All posts by Scott Eisland

Scott is a rising senior at the University of Maryland, College Park. He is majoring in both Finance and Marketing, and has little to no idea what he wants to do with his life. This is his first year at Metropolitan Risk.
Claims Management, Construction Practice Group Content, Food & Beverage Practice Group Content, HR Challenges, Human Services Practice Group Content, Transportation Practice Group Content, Workers Compensation Insurance, Workers Compensation Premium Audits

Why Job Descriptions Save Money On Workers Compensation Insurance

“Do I really need to write job descriptions?” We are asked this question constantly when we are setting up a workers compensation cost containment program. We say absolutely if you want to distinguish yourself AND save big bucks when you purchase workers compensation insurance!  Job descriptions are by no means required by the Dept of Labor, but they are enormously important to smooth and successful recruiting, hiring, and workers compensation claims processes.  They assist applicants in better understanding the position beyond the typical bullet points of a job posting. 

Hiring & Recruiting: From the initial job post on various posting sites like www.INDEED.com, to the interview and hiring stage it’s so important to be specific and communicate to your potential new hire/employee exactly what is expected of them. Typically a business is not hiring a one off for this position as they will most certainly hire more employees for this role in the future. Rather than re-invent the wheel, spend some time and really drill into the job description. It not only helps your potential hires select right fit for them, it will also help you think though what you want in your future employee.

Employee Injuries: We did an article about the most underutilized tool to gain a competitive advantage, this post might seem familiar. It was all about setting up a Return to Work Program also know as Transitional Duty. This is an extremely effective tool in controlling workers compensation costs.  One of the more important components of the Return to Work program is having a proper job description whereby your staff, the insurance carrier adjusters and the treating physicians can get a full understanding of what is entailed for your injured employee to execute their job function. In  absence of a thorough job description often times the treating physician will not authorize medical clearance for the employee to return to work which drives your workers comp costs up significantly. Further your staff and the carriers adjusters if they are fuzzy on job execution they will often arrive at the wrong answer.

It’s helpful if you have job descriptions already built for your potential alternative duty position too so the treating physician might consider this alternative duty job in lieu of their present job. If you want to know more about building out your own Return To Work Program CLICK HERE

Defining exempt vs. non-exempt:   Job descriptions are key to determining if a position qualifies as exempt (a.k.a. salaried without overtime) under the law.  Actual duties, not titles, drive this determination.  A job description that accurately reflects the realities of the day-to-day functions of a role can help you defend against any claims that an employee is being improperly denied overtime.

Identifying “essential functions”: The Americans with Disabilities Act (ADA), as well as many state anti-discrimination laws, requires employers to provide reasonable accommodation to employees with covered disabilities, provided the employee can perform the essential functions of the job.  A well-written job description is key for identifying those functions that are essential versus those that are marginal, incidental, etc.

Protecting against discrimination claims: Using job descriptions to compare an applicant’s experience, skills and credentials to the minimum qualifications of the job can aid in protecting an organization against claims that it excluded someone based on race, age or other protected class.  Skills and requirements should be identified as minimally required or preferred so it’s clear who meets the bona fide job criteria and who doesn’t.

Need more information on job descriptions? We have a job description tool builder as part of our THINK HR platform which is free to customers of Metropolitan Risk.  We would love to answer any questions you have and assist you in developing them for your organization. Contact Metropolitan Risk today at (914) 357-8444 or click here!

 

Construction Practice Group Content, HR Challenges, Transportation Practice Group Content, Workers Compensation Insurance, Workers Compensation Premium Audits

Workers Compensation Insurance for Leased Workers

Many companies are increasingly turning to staffing agencies where they lease employees to meet their needs for a variety of reasons, including increased workloads and high employee turnover rates. Companies that use staffing agencies can save money because they avoid selecting, hiring and training new full-time employees. In addition, using staffing agencies frequently offers companies peace of mind because they know that workers will show up and perform their duties consistently. The question becomes when you employ leased workers from a third party who provides workers compensation insurance for leased workers?

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

Workers’ Compensation Versus Commercial General Liability Insurance   

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

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

Leased Versus Temporary Workers Compensation

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

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

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

The Coverage Gap

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

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

Further it’s important to beware that many commercial general liability policies; especially construction general liability policies specifically exclude temporary or leased workers  further exacerbating the commercial general liability coverage gap.

Solutions to the Coverage Gap

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

  • Alternate Employer Endorsement

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

  1.   Coverage for Injury to Leased Workers

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

Lastly and most importantly it’s imperative that you speak with a Risk Advisor and lay out exactly what your plan is and why. Insurance is always a trailer and never a leader. Your insurance program should be designed to how you are effectively executing your business. If this is not properly communicated to your agent or broker chances are your current insurance program will fail when a claim occurs. If when you communicate your business plan to your broker the response you get back doesn’t bring clarity to a level of comfort that they understand this nuance it may be time to select a Risk Advisor instead of your current brokerage relationship.

Construction Practice Group Content, Workers Compensation Insurance, Workers Compensation Premium Audits

Is Your Construction Company Missing Your CPAP Workers Compensation Insurance Premium Credit

If you are a construction company that purchases workers compensation insurance make sure you are receiving the CPAP workers compensation insurance premium credit. The Contracting Classification Premium Adjustment Program (CPAP) is a discount program that can reduce the amount that an a construction company pays in workers compensation insurance premiums. It was designed to help offset the higher workers compensation costs for union based shops who pay a higher wage rate. If your construction company buys workers comp insurance in NY and pays NY workers comp rates you must look into obtaining the CPAP credit. It could lower your NY workers compensation rates for your construction company by over 10% a year. CLICK HERE to have us review your workers comp policy to see if your construction company qualifies. 

How does the CPAP Workers Compensation Insurance Premium Credit work?  

CPAP Workers Compensation Insurance Premium Credit

The CPAP was developed to provide a premium credit for employers in the contracting and construction industry who pay their employees higher than average wages. The CPAP discount is calculated using the hourly rate of employees who are classified within the construction industry’s contracting class codes.

The system that is used to calculate workers’ compensation premiums groups employees according to risk-based classifications. For each classification, the employer must pay a certain amount of workers’ compensation premiums based on every $100 of payroll. Since high wages amount to higher workers’ compensation premiums, employers use the CPAP. The goal is to lower their premiums to an amount more level with what they would be paying if they paid their employees less. Think Union shops versus open shops. With the CPAP, employers aren’t penalized for paying their employees higher than average wages.

How does an employer apply for the CPAP Workers Compensation Insurance Premium Credit?

An employer must complete the CPAP application and return it to either the NYS Workers Compensation Rating Board or the National Council on Compensation Insurance (NCCI) if they are a multi-state operation within 180 days from either the effective date or the anniversary rating date of the workers’ compensation policy. The CPAP form MUST be completed every year as this is a use it or lose it proposition. Most construction companies do not have a process in place to reapply every year. especially if they use a pay as you go program as they automation makes them fall asleep at the wheel. 

When completing the application, the employer must determine which calendar quarter data to use.; in NY it’s always Q3.  The employer will also be asked to provide a description of operations or its classification, the appropriate classification code, the total wages paid and the total hours worked.            

Once the application is received by the NYS Workers Compensation Rating Board or  NCCI, the average hourly wage will be computed and the CPAP credit will be generated according to the rules for the state in which the application is being made. The insurance company will then be notified, and the credit will be applied to the policy.

In which states is the CPAP Workers Comp Premium Credit Available?

The CPAP is not a national program. Each participating state has its own rules, which include qualification and calculation of credits. Some states may also have an hourly pay rate threshold for entry into this program.

To see if the CPAP is available for your business, consult with Metropolitan Risk Advisory. For more information about the CPAP program and the potential to lower your workers’ compensation premiums by CLICKING HERE.  You can also call (914) 357-8444 today!

HR Challenges, Human Services Practice Group Content

Purchasing EPLI Insurance Coverage Can Protect You With Respect To NJ Wage and Payment Requirements

When evaluating your insurance program an often overlooked coverage is Employee Practices Liability Insurance, or EPLI for short. Failure to properly pay a fair wage and calculate time worked including time off can land any unsuspecting business owner in trouble with the Department of Labor.

In New Jersey, for example, wage payment laws might not be exactly what you expect. Several federal laws regulate wage payments, including the Fair Labor Standards Act (FLSA), the Davis-Bacon Act, and the Service Contract Act. New Jersey law also imposes state wage payment requirements. When federal and state laws differ, the law that is more favorable to the employee will apply.

The New Jersey Department of Labor and Workforce Development (LWD) enforces wage payment requirements throughout the state.

Method of Payment  

New Jersey law requires employers to pay wages in lawful United States currency by:

  •         Cash;
  •         Check;
  •         Payroll debit card; or
  •         Direct deposit.

 

Employers may use payroll debit cards to pay their employee’s wages if they can ensure that each employee can make at least one withdrawal or transfer per pay period without incurring any costs to the amount contained on the card.

In addition, employers must secure each employee’s written authorization before using payroll debit cards. Employee consent must not be a condition of employment nor be obtained through duress, intimidation, or coercion.

Frequency of Payment

In general, employers must pay employee wages at least twice per month on established paydays, designated in advance by the employer. Employers can establish regular paydays once per month for executive, supervisory and other special classifications of employees. Railroad, express, car-loading, and car-forwarding employers must pay their employees at least once per week.

Regular paydays must generally take place within 10 calendar days after the end of the pay period. If a payday falls on a weekend, holiday or other non-working day, employers must pay wages on the working day immediately prior to the non-working day.

Collective bargaining agreements can override the frequency of employee wage payments.

Last Payment of Wages

Employees separated from their employers, whether by discharge, voluntary resignation, or any other reason are entitled to receive their unpaid wages by the next regular payday. If an employee’s wages are paid in part or in full on an incentive system (such as commission), the employer must pay a reasonable approximation of all wages due until the exact amount is computed.

However, when an employee departs because of a labor dispute which involved employees who processed payroll information, the employer has an additional 10 days to pay that employee’s last wages.

In the event of the death of an employee, all outstanding wages may be paid directly to the person who pays for the funeral expenses or to the decedent’s surviving spouse, children over the age of 18 (or their legal guardians, if they are under 18 years of age), parents or siblings.

Disputed Wages

In case of a dispute over the amount of wages due to an employee, an employer must pay any undisputed portion of the employee’s wages in accordance with the regulations described above. In doing so, the parties to the dispute do not waive their right to collect or dispute the remaining balance.

Withholdings and Deductions

Can an employer withhold pay in New Jersey? Yes, they may withhold or divert a portion of an employee’s wages when (1) required or allowed by law (state or federal), (2) necessary to correct a payroll error or (3) authorized by the employee or a collective bargaining agreement.

Payroll deductions authorized by employees or collective bargaining agreement must be in writing and for a lawful purpose accruing to the employee’s benefit, such as:

  •         Contributions to employee welfare, insurance, hospitalization, medical or surgical, pension, retirement and profit-sharing plans;
  •         Contributions to company-operated thrift plans;
  •         Purchase of security options and company stock;
  •         Payments into employee personal savings accounts;
  •         Payments for company products, employer loans to employees, work-safety equipment and replacing an employee identification;
  •         Installment payments to satisfy a financial obligation owed by the employee to the state;
  •         Payments for the purchase of U.S. government bonds;
  •         Donations to charitable institutions and political committees (certain conditions apply);
  •         Payments for the rental or cleaning of work clothing and uniforms;
  •         Labor organization dues, union initiation fees and other labor organization charges permitted by law;
  •         Payments for health club membership fees or child care services;
  •         Mass transportation commuter tickets or other employer-provided transportation, if available to all employees; and
  •         Any other deductions allowed by the LWD.

Employers must record each withholding accurately. Unless authorized by law, wage deductions and withholdings cannot reduce an employee’s gross wages below the minimum wage rate. Employers may not derive any financial gain from making wage deductions.

Statements

Employers that pay their employees through direct deposit or with a payroll debit card must provide each employee with a statement that shows all deductions taken from the employee’s wages at the time the wages are paid.

More Information

Need more information on how EPLI Insurance can protect your business? CLICK HERE or contact Metropolitan Risk Advisory at (914) 357-8444 for more information on wage payment and work hour laws in New Jersey.

Construction Practice Group Content, General Liability Insurance

Ladder Safety Plan Is Critical To Controlling NY Construction Liability Insurance Costs

Why Ladder Safety Is Important To Controlling NY Construction Liability Costs

Falls from elevated surfaces are frequently listed as one of the top 10 causes of accidents in the workplace. Most of these accidents occur due to failure to follow basic ladder safety. In New York a fall from a height may trigger Labor Law 240 or Labor Law 241 also know as the scaffold law. According to Howard Klar partner at Gallo Vitucci & Klar the average award for a labor law case is over 7 figures. When your insurance company gets punched in the face with a labor law claim; you need to know they are going to turn around and punch your companies insurance renewals hard, for 5 years! That is why at Metropolitan Risk we suggest building out a ladders last program. When ladders are an absolute must on a job site then implement these tips if you want to control your NY construction liability costs.

Below we highlight some basic ladder safety tips. If you want a copy of our Ladders Last Program Pack CLICK HERE.  It includes as how to guide and hand outs for your line labor staff for tool box talks and safety training.

Setting up Safely

Make sure you select the correct ladder for the job—check the length and duty rating. Proper length is a minimum of three feet extending over the roofline or working surface.

Inspect your ladder before each use for loose or damaged:   

Ladders Last
  • Steps
  • Rungs
  • Spreaders
  • Rung dogs
  • Safety feet
  • Other parts  

Clear the area where you will be working. Never place a ladder in front of a door that isn’t locked, blocked or guarded.

Because metal ladders conduct electricity, use a wooden or fiberglass ladder near powerlines or electrical equipment.

Check that all locks on extension ladders are properly engaged before placing your ladder on a steady surface. The ground underneath the ladder should be level and firm. Large, flat wooden boards braced underneath a ladder can help level it on an uneven surface or soft ground. Straight, single or extension ladders should be set up at approximately a 75 degree angle.

Use the 1:4 ratio to ensure your safety when on a ladder. Place the base of the ladder one foot away from whatever it’s leaning against for every four feet of height up to the point of contact for the top of the ladder.

Use Caution When Using Your Ladder:

Always exercise caution when using a ladder and do not use a ladder for any other purpose than intended. Too often we see ladders being used as make shift scaffold or bridges. Really bad idea. Spend the extra money and rent the proper equipment for a day. It will be far cheaper in the long run.

 Other safety considerations include:

  • Make sure the weight that your ladder is supporting does not exceed its maximum load rating (user plus materials). And only one person should be on a ladder at a time.
  • Keep your body centered between the rails of the ladder at all times. Do not lean too far to the side while working. Never overreach. Instead, descend from the ladder and move it to a better position.
  • Do not step on the top step, bucket shelf, or attempt to climb or stand on the rear section of a stepladder.
  • Always face the ladder when climbing up or down. Never leave a raised ladder unattended.
  • Slowly step down from a ladder if you feel dizzy or tired.
  • Non-slip footwear should be worn at all times when on a ladder.

By minimizing ladder accidents by adhering to these safety and prevention tips you will prevent having a large NY construction insurance liability claim.  If you have further questions or concerns download our Ladders Last Program Pack or contact Metropolitan Risk Advisory at (914) 357-8444 today!

Commercial Auto, Construction Practice Group Content, Transportation Practice Group Content

Drive Other Car Coverage Helps to Bridge Auto Policy Gap

If you provide company vehicles to your employees and these employees don’t have their own personal automobile insurance policy, a potential gap in coverage exists. To adequately cover commercial automobile liability, a drive other car endorsement is specifically intended to bridge this commercial auto liability insurance coverage gap, therefore keeping you safe.

Drive Other Car Coverage

Drive Other Car Coverage Basics:

So, what does Drive Other Car Coverage mean? If you have employees that you provide with company-owned vehicles, they often do not have an additional automobile and therefore do not carry a personal automobile policy.

If an employee doesn’t carry a personal policy and drives a vehicle borrowed from a party separate from the company, drive-other-car coverage affords them liability protection should an accident occur. As a result, you can lend out your car without the unwanted anxiety.

Your business automobile policy endorses your drive-other-car coverage. This provides coverage only for scheduled individuals.

How Does This Differ From Hired/Non-owned Coverage?

Some key differences between hired non-owned coverage and drive-other-car coverage:

  •        Hired Automobile coverage provides for vehicles that are leased, rented, hired or borrowed by the insured or its employees for business purposes.
  •        Hired non-owned coverage to employers when an employee uses their own personal vehicle for business purposes.

I have a commercial auto liability claim. Does that mean Coverage Applies to Me?

To show how drive-other-car coverage applies, consider the following situations:

  •         A salesperson rents a car for personal use on vacation and damages another vehicle.  Is he or she covered?
  •         A business owner has all the vehicles titled in the company’s name. The owner’s family travels out of town on vacation and rents a car. They opt not to purchase coverage and an accident ensues.  Is he or she covered?
  •         An executive borrows a friend’s minivan to move and is involved in an accident. Is he or she covered?

In all of these circumstances, the business automobile policy provides no coverage. This is because the accident did not involve the “covered auto,” or company-owned vehicle. A drive-other-car endorsement closes the exposure loop in these instances.

Minimize Your Commercial Auto Liability Exposure:

Consider these commercial auto insurance tips and tricks to help minimize your exposure:

  •         Require all of your employees who are either issued or that will drive company vehicles to have personal automobile policies. You do this by first inserting language into your company’s employee hand book.
  •         Notify Metropolitan Risk Advisory of any employees and family members that do not have personal automobile policies. We suggest you do an audit at least once a year and keep the results on file just in case. Make it a requirement that if an employee cancels their personal auto insurance coverage they must notify HR in writing. You can’t manage what you don’t know!
  •         Review the coverage provided on the endorsement so that you have a clear understanding of what is included as coverage differs greatly by insurance carrier. Coverage can include liability, medical payments, uninsured motorist and physical damage coverage. Review the endorsement to ensure that all employees and/or family members that do not have personal automobile policies are scheduled on the endorsement.
  •         Notify the carrier of any individuals not shown on the schedule that should be. Always do this in writing so you have written proof of the request. This means time and date stamped via email.

Especially relevant, continue planning properly as one of the trickier elements of insurance is commercial auto insurance coverage. A Risk Advisor who understands your business can help you understand drive-other-car coverage. This knowledge helps you and endorse your business automobile policy to reduce your exposure to loss.

Still have questions? Still want more information? Call us today at (914) 357-8444 to ensure that your automobile coverage adequately meets your needs. Or, you could also visit our website here. We are here to help!

Claims Management, HR Challenges, Loss Control, Risk Management, Transportation Practice Group Content

Looking for the Root Cause Of Your Problem ? Try Why Analysis

Remember when your kids annoyed you by responding to everything you said with “Why?” Well, there was a genius to that tactic only children can impart.  The 5-Why Analysis is a method used to determine and understand the root cause of a problem by repeating the question “why?” five times. Each answer forms the basis of the next question.

There are no hard and fast rules about what questions to explore, or how long to continue the search for additional root causes (e.g. asking “why?” seven or eight times instead). Therefore, the outcome of the analysis will always depend upon the knowledge and persistence of the people involved.

Here is a relatively simple example of Why Analysis:

Problem: The car will not start!

  1. Why? – The battery is dead. (First why)
  2. Why? – The alternator is not functioning. (Second why)
  3. Why? – The alternator belt has broken. (Third why)
  4. Why? – The alternator belt was well beyond its useful service life and not replaced. (Fourth why)
  5. Why? – The vehicle was not maintained according to the recommended service schedule. (Fifth why, a root cause)

Just as annoying children so often do, it would be easy to continue asking “why?” in order to delve even deeper into the problem. However, five repetitions will generally suffice in leading to a root cause.

About Why Analysis

It is important to note that the determined root cause should almost always point toward a process that is not working well or does not exist, rather than something simple and generally uncontrollable such as “There wasn’t enough time.” Answers that are out of our control are not helpful; further in most cases what you will discover in your 5 Why Root Cause Analysis is a failure of process, which is the ultimate goal. You can’t manage and improve what you don’t know.

The developer of the 5-Why Analysis method  Sakichi Toyoda was head of the Toyota Motor Corp who used this method to great effect. Toyoda has some helpful tips and strategies to think about when performing “ Why Analysis”:

  • Use paper or whiteboard instead of computers
    • Writing the issue helps you formalize the problem and describe it completely. It also helps a team focus on the same problem
  • Look for the cause step by step. Don’t jump to conclusions.
  • Base our statements on facts and knowledge; not conjecture.
  • A root cause should never be something as simple as “human error” or “workers’ inattention”

The Why Analysis can be used in day to day business life, and is especially helpful when dealing with persistent problems that never seem to go away. Stubborn and recurrent problems are often so because they contain deeper issues, and “quick fixes” only solve the surface issues.

Need help dissecting and solving a recurring problem safety or employee injury problem? Don’t hesitate to call us at (914) 357-8444. We have  been invited into thousands of businesses to break down their challenges and help solve for “x” , usually high insurance costs driven by claims. We will help you get to the why that much quicker. Time is money, gives us a call.