Cyber Attack Nightmares Continue

While most of us were celebrating Mother’s Day on Sunday, Colonial Pipeline was attempting to assess the damage related to a cyber-attack last week. Colonial Pipeline accounts for 45% of the East Coast’s fuel (diesel and petroleum). Colonial has had to take 4 of their main pipelines offline; they are operating off of smaller lines and delivery points. Impacts from New Jersey down through Texas are expected. As a response to the cyber-attack and limitation of the company’s resources the US government issued emergency legislation to lighten the regulation on fuel transportation. Extended shutdowns are “fueling” fears over pump prices.

The 5 Key anticipated cybersecurity risks in 2021 were reported as Endpoint threats (servers, VPNs and cloud based software services), Remote workforce exposures (weakened network security of remote devices), Cloud Security (business-critical data on cloud platforms), and Shortage of security professionals or services (availability and affordability). You can check out the full article here of expected cyber threat trends for 2021.

Newer threats emerging are “multi-stage attacks like ransomware or “low and slow hacks”. Ransomware attacks gain exposure through stolen credentials and are designed with the goal of systems and data infiltration. While mutli-factor authentication (MFA) is an important security feature to mitigate ransomware attacks, it is reported that 78% of Microsoft 365 admin users don’t activate MFA.

Colonial Pipeline’s hack is reported to be a ransomware attack, ” Sources said the ransomware attack was likely to have been caused by a cyber-criminal gang called DarkSide, who infiltrated Colonial’s network and locked the data on some computers and servers, demanding a ransom on Friday.

The gang tried to take almost 100 gigabytes of data hostage, threatening to leak it onto the internet, but the FBI and other government agencies worked with private companies to respond. The cloud computing system the hackers used to collect the stolen data was taken offline on Saturday, Reuters reported.

Colonial’s data did not appear to have been transferred from that system anywhere else, potentially limiting the hackers’ leverage to extort or further embarrass the company, the news agency said.” You can read the full Colonial Pipeline article issued by BBC News here.

Mitigate Your Cyber Security Risks

1 – Identify and document asset vulnerabilities; What data are you storing?

2 – Identify and document internal and external threats; disgruntled employees, Dark Web techniques

3 – Assess your vulnerabilities; software security up to date and in place

4 – Identify potential business impacts; financial, operational, etc

5 – Identify and prioritize your risk responses; Response plan, best practices, documentation of procedures

Check out our previous articles on Cyber Risk at PEO Compass search Cyber. Libertate Insurance Services has Cyber Programs available to mitigate the loss.

NAPEO announces in-person conference opening back up for September 27-29, 2021

NAPEO‘s President, Mr. Pat Cleary has exciting news about future in-person meetings and events!

The following post was from an eMail to the members from NAPEO’s President, Mr.Pat Cleary regarding the status of upcoming events and the status on in-person attendance.


Ten months ago to the day, I sent an email stating that due to COVID-19 and the associated risks that the committee voted against having the annual SAGE event and conference. It was a heartbreaking email to write, in that the conference was a speck of hope for us all, something out in the far distance that we all looked forward to, when this damned thing would be over. But it was not to be. I attached the email here because re-reading it today, it’s a bit of a time capsule, and reminds us of a low point that we experienced – and survived – together.

So today I’m writing with some very good news: I just this hour signed our contract with the JW Marriott San Antonio Hill Country to hold our conference there – in person – on September 27 – 29 this year. Just about every conversation I have had with any NAPEO member over the past few months has included a discussion of when we would be able to meet again in person. We are all suffering Zoom fatigue, that’s for sure. Looking at the email below, I said, “We want to gather with our members, and as soon as it’s safe to do so, we will.” Every organization has its own level of risk tolerance. Our litmus throughout has been the health and safety of our members and of our team here at NAPEO. Comforted and fortified by the upward trend in vaccinations and downward trend in cases – and the slow easing of restrictions – we will hold our first in-person meeting, our CFO Seminar, at the end of June (location TBD) and hold our Georgia Leadership Council Forum in-person on June 28. And the conference in September. 

I’ve said so many times that the arc of meetings during COVID was like this: Plan the meeting, book the hotel, promote the meeting, watch the registrations climb, meeting draws near, registrations begin to cancel, then the meeting cancels. We did that dance too many times in 2020. For our November Board of Directors meeting, we asked our 24 Board members if they wanted to meet virtually or in person. Twenty two said they wanted to meet in person, so we planned the meeting. The week before, in the face of too many cancellations, we moved the meeting to virtual. It was a discouraging, defeating, and tiresome cycle.

So if the cancellation of the 2020 in-person conference was a sign of despair, let this now be a sign of hope, of light, and of hopefully reaching the end of this pernicious thing that has dogged us for so long. As I said in the email below, “The sun will shine again.” And indeed it will – in San Antonio, in September.

I want to thank all of you who have stood by us, who have gamely pivoted with us to the virtual world. It wasn’t a world we wanted, but it was the world we were handed. I want to especially thank our associate members. The face to face meeting is their lifeblood, an option they didn’t have for the past year. They, too, stood with us, and we are grateful. And finally, I want to thank my team here at NAPEO. I use the royal “we” all the time, but the truth is they are the ones who are doing the innovating, the pivoting, the work. 

As I always say, this thing isn’t completely over yet, but we appear to be moving in the right direction. I look forward to seeing – and celebrating with – you all in San Antonio. 

All the best,

Pat Cleary
President & CEO
NAPEO
707 N. St. Asaph St.
Alexandria, Va. 22314
703-739-8163

Florida House Bill 1305 Stalls for Now

One in Four construction workers in Florida lack workers compensation – a bigger issue is at hand; premium fraud in the construction industry.

When the House Commerce Committee agenda for April 14, 2021 was announced in Florida at 4:30 yesterday the 12’th, thankfully, HB 1305 was not a part of it. While this does not mean that the bill still cannot be taken up by the House Commerce Committee when it meets again Monday April 19’th, every day that passes is one less in the Legislative Session for this bill to get further traction.

We appreciate foremost the grass roots efforts of all PEO industry advocates in making sure that the real issue is addressed; the plight of uninsured worker. Further research by industry insiders has found that there are material amounts of workers in Florida whom are being passed off as 1099 employees (more on that to come) and still others that are being flatly paid under the table in cash. Add a language barrier that often exists with a typical construction worker in Florida and it is the backdrop for at best confusion and often times, unnecessary litigation. This is the dirty little secret trying to be pinned on the PEO industry.

Both FAPEO and NAPEO continue to do a good job in communicating the issues at hand and making sure that we are well represented in Tallahassee and the real issues are being addressed.

The focus of uninsured employees in workers’ compensation must be addressed. The lobbyist of the opposition went on public record that one in four workers on any given job site lack workers’ compensation insurance. Since PEO’s supply only one of seven checks to construction workers in Florida and these are workers that must be submitted as employees, that leaves a lot of claimants may finally be realized is not an offshoot of being in a PEO relationship,

Please continue to reach out to the following lawmakers to enforce that premium fraud is addressed in the State of Florida, not the legislation of it:

Here are the individuals to contact: 

Representative Webster Barnaby (Orange City)  Webster.Barnaby@myfloridahouse.gov

Representative Dan Daley (Sunrise) Dan.Daley@myfloridahouse.gov

Representative Brad Drake (DeFuniak Springs) rad.drake@myfloridahouse.gov

Representative Joe Geller (Dania Beach) joseph.geller@myfloridahouse.gov

Representative Chris Latvala (Clearwater) Chris.Latvala@myfloridahouse.gov

Representative Randy Maggard (Zephyrhills) randy.maggard@myfloridahouse.gov

Representative Lawrence McClure (Plant City) Lawrence.McClure@myfloridahouse.gov

Representative Angela ‘Angie’ Nixon (Jacksonville) Angie.Nixon@myfloridahouse.gov

Representative Anika Tene Omphroy (Sunrise) Anika.Omphroy@myfloridahouse.gov

Representative Scott Plakon (Longwood) Scott.Plakon@myfloridahouse.gov

Representative Rene Plasencia (Titusville) Rene.Plasencia@myfloridahouse.gov

Representative Anthony Rodriguez (Miami) Anthony.Rodriguez@myfloridahouse.gov

Representative Bob Rommel (Naples) Bob.Rommel@myfloridahouse.gov

Representative Jason Shoaf (Blountstown) jason.shoaf@myfloridahouse.gov

Representative David Silvers (West Palm Beach) David.Silvers@myfloridahouse.gov

Representative Emily Slosberg (Delray Beach) Emily.Slosberg@myfloridahouse.gov

Representative Josie Tomkow (Auburndale) Josie.Tomkow@myfloridahouse.gov

Representative Matt Willhite (Wellington)   Matt.Willhite@myfloridahouse.gov

Thank you for your help. This is not over and will not be in my mind until we prove the point that this is a premium fraud issue, not a PEO issue. Please reach out and let those that represent us know!

Sunz Holdings Advocates for Employee Rights and Business Protection

Great article from our friends at Sunz regarding their efforts to protect small businesses and worksite employees. Bravo!

Bradenton, FL, April 12, 2021 (GLOBE NEWSWIRE) — SUNZ Holdings has long served as the bridge connecting employees, businesses, and lawmakers. As a national insurance provider, the company is in the unique position of being able to effectively translate the needs of businesses while also highlighting the potential voids in employee protection. This ability to see all sides and understand how various lawmakers across the country draft legislation has become an important part of protecting employees under the Professional Employer Organization (PEO) model.

Providing perspective is essential to the ongoing relationship between government entities and the business community. Naturally, the two want to work together to form a symbiotic relationship, which ultimately leads to a stable workforce and robust economy. However, sometimes it can be difficult for the two sides to communicate effectively, often leaving workers in the crossfire. The role of SUNZ is to create an ongoing conversation that values the views of both parties and seeks to achieve a shared understanding. Through advocacy, education, and transparency, SUNZ creates that conversation in state capitals and board rooms across the country.

To foster an open dialogue with lawmakers, SUNZ will meet one-on-one or in small committee groups with representatives. These meetings serve as working thought leader sessions where representatives can dive into important constituent issues specific to employment and workers’ compensation. Intimately understanding these issues, SUNZ provides lawmakers with a clear picture of how each decision will ultimately affect workers and businesses.

Take, for example, HB 1305 introduced in the Florida House of Representatives in March of 2021. On its own, the bill does little to protect employees or ensure they are provided safe working conditions. That is a significant problem considering that according to the Bureau of Labor Statistics, 2.8 million nonfatal injuries occurred in the private sector in 2019 alone (2020 statistics are not available). One step further, according to the BLS, one worker died every 99 minutes in that same year. With such high numbers of workplace injuries, it is no surprise that American companies spend roughly $1 billion in workers’ compensation per week.

Putting increased burden on PEO organizations, the bill was missing a crucial point of view. Working closely with lawmakers, the SUNZ team illustrated how “The Gap” left vulnerable employees uninsured. Since the early days of workmen’s compensation, “The Gap” has allowed contractors to underreport their employee roster to cut costs. By underreporting, contractors alleviate themselves of the responsibility and expense of insurance while employees are left in coverage limbo.

In the above case of HB 1305, SUNZ serves a crucial role as voice and translator. Through its working relationship with legislators, SUNZ has carefully illustrated the reality of “The Gap.” If passed, this legislation would make it virtually impossible for PEOs to work with small construction companies, but it would not put a stop to the real problem, which is fraud. As a third party, the SUNZ team can provide a bird’s eye view of the situation and effectively advocate for the employees who suffer when fraud occurs.

HB 1305 is only one of many national legislative priorities that the SUNZ team monitors on a daily basis. Clients of the organization come to SUNZ looking to streamline their employee insurance coverage while also providing the highest level of protection for their workforce. This need takes many different forms depending on the industry and is heavily influenced by state and federal legislation.

Legislation can have profound and extended consequences for companies and their employees. While lawmakers often have the best intentions, it is vital that advocates provide a picture of how a decision will affect those downstream of it. SUNZ has and will continue to serve as that advocate, giving voice to the concerns of its clients and everyday employees nationwide. This mission is not about deal-making or lobbying; it is about providing companies and workers with the confidence that they and their families are protected in a risky world.

SUNZ Holdings, LLC is the parent company of SUNZ Insurance, a national workers’ compensation insurance company headquartered in Bradenton, Florida. SUNZ Insurance develops unique workers’ compensation programs that deliver innovative and tailored solutions to protect businesses and their employees. SUNZ understands its clients’ needs for fluidity, offering workers’ compensation insurance options that do not begin and end with the printed policy. SUNZ believes that a safe work environment and a healthy workforce are the foundation for a successful business. There are several affiliate companies within the SUNZ Holdings enterprise that provide related and ancillary services to the workers’ compensation insurance industry. These companies include Next Level Administrators, WatchPoint, Avalon Subrogation Partners, and Ascential Care Partners. For more information, visit www.sunzinsurance.com.

CONTACT: Rick Leonard SUNZ Insurance 9413063077 rleonard@sunzinsurance.com Matt Solomon HCP Associates 8133180565 msolomon@hcpassociates.com

https://finance.yahoo.com/news/sunz-holdings-advocates-employee-rights-184100488.html

Finding Subs Who Really Work

The recent activities surrounding the Florida House Bill 1305 has forced a lot of attention and thought regarding subcontractors. We continue to monitor the progression of this bill, however one powerful takeaway from this conversation can already be appreciated: the importance of hiring and working with good subcontractors. But what makes a subcontractor “good”?

A good subcontractor is willing to work within reasonable parameters which should always be set out in a written agreement. A sound Subcontractor Agreement should outline important items such as:

  • The Subcontractor’s responsibilities,
  • Terms and conditions of the work to be undertaken,
  • Safety requirements,
  • Indemnity stipulations,
  • Insurance requirements, and
  • Any additional provisions related specifically to the job.

Here is a sample Subcontractor Agreement which speaks to recommended details for each of the above provisions. 

Any company using Subcontractors should have a Subcontractor Management Plan (SMP) in place and should require all subs to adhere to the stipulations outlined in the plan.  A SMP provides guidance for subcontract management activities, including the following:

  • Prequalification and bidding process
  • Insurance considerations
  • Beginning work
  • Work site’s written safety plan
  • Safety training and recordkeeping policies
  • Safety inspections
  • Work-in-progress and post-project reviews

We have included a downloadable copy of our SMP as an example, which includes a detailed and useful safety inspection checklist, among many other important guidelines.

Well documented and verifiable proof of insurance is of upmost importance when dealing with a sub.  Subcontractors should maintain Commercial General Liability, Auto Liability, Umbrella or Excess Liability and Workers’ Compensation.  Of these coverages, Florida House Bill 1305 specifically focus on Workers’ Compensation.  The subcontractor should secure a workers’ compensation insurance policy. The workers’ compensation policy must cover all of the subcontractor’s work and performance and provide coverage for all employees, executive officers, sole proprietors, and partners and members of a limited liability company, in the amounts required by all applicable laws.  In addition, the subcontractor should secure an employers’ liability insurance policy (part II of the standard workers’ compensation policy). This type of coverage covers the damages that become due in case of bodily injury, occupational sickness or disease or death of subcontractor employees that are not covered by the workers’ compensation policy.

The attached Subcontractor Certificate of Insurance Letter is a great, single page Word document which can be used to concisely outline your insurance requirements to a sub.  The document is in Word and can be amended as needed to suit you or your clients’ needs. Work with a sub should never be initiated until the items requested in this letter are received and verified.

We hope you find these documents helpful!  Work smart and stay safe everyone! 

Interesting Tidbits for Your Week!

Expecting the Unexpected for Your Small Business. Common insurance types for small businesses.

For better or worse is generally a term related to marriage vows, but in business its just as important! Luckily for business owners there are ways to mitigate the risks associated with the “worse.” Pie Insurance recently released an article covering the types of common insurance for small businesses as well as some not so common options like a business owner’s policy (BOP); I thought it was worth sharing.

A Business Owner’s policy can include professional liability insurance (errors and omissions insurance), a commercial umbrella policy, employment practices liability insurance, directors and offices liability insurance and terrorism insurance. You can check out the full article here. The key to insurance is never needing it, but having it in place when you do. It can make the difference in saving your company when the unexpected happens. Contact us at Libertate Insurance, we can help.

1st Qtr 2021 Small Business Data

NAPEO issued small business snapshot data on Q1 of 2021. Check out the full review here.

High points from the data include:

Percentage change of Daily Small Business Revenue from January 2020 to January 2021 showing 50% decrease in revenues at April 1, 2020 with slowing increase about 31% overall increase at January 1, 2021. Small businesses are slowly pulling back.

Job losses in the United States are reported at 9.6 million; with the expected hardest hit industry of Leisure and Hospitality accounting for nearly 40% of all loss reported.

On a state by state analysis the numbers are showing more increase than decrease with the average unemployment rate reporting at 5.6% at the close of February 2021. (US Bureau of Labor Statistics). Overall jobless rates are down in 23 states as of March and higher in only 4.

US Small Business Administration (SBA) Updates

If your business previously received the Economic Injury Disaster Loan (EIDL) Advance from the SBA for less than $10,000, the SBA is allowing applicants to re-apply to receive the full amount of the advance up to $10,000.

If your business was also a recipient of the EIDL these loans were previously limited to six months of economic injury up to a maximum of $150,000; the SBA has announced a change that will allow loan limits up to 24 months of economic injury with a maximum loan amount of $500,000. Be advised and proceed with caution, as the SBA takes security interest in the business assets for loan amounts over $25,000.

The SBA is also sending out emails to the EIDL loan recipients extending the first payment due on the EIDL loans to 2022 for loans issued in 2020. The first payment due date is extended 24 months from the date on the note. They have indicated that 2021 loans will have initial payments due 18 months from the note date. Interest continues to accrue during the deferment period.

Follow these instructions if you wish to request a loan increase:

  • Send email to CovidEIDLIncreaseRequests@sba.gov
  • Use subject line “EIDL Increase Request for [insert your 10-digit application number]”
  • Be sure to include in the body of your email identifying information for your current loan including application number, loan number, business name, business address, business owner name(s), and phone number.

Important: Do not include any financial documents or tax records with your initial request. You will receive a follow up email notification if we need additional documents.

You can check out all of the updates for offerings available from the SBA here.

History of Workers’ Compensation

AND last but not least, for those insurance nerds, another very interesting release from Pie Insurance is a history of workers’ compensation insurance. Covering where the laws stand today, where it started and how it has changed the benefits to workers in the United States. Interesting and educational read, check it out here.

Be sure to check out our continual updates here, on PEO Compass, regarding Florida’s House Bill 1305 and its impact on workers’ compensation and the PEO industry.

Highlights of the Proposed $1.9 Trillion Stimulus Package

The House of Representatives has passed its version of the proposed stimulus bill, which includes extended unemployment benefits, direct checks to individuals and more. The bill is now with the Senate, where some provisions will likely change. Democrats hope to pass the $1.9 trillion relief package by mid-March, before existing COVID-19 relief measures, such as enhanced unemployment insurance, expire.

The bill could pass a Senate vote in the coming weeks, but it may face significant challenges amid a 50-50 party split.

It’s important for employers to have an idea of what to expect. To that end, this article outlines the most relevant aspects currently known about the bill—these components are likely to change as Congress hashes out its details.

Small Business Assistance

The proposed bill intends to invest billions toward small business assistance, and even provides heavily impacted businesses with fewer than 10 employees priority with some of the funds. Here is the current funding breakdown:

  • Emergency Injury Disaster Loan program: $15 billion
  • New grant program for bars and restaurants, specifically: $25 billion
    • Eligible businesses could receive up to $10 million, using the money for payroll, rent, utilities and other expenses.
  • Paycheck Protection Program: $7.25 billion

Stimulus checks

Just like the two other COVID-19 stimulus packages passed during the pandemic, this version will also feature direct payments to Americans. This time around, eligible recipients can expect $1,400 per person ($2,800 for couples), including adult dependents—a family of four could get up to $5,600.

However, payment parameters are stricter this time around than with previous stimulus checks. The full check amount will go to individuals earning under $75,000 (or $150,000 for couples), with payments cut off entirely for individuals earning over $100,000 (or $200,000 for couples). Anyone with income between those figures will receive a reduced check.

Unemployment Aid

The proposed bill seeks to extend two previously established pandemic unemployment assistance efforts: the Pandemic Unemployment Assistance Program and the Pandemic Emergency Unemployment Compensation program. The financial assistance from these programs is currently set to expire in mid-March, pressuring legislators to act quickly.

The bill also seeks to enhance unemployment assistance payments from the current $300 per week to $400 per week. Unemployed gig workers, freelancers, contractors and others who previously qualified for aid will continue to be eligible under these programs.

Under the proposed bill, these programs and their financial aid would be extended through Aug. 29.

Housing Assistance

This proposed stimulus plan intends to set aside billions in financial aid to homeowners and renters. Here is the current funding breakdown:

  • Aid for back rent, rental assistance and utility payments: $19.1 billion
  • Aid for mortgages, utilities and property taxes: $10 billion
  • Aid to states and localities to help individuals at risk of becoming homeless: $5 billion

Paid Sick Leave

Previous stimulus packages guaranteed workers two weeks’ pay if they couldn’t work due to COVID-19-related reasons. The current proposal does not extend these benefits. However, employers that choose to continue offering this paid sick and family leave through Oct. 1 may receive a tax credit.

Minimum Wage

The proposed bill would gradually increase the federal minimum wage to $15 per hour by 2025. It would also mandate that tipped employees, youth workers and workers with disabilities all receive the full federal minimum wage. This change would affect the wages of 27 million Americans. However, this particular proposal is hotly contested, and there has been speculation that it may need to be scrapped in order to secure the requisite number of votes to pass.

Update: Due to congressional rules, this provision will almost certainly not appear in the final bill after going to the Senate.

Aid to Schools and Child Care

A significant portion of the stimulus bill involves aid to states, including schools and child care facilities. Here is the current funding proposal:

  • Aid for getting K-12 schools ready for in-person learning: $130 billion
    • Money could be used for purchasing protective equipment, improving ventilation systems and preventing teacher layoffs. However, 20% of the money schools receive must be used to address pandemic learning loss—for example, extending learning time into the summer.
  • Aid for colleges: $40 billion
    • Institutions would be required to spend at least 50% of their allocated funds on emergency financial aid grants to students.
  • Child care provider assistance: $39 billion
    • Funds may be used for payroll, rent, protective equipment and other expenses.

Tax Credits

The stimulus bill aims to provide child tax credits to more low-income families. The bill proposes $3,000 for parents of children under the age of 18—$3,600 for parents of children under the age of 6. This credit would also become fully refundable.

The bill also seeks to expand the earned income tax credit for individuals without children. The maximum credit would be nearly tripled under the stimulus proposal, and eligibility would be expanded—the childless tax credit eligibility age would be reduced to 19 years of age, down from 25.

Aid to states, local governments, tribes and territories

The proposed bill would provide billions in financial assistance to states, local governments, tribes and territories. It’s currently unclear whether there are specific usage requirements tied to this assistance, or whether funds may be used however the entities deem fit. Here is the current funding breakdown:

  • Aid to state and local governments: $325.5 billion
  • Aid to tribes and territories: $24.5 billion

Summary

Again, these proposed figures are subject to change as Congress continues its debate over specific policy aspects. Some aid amounts are wildly above what some legislators deemed appropriate, signaling a contentious battle ahead.

Thank you for being part of our PEO Compass information outlet. Contact us at Libertate Insurance for your PEO and Workers’ Compensation needs.