January, 2012  

 

INSURANCE

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ADVISOR

A Publication of Parsons & Associates, Inc.

 

 

 

 

 

 

INDEX

  

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  Not so minor issues hiring minors

A restaurant chain that caters to children has been fined tens of thousands of dollars for, ironically enough, breaking federal child labor laws. But the chain's crime wasn't that it forced 8-year-olds run the pizza oven, instead it involved something some businesses owners wouldn't think twice about asking a minor employee to do – take out the trash.

 

The incident is noteworthy because it is a great illustration of just how easy it can be for businesses to get in trouble with federal authorities when they employ children. The chain in question, Chuck E. Cheese's pizza parlors, was fined almost $30,000 largely because many of its Bay Area restaurants were having minors operate large trash compactors used by many businesses. This is considered hazardous equipment by the federal government. And federal labor laws prohibit minors from doing anything considered hazardous.

 

Knowing and following the law is important. State and federal authorities can impose hefty fines for violations of child labor laws. Violating the law can also expose your company to civil suits and potential embarrassment -- the U.S. Department of Labor regularly publicizes companies with egregious child labor law violations. It is also important to train mid-level managers on child labor regulations. They need to know when they can schedule teenagers to work and what tasks they can assign to them.

 

Know the law:

 

  • A teenager must be at least 14 to work outside of a few exempt jobs, such as newspaper delivery.
  • 14- and 15-year-olds cannot work between 7 p.m. and 7 a.m. except from June 1 through Labor Day, when they can work until 9 p.m. There are also limits on how many hours they can work on a school day.
  • There are many restrictions on what kinds of jobs teenagers younger than 18 can do. If the worker is under the age of 18 they are generally prohibited from doing anything that could be considered hazardous, such as running machinery (like a trash compactor). The U.S. Department of Labor maintains a list of jobs and duties that are restricted to those 18 and older.
  • Your state may have additional restrictions on child labor. It is important to know of any additional regulations.

 

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 The 25 worst passwords

 

In an age where cyber security is a real threat to even small businesses, one of the stupidest things an employee or business can do is leave themselves vulnerable to hackers by choosing a simple-to-guess password to their networks. You might think it's clever to use “passw0rd” or “qwerty” but it isn't – and hackers take advantage of these simple passwords.

 

To illustrate this point, SplashData, a maker of cyber security applications, recently issued its top “25 Worst Passwords of the Year.” The list was assembled from files containing millions of stolen passwords posted online by hackers, according to SplashData's CEO, Morgan Slain.

 

“Hackers,” Slain said, “can easily break into many accounts just by repeatedly trying common passwords. Even though people are encouraged to select secure, strong passwords, many people continue to choose weak, easy-to-guess ones, placing themselves at risk from fraud and identity theft,” Slain said.

 

The most common passwords are:

 

·                     password

·                     123456

·                     12345678

·                     qwerty

·                     abc123

·                     monkey

·                     1234567

·                     letmein

·                     trustno1

·                     dragon

·                     baseball

·                     111111

·                     iloveyou

·                     master

·                     sunshine

·                     ashley

·                     bailey

·                     passw0rd

·                     shadow

·                     123123

·                     654321

·                     superman

·                     qazwsx

·                     michael

·                     football

The best advise is to use passwords that have at least eight characters and contain numbers, letters and other symbols. And while this is no guarantee that you will avoid being hacked, it certainly makes you a harder target for those hoping to breach your network's security.

 

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 A harassment wage premium

 

There are many reasons sexual harassment is bad for business: lawsuits, bad morale and declines in productivity, just to name a few. But new research shows that you may have to pay your workers more to put up with jobs where sexual harassment is common.

 

Women in jobs where there is an average risk of sexual harassment are paid about 25 cents more an hour than women who are in jobs with a low risk of sexual harassment, according to a new study by researchers from Vanderbilt University. And its twice as bad with men, who earn 50 cents more per hour in high-risk jobs. However, unsurprisingly, women were six times more likely to experience sexual harassment on the job.

 

“Sexual harassment in the workplace is so universally despised that people require some extra compensation for exposure to a sexually harassing environment,” said Joni Hersch, a professor of law and economics who conducted the study. “The only other work-related risks that receive hazard pay are for risk of injury or fatality.”

 

The study, which was published in the American Economic Review, looked at claims for sexual harassment filed with the federal Equal Employment Opportunity Commission and corresponding local agencies.

 

Research like this shows that it is not only important to prevent sexual harassment on the job because of the threat of litigation – and to carry appropriate liability insurance for this risk – but because it can cost companies extra money every month in the pay they give their employees.

 

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  Call for total phone ban

 

Every year, more and more evidence piles up showing the dangers of texting and using the phone while driving. And every year, more and more states increase the restrictions on the use of phones and other personal electronic devices in cars. But, now, for the first time the National Transportation Safety Board has taken the the next logical step: a total ban on their use while driving.

 

The N.T.S.B. has issued a recommendation to all states that they should ban all texting, talking and other use of electronic devices while driving a car. This would include the use of hands-free devices. No state currently goes this far, but the N.T.S.B. insists that it is needed to prevent more deaths and costly accidents on America's roads.

 

“According to [the National Highway Traffic and Safety Administration], more than 3,000 people lost their lives last year in distraction-related accidents,” said N.T.S.B. Chairman Deborah A.P. Hersman. “It is time for all of us to stand up for safety by turning off electronic devices when driving.”

 

“No call, no text, no update, is worth a human life,” she said.

 

The N.T.S.B. is not the first organization to propose such a ban, but it is almost certainly the most influential. About two years ago the National Safety Council, a leading advocate of road safety and a group that helped get seatbelt laws passed in many states, urged states to ban the use of phones while driving – even hands-free phones.

 

The data back up the potential need for such an all-encompasing ban on the use of phones. Many studies have shown that hands-free phones are no better than hand-held phones in preventing accidents. And drivers who are texting, e-mailing or using the Internet have been shown to be 163 times more likely to cause a “safety-critical event.”

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  SEC urges disclosure of cyber attacks

 

The growing risk of cyber attacks on businesses has gotten so bad that the Securities and Exchange Commission  has felt the need to take action to protect the investing public. Specifically, the SEC recently issued instructions that publicly traded companies should disclose to the public any time they have a significant computer breach.

 

Publicly traded companies are already required to disclose information that is considered “material” to the investing public. This most recent guidance only makes explicit that such “material” information may include breaches of cyber security. In addition, the SEC advised public companies that they may also need to disclose potentially serious threats posed by cyber criminals, even if no information is stolen.

 

While this advisory only applies to publicly traded companies, it shows just how much of a threat to business cyber attacks have become. Protecting your business from these criminals involves not just proper security measures, but also making sure you have adequate insurance. Talk to your insurance representatives to see what options are available to you.

 

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 Bad year for discrimination complaints

 

It was a banner year for the Equal Employment Opportunity Commission, which recorded a record number of complaints of employment discrimination and a record amount of money collected from businesses through enforcement actions. The federal agency received almost 100,000 charges in the 2011 fiscal year and won $356 million for victims of workplace discrimination – both of which were the largest numbers in the agencies history.

 

The EEOC is the federal agency tasked with investigating claims of discrimination by employees. It can file suit or help settle cases it thinks have merit. During tough economic times, it is common that there is an increase in discrimination claims. This is largely because those who lose their jobs are much more likely to file a claim with the EEOC if they have trouble finding another job. In good economic times, workers often don't bother filing a claim because they quickly find new work.

 

That's why it is especially important for employers to have adequate protection from these suits during times of economic uncertainty. Employment practices liability insurance is a common way to protect your business from these kind of suits. Talk to your insurance representative if you have questions about your business's risk and about your options.

 

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   Business briefs: Injured workers out longer

 

It seems that nothing is immune from the economic downturn. A new study from the Workers Compensation Research Institute shows that injured workers are coming back to work more slowly that during good economic times. The report says that the economy has made it more difficult for some employers to offer “light, transitional, or modified duty to assist their injured workers in returning to sustainable work or to provide permanent job accommodations for workers with restrictions.” This problem has a real impact on both employers and employees as it tends to increase the time workers are out on disability.

 

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  Business briefs: “Hurricane amnesia” over?

 

 The 2011 hurricane season has finally come to an end after one of the most active years on record. There were 19 named storms last year, tied for the third-most since record keeping began in 1851. But only one hurricane hit the United States – the much-hyped Hurricane Irene. The National Oceanic and Atmospheric Administration is hoping Irene and the overall active year are enough to get American's out of their comfort zone and take hurricanes seriously after couple of somewhat quiet hurricane seasons. “Irene broke the ‘hurricane amnesia’ that can develop when so much time lapses between landfalling storms,” said Jack Hayes, director of NOAA’s National Weather Service. “This season is a reminder that storms can hit any part of our coast and that all regions need to be prepared each and every season.”

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  Business briefs: N.Y. Fraud crackdown

 

New York's Department of Financial Services recently announced the arrest of 18 people for workers compensation insurance fraud in separate incidents in a recent crackdown on fraud in the state. Most of those arrested were making claims for compensation for workplace injuries while working other jobs, often off the books. Others involved faking an injury or even cashing workers compensation checks for the dead. “Workers’ compensation fraud is a serious crime that victimizes honest businesses and taxpayers who are forced to shoulder the burden of higher premiums,” said Benjamin M. Lawsky, superintendent of the department.

 

 

 

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