Archive for June, 2009

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The New Minimum Wage – Do You Know What it Is?

Tuesday, June 30th, 2009

Effective July 24, 2009, the Federal Minimum Wage will increase from $6.55 to $7.25 per hour, representing more than a 10 percent increase. All employers, regardless of size, are required to post the most recent Minimum Wage poster (that went into effect on January 16, 2009) even if your state’s minimum wage differs.

If  you employ staff in California, the new law will not affect your state-based employees, as the California minimum wage is $8.00. However, be aware that employees residing out of state are subject to their states’, or federal, guidelines.

The Federal Minimum Wage is governed by the Fair Labor Standards Act of 1938. The FLSA establishes minimum wage, overtime rules, record-keeping requirements, and youth employment standards affecting employees. Remaining compliant with the myriad of FLSA requirements is daunting, as employers often confuse the federal guidelines with their state rules.

If you are concerned about compliance, contact an HR Consulting firm who can guide through the FLSA maze.

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Unemployment Rates Jump, Again.

Thursday, June 25th, 2009

Just as we were beginning to feel a glimmer of optimism that the economy was slowly beginning to turn, we were hit again with some pretty depressing news – the California Employment Development Department (EDD) released May’s unemployment figures, and they were pretty dismal.

April saw a slight drop in unemployment,with the unemployment rate dipping to 11 percent, down from 11.2 percent in March. However, May’s rate jumped back up to 11.5 percent. That is the highest rate in close to seventy years.

To put things in perspective, the last time California experienced such a height of unemployment, the young men of our country were donning their uniforms to fight in World War II.

Yep, that’s right. In January 1941, California’s unemployment peaked at 11.7%. We haven’t been close since.

Seeing misery loves company, the national unemployment rate also hit a thirty year high, topping off at 9.4 percent in May.

What about you?

If you are a small employer and are struggling to keep your head above water, you may also be considering letting staff go. But beware a wide range of traps and pitfalls that may await you. The laws governing downsizing and layoffs are complex and can lead to employment lawsuits if not managed properly. Here are a few areas to consider:

1. Be proactive by forming a committee to address the multitude of areas which are likely to be affected. Be sure to review your company’s Employee Handbook and review your termination policies. Be sure to ask, and answer, the following questions:

  • Have you reviewed your company’s Progressive Discipline policies?
  • If so, was the system followed?
  • Are there written employment contracts?
  • Are there union contracts? Do they limit your right to terminate?

2. Establish an objective, financially beneficial reason to layoff staff. This will be important if your motives are questioned in the future.

3. Review your workforce and determine which employees will be selected for layoffs.

4. Train managers and supervisors on proper layoff procedures.

5. Draft enforceable severance and release agreements.

6. Prepare COBRA notices.

Consider Outsourcing.

If you are concerned about being sued, or simply don’t have the manpower to address each of these areas, we strongly recommend considering an outside Human Resources Consulting firm to assist you. These firms have experts on staff that are familiar with all the required laws and guidelines, and can assist you through the entire layoff process. You have enough to worry about, so leave the layoffs to the experts.

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Boost Employee Morale and Fight the Economy Blues!

Tuesday, June 23rd, 2009

Your employees are smart – they sense the vibe of your workplace, whether you have an open door policy with full disclosure, or not. When the economy is down and sales are flat, it is important to maintain a positive and upbeat work environment, regardless of your financial statement.  Motivated employees will continue to give you their all, if they feel recognized and appreciated.

Studies show that employee development, training and recognition programs are invaluable in motivating the workforce. Yet, most small employers find their time and resources too limited to research, create, and implement effective programs.

In recent years, thousands of local employers have begun turning to Professional Employer Organizations (PEOs) and HR Outsourcing firms for support. A PEO/HRO firm typically provides many services that help improve employee morale and productivity. We’ll touch upon a few here, and discuss them in more detail in future posts:

Management Training – Some trainings are required by law, such as Unlawful Harassment Training. However, many courses empower supervisors to reach higher levels of confidence and commitment to their employer. With advanced management courses in their pocket, they can more readily motivate, train, and lead their staff.

Employee Development – An educated employee is a dedicated employee. Numerous trainings motivate and empower staff to reach their full potential. Time management, Positive Motivation, and Managing through Difficult Times are just a few examples of training that motivate employees to excel.

Incentive Programs – In a tight economy, most employers don’t have the financial resources to provide large bonuses or cash incentives. However, with a little creativity, employers can find alternatives to incentivize and motivate their staff. Birthday parties, small gestures of appreciation, public recognition, and minor gifts go a long way in keeping your staff supportive of your efforts in tough economic times.

Employee Benefit Packages – A key motivator for employees to work hard and remain dedicated are good benefit programs. While insurance can be costly, many low-cost alternatives exist, including voluntary benefit and retirement plans.

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One More Secret to Workers’ Compensation Savings

Monday, June 22nd, 2009

Our last post reviewed the importance of reducing the frequency of injuries. Accidents happen, but if you notice a repeating pattern of similar injuries, you know you have some work to do.

Today, let’s look at severity, and how it impacts your insurance premiums.

Once an injury occurs, the employee will generally receive medical care. They will be examined by an industrial doctor who will determine the severity of their injury, the necessary medical care, and if they will be required to take time off work.  The insurance company will be responsible to pay for all related medical, rehabilitation and indemnity (time off of work) costs.  The longer an employee receives medical care and remains off work, the more the insurance company pays.

It is in the best interest of the employer to return the employee to work as soon as possible. If an employee is unable to resume their previous job function, the employer is encouraged to incorporate a “Modified Return To Work” Program whereby the employee can return to payroll while performing permitted job functions. This can significantly reduce the indemnity costs and minimizes the negative impact to the employer’s insurance policy. An employer should also be vigilant in reviewing open claims with the insurance carriers and to have them closed and removed from the record as soon as possible.

While you may earnestly want to reduce your workers’ compensation rates, some of these tasks may sound a bit daunting. However, don’t despair. There are many resources out there that help you implement effective safety programs. When you consider the long term savings you will enjoy by reducing your Experience Modification and rates, the up front expense of hiring a professional will be an easy investment choice. Click here to learn more about our Workers’ Compensation Safety Services.


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2 Steps Closer to Workers’ Compensation Savings

Monday, June 22nd, 2009

In our last Workers’ Compensation post we discussed 3 basic starters to keep your workers’ compensation costs down. To recap:

  1. Focus on keeping a safer work environment
  2. Shop around to different carriers
  3. Consider working with a Professional Employer Organization

Despite the state-wide increases, insurance companies view the loss history of an individual company before bumping rates. Companies can actually achieve a reduction in rates, even while the state bumps them up.

The Loss Ratio (the ratio of losses paid out versus premiums paid in) is the most important factor in determining rate increases. Even while published base rates state-wide may be increasing, a company with a low loss ratio can still experience a decrease. There are two ways to keep your Loss Ratio low: 1) decrease the FREQUENCY of accidents, and 2) decrease the SEVERITY of an injury when it occurs.

Let’s discuss FREQUENCY:

When reviewing loss ratios, the insurance companies analyze how often injuries occur, and if they are of similar type. Similar injuries that repeat themselves time and again (slips and falls, or back strains, for examples) indicate a weakness on the part of the employer in that area. Improved training and awareness will help reduce the frequency of these injuries. On the other hand, common, unrelated injuries may indicate a general lack of training and give the employer reason to pause and assess their workplace safety on a whole. They should review and update their Injury and Illness Prevention Plan, institute regularly scheduled safety meetings, and implement incentive/bonus program that recognize and reward workplace safety.

In our next post we’ll look at SEVERITY, what it means, and how it can impact your rates.

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