Conducting Legal Background Checks

With the number of harassment, discrimination and other employee lawsuits growing, besides examining their internal policies, employers need to be careful about who they hire.

Apart from calling previous employers and schools and checking for any lawsuits with the courts, many businesses will also consider using a vendor to do a background check and to look at an applicant’s social media posts.

The key to staying on the right side of the law is following the Fair Credit Reporting Act (FCRA). Despite its name, the law covers more than just credit checks. It governs how an employer or a third party entity gathers background information and what it can access. It established requirements for:

  • Notice
  • Consent
  • Steps required before taking an adverse action based on information from the background check (like rescinding an offer).
  • Using out-of-state agencies to pull court records.

 

Follow the law

The Federal Trade Commission, which regulates the FCRA, outlines the rules employers must follow on its website.

Here are the basics:

  1. Always notify the employee or applicant that you plan to conduct a background check. Use a notification form with the singular purpose of notifying applicants that you plan to conduct a background check and need their consent.
  2. Get written permission from the applicant or employee. This can be part of the document you use to notify the person that you will get a consumer report. If you want the authorization to allow you to get consumer reports throughout the person’s employment, make sure you say so clearly and conspicuously.
  3. If you are using a third party to conduct the background check, certify that they comply with the FCRA.
  4. Before you reject a job application, reassign or terminate an employee, deny a promotion, or take any other adverse employment action based on information in a consumer report, you must give them:
  • A notice that includes a copy of the consumer report you relied on to make your decision; and
  • A copy of “A Summary of Your Rights under the Fair Credit Reporting Act,” which the company that gave you the report should have provided to you.

Give the applicant or employee the notice in advance so they have the opportunity to review the report and tell you if it is correct.

 

Checking social media

Several US states have social media laws in place that restrict employers from asking job applicants or existing employees from sharing their login credentials or private information. But hiring managers and recruiters are free to check the information and photos of anyone which is available in the public domain.

If you do plan to check an applicant’s social media:

  • Know what you are looking for and why the information would be relevant to your hiring decision. Remember, there are laws against considering a person’s gender, race, national origin, sexual orientation, age, disability or religion when making hiring decisions. Social media may reveal all that information.
  • Is the information relevant to the hiring decision? You may find social media posts that are distasteful, and you might think based on that you would never hire the person. But you may not know the whole story behind a post.
  • Is the information reliable? While you can glean some important information about somebody on their public profiles, it can also likely be a very unreliable process. Social media sources may contain false, doctored and biased information, and posts can easily be forged. People can also alter pictures using Photoshop and other editing software.
  • Give a candidate the chance to explain or dispute any information you find.

 

 

 

Preparing for a Workers’ Compensation Audit

Just the mention of a workers’ compensation audit can stir up the butterflies in your stomach and add a serious dose of stress to your existence.

But, if you are scheduled for an audit, there is no need to dread it. A small amount of preparation and common sense can save you a lot of aggravation and money.

Timing
Devoting a few hours of effort now can save you a lot of time in the future. Give your full attention to the auditor and remain with them throughout the entire process. The process may take a couple of hours to complete, so make sure that the time and date of the scheduled audit are convenient for you. Call to reschedule the audit if it has been scheduled at an inopportune time.

 

Documentation

As soon as you learn about the audit, begin to collect and organize:

  • Payroll records,
  • Overtime payroll records,
  • Classification divisions, and
  • Insurance certificates.

 

This should give you plenty of time to compose a summary of each, which will help you to better communicate important data during the audit process. Information that is well organized will also expedite the process. If you can reconcile your calculations to payroll records, such as W2s and payroll stubs, the auditor might be more comfortable trusting your data.

You will also want to make any needed adjustment to payrolls; for example, subtracting bonus pay from overtime pay.

If applicable, you will need to apply the maximum and minimum payrolls to the calculations. This part may take a little research, since the minimum and maximum will vary based on state, career, and even among sole proprietors, partners and executive officers.

 

Classification and subcontractors

Before the audit, review the different employee job classifications and make sure that each person is correctly classified.

This is a key element to ensure that the audit flows smoothly. If there’s any question about how to classify an employee, call us. The auditor is most likely going to ask you about the classification and job duties for multiple different employees, so be prepared and armed with knowledge.

One last important preparation concerns subcontractors. Payments issued to subcontractors can go against your workers’ compensation in the event that the subcontractor did not have a certificate of workers’ compensation.

You can get a copy of the certificate, but make sure that it is current and shows coverage during the time the subcontractor worked for you.

 

D-day

Once the audit arrives, you’ll be glad that you took a little time collecting, organizing and summarizing your information. You will also find that the auditor is not a nemesis, especially when you provide honest answers and organized paperwork.

At the conclusion of the audit, ask the auditor for the audit worksheet. Then ask us to review the accuracy of the final audit.

You have a legal right to ask for a corrected audit anytime you think there were any errors. If any overpayment was made under the last three preceding audits, you also have a legal right to recover it.

 

Do You Need Workers’ Comp Coverage for Family Members?

One question we get often from small business owners is whether they have to secure workers’ comp coverage for family members that work for them. The short answer is “yes,” in most cases.

Under California law, every employer in the state that uses employee labor, including family members, must secure workers’ comp coverage, as per California Labor Code Section 3700. When we talk about family members we usually mean children, spouses, nieces, nephews, uncles, aunts, grandparents and cousins.

If you fail to include a working family member on your workers’ comp policy, you could risk a fine, so it’s wise to understand the regulations.

Here are a few scenarios:

Your nephew helps in your business for a few hours a day, but you don’t consider him an employee. – Under labor law he is considered an employee. An “employee” is defined as someone you engage or permit to work. Even though your nephew is part of your family, he is considered an employee and hence must be covered by workers’ comp insurance in case he is injured on the job.

If the state finds out that you don’t have the necessary workers’ comp insurance, you could face serious consequences including fines ($1,500 per employee or twice the amount you would have paid in insurance premiums, whichever is more) and even misdemeanor charges.

Also, if your nephew got hurt at the store, he (or his parents) could file a personal injury lawsuit against you if you don’t have him covered on your policy.

You run a diner and your daughter works 25 hours a week in the kitchen< – Your daughter would be considered an employee subject to workers’ comp laws and she would not be able to be excluded on your workers’ comp (unless of course she was an owner/officer, member or partner).

You have a small business and your husband helps out about 10 to 15 hours per week – Your workers’ comp policy may not have to cover you and your husband.

But it could depend on whether your business is a sole proprietorship (which can be owned by a married couple in California), a partnership or a limited liability company.

If you are a married sole proprietor, in the state of California, typically your insurance company will consider your spouse a co-owner and exclude them without any question. But different insurance companies will handle this situation differently, so it’s important to know how yours handles it.

If you’re a corporation, LLC or partnership, your spouse cannot be excluded merely because he/she is your spouse. If you formed a corporation, your spouse would have to own shares and be a titled officer in the corporation in order to be excluded.

If you formed an LLC, your spouse would have to be member of the LLC in order to be excluded. If you formed a partnership, your spouse would have to be one of the partners to be excluded.

 

 

Vacant Buildings Pose Risks, Insurance Challenges

According to the website Statista.com, the average 2018 average vacancy rate for offices nationwide was to 12.2%, while 12.1% of retail spaces and 7.8% for industrial spaces were vacant.

Unfortunately, when buildings stand vacant they become susceptible to a variety of problems.

There are approximately 31,000 fires in vacant buildings annually, resulting in dozens of deaths, hundreds of firefighter injuries, and an average $642 million in property damage.

Vacant buildings receive little or no maintenance, attention, or security. This can lead to problems such as:

  • With no security on the premises, the building becomes a target for vandals. Vacant buildings frequently wind up with broken windows and graffiti-covered walls.
  • Fixtures and materials inside the building, such as copper piping, may attract thieves.
  • Vacant buildings can become convenient hang-outs for young people or shelters for homeless people; they also can become centers of criminal activity such as drug dealing.
  • Trespassers smoking on the premises, decayed wiring, arson, and production of illegal drugs like methamphetamines may cause fires in vacant buildings. In addition, automatic sprinkler systems may be shut off, allowing fires to spread, and lack of security prevents early detection.
  • Toxic substances remaining on the premises may leak and contaminate soil and groundwater.

 

Owners of vacant properties can take many steps to prevent these problems or make them less likely.

  • Visit the property at least weekly or hire a property management company to do so.
  • Clear the exterior of the building of scrap wood, paper, cardboard, and brush.
  • Remove any toxic substances that could contaminate the area or harm police or firefighters.
  • Maintain sidewalks and parking areas in good condition, and clear them of snow and ice.
  • Erect obstacles to keep vehicles and pedestrians out of the parking areas.
  • Hire security guards to watch the building at night and have exterior lighting turned on.
  • Maintain the heat or drain the plumbing system to keep pipes from bursting, but maintain at least a minimum temperature in areas protected by automatic sprinkler systems.
  • Maintain electricity to emergency lighting and exit signs.
  • Shut off utilities except where necessary to power desired lighting and alarm systems.
  • Maintain fire detection systems and link them to a central station monitoring service.

 

Insurance implications

Buildings that are more than 70% percent vacant for more than 60 days also lose some important insurance coverage. If the building is largely vacant, the standard commercial property insurance policy reduces loss payments by 15% for most causes of loss and does not cover others at all, including vandalism, water damage, glass breakage, and theft.

For an additional premium, the building owner may be able to purchase vacancy permit coverage which reinstates some or all of this coverage for a specific period of time. An alternative, vacancy changes coverage, can reduce the minimum occupancy that the building must have before the insurance company will consider it vacant from the standard 31%. We can work with you to get the coverage you need.

A vacant building is never a good situation, but with the proper precautions, the owner can maintain its value and keep it secure until new tenants move in.

 

Smartphones and the Wage and Hour Dilemma

Do you ever wonder if your non-exempt employees are sneaking a peek at work e-mail off the clock? Ever suspect their bosses of pressuring them to respond to calls and e-mails after the workday ends?

If those thoughts keep you up at night, it’s time to make sure your employees’ smartphones aren’t putting your organization at risk of violating wage and hour laws.

The proliferation of smartphones has led to a rapidly rising number of lawsuits by employees claiming they were required to work uncompensated on evenings and weekends when not on the clock. The lawsuits are often class actions stemming from overtime-eligible employees using smartphones to extend their workday without those after-hours tasks being compensated.

The problem for employers is that when one employee complains to the Labor Department that they are not being compensated for time working on their smartphones when away from work, the agency’s investigators won’t stop with the complaining employee. They also look at how many others are “similarly situated.”

A single employee’s complaint can turn in to a class action when all the other similarly situated employees are included.

Just a few minutes a day over months or years can add up to financial disaster if an employer has a number of employees regularly using their phones for uncompensated work.

In the last several years, the courts have seen a flood of lawsuits in which groups of employees claim the time they spend reading and responding to e-mail should be considered work time, and therefore paid.

The danger is that when a boss sends a worker a message off-hours and asks them to read something or send an e-mail, the employee will usually feel compelled to do as they’re told, even if they don’t want to. It’s unlikely a subordinate will refuse to a superior for many reasons, such as job security and also advancement possibilities. Who wants to look lazy when the go-getters are the ones who are recognized?

Employees often are expected to check their work e-mail, and it’s not too much of an overstatement to say many employees today are under pressure because they are required to respond to after-hours messages.

You might think that just a few minutes of after-hours work won’t cause a problem because the time is minimal. But when employees sue claiming they should be compensated for after-hours smartphone work, the employer typically uses the de minimis defense.

De minimis means very little, perhaps just a minute or two. The employer maintains that the time spent is de minimis, but it isn’t. Just five minutes a day adds up to almost a half hour a week. But there are precedent-setting court decisions that have said that even 30 minutes extra a week is not de minimis.

Also, besides federal law, you have our own state law to contend with.

Additionally, you may not even know that some employees are checking work e-mail at home whether they’re told to or not.

Just because the employer doesn’t require employees to stay tied to their phones doesn’t eliminate legal risk. The law defines work time as the time an employee is “suffered or permitted” to work.

So, an employer doesn’t have to require employees to answer e-mail and perform other tasks off the clock to run into trouble. Merely permitting that work without counting it as compensable time, puts the employer at risk.

 

What should you do?

The extension of work time made possible by smartphones and other electronic devices poses a new danger for employers.

To ensure you don’t’ find yourself the target of a wage and hour lawsuit, you need to put in a place a solid policy about non-exempt employees working on their smartphone after hours.

You should put the policy in place, communicate it to your staff in a meeting, as well as include the policy in your employee handbook. Passing out a memo on the matter is also helpful.

Once the policy has been communicated, you have to monitor and survey staff to make sure they are not breaching the rules.

Does Your Business Have to Comply with GDPR?

On May 25, 2018, a major rules change that impacts millions of businesses took effect. The European Union’s General Data Protection Regulation (GDPR) is the most significant change to European data security standards in two decades.

While the regulation has a direct impact on enterprises located or doing business directly in EU countries, it can also apply to U.S.-based businesses. GDPR gives consumers more control over how companies use their personal data. In particular, European consumers now have the right to:

  • Be informed about when companies are collecting their information.
  • Access the information companies possess about them, via a “subject access request.” Companies must provide the requested information within one month and correct any inaccuracies.
  • Have their information erased (this is known as “the right to be forgotten”).
  • Ask for restrictions on the use of their data.
  • Move or copy their data from one source to another (this is known as “data portability”).
  • Object to how companies use their data, including for direct marketing and when companies make automated assumptions about what an individual might want to buy.

Companies outside the EU are subject to GDPR if they collect personal data or behavioral information on individuals located in an EU country, even if no financial transaction takes place. A simple survey can trigger compliance requirements. Any businesses with websites that target-market to international customers may also have to comply.
A business is bound by the requirements if it specifically targets consumers in an EU country. For example, if the web pages use the particular country’s language and refer to users and customers in that or other EU countries, the EU regulators would consider that target marketing. Target marketing does not include a web page written in English that makes no such references, but that a European consumer could possibly access.
Any company selling goods and services via the Internet, and that targets EU customers, may have to comply. If your company fits the bill, you should:

  • Obtain clear and explicit customer consent for collection and use of their data for each type of processing done on the data. For example, one permission is required for sending e-mail marketing messages, another for sharing with third parties, and others for additional types of processing.
  • Protect collected customer data. The protection requirements are similar to standards in place in the U.S.
  • Notify the EU or other supervising authority within 72 hours of some data breaches. A breach must be reported if it involves “accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to, personal data transmitted, stored or otherwise processed” that can cause “risk to the rights and freedoms” of EU customers.
  • Notify the individuals within the EU when a breach presents a “high risk” to basic property and privacy rights, such as when account passwords are compromised

The EU can fine a company 2% of its global revenue for failing to report a breach on time. Other penalties can be up to the larger of 4% of revenue or €20 million (about $24.4 million.)

Prioritize your compliance efforts
Experts advise companies that are just starting their compliance efforts to identify the most important thing they need to do, and tackle that first. Lesser priorities follow from that.
As Chris Combemale of the Direct Marketing Association said, compliance is an ongoing process: “GDPR is a way of thinking about your customer, a way of thinking about your business that is permanent and long term.”

 

 

 

 

 

 

 

Preventing Heat Illness as Temperatures Soar

With temperatures rising, employers with outdoor workers need to take steps to protect them from heat illness.

California employers need to be especially mindful as Cal/OSHA has workplace safety regulations governing the prevention of heat illness. The heat illness standard came into effect about seven years ago as the number of deaths due to heat illness started climbing, particularly among, agricultural, construction and landscape workers, among others.

Heat illness occurs when the body’s temperature control system cannot maintain an acceptable level. Under normal circumstances, the body cools itself by sweating. However, when high temperatures and high humidity prevent the body from releasing heat efficiently, a person’s body temperature can rise quickly.

Progression to serious illness can be rapid. If left untreated, very high body temperatures might damage the brain and other vital organs – and ultimately cause a person’s death

You should take immediate action to seek treatment for a worker if they start exhibiting one or more of the following signs:

  • Headache
  • Fatigue
  • Dizziness
  • Confusion
  • Cramps
  • Exhaustion

 

Workers with existing health problems or medical conditions – such as diabetes – that reduce tolerance to heat, need to be extra vigilant. Some high blood pressure and anti-inflammatory medications can also increase a person’s risk for heat illness.

To ensure you are in compliance with California workplace safety regulations, you need to ensure the following:

 

Access to water

Staying hydrated is probably the single-most important step in heat-illness prevention. Water must be “fresh, pure, suitably cool” and located as close as practicable to where employees are working (and enough to provide at least one quart per employee per hour for the entire shift).

Employers should encourage workers to stay hydrated and drink water.

 

Access to shade

When temperatures reach 80 degrees, you must have and maintain one or more areas of shade at all times, when employees are present. Locate the shade as close as practical to the area where employees are working and provide enough to accommodate the number of employees on meal, recovery or rest periods.

Even if temperatures are less than 80 degrees, you must permit access to shade for workers to rest.

 

Preventative cool-downs

If an employee starts feeling unwell, they must be allowed to take a “preventative cool-down rest,” during which they must be monitored for symptoms of heat illness.

They should be encouraged to remain in the shade and not ordered back to work until symptoms are gone. Employees with heat illness symptoms must be provided appropriate first aid or emergency response.

 

Weather monitoring and acclimatization

Instruct supervisors on-site to monitor the weather so they can institute the correct procedures (like erecting shade at 80 degrees).

Acclimation procedures include close observation of all employees during a heat wave —defined as at least 80 degrees. New employees must be closely observed for their first two weeks on the job.

 

High-heat procedures

High-heat procedures (which are triggered at 95 degrees) must include:

  1. “Effective” observation and monitoring of employees, including a mandatory buddy system.
  2. Regular communication with employees working by themselves.
  3. Designating one or more employees to call for emergency services, if needed.
  4. Giving more frequent reminders to drink plenty of water.
  5. Holding pre-shift meetings on prevention.
  6. During high heat, agricultural employees must be provided with a minimum 10-minute cool-down period every two hours.

 

Employee and supervisory training

Ensure appropriate training of both your workers as well as supervisors. Nobody should be working outside in heat if they have not been trained in heat illness prevention and emergency procedures.

Employee training should cover:

  • The company’s heat illness prevention procedures.
  • Their rights to take regular water and rest breaks.
  • Importance of frequent consumption of small quantities of water.
  • Signs and symptoms.
  • Appropriate first aid or emergency response.
  • Importance and methods of acclimatization.
  • Importance of immediately reporting signs or symptoms of heat illness to a supervisor.
  • Procedures for responding to possible heat illness.
  • Procedures to follow when contacting emergency medical services, providing first aid.

 

Supervisors must be trained on the following:

  • The heat standard requirements.
  • The procedures they must follow to implement the requirements.
  • Procedures to follow when a worker exhibits or reports symptoms consistent with possible heat illness, including emergency response procedures and first aid.
  • How to monitor weather reports and how to respond to hot-weather advisories.

 

Emergency response and written procedures

Emergency response procedures include:

  • Effective communication.
  • How to respond to signs and symptoms of heat illness.
  • Instructions on what to do when employees exhibit severe heat symptoms.
  • Procedures for contacting emergency responders to help stricken workers.

 

Written procedures form part of an effective heat illness prevention plan that should include, but not be limited to your responsibility to provide:

  • Water
  • Shade
  • Cool-down rests.
  • Access to first aid.
  • The employees’ right to exercise their rights under this standard without retaliation.

 

 

Compromized E-mails Grow as Hackers Double Down on Employees’ Bad Clicks

As the cyber threat spreads its tentacles, a new report sheds light on a rising risk, with the number of business e-mail compromises growing at an increasing rate.

The report by Beazley Breach Response Services, part of specialist insurer Beazley P.L.C., found that the e-mail threat is greater for organizations that use Office 365, Microsoft’s cloud-based package of popular software like Word, Excel and Outlook, the e-mail platform.

The study found that hack and malware breaches via Office 365 accounted for 13% of incidents during the first quarter of 2018.

The report should set off alarm bells at all organizations since e-mail is central to how we get business done these days.

Financial services, health care and professional services are the top sectors targeted by attempts to compromise e-mail as a way to gain entry into an organization’s systems.

 

What’s happening?

Employees are usually the weakest link in an organization’s chain. Anybody with e-mail in an organization can let in hacks and malware by clicking on a link in a phishing e-mail, but also on a HelpDesk message or Microsoft survey. Once they click on these links, the employee is directed to a website that appears legitimate, with the Microsoft logo and a general “look” that mimics the company’s own website.

There they are asked for e-mail credentials, including a password. Once those details are supplied, the malware does its stuff and infects the system or the hacker starts harvesting the user’s credentials and logs into the mailbox undetected.

 

What happens when hackers gain access to e-mail?
After getting access, hackers can:

  • Run searches to steal personally identifiable information.
  • Steal bank information to send e-mails requesting fraudulent wire transfers.
  • Search the inbox to determine what HR and benefits self-service portal the employer uses, and then request a password reset for the user in that system. Once in the self-service portal, the attacker redirects the employee’s paycheck to one of their accounts.
  • Send spam e-mails to all of the user’s contacts in an attempt to get others to give up their credentials as well.

 

The top two causes of data breaches reported to Beazley Breach Response Services were hack or malware (42%) and accidental disclosure (20%). Social engineering and disclosure by insiders were the next highest causes of incident, each at 9%.

Other threats that also gain entry when employees click on bad links are ransomware that can shut down an organization’s entire system. Hackers then demand a ransom to unlock it.

 

What you can do

There are a number of simple ways to thwart infiltrators:

  • Change passwords regularly
  • Have dual-factor authentication
  • Remove auto-forwarding or auto-delete rules
  • Teach your employees how to detect bogus-looking e-mails. If unsure, one of the best ways is to look at the sender’s full e-mail address and see if it comports with the e-mail address of a known entity, like a bank.

 

Office 365 tips

For organizations that use Office 365, Beazely recommends that they:

  • Require two-factor authentication for access to Office 365.
  • Use the Secure Score tool. This Microsoft tool can be used by anyone who has administrative privileges for an Office 365 subscription. It assists not just in analyzing, but also with implementing best practices regarding their Office 365 security.
  • Enforce strong password policies. Educate employees about the risks of recycling passwords for different applications.
  • Alert employees who have access to accounts-payable systems or wire transfer payments about these types of scams.
  • Train all employees to beware of phishing attempts.
  • If you use cloud-based platforms, investigate what logging is available and make sure it is enabled. For instance, if you’ve migrated from on-premises Exchange to Office 365, audit your security settings, which are reset to default settings during migration. In Office 365, you must turn on audit logging in the Security & Compliance Center.
  • Work with your cloud provider’s technical team to determine what activities are logged and ensure you have the visibility you need, for the monitoring period you need.

 

Most Disaster-hit Firms Have Wrong Type of Insurance

A new report by four Federal Reserve Banks found that small businesses affected by large disasters had failed to secure the right type of insurance, and that there was a mismatch between damages suffered and their insurance coverage.

While some businesses suffered actual property damage, the majority that were affected by hurricanes, other major storms, wildfires and flooding suffered uninsured economic damages as a result of having to close or limit operations following such events that struck in 2017.

The study by the Federal Reserve Banks of San Francisco, New York, Richmond and Dallas found that because insurance holdings appeared to be mismatched to the actual damage that occurred, many businesses suffered uncovered losses.

Additionally, affected firms applied for credit financing more than disaster relief, and most of them faced funding gaps.

The concern is that this phenomenon is widespread across the United States, which is experiencing an increasing frequency and severity of natural disasters. And the main area of an insurance mismatch seems to be not in property protection, but in business interruption coverage.

Here were some of the main findings of the report:

  • For affected firms, foregone revenues – not assets – were the largest source of losses.
  • Sixty-five percent of affected firms cited loss of power or utilities as the source of their losses. But, only 17% had business disruption insurance at the time of the disaster.
  • Flood damage (38%) and wind damage (36%) were also common sources of losses, but only 16% of affected firms had specific flood insurance coverage and just 21% had wind insurance.
  • Of the affected businesses, 36% did not lose any assets, 45% had asset losses ranging from $1-$25,000, and only 19% lost more than $25,000.
  • Of the affected firms, only 4% did not have any revenue losses, 61% had revenue losses ranging from $1-$25,000, and 35% lost more than $25,000.
  • Affected firms reported sizable revenue and employment gaps and elevated incidence of financial challenges compared to unaffected firms.
  • Their insurance holdings appeared to be mismatched to the sources of their damages, leaving uncovered losses. For example, 65% of affected firms cited power or utilities issues as the source of their losses, but only 17% had business disruption insurance.
  • After the catastrophes, 48% of affected businesses applied for credit financing and 27% filed for disaster relief (indicating they did not have the correct insurance).

 

The takeaway

In light of the increasing severity and economic cost of natural disasters, it is critical that small businesses secure business interruption coverage to account for the lost revenue from the downtime they suffer post-incident.

Many business owners assume that the property insurance they already own will cover their lost revenue, but they’re wrong. Business interruption insurance is designed to replace revenue losses a firm might suffer in the case of a disaster, be that an equipment breakdown, problems experienced by suppliers, strikes that affect distribution networks or a natural disaster, among others.

While property insurance covers the value of those physical assets, it does not cover the lost revenue potential. In some cases, this has led to businesses losing so much income that they have had to shut down.

Your business may need business interruption coverage if it:

  • Relies heavily on physical assets
  • Has smaller profit margins
  • Operates in areas prone to natural disasters
  • Deals with or handles volatile materials.

 

Call us for more details and to find out if your firm may need coverage.

Workers Who File Claims More Likely to File Subsequent Ones

A new study has found that people who have had workers’ comp claims in the past are more likely to file future claims compared to those who have never suffered an on-the-job injury.

The study – the subject of an article published in the Journal of Occupational and Environmental Medicine – concluded that a past claim is the most predictive factor in determining the likelihood of future workers’ comp claims.

While the findings shed light on a significant driver of workplace injuries, employers are in a difficult position as asking prospective employees about past claims experience is illegal in most jurisdictions.

The main findings of the study, “Reoccurring Injury, Chronic Health Conditions, and Behavior Health: Gender Differences in the Causes of Workers’ Compensation Claims,” are:

  • A higher proportion of both men and women who had filed workers’ comp claims in the past also experienced a subsequent workplace injury.
  • For both genders, a past claim is the most predictive factor in determining the likelihood of filing a future claim.
  • Women who had certain pre-existing behavioral risk factors like depression, poor sleep habits and headaches were more likely to file a subsequent claim if they had already filed one. These same risk factors did not add to the likelihood among men in filing second claims.
  • Future claims are associated with individual workers’ overall health.

 

The takeaway

Besides addressing workplace hazards proactively, anytime you have a workplace injury, you should investigate to determine how the incident occurred. Once you identify what went wrong or broke down in your processes leading to the incident, you can address the problem through new safeguards and training.
Also, if an employee does file a claim, when they are back on the job you should give them additional safety training and attention to reduce the chances of them suffering future workplace incidents.

And what about prospective employees? First off, most states bar employers from asking prospective hirees about any past workers’ comp claims they have filed with previous employers.

The Federal Americans with Disabilities Act, as well as numerous state laws, seeks to protect job seekers from discrimination in hiring as a result of filing valid claims.

The bottom line is that an employer cannot request workers’ compensation records in order to have a policy of not hiring anyone who has made a claim. It is discriminatory to penalize a person who has exercised a lawful right in a lawful way and filed a valid claim.

If you are considering trying to obtain past workers’ comp records, you should consult with a labor lawyer before making any moves.