BLOG

Looking For Something?

Businesses Aren’t Weeding Out Employees with Marijuana Tests: Find Out Why

As more states continue to legalize the medical and recreational use of marijuana, employee impairment may become a significant safety concern for all businesses.

While employers want to keep their workforces productive by deterring the use of drugs and alcohol, new research from employer solutions firm Quest Diagnostics shows that marijuana testing rates are falling. And, as more states continue to legalize the medical and recreational use of marijuana, employee impairment may become a significant safety concern for all businesses.

Quest Diagnostics found that the national marijuana testing rate fell by nearly 1 percent between 2016 and 2017, and nearly 2 percent in states with legalized marijuana use. While these numbers may seem insignificant, employers conduct millions of drug tests every year and businesses that must perform federally mandated marijuana screenings lead to higher-than-normal average rates.

According to Quest Diagnostics and other experts, a number of factors may contribute to falling test rates:

• Increased use— Marijuana is now easier to obtain legally than ever before, with 30 states and the District of Columbia allowing medical use and nine states allowing recreational use.
• Unclear definition of impairment— Screenings for alcohol and other drugs can show levels of intoxication, but a positive marijuana test result can’t specify when or how much of the drug was taken.
• Americans with Disabilities Act (ADA) compliance— Some states prevent employers from hiring or terminating employees based on the valid use of a medical marijuana card. As a result, some employers avoid ADA violations by dropping marijuana screenings altogether.

Although employee marijuana use is a complicated topic, it’s one that your business should address as usage continues to increase. Contact us at (916) 380-5300 today for help with your safety management and workers’ compensation concerns.

Filed under: Property & Casualty,Safety — Jillian Bender-Cormier @ 11:02 pm June 13, 2018


4 Reasons Why Businesses Need D&O Insurance

With today’s emphasis on corporate transparency and accountability, an organization’s directors and officers face a countless number of exposures. Regardless of your company’s size or mission, the legal costs associated with a lawsuit can be crippling for both the organization and your directors and officers.

Many wrongly assume that directors and officers (D&O) insurance is only necessary for publicly traded companies. However, privately held organizations can just as easily fall victim to lawsuits that can impact the company, its officers and board, making D&O a must. Specifically, D&O insurance can provide the following benefits to privately held companies:

1. Legal cost reimbursement. In the event of a claim, D&O policies can provide legal cost coverage for a variety of claims. Specifically, D&O insurance can provide reimbursement to leaders of private companies following allegations of wrongful acts, financial mismanagement, errors in judgement and negligence. because D&O lawsuits can occur without warning and easily reach six figures, it’s critical that private company leaders arm themselves with the right policy.

2. Peace of mind. D&O claims can come from a variety of sources, including employees, clients, contractors, and government bodies. For private companies, claims from creditors and competitors are particularly common. D&O insurance ensures that private company leaders are protected regardless of where claims originate, providing timely and effective coverage.

3. An improved ability to attract new directors. Simply put, having a strong D&O policy in place makes board seats more attractive. This is because purchasing insurance shows prospective leaders that you take D&O risks seriously and are prepared to protect them in the event of a claim.

4. Coverage for regulatory exposures. Regulatory agencies are increasing their scrutiny of private companies, making D&O insurance all the more important. Paying the cost of an attorney to defend a director or officer against a government enforcement action is expensive, and private company D&O insurance policies can help with these types of expenses.

Want to Learn More About D&O Insurance for Private Companies?
Many private organizations don’t believe they need D&O insurance. This can be dangerous thinking, as just one D&O claim can drain the personal assets of a company’s leadership team. To learn more about D&O insurance, contact Warren G. Bender Co. today.

Filed under: Directors & Officers,Property & Casualty — Jillian Bender-Cormier @ 10:26 pm June 6, 2018


California Minimum Wage Laws

Federal minimum wage law is governed by the Fair Labor Standards Act (FLSA). The current federal minimum wage rate is $7.25 per hour for nonexempt employees. California law complements federal law and, in some cases, prescribes more stringent or additional requirements that employers must follow. Whenever employers are subject to both state and federal laws, the law most favorable to the employee will apply.

The Division of Labor Standards Enforcement (DLSE), part of the California Department of Industrial Relations, enforces and investigates minimum wage violation claims.

MINIMUM WAGE RATE
Effective Jan. 1, 2018, the minimum wage rate in California is $11 per hour for employers with 26 or more employees and $10.50 per hour for employers with 25 or fewer employees.
“Employee wages” are the entire amount of compensation an employee receives for his or her labor or services. Wages can be fixed or based on time, task, piece, commission or other method.

Minimum wage rate increases will take place every year until the minimum wage rate reaches $15 per hour by 2022. After the rates described below are implemented, the state will adjust the minimum wage rate annually to reflect the rising cost of inflation.

California law allows the governor to temporarily suspend the minimum wage rate increase schedule if the state’s economic condition does not support an increase. Under a temporary suspension, the implementation schedule would be delayed by one year. However, the governor may not implement a temporary suspension more than twice.

MEALS AND LODGING CREDITS
If the employee voluntarily agrees in writing, employers may generally include in employee wages part of the cost of meals and lodging they provide.
The adjacent table provides the maximum amount employers may credit for meals and lodging. Special rules exist for sheepherders and employees of organized camps.
• Sheepherder wages cannot be offset by meal and lodging credits; and
• Organized camps may deduct the entire value of meals and lodging from the salary of a student-employee, camp counselor or program counselor.
Refer to the California wage orders for more information on industry-specific meal and lodging credits.

TIPPED EMPLOYEES
In California, employers must pay tipped employees a wage rate equal to or greater than the state’s minimum wage rate. Employers may not deduct a tip credit from their employees’ wages. Tip payments include any tip, gratuity, money or other gift a patron gives an employee over and above the actual amount of the goods, food, drink, items or services the patron received from that business.

Employers cannot enter into contracts with their employers to override tipped employee regulations.

SUBMINIMUM WAGE RATES

California law allows disabled workers, apprentices, learners, student-employees, camp counselors and program counselors to receive wage rates below the minimum state rate. In certain cases, a license may be required for a subminimum wage rate to apply. When a license is required, the DLSE may set the terms and conditions of employment. Licenses may be revoked if the employer violates any term or condition of employment set by the license.

DISABLED WORKERS

Employers that obtain a special license issued by the DLSE may pay disabled workers a wage rate below the state’s minimum wage rate. Employers must generally obtain a separate license for each disabled employee. These licenses are valid for up to one year, and must be renewed on a yearly basis.

Nonprofit employers, including sheltered workshops and rehabilitation facilities, may receive a general license to employ disabled employees at subminimum wage rates, instead of individual licenses for each employee. Employers may be required to renew these licenses every year or on a more frequent basis.

APPRENTICES AND LEARNERS

The DLSE may also issue special licenses authorizing employers to pay subminimum wage rates as low as 85 percent of the state’s minimum wage rate to employees during their first 160 hours of employment in occupations in which they have no previous similar or related experience.

ORGANIZED CAMPS

Employers operating an organized camp can pay their student-employees, camp counselors and program counselors a minimum wage rate equal to 85 percent of the state minimum wage rate. These employers can also deduct the entire value of meals and lodging they provide to these employees.

MINIMUM WAGE RATE EXEMPTIONS

California’s minimum wage rate requirements do not apply to certain occupations and industries. Separate specific minimum wage rate and payment requirements, described in a series of minimum wage orders, apply for these employees.

Other exceptions to California’s minimum wage rate requirements include individuals who are closely related to their employer (parent, spouse or child) and outside sales personnel.

NOTICE AND POSTINGS

Employers are required to post and maintain updated information on the state’s minimum wage rate. The Industrial Welfare Commission (IWC) has provided a model poster that employers can use.

Employers covered by one of California’s industry-specific wage orders must also display a copy of the applicable wage order. These wage orders are available on the IWC’s website.

Business necessity

Business necessity is an overriding legitimate business purpose. Business necessity does not exist when the employee can demonstrate that the employer could have implemented or used an existing alternative practice that would avoid a wage differential while serving the same business purpose.

PROHIBITED WAGE DISCRIMINATION

In general, the California Equal Pay Law prohibits employers from discriminating on the basis of sex in the payment of wages.

Subject to some limited exceptions, female and male employees are entitled to equal pay for substantially similar work. Substantially similar work is determined by evaluating the level of skill, effort, responsibility and performance under similar working conditions.

California’s Equal Pay Law allows employers to pay different wages for employees of opposite sex when the wages are based on:
• A seniority system;
• A merit system;
• A system that measures earnings by quantity or quality of production; or
• A differential based on any bona fide factor other than sex.

PENALTIES

Criminal, civil and administrative penalties may apply for violations of California’s minimum wage laws.

CRIMINAL PENALTIES

Employers that violate California’s minimum wage laws commit a misdemeanor, punishable by a fine of at least $100, imprisonment for at least 30 days or both a fine and imprisonment. Employers that violate tipped employee regulations also commit a misdemeanor, punishable by a fine of up to $1,000, imprisonment for up to 60 days or both.

CIVIL PENALTIES

Employers that pay wages below the state minimum wage rate or that violate California’s equal pay laws are subject to civil lawsuits, and could be ordered to pay:
• The difference between what an employee’s wages should have been and what they actually were (plus interest);
• Liquidated damages (in an amount equal to the wage difference plus interest); and
• Court costs and reasonable attorneys’ fees.

Employers may avoid paying liquidated damages if they can prove that their actions were in good faith.

Employee lawsuits must be filed within two years of when the violation takes place (or within three years, for willful violations). In the case of any wilful violation, the DLSE can request and obtain injunctions against any further violations.

The identity of any employee that files a complaint for wage discrimination with the DLSE will remain confidential during an investigation and will not be disclosed until the validity of the claim is established.

ADMINISTRATIVE PENALTIES

In addition to the civil penalties described above, the DLSE may issue citations for any employer that violates the state’s minimum wage laws. Cited employers may be subject to fines as follows:
$100 per underpaid employee for each pay period in which the employee is underpaid, for a first offense; and
$250 per underpaid employee for each pay period in which the employee is underpaid, for a second or subsequent violation.

Employers can appeal these fines by requesting a hearing within 15 days of receiving the citation.

MORE INFORMATION
Contact Warren G. Bender Co. for more information on wage payment and work hour laws in California.

Filed under: HR,Property & Casualty — Jillian Bender-Cormier @ 11:21 pm April 10, 2018


Kidnap, Ransom and Extortion Insurance Coverage

Kidnap and extortion is a legitimate threat for U.S.-based businesses. Unfortunately, in many parts of the world, these illegal acts have become a business in and of themselves, with sights set on wealthy U.S. companies and business travelers. In most cases, kidnappers take professionals captive to make a profit, releasing the individual once demands have been met.

Because many overseas attacks are related to business, the need for kidnap and ransom coverage continues to grow. This is particularly true in areas where law enforcement has a blind eye to guerilla activity and in areas that are stricken by poverty. To combat financial losses in the event of a kidnap or extortion situation, Kidnap, ransom and extortion (K&R) insurance is a practical risk transfer option.

What is K&R Insurance?

K&R is typically a stand-alone policy for employees engaged in international business travel. It covers costs relating to events such as:

Kidnap and ransom: seizing an employee with the intent to demand money in return for the employee
Wrongful detention: confining an employee under the guise of government
Extortion: demanding money with the threat to injure or kill an employee, damage property, divulge trade secrets or spread a computer virus
Hijacking: holding an employee for an extended period of time against his/her will on an airplane, motor vehicle or ship.

Coverage includes ransom and extortion payments, in-transit money delivery coverage, consultant costs, negotiation costs, public relations costs, interest fees coverage, judgment settlements and defense costs. The policy also covers harm to the captive employee and his/her family such as death and dismemberment benefits, medical costs for injuries and psychiatric treatment after the employee is freed. Coverage is particularly helpful during times of negotiation, as experts are provided to the company to successfully free the captive employee with minimal harm.

In addition to purchasing proper coverage, check with your insurance carrier to see if they offer training sessions for traveling employees to educate them on how to react in a hostage situation. The training typically provides insight on how to initially deal with captors until an expert is available to take over negotiations.

Insurance carriers also advise that employers not reveal that they have K&R coverage. This confidentiality provision is designed to thwart employees from revealing to potential captors that they are insured. A large K&R insurance policy may make the employee a lucrative target.

Who Needs K&R Insurance Coverage?

Companies operating overseas need K&R insurance to protect their traveling employees. This applies to businesses of all sizes—kidnappers do not prefer larger companies over the small ones. In this business, everyone with money is considered a good target.

The coverage is particularly beneficial for employees who travel to regions of the world that are considered high risk. Countries with a consistently elevated rate of kidnaps and/or extortions include Afghanistan, Brazil, Honduras, India, Mexico, Nigeria, Pakistan, Philippines, Somalia, Venezuela and South Africa.

Underwriting Considerations

The premium for this type of coverage is generally based on the following:

• Type of industry
• Revenue of the insured company
• Country of residence
• Travel patterns of the employees

At Warren G. Bender Co., we can assist you in designing a K&R a policy that meets your company’s specific needs. We work closely with K&R insurance carriers to ensure you have the coverage, training and support you need, when you need it most. Call us today at (916) 380-5300 for more information.

Filed under: Property & Casualty — Jillian Bender-Cormier @ 10:59 pm


Home-based Business Coverage

If you conduct business in your home, insuring your business properly is part of a solid risk management plan. We can help!

What Protection Does it Offer?
Common coverages for home-based businesses include personal business property, professional liability, business income, personal and advertising injury, loss of business data, crime and theft, workers’ compensation and auto coverage. Depending on the type of home-based business you have, not all coverages apply, and other coverage options may be available.

Coverage Options
Based on your business needs, you have three basic coverage options to choose from, depending on your level of risk:

1. Homeowners Policy Endorsement. This provides the least amount of coverage and, therefore, is not ideal for most home-based businesses (depending on the level of risk). While it may provide enough coverage for a freelance writer with one computer and no business foot traffic, it’s not enough for someone who employs others, has clients visiting his or her home or has valuable business equipment and/or inventory.

2. In-home Business Policy. More comprehensive than a homeowners policy endorsement, in-home business coverage is a stand-alone policy that provides higher amounts of coverage for business equipment and liability.

3. Business Owners Policy, or BOP. A BOP bundles property and liability insurance into one policy. Created specifically for the small- to mid-size business, a BOP covers your business property and equipment, loss of income, extra expense and liability. It is the most comprehensive property and liability option. It does not include workers’ compensation, health or disability insurance, which are available as separate policies.

What’s Your Risk?
While most homeowners insurance policies do cover a limited amount of business equipment—computers, copiers and printers, to name a few—it’s likely that what you own is worth more than your policy’s limits. Also, your homeowners liability insurance probably won’t cover any injuries that may occur to the employees or clients that you have on your premises. What’s a home-based businessperson to do?

We’re Here to Help
Properly insuring your home-based business is crucial to protecting both your business and your home. At Warren G. Bender Co., we understand the small business owner’s personal and business needs, and can help you tailor coverage that’s as unique as the products and services you provide. Contact us today at (916) 380-5300 to learn more about how we can help you insure your livelihood.

Filed under: Personal Insurance,Property & Casualty,Uncategorized — Jillian Bender-Cormier @ 10:52 pm