of their workers above the threshold of $35,568 to avoid an overtime issue. However, in order to avoid paying overtime for those workers, the employer would need to make sure the worker also qualified for an exemption under professional, administrative or executive.

“In other words, if the employer raised the salary of a worker above $35,568 per year, and the worker did not qualify for one of the exemptions, the worker would still be entitled to overtime,” he said.

Williams recalled that happened in some cases after the Obama Administration in 2016 initiated an even high threshold of $47,000. Some employers increased the pay of some of the workers beyond that threshold. But then the Obama change was struck down in court in September 2017 when a judge ruled that the ceiling was set too high and might apply to some management workers who are supposed to be exempt from overtime pay protections. Business groups and 21 Republican-led states had sued to challenge the 2016 rule.

The Department of Labor estimates that 1.2 million additional workers will be entitled to overtime pay as a result of the increase to the standard salary level, while an additional 101,800 workers will be entitled to overtime pay as a result of the increase under the highly-compensated employee rule.

Williams urges agents to advise their clients to take advantage of resources available to them to be sure they are in compliance— whether that be a human resources department, payroll processor or general counsel. He also recommends the DOL’s website that has information about the final rule.

Williams added that a number of insurance carriers including Travelers also have resources available. “It’s sort of a matter, one, of employers educating themselves, and then, two, taking action on that information,” he said.

Wage-and-Hour Claims

Those caught not in compliance could face wage-and-hour claims. Defense costs only for such claims may be covered under employment practices liability insurance (EPLI) but only for those purchasing a separate endorsement under their EPLI. It’s not part of the traditional EPLI. (Coverage of unpaid wages may be available to large firms with sizable self-retentions but this coverage is not typically available to small and medium firms.)

“A lot of carriers, including Travelers, will provide a sublimit that applies to defense expenses only for wage-and-hour claims. That generally includes issues like failure to pay overtime, misclassifying workers as exempt, potentially misclassifying workers as independent contractors when they’re in fact employees,” Williams explained.

There are certain state statutes, like in California, where employers are obligated to provide rest and meal periods. The separate coverage would include defense expenses for those types of claims as well.

Travelers offers a sublimit up to $250,000. “I think the market’s generally between $100,000 and $250,000, and there may be some outliers beyond that,” he said.

Since it’s been 15 years since the overtime rule was changed, this is in a way a new exposure, one agents may want to explore with clients.

“I think that’s a good idea. We sell this coverage to privately held companies and nonprofits, and we try to be proactive in selling it because it’s an exposure for employers that’s out there,” Williams said.

He noted that these claims are attractive to the plaintiffs’ bar because there is a fee shifting provision in the statute so that if the plaintiff prevails on the claim, they’re entitled to their attorneys’ fees. “You can have cases where the actual recovery amount may not be that significant in terms of the unpaid wages, but the attorney fee is potentially significantly more than that unpaid wage portion,” he said.

Other EPLI Issues

Overtime is hardly the only pressure on employment practices liability insurance (EPLI) these days when workplace issues are in the news on a regular basis.

EPLI provides protection against many kinds of employee lawsuits including claims alleging sexual harassment; discrimination based on age, race, gender or disability; wrongful termination, hiring or promotions; retaliation and wrongful infliction of emotional distress.

According to Williams, there are two areas in particular where EPLI is currently seeing increasing claims activity: sexual harassment and privacy.

“I’ll start off with the sexual harassment, and there’s been an uptick, particularly in severity, on those claims. There’s been an uptick in the frequency of those claims as well. It’s a challenging environment to litigate one of those cases in,” he said.

The second issue is biometric claims, driven by the Illinois biometric information privacy act.

“One of the requirements under that is that if you’re going to use biometric information of your customers or employees, you have to get a signed release from the employee or customer,” he said.

A number of employers have been using fingerprint technology to scan employees in and out and to clock when they’re coming and leaving work. In many cases, they did not get a signed release from the employee. “That’s resulted in class action claims brought against those employers alleging violation of this statute, sort of quasi-invasion-of-privacy claims,” he said.

Other claims areas that are relatively new include websites not in compliance with the Americans with Disabilities Act. “The website isn’t compliant if it doesn’t allow the disabled individual full use of that website because it hasn’t been programmed properly,” he said.

Travelers is among the insurers that will provide workplace violence expense reimbursement coverage that reimburses employers for certain expenses in the event of a workplace violence event. The expenses might include counseling, additional security, and services of a public relations firm to help a business through the crisis.

An employment practice claim is not a recommended experience.

“No one’s ever gone through an EPLI claim— which is a tremendously burdensome process in terms of the documents that have to be turned over, all the emails, the personnel files, the deposition the employer has to go through— no one’s gone through that process and ever said, ‘Boy, we’d like to do that again,’” Williams said.

Workers’ Compensation Claims for Leased or Temporary Workers

Published by Jennifer Bush on January 16, 2020

Many companies are increasingly turning to staffing agencies to meet their personnel needs for a variety of reasons, including increased workloads and high employee turnover rates. Companies that use staffing agencies can save money because they avoid selecting, hiring and training new full-time employees. In addition, using staffing agencies frequently offers companies peace of mind because they know that workers will show up and perform their duties consistently.

But what happens if one of the staffing agency workers is hurt on the job? Who is responsible for covering the injury? What if the injured worker wants to sue the staffing agency’s client company for negligence? Answering these questions requires a thorough understanding of the employment relationships between the staffing agency worker and the client company. And the way employees are classified affects how the staffing agency and the client company’s workers’ compensation and commercial general liability (CGL) policies apply to work-related injuries.

Workers’ Compensation Versus CGL

Generally, companies are required to cover an injured employee’s medical treatment and lost wages through a workers’ compensation policy. This is a system of no-fault insurance that affords employees some security while recovering from work-related injuries. In exchange for these benefits, employees waive their right to sue their employers for negligence and related damages. Workers’ compensation provisions apply only where an employer-employee relationship exists between a company and its workers.

CGL policies protect companies when third parties (non-employees) are hurt because of the company’s negligence or misconduct. The issue of CGLs is particularly important for companies with staffing agency workers because it is not always clear whether an employment relationship exists between the company and the staffing agency workers. To fully appreciate the complexity of the issue, companies must be able to properly

Leased Versus Temporary Workers

The definitions for leased and temporary workers vary from state to state, so an adequate classification of staffing agency workers requires a solid understanding of state and local requirements.

For CGL purposes, a leased worker is an individual leased to a client company by a labor leasing firm under an agreement between the company and the labor leasing firm to perform duties related to the conduct of the company’s business. The leased worker category does not classify staffing agency workers as either leased workers or temporary workers.

Leased Versus Temporary Workers

The definitions for leased and temporary workers vary from state to state, so an adequate classification of staffing agency workers requires a solid understanding of state and local requirements.

For CGL purposes, a leased worker is an individual leased to a client company by a labor leasing firm under an agreement between the company and the labor leasing firm to perform duties related to the conduct of the company’s business. The leased worker category does not include temporary workers. Under this definition, leased workers are considered employees of the client company and are, therefore, excluded from the client company’s CGL.

CGL policies define a temporary worker as an individual furnished to a client company to substitute for a permanent employee who is on leave or to meet the company’s seasonal or short-term workload conditions. Temporary workers are considered employees of the staffing agency and are covered by the staffing agency’s workers’ compensation policy and could be covered by the client company’s CGL.

The Coverage Gap

An insurance coverage gap exists when a leased employee is injured while in the client company’s employ. Leased employees are considered to be employees of the client company for CGL purposes, but they may not necessarily qualify as employees under applicable workers’ compensation regulations.

This results in employing individuals who could sue the client company for negligence (because they are not limited by applicable workers’ compensation provisions). A company with no CGL coverage must pay any court-ordered damages (because CGL coverage does not apply to the company’s employees).

Solutions to the Coverage Gap

To bridge the gap created by leased workers, companies can look at shifting work-related injury liability to the staffing agency through an alternate employer endorsement or an extension of their CGL coverage to injury to leased workers.

Alternate Employer Endorsement

Client companies can negotiate with staffing agencies to include an alternate employer endorsement on the staffing agency’s workers’ compensation and employer liability policies. This endorsement protects the client company, providing coverage to the client company in the case of a tort action and by giving the client company all the workers’ compensation coverage the staffing agency enjoys.

Coverage for Injury to Leased Workers

This endorsement can be added to the client company’s CGL policy by changing the language that excludes leased workers and temporary coverage from CGL coverage. However, companies should recognize that insurance carriers will disfavor this solution as it effectively removes an exception they intentionally built into the CGL policy.

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