Data compromise events include data breaches, data exposures and data leaks. In 2023, there were 3,205 such events and more than 353 million estimated victims. The top five compromises by victim count are:
The top five compromises by industry are:
The report’s attack vector data is particularly interesting. The attack vector is the method used by cyber criminals to compromise an organization’s data. Cyberattacks were the most common attack vector. They involve compromising an electronic information system using software or computer technology. They include phishing/smishing/BEC, ransomware, malware, zero-day, credential stuffing and non-secured cloud environments.
Events caused by another attack vector, system and human errors, more than tripled in 2023. These are failures of a system or person to perform as expected or required without malicious intent that results in a data compromise. This attack vector targets correspondence, lost devices/documents, missing and misconfigured firewalls and cloud security systems. Physical attack vectors, such as device and document theft, skimming devices and improper disposal, were employed with less frequency than other vectors, but remained a threat in 2023.
The 2023 Data Breach Report describes the dramatic increase in supply chain (third-party vendor) attacks as an emerging trend. A supply chain attack targets a single entity in hopes of gaining access to information maintained by the organization on behalf of other businesses or institutions. According to the ITRC, the number of organizations impacted by supply chain attacks has surged by more than 2,600 percent since 2018.
Awareness of these emerging trends can help businesses protect their sensitive data and maintain cybersecurity. Developing and strengthening a culture of cyber readiness with appropriate security protocols is just the first step. Businesses should also have Cyber Perils Insurance Coverage to protect against various cyber threats and liability exposures, including the cost of complying with data breach notice laws.
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]]>Correctly classifying workers as employees or independent contractors is crucial for businesses. It can affect a worker’s rights to minimum wage and overtime pay and an employer’s liability for failing to pay lawful wages. Unfortunately, the correct classification is not always obvious and misclassifications can be costly.
Under the final rule, a worker is not an independent contractor if they are, as matter of economic reality, economically dependent on an employer for work. The rule applies the following six factors to analyze employee or independent contractor status under the FLSA:
No factor or set of factors among this list has a predetermined weight. Additional factors may also be relevant if such factors in some way indicate whether the worker is in business for themself (i.e., an independent contractor), as opposed to being economically dependent on the employer for work (i.e., an employee under the FLSA).
How does this final rule differ from the 2021 Independent Contractor Rule? In addition to restoring the totality-of-the-circumstances economic reality test, where no single factor or group of factors is assigned any predetermined weight, the final rule:
Despite (or because of) the new final rule, difficulty and uncertainty surrounding independent contractor classifications is likely to continue for some time. Unfortunately, different circumstances can affect the relevancy of any specific factor, which makes it nearly impossible to adopt a one-size-fits-all approach to making this determination. Employers should carry Employment Practices Liability Insurance to protect against mistakes that are more likely to result from the confusion that always seems to accompany regulatory rule changes.
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]]>Thanksgiving Fire Prevention. Did you know that the average number of residential fires nearly doubles on Thanksgiving? Fortunately, FEMA put together the following list of safety tips to reduce the risk of a Thanksgiving fire.
Avoiding Black Friday (and Cyber Monday) Scams. We are not the only ones preparing to take full advantage of Black Friday. Hackers and other bad actors are preparing too, hoping to take advantage of stressed, hurried, and oftentimes careless consumers. It is a target-rich environment, and the predators know it. The following tips from the Better Business Bureau can help keep you safe while shopping online this holiday season.
Happy Thanksgiving!
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]]>This year’s list of most frequently cited safety standards looks a lot like last year’s. In fact, except for a slight change in order, the lists are identical. Fall protection was the most frequently cited violation for the 13th consecutive year. Here is the complete list.
An employer’s failure to observe safety standards can quickly become an OSHA violation. These can be very costly. The maximum penalty for the following OSHA violations is currently $15,625 per violation, except for willful or repeated violations, which carry a maximum penalty of $156,259 per violation.
Workplace safety, for better or worse, begins at the top. Knowing how and why workplace injuries occur puts employers in a better position to prevent them. With an effective workplace safety program, employers can reduce the risk of workplace injuries and may even end up paying less for workers’ compensation insurance.
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]]>It should come as no surprise that board members are held to a higher standard of conduct. This standard is clear when it comes to hiring contractors as board members must act in the best interests of the association. Those who fail in this respect may find that instead of serving their community, they have damaged it.
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]]>The Affordable Care Act’s affordability threshold will be lower in 2024 than ever before. The Internal Revenue Service recently announced that the affordability threshold for employer-sponsored group health plans that begin in 2024 will be 8.39 percent. The affordability threshold, which is currently 9.12 percent, affects an employer’s potential liability for shared responsibility assessments (the pay-or-play penalty) under the ACA. The decreasing threshold means that an affordable group health plan in 2023 could become “unaffordable” in 2024, despite identical pricing and employee contribution requirements. So, employers with 50 or more full-time or full-time equivalent employees (Applicable Large Employers or ALEs) must review, and possibly adjust, employee cost and contribution requirements for group health insurance coverage in 2024.
Applicable Large Employers are generally required to offer full-time employees “affordable” minimum essential health care coverage to avoid an ACA shared responsibility assessment (penalty). Affordability is calculated as a percentage of household income. To be affordable in 2024, an employee’s required contribution for the lowest-cost, self-only coverage option offered by their employer (regardless of which coverage option is selected) cannot exceed 8.39 percent of that employee’s household income.
Since employers typically do not know their employees’ household incomes, ALEs can use one of the ACA’s affordability safe harbors to determine the maximum amount an employee can be required to pay without exceeding the affordability threshold. For example, assume Sam works 40 hours per week for 52 weeks, earning $12 per hour. The most Sam can be required to pay for the lowest-cost, self-only coverage option offered by Sam’s employer during the 2024 plan year is:
If Sam earned $15 per hour, Sam’s required contribution for the lowest-cost, self-only coverage option cannot exceed:
Note that the basis on which the ACA’s affordability threshold is applied is plan-year, not calendar-year. In other words, next year’s affordability threshold (8.39 percent) will apply on the first day of the new plan year in 2024, which could be January 1, July 1, or any other day in 2024. For non-calendar-year plans, the current affordability threshold (9.12 percent) will continue to apply until the new plan year begins in 2024.
The consequences for failing to satisfy the ACA’s affordability requirement can be severe. Applicable Large Employers need to review, and possibly adjust, next year’s group health plan offerings, pricing options, cost-sharing structure, and in some cases, compensation levels, to ensure compliance with the ACA’s affordability requirement.
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]]>NCCI’s proposed rate reduction is based on claims experience data for policy years 2020 and 2021, as of year-end 2022. According to NCCI’s rate filing summary, a favorable loss experience has been observed in each of these time periods. This was a primary driver of the proposed 15.1 percent decrease. NCCI also notes that the proposed rate reduction includes additional changes due to recent medical fee schedule updates and higher investment returns expected in today’s interest rate environment.
The favorable conditions prompting the proposed rate decrease in Florida seem to extend nationwide. According to NCCI, the workers compensation system remains healthy.
There are, however, some areas of concern. According to NCCI, there was a notable rise in claim costs for 2022. Year over year, medical claim costs increased approximately 5 percent and indemnity claim costs increased approximately 6 percent. Although medical inflation is predicted to increase at a rate of about 3% per year, it remains below the inflation rate of the Consumer Price Index.
Remember, the 15.1 percent rate decrease has only been proposed by NCCI. Florida’s Office of Insurance Regulation must still analyze NCCI’s data and may request an adjustment to the current recommendation before holding a public hearing. Although optimism surrounds NCCI’s recommendation, next year’s workers’ compensation premium rates will not be known until Florida’s Office of Insurance Regulation issues a final order.
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]]>The amended administrative rules, including those discussed below, became effective July 18, 2023.
Updated Forms. The amended rules incorporate recent updates made to various forms, including the following forms used by corporate officers electing to be exempt from Florida’s Workers’ Compensation Law.
Exemption Tutorial. The rules were amended pursuant to a recent statutory amendment that requires corporate officers electing to be exempt to certify that they have completed an online workers’ compensation coverage and compliance tutorial developed by the department.
15 Percent Penalty Reduction. The rules were amended pursuant to a recent statutory amendment that gives employers an opportunity to reduce an assessed penalty by 15 percent. Under the amended rule, the Division of Workers’ Compensation will reduce the final assessed penalty by 15 percent if:
The online tutorial must be taken in one of the specified district offices located throughout the state during standard business hours. Under the amended rule, eligible employers may make multiple attempts to achieve a minimum passing score of 80%.
Production of Business Records. The rules were amended pursuant to a recent statutory amendment that requires employers to produce records within 21 days after receiving a written records request from the department. Employers previously had ten business days to produce the requested records.
The extent to which an employer may be affected by the recent amendments to Florida’s administrative workers’ compensation rules will depend on the circumstances. Employers need to understand if and how these changes may impact their operations.
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]]>Existing OSHA regulations generally require nonexempt employers with more than ten employees in most industries to keep records of occupational injuries and illnesses. This was not changed by the final rule. Covered employers are still required to record information about recordable injuries and illnesses on three separate OSHA forms.
As you will see, these employer groups are determined primarily by the total number of employees working at an establishment during the previous calendar year. This is necessary because OSHA’s recordkeeping regulations require employers to maintain and report injury and illness data at the establishment level. OSHA regulations define an establishment as a single physical location where business is conducted or where services or industrial operations are performed. This makes it possible for a single employer to have multiple “establishments” for purposes of OSHA’s electronic reporting requirements.
Under the final rule, the following groups of establishments will be required to electronically submit injury and illness information from their recordkeeping forms to OSHA once a year.
Before the final rule goes into effect, employers must determine whether they have an establishment that will be subject to OSHA’s new electronic submission requirement. Does the establishment operate in one of the designated industries listed in the final rule’s new appendix B? Did the establishment have 100 or more employees at any point during the previous calendar year, including full-time, part-time, temporary and seasonal employees? Only those who answered yes to both questions are subject to the final rule’s new electronic submission requirement.
Unfortunately, employers do not have much time left to figure this out. Establishments subject to the final rule must submit all the required information to OSHA by March 2 of the following calendar year. These establishments will have to electronically submit their 2023 injury and illness information to OSHA by March 2, 2024, which will be the first submission deadline under the final rule.
The revised regulations should serve as a reminder for employers of their obligation to provide a safe and healthy workplace. In addition to protecting employees from work-related injuries, employers may benefit financially from lower workers’ compensation insurance premiums.
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]]>Senate Bill 154 made quite a few changes to the milestone inspection requirement. Some were made for purposes of clarification. Others were made to address issues and ambiguities that were revealed after the law was enacted. All the changes, however, need to be reviewed and understood by board members statewide because any one of them could have significant implications for their condominium association.
For example, the new deadline to complete a building’s initial milestone inspection will be relatively meaningless to some associations, but crucial to others. Under the amended law, if a condominium building that is three or more stories in height reached 30 years of age before July 1, 2022, its initial milestone inspection must be done before December 31, 2024. But, if a building reaches 30 years of age on or after July 1, 2022, and before December 31, 2024, its initial milestone inspection must be done before December 31, 2025.
Some associations will also need to know that the 25-year milestone inspection for buildings located within three miles of the coastline is no longer mandatory. Instead, local agencies responsible for enforcing milestone inspections have the option to set a 25-year inspection requirement for buildings three stories or more in height if justified by local environmental conditions, including proximity to seawater.
The milestone inspection requirements for condominium buildings three or more stories in height were also amended to:
Given the potential significance of all the recent changes to Florida’s mandatory milestone inspection requirement, association board members should consider consulting a licensed professional to ensure compliance and avoid violations. Board members should also review their association’s Directors and Officers (D&O) insurance policy to confirm sufficient coverage as mistakes are more likely to happen whenever the law changes.
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]]>The Summary Plan Description is used to disclose and communicate important information about an employer’s employee benefit plan. It provides information about the plan, what benefits are available under the plan, the rights of participants and beneficiaries under the plan, and how the plan works. SPDs must be furnished to employees without charge within 90 days after the employee becomes a participant or within 120 days of the plan’s adoption date. SPDs must also be provided within 30 days of being requested.
Pursuant to ERISA regulations, the SPD must:
The SPD must also explain various aspects of the benefits being provided, such as the plan’s:
Since comprehension is the key, SPDs must follow strict style and formatting requirements. For example, SPDs must:
Plan administrators must consider the level of comprehension and education of typical plan participants and the complexity of the terms of the plan. In most cases, this requires limiting or eliminating technical jargon and long, complex sentences. It may also require the use of clarifying examples, illustrations, clear cross references and a table of contents.
Unlike these general descriptions, ERISA’s SPD requirements are highly technical and very specific. Employers must ensure strict compliance with all applicable rules. Given ERISA’s relative complexity, employers may need to consult licensed professionals to avoid the potentially severe consequences that can result from violations. In addition to having an ERISA fidelity bond to protect against losses due to fraud or dishonesty by persons handling funds, employers should also carry employment practices liability insurance.
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]]>So, how does the FFT scam work? Though methods are constantly evolving, cybercriminals typically use business email compromise (BEC) attacks to initiate FFTs. BEC attacks are sophisticated scams that rely on deception and social engineering to convince victims to transfer money to an account controlled by criminal actors. Schemes often involve the spoofing of legitimate, known email addresses or the use of a nearly identical address to appear as someone known to or trusted by the victim. The FBI describes BEC attacks as one of the fastest growing, most financially damaging internet-enabled crimes.
This means that criminals are constantly refining their tactics to maximize their FFT payout. Over the last few years, scams have progressed from spoofed emails purportedly from chief executive officers to criminals impersonating legitimate vendors to redirect invoice payments to the criminal’s account. These scams can be very sophisticated and difficult to spot, so the FBI offers the following suggestions to help protect against FFTs.
Businesses must implement and maintain appropriate security protocols to avoid not just FFT scams, but other forms of cybercrime as well. Ransomware, for example, did not go away. Despite declining frequency, ransomware remains a top driver of cyber loss.
While preventative measures can effectively reduce the risk of FFTs and other cyber threats, they are not foolproof. Every business should have Cyber Perils Insurance Coverage to protect against various cyber threats and liability exposures, including coverage for losses caused by FFT and other BEC attacks.
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]]>COBRA generally requires covered group health plans to provide a temporary continuation of group health coverage that would otherwise be lost due to the occurrence of certain qualifying events, like termination of employment. To give individuals more time to elect and pay for COBRA coverage during the pandemic, the Department of Labor (DOL), IRS and other federal agencies issued multiple notices stating that the following time periods and dates must be disregarded when determining COBRA deadlines:
The disregarded periods, which cannot exceed one year, are scheduled to end sixty days after the announced end of the COVID national emergency (the “Outbreak Period”). In other words, the COBRA time periods and dates were extended until one year from the date a participant or beneficiary was first eligible for relief, or the last day of the Outbreak Period, whichever is earlier. All COBRA extensions will end as of the last day of the Outbreak Period, but unfortunately, the actual date on which this is supposed to happen remains uncertain.
The uncertainty stems from the fact that the national emergency ended a month earlier than expected. The planned end date was May 11, 2023, which would have made July 10 the last day of the Outbreak Period (60 days from May 11), but things did not go according to plan. And while determining the actual end of the Outbreak Period should be simple (60 days from April 10), somehow it isn’t. You see, the DOL relied on the original plan when preparing a series of FAQs and examples to help the public navigate the end of the COBRA extensions, all of which assumed that the Outbreak Period would end July 10. Despite not being technically correct, the DOL has hinted that it plans to keep using July 10 as the last day of the Outbreak Period. Hopefully, additional guidance will be provided soon.
While the last day of our ‘COBRA extension adventure’ has yet to be determined, it is coming up fast. Affected employers should prepare in advance to avoid missteps along the way. The DOL’s FAQs are a good place to start, though some employers may require professional guidance to ensure compliance. Employers should also carry Employment Practices Liability Insurance to protect against mistakes that always seems to accompany significant legal and regulatory changes.
No one should expect the process of unwinding three years of COBRA extensions to be simple or seamless, but there is simple and obvious silver lining. Once the Outbreak Period ends, so do all the COBRA extensions.
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]]>There are two more things that condominium associations must do by January 1, 2025 to enjoy the presumption against liability.
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Workers’ compensation insurance generally covers injuries that arise out of and in the course and scope of employment. However, depending on the circumstances, injuries sustained by employees attending company-sponsored social or recreational activities may be covered by workers’ compensation. This determination can be both state- and fact-specific, with each state applying its own interpretation of whether injuries “arise out of and in the course of employment” when they occur at a company-sponsored social or recreational event.
In Florida, for example, “recreational or social activities are not compensable unless such recreational or social activities are an expressly required incident of employment and produce a substantial direct benefit to the employer beyond improvement in employee health and morale that is common to all kinds of recreation and social life.” Under this standard, issues of compensability often turn on whether the employee’s attendance at the company-sponsored event was truly voluntary.
An injury sustained at a company-sponsored event will likely be deemed employment-related (and covered by workers’ compensation) if attendance is mandatory. Attendance at a “voluntary” event may also be considered mandatory if employees feel forced to attend. A company-sponsored event is not truly voluntary if attendees are rewarded or absentees are punished.
It should also be noted that the employer need not actually “host” the event for liability to be imposed. For example, if employees are required to attend an event sponsored by a customer, they are likely covered by workers’ compensation because the employer made attendance mandatory hoping to benefit from the goodwill generated by the staff toward the customer.
Generally, employer-sponsored picnics, sports events, recreational leagues, and company retreats are meant to foster team building, inspire loyalty, and boost employee morale. Such events are usually well-received by employees and may serve as a reward for hard work. However, employers would be wise to consider the potential risks involved when planning these events. To minimize exposure, employers should:
When these and other appropriate risk-management measures are taken, employers can maximize the benefits of company-sponsored while minimizing the risk of compensable workers’ compensation claims. The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.
]]>Under the proposed rule, the use of non-compete clauses would be considered an unfair method of competition. As such, it would be unlawful for an employer to:
The notable breadth of the proposed rule comes from its definitions. “Worker” is defined broadly to mean any natural person who works for an employer, whether paid or unpaid, including employees, independent contractors, interns and volunteers. A “non-compete clause” is any contractual term between an employer and a worker that prevents the worker from seeking or accepting employment, or operating a business, after the conclusion of the worker’s employment with the employer. This already broad definition is made even broader by including de facto non-compete clauses.
A de facto non-compete clause is any contractual term that has the effect of prohibiting a worker from seeking or accepting employment or operating a business after the conclusion of the worker’s employment with the employer. A non-disclosure agreement, for example, could be considered a de facto non-compete clauses if it is written so broadly that it effectively precludes the worker from working elsewhere in the same field. If the proposed rule is adopted, this functional test to determine whether a contractual term should be interpreted as a prohibited non-compete clause seems to be fertile ground for litigation.
So, what happens to existing non-compete clauses under the proposed rule? If adopted as is, the rule would require employers to rescind existing noncompete clauses with workers and actively inform their employees that the contracts are no longer in effect. The rule, however, does have a limited sale-of-business exception that allows a person who owns at least 25 percent of a business entity to execute a non-compete clause as part of a sales transaction.
It's important to note that this is not a final rule. If and when the FTC publishes a final rule, it may be substantially different than the proposed rule. However, since any such rule could have potentially significant implications, employers should be paying attention to the FTC and its desire to essentially prohibit the use of non-compete clauses. Those not comfortable taking the wait-and-see approach are free to participate in the rulemaking process. The FTC is accepting public comments on the proposed rule through March 10, 2023. So, what do you think? Should non-compete clauses be banned?
If adopted, the proposed rule would supersede any inconsistent state statute, regulation, order or interpretation, altering the nature employer / employee relationships nationwide.
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]]>ALEs are generally required to offer full-time employees “affordable” minimum essential health care coverage to avoid the ACA’s employer shared responsibility (pay-or-play) penalty. Affordability is calculated as a percentage of household income. To be affordable in 2023, an employee’s required contribution for the lowest-cost, self-only coverage option offered by their employer (regardless of which coverage option is actually selected) cannot exceed 9.12 percent of that employee’s household income.
Since employers typically do not know their employees’ household incomes, ALEs can use one of the ACA’s affordability safe harbors to determine the most employees can be required to pay without exceeding the affordability threshold. For example, let’s assume Jordan works 40 hours per week for 52 weeks, earning $10 per hour. The most Jordan can be required to pay for the lowest-cost, self-only coverage option offered by Jordan’s employer in 2023 is:
If Jordan earned $15 per hour, Jordan’s required contribution for the lowest-cost, self-only coverage option cannot exceed:
The affordability threshold for group health plans beginning in 2023 is only a fraction of a percent lower than 2022’s threshold, but the consequences for ALE’s that fail to adapt accordingly can be substantial. To ensure compliance with the ACA’s affordability requirement in 2023, ALEs need to evaluate and possibly adjust their health plan pricing options, cost-sharing structure, and in some cases, compensation levels.
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]]>The good news is that it’s pretty easy to effectively reduce to risk of a Thanksgiving fire in your home. Here are ten tips from FEMA to help keep your family and friends safe this year.
FEMA also offers the following recipe for preventing turkey fryer fires.
Happy Thanksgiving!
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]]>
Every covered employer is required to conspicuously post the new Know Your Rights poster upon its premises. This includes every employer covered by Title VII of the Civil Rights Act, the Americans with Disabilities Act or the Genetic Information Nondiscrimination Act. The poster summarizes various laws enforced by the EEOC and includes information about discrimination based on:
The Know Your Rights poster must be posted in a conspicuous place where notices to applicants and employees are customarily posted. In addition to physically posting, the EEOC encourages covered employers to conspicuously post the notice digitally on their website. In most cases, electronic posting supplements the physical posting requirement. However, for employers without a physical location or employees working remotely, it may be the only posting.
Finally, be sure to use the correct version of the new poster, which you can download here. The following notice was posted on the EEOC’s website. “Employers, please note a new version of the “Know Your Rights: Workplace Discrimination is Illegal” poster has replaced and supersedes a version uploaded on 10/19. Please use the version marked “(Revised 10/20/2022)” going forward. We apologize for any inconvenience.”
Failing to post the Know Your Rights poster as required may result in a fine (adjusted for inflation) that is currently up to $612 per offense. To protect against costly employment-related claims, employers should have a policy prohibiting workplace discrimination and harassment. Managers and employees should be trained to prevent and avoid unlawful behavior. Employment Practices Liability Insurance is also needed to cover the high cost of defending actual and alleged claims of unlawful conduct.
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]]>The Department of Labor is proposing a new rule for determining independent contractor status under the Fair Labor Standards Act. This is significant because correctly classifying workers as employees or independent contractors is crucial for businesses. The correct classification isn’t always obvious and misclassifications can be costly. Unfortunately, the rules for determining independent contractor status lack uniformity and have recently become increasingly inconsistent and uncertain. Time will tell whether the new proposed rule will fix the problem, or just extend it.
According to the DOL, the proposed rule adopts a framework more consistent with longstanding judicial precedent under the FLSA. The DOL believes that the new rule preserves essential worker rights and provides consistency for employers and businesses. To that end, the proposed rule:
The proposed rule focuses on the economic realities of the worker’s relationship with the employer. A worker is an independent contractor if the worker is, as a matter of economic reality, in business for themself. Six factors must be considered to determine the economic realities of the working relationship and the question of economic dependence.
No one factor or subset of factors is necessarily dispositive, and the weight given each factor may depend on specific facts and circumstances. Moreover, these six factors are not exhaustive. Additional factors may be considered relevant under some circumstances. Unfortunately, different circumstances can affect the relevancy of any specific factor, so it’s nearly impossible to adopt a one-size-fits-all approach to making this determination.
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]]>Employees are commonly targeted during cyberattacks, so it’s crucial to make them part of the solution, so they will not contribute to the problem. This can be done by making employees an integral part of your cybersecurity culture. Fostering a culture of cybersecurity can strengthen protections against organizational cyberthreats. For those concerned about the bottom-line, it can also increase customer trust and loyalty. A true win-win.
Changing the workplace culture isn’t easy, but it’s not impossible. The following tips can help create a culture of cybersecurity within in your workplace.
Implementing, maintaining and updating security policies and procedures is important, but it’s not always enough. Small and medium-sized businesses should have Cyber Perils Insurance Coverage to protect against various cyber threats and liability exposures, including the cost of complying with data breach notice laws.
The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.]]>This year’s theme—See Yourself in Cyber. It’s meant to demonstrate that cybersecurity is ultimately about people. Instead of promoting weekly themes, this year’s focus is on promoting four key behaviors.
While a culture a cyber readiness can significantly enhance cybersecurity, it isn’t foolproof. However, there is insurance specifically designed to protect both individuals and businesses against identity thieves and hackers. For example, identity theft coverage can help individuals cover the cost of clearing their name. Cyber Liability and Security Breach (Cyber Perils) coverage can protect businesses against various cyber threats, including the cost of complying with data breach notice laws.
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]]>Amendment 2 increases Florida’s minimum wage incrementally over a period of years until it reaches $15 per hour in 2026. The first (and largest) minimum wage increase happened last year. Future increases are set to occur annually on September 30th per the following schedule.
2022 $11.00
2023 $12.00
2024 $13.00
2025 $14.00
2026 $15.00
Annual adjustments for inflation, which have taken place since 2005, are scheduled to resume September 2027. Florida’s Minimum Wage Act is interpreted and applied much like the federal Fair Labor Standards Act. Employers must pay no less than the federal minimum wage or their state’s minimum wage, whichever is higher. Florida’s 2022-2023 minimum hourly wage remains higher than the current federal minimum hourly wage of $7.25.
Florida’s constitutional minimum wage requirements remain otherwise unchanged by Amendment 2. Employers, for example, are still prohibited from discriminating or retaliating against employees for exercising their constitutional minimum wage rights. Employers can still be sued by employees and Florida’s Attorney General for violating these rights. These lawsuits are still expensive.
Covered employers are also still required to post the required minimum wage notice in the workplace. Per Florida law:
To reduce the likelihood of costly mistakes, employers should provide wage and hour training to managers and supervisors. Employers should also carry Employment Practices Liability Insurance with limited coverage for wage and hour claims.
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]]>NCCI’s recommended rate reduction is based on claims experience data for the 2019 and 2020 policy years as of year-end 2021. According to NCCI:
NCCI’s recommendation was not influenced by the pandemic as its analysis did not include COVID-19 claims data. Nevertheless, NCCI’s assessment of possible pandemic-related impacts revealed that:
Despite recommending a rate reduction, NCCI cautions that inflation has the potential to influence the workers’ compensation system nationwide. Wage inflation is a concern as many workers, particularly those in leisure and hospitality, have seen significant pay increases recently. This directly impacts the cost of workers’ compensation insurance because payroll is used as the base to calculate premium. Rising medical claim costs (medical inflation) can also lead to higher premiums.
Remember, NCCI is only recommending an overall average rate level decrease of 8.4 percent in 2023. Florida’s Office of Insurance Regulation will analyze NCCI’s data and may request an adjustment to the current recommendation before holding a public hearing. Although optimism surrounds NCCI’s recommendation, next year’s workers’ compensation premium rates will not be known until Florida’s Office of Insurance Regulation issues a final order.
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]]>While employers aren’t necessarily required to respond to or otherwise address inflation with their employees, it may be something worth considering. The Great Resignation has left many employers struggling to maintain adequate staffing levels, and employees concerned about money are more likely to leave in search of higher pay. So, addressing concerns about inflation may prevent defections from an already depleted workforce. Here are a few things employers have been doing.
Employee Benefits. Some employers are altering their benefits offerings to help mitigate the effects of rising inflation. For example, employers are offering options like daycare subsidies and student loan repayment assistance to help employees with budgeting and expenses at a time when prices are high and employees are looking for ways to cut costs.
Remote Work. Continuing to offer remote and hybrid work schedules is another way employers are coping with soaring inflation. Employees can repurpose cash that would otherwise be spent on gas or other travel-related expenses. It can also help decrease the cost of day-to-day things, like buying lunch or coffee at work.
Reevaluating Compensation. Though not always feasible, many employers are considering pay increases to offset record inflation rates. Bonuses are another option. Some employers are providing gift cards for food, gas or groceries to help employees make ends meet. Make sure any compensation changes comply with applicable wage and hour laws.
Maintaining Benefit Costs. Health care costs are also rising with inflation, but now may not be the best time to increase the employees’ share for health benefits. Employers looking to attract and retain top talent are avoiding raising copayments, deductibles and other out-of-pocket costs for employees. This allows employees to save money and allocate it to other essential needs.
Offering Retirement Benefits. Some employers are increasing education efforts surrounding retirement options. Retirement plans are often quick to be cut during times of financial difficulty, so employers who are promoting those benefits are likely to be viewed more favorably by current and future employees. Heightening the conversation around retirement options is a great way prove to employees that an employer cares.
In times of financial uncertainty, employees value employers that make an effort to ensure their stability. Responding to employees’ concerns about inflation can help employers retain their existing employees and even make it easier to recruit new employees.
The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.
]]>Structural integrity reserve studies must be completed at least every 10 years for each building on the condominium property that is three or more stories high. The deadline for existing associations to complete their initial structural integrity reserve study is December 31, 2024. The failure to complete the study as required by law is considered a breach of the board’s fiduciary duty.
So, what exactly is a structural integrity reserve study? It’s a study of the reserve funds that will be needed for future major repairs and replacement of the common areas based on a visual inspection. The visual inspection portion of the study must be performed by a Florida-licensed engineer or architect and must:
The study must include the following items as they relate to the structural integrity and safety of the building.
The new law makes it difficult for associations to avoid their obligation to maintain the structural integrity of buildings that are three or more stories high. For example, developers must complete a study before control of the association can be turned over to unit owners. And, beginning December 31, 2024, unit-owner controlled associations will not be able to vote to use reserve funds that are allocated to structural integrity for any other purpose.
Since this is a new requirement, condominium associations are strongly encouraged to consult with licensed professionals to avoid unintentional violations. Board members should also review their association’s Directors and Officers (D&O) insurance policy to confirm sufficient coverage.
The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.
]]>The EEOC addressed whether the ADA permits employers to administer a viral test (to detect the presence of COVID-19) when evaluating an employee’s presence in the workplace. Recall that the EEOC’s position at the outset of the pandemic was that the ADA standard for conducting medical examinations was always met for employers to conduct worksite COVID-19 viral testing. Today, the EEOC’s position is slightly different.
According to the EEOC, employers may still administer COVID-19 viral tests in the workplace, but only if the employer can show it is job-related and consistent with business necessity. Employers no longer have an absolute right to administer COVID-19 viral tests in the workplace. So, how does an employer establish business necessity?
Per the EEOC, employers use of viral testing will meet the business necessity standard when it is consistent with current guidance from the Centers for Disease Control and Prevention, the Food and Drug Administration or state/local public health authorities. According to the EEOC, possible considerations in making the business necessity assessment may include:
The EEOC also addressed antibody (serology) tests, which are used to determine prior infections. Unlike viral testing, the process for determining whether antibody testing is permissible in the workplace is much simpler. They aren’t.
According to the CDC, antibody testing may not show whether an employee has a current infection or has immunity from a prior infection or vaccination. Given these deficiencies, the EEOC has taken the position that antibody testing does not meet the ADA’s “business necessity” standard for medical examinations or inquiries. Therefore, requiring antibody testing before allowing employees to re-enter the workplace is not allowed under the ADA.
The EEOC’s updated business necessity assessment for viral testing introduces a new process for employers to follow. Those wanting to commence or continue viral testing of employees in the workplace should review their current policies and procedures to ensure compliance with the EEOC’s updated guidance. To reduce the likelihood of a testing-related ADA claim, employers should proceed cautiously and consult legal counsel if necessary. Employers should also carry Employment Practices Liability Insurance to cover the high cost of defending actual and alleged claims of unlawful conduct.
The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.
]]>What is a milestone inspection? A “milestone inspection” is a structural inspection of a building, including its load-bearing walls and primary structural systems, by a licensed architect or engineer. Its purpose is to confirm the life safety and adequacy of the building’s structural components and determine its general structural condition as it affects building safety. A milestone inspection should include, to the extent reasonably possible, a determination of any necessary maintenance, repair or replacement of any structural component of the building.
When is a milestone inspection required? Condominium associations must have milestone inspections performed for each building that is three stories or more in height by December 31 of the year in which the building reaches 30 years of age, and every 10 years thereafter. If the building is located within three miles of a coastline (direct contact with the open sea), a milestone inspection is required by December 31 of the year in which the building reaches 25 years of age, and every 10 years thereafter. A building’s age is based on the date the certificate of occupancy was issued.
Note that if a milestone inspection is required and the building’s certificate of occupancy was issued on or before July 1, 1992, the building’s initial milestone inspection must be performed before December 31, 2024.
What is a phase one milestone inspection? A milestone inspection consists of two phases. For phase one, a licensed architect or engineer performs a visual examination of a building, including its major structural components, and provides a qualitative assessment of the building’s structural condition. If no signs of substantial structural deterioration are found, then a phase two inspection is not required. “Substantial structural deterioration” means substantial structural distress that negatively affects a building’s general structural condition and integrity. It does not include surface imperfections (cracks, sagging, signs of leakage, peeling of finishes, etc.) unless they are a sign of substantial structural deterioration.
When is a phase two milestone inspection required? A phase two milestone inspection must be performed if any substantial structural deterioration is identified during phase one. The inspection may be as extensive or as limited as necessary to fully assess areas of structural distress in order to confirm that the building is structurally sound and safe for its intended use and to recommend a program for fully assessing and repairing distressed and damaged portions of the building. The phase two inspection may involve destructive testing at the inspector’s direction, though preference must be given to locations that are the least disruptive and most easily repairable.
What happens after a milestone inspection? Upon completion of a phase one or phase two milestone inspection, the architect or engineer must submit a sealed copy of the inspection report to the condominium association, along with a separate summary of material findings and recommendations. A copy must also be furnished to the appropriate local building authority. The inspection report must include all the information required by the statute. Condominium associations must then distribute the inspector’s summary to each unit owner and post a copy in a conspicuous place on the condominium property. Associations required to maintain a website must also make the full report and the inspector’s summary available online.
The new law makes each condominium association responsible for arranging milestone inspections and ensuring compliance with the law’s requirements. Associations are also responsible for all costs associated with the inspection. Since this is a new requirement, condominium associations are strongly encouraged to consult with licensed professionals to avoid unintentional violations. Board members should also review their association’s Directors and Officers (D&O) insurance policy to confirm sufficient coverage. Because when it comes to safety, there’s no room for error.
The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.
]]>This information reporting requirement dovetails with Florida’s new mandatory structural inspection requirement for condominium buildings that are three or more stories high. According to the Florida Legislature, the imposition of a statewide structural inspection program for aging condominium buildings is necessary to ensure they remain safe for continued use. To further this goal, condominium associations must provide the following information to the Division.
In addition to providing this information to the Division on or before January 1, 2023, condominium associations must also notify the Division of any changes within six months. This information, which must be provided in the form and manner set forth by the Division, will be used to create a list of condominium associations with buildings that are three stories or higher in height. The resulting list must be searchable by county and posted on the Division’s website.
Since this is a new requirement, condominium associations may want to consult with a licensed professional prior to the reporting deadline. Board members should also review their association’s Directors and Officers (D&O) insurance policy to confirm sufficient coverage. Mistakes are more likely to happen whenever you are doing something for the first time.
The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.
]]>The first step to developing an effective safety program is to identify the most common causes of workplace injuries. According to Travelers’ analysis of more than 1.5 million workers’ compensation claims, the most common causes of first-year injuries were:
The most common injuries suffered by first-year employees were:
Though workplace injuries can and do happen anywhere and everywhere, the heightened risk of injury to first-year employees is more pronounced in specific industries. According to Travelers, the industries most affected by first-year injuries were:
Employers can do a number of things to reduce the risk of injury among first-year employees. Integrating safety into the hiring process, for example, makes employees aware of the risks and the organization’s emphasis on workplace safety. Employers can also perform a job-safety analysis or implement an accident analysis program to better understand the risks associated with specific jobs and tasks. The kinds of preventative measures may vary depending on the circumstances, but every workplace safety program must include regular safety training for all employees, beginning day one.
Workplace safety, for better or worse, begins at the top. Knowing how and why workplace injuries occur puts employers in a better position to prevent them. With an effective workplace safety program, employers can reduce the risk of workplace injuries and may even end up paying less for workers’ compensation insurance.
The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.
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