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Contents
Welcome to the Spring/Summer edition of the Alcott Advisor. This month's feature article is an interview
on "Succession Planning" with David DePinto, Esq. of DePinto Nornes & Associates LLP, an estate and elder
law firm in Melville, NY. Mr. DePinto discusses the why's and how-to's of succession planning and clears
up some misconceptions along the way.
We also address the issue of risk management, primarily from an employment standpoint. It's often been said
that while your employees can be your greatest asset, they can also be your greatest liability. If you haven't
taken a hard look at your company's exposure, then it's important that you do so. Just the thought of an
employee lawsuit should send shivers up your spine and it's much more likely to occur than you think
- many times more likely than a fire, flood or natural disaster. The good news is that there are ways
to protect your company through insurance, training and careful attention to policies and procedures.
Your efforts will be rewarded, not only by keeping you out of the courthouse, but by making you a better employer.
Please let us know if there are employment-related issues you would like us to cover in the future. Send your e-mails
to Al Anastasi at ata@alcottgroup.com or call 631-420-0100.
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BUSINESS TORT LIABILITY COSTS
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Small Businesses Bear the Brunt of Business Tort Liability Costs
Consider these startling statistics courtesy of the AEI-Brookings Joint Center for Regulatory Studies
regarding small businesses and their tort liability costs:
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Despite the fact that small businesses – defined as those with less than $10 million in annual revenues and
at least one employee in addition to the owner – take in only 25% of business revenue, they bear 68% of
business tort liability costs.
- The cost of tort liabilities for small businesses is a whopping $88 billion annual.
- Very small businesses - defined as those with annual revenues under $1 million and at least one employee
in addition to the owner – take in just 8% of business revenue, yet pay 26% of business tort liability costs.
- The price tag on tort liabilities for very small business is approximately $15 billion and 44% of these costs
are paid out of pocket by the business and not through insurance. Note: The $15 billion represent costs that
very small business must pay because either they are uninsured or the costs are above their insurance policy
deductibles, limits, exclusions and/or include punitive damages where states prohibit their coverage through
insurance.
Click here to read more
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5 STEPS TO RISK MANAGEMENT
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Five Steps to Business Risk Management
While every business -- regardless of its size -- should have exposure-specific risk management policies,
there are some general steps that should be taken to establish an overall corporate culture which
emphasizes risk management. Following are steps which will help businesses cultivate an organization
whose day-to-day activities promote risk management:
- Know your past losses and implement procedures to mitigate future risks which could lead to more of the same
losses. Similarly, apply the necessary resources to avoid the same losses.
- Conduct an audit of your businesses potential risks within the key areas of: product liabilities, professional
liabilities, contracts, environmental liabilities, vehicle-related liabilities and employment-related liabilities.
In addition to your attorney, accountant and insurance/risk management professional, reach out to small business
resources such as the National Federation of Independent Businesses, the Small Business Administration, trade
associations, local business associations and Chambers of Commerce. Participate in their risk management
educational programs and tap the expertise of their advisory boards.
- Train your staff regarding workplace regulations and proper protocol for compliance. Raise the awareness
of your staff pertaining to the high costs and negative impacts associated with business liabilities and related
litigation.
Click here to read more
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10 REASONS FOR EPLI
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10 Reasons for Employment Practices Liability Insurance
According to Jim Mooney of the Terry Gibson Insurance Agency, Employment Practices Liability Insurance
(EPLI) is an essential risk management tool for every business. Mr. Mooney cites the following Top
10 reasons to have EPLI:
- Employee lawsuits are excluded under standard insurance policies
- 75% of businesses may not be insured for employee lawsuits
- Employee lawsuits may be 1,000 times more likely than a fire
- Employees file over 80,000 cases per year with the E.E.O.C.
- Employees can easily file lawsuits, at no cost, with no risk
- Employees may win 70% of jury trials
- Many jury awards can exceed $1,000,000
- Employer defense costs can exceed $200,000
- Owners, Directors and Officers personal assets can be at risk
Click here to read more
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SUCCESSION PLANNING
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Interview with David J. DePinto, Esq. on Succession Planning
For many growing businesses, knowing when to turn over the reigns of leadership to a successor is a
challenging assignment wrought with emotional and operational risks. The Alcott Advisor went to noted
estate and elder law attorney, David J. DePinto of DePinto Nornes & Associates LLP (Melville, NY) for
some answers that will help mitigate these risks.
Question: While larger businesses often have a highly developed infrastructure and organization chart that addresses
the leadership successor question when a CEO/President steps down, many smaller businesses do not. Why are
they actually in greater need for a sound succession plan, and aren’t there particular exposures to smaller
companies when a CEO must step down suddenly and there is no succession plan in place?
DePinto: Unlike larger and highly structured businesses, smaller businesses usually are managed by the
founder who built the company. If there is more than one owner, one is usually the rainmaker. This
individual typically has most of the business contacts and referral sources and, the majority, if
not all of the company’s business, originates from that executive. The serious illness or death of
this individual could easily send the business in a downward spiral towards failure. Furthermore, many
closely-held businesses are family run, and sometimes the next generation is not as motivated or talented
as the parent/founder.
Click here to read more
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RISK MANAGEMENT AND THE PEO
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Sound Risk Management and the PEO Relationship
For many businesses, risk management is a primary motivation for outsourcing their human resources to a
Professional Employer Organization (PEO). They recognize that, in addition to gaining the ability to
provide their employees with a better selection of benefits, the HR outsourcing relationship affords
Management the opportunity to focus on core-revenue producing functions -- confident that their business
is in full compliance with various federal and state regulations. Those very factors are what motivated
Buffalo, NY based World DLA to enter into a PEO relationship with The Alcott Group.
Alcott will be providing World DLA, a leading-edge provider of real time, endpoint authentication solutions
applied particularly for driver’s license authentication, with its comprehensive Human Resources (HR)
outsourcing solution including payroll administration, employee benefits design and administration, tax
administration and regulatory compliance.
World DLA was founded in 1997 by Rick Nicholas, an Oklahoma Police Officer and developed by Donald Meade,
a Canadian businessman upon their realization that approximately 10% of the U.S./Canadian population has
invalid licenses at a given moment. When the company decided to form a U.S. enterprise, it incorporated
in Delaware in April 2005 and established its offices in Buffalo, New York.
Click here to read more
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WHO'S NEW AT ALCOTT?
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The Alcott Group recently announced the appointment of Robert Chanin, M.B.A., as Director of Human Resources.
Mr. Chanin, a 26-year business and Human Resources professional, will oversee Alcott's broad scope of HR
programs and services on behalf of its over 350 affiliated companies and their over 4,500 employees. His
career includes consulting assignments on behalf of The Bank of New York (New York, NY) and small businesses,
as well as the roles of Director of Human Resources for Lambda Electronics, Inc. (Melville, NY), Division
Personnel Manager for Veeco Instruments, Inc. (Plainview, NY) and Employee Relations Administrator for
Hazeltine Corporation (Greenlawn, NY). Mr. Chanin holds a Bachelor of Arts in Political Science from
the State University of New York at Albany (Albany, NY) and an MBA in Management-Human Resources from
Adelphi University (Garden City, NY). Mr. Chanin holds the PHR certification which is awarded by the
Human Resources Certification Institute affiliated with the Society for Human Resource Management (SHRM).
The Alcott Group, Western New York Division, announced the promotion of Holly M. Patterson to Human
Resources Specialist Team Leader. Holly M. Patterson, PHR, formerly served as a Human Resources
Specialist. Since joining Alcott in February 2004, Ms. Patterson has continually demonstrated a strong
professional skill set and the ability to assume broader responsibilities. In her new role, she'll
oversee Alcott's HR Specialists in a full range of client services. Ms. Patterson received a Bachelor
of Arts (BA) in Psychology and a Masters of Business Administration (MBA) with a concentration in
Human Resource Management from Niagara University. She also her holds the prestigious Certification
as a Professional in Human Resources (PHR) and is a member of SHRM.
The Alcott Group announces the appointment of Jeanne Anderson as Senior Human Resources Representative.
Ms. Anderson brings 17 years of experience to her new position, in which she will be primarily responsible
for administrating the 401(k) plan. Directly prior to joining Alcott, Ms. Anderson served as Group Operations
Manager for Mellon Financial Corporation (Uniondale, NY), where she lead, trained, coached and evaluated
the organization's financial control/reconciliation team, which consisted of seven direct and 40 indirect
reports working from five locations. In addition to her career at Mellon, Ms. Anderson served as an Actuarial
Analyst for Improved Funding Techniques, Inc. (Lynbrook, NY). Ms. Anderson holds a Bachelor of Arts in
Economics/Computer Sciences from St. John's University, from which she graduated Summa Cum Laude.
The Alcott Group, Western New York Division, has named Julie M. Winkelman Human Resources Specialist.
Ms. Winkelman, who brings strong HR credentials to the role, will manage a wide range of HR-related
client services. Directly prior to joining Alcott, Ms. Winkelman served as the Human Resources Manager
for MJW Corporation (Amherst, NY), where she was the sole HR contact for 110 employees located in 13
states. Previously, she also served as an Agency Personnel Development/Recruiting Representative for
MassMutual Financial Group (Buffalo, NY). Ms. Winkelman holds multiple degrees, including a Bachelor
of Arts in Psychology and a Bachelor of Science in Business Administration from the University at
Buffalo, State University of New York, where she graduated Magna Cum Laude, and an MBA in
Marketing/Management Consulting from the University at Buffalo.
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RECENT NEW YORK HR LEGISLATION
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New York's Governor and legislature recently demonstrated their commitment to combat identity theft with the
passage of several laws requiring businesses to assist in this effort.
On June 9th, Governor Pataki signed into law legislation which requires employers to dispose of records
containing employee personal information in specific ways. The "Disposal of Personal Records Law"
requires employers to either shred, destroy, modify or take reasonable action to ensure that no
unauthorized person has access to the information. The Law also provides that a failure to properly
dispose of records by any business under this law would result in a civil penalty of up to $5,000.
The state "Security Freeze Law" also protects against identity theft as it allows consumers who are
identity theft victims, or are concerned that they might be at risk of having their identity stolen,
to place a "freeze" on their consumer report to prevent others from gaining access to it.
Click here to read more
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Complimentary HR Strategy Evaluation:
Is your HR shop in order? Do you have a focused HR strategy or is it something you just can't seem to get to?
Alcott's on-site evaluation will help you create an actionable plan for addressing one of your most critical business
processes. Click here to
learn more.
Alcott in the News
The Alcott Group continued its tradition of support for the Central Nassau Guidance and Counseling
Services, Inc. (CNGCS, Hicksville, NY) by serving as a sponsor for two upcoming events: CNGCS' Annual
5K Runday on Saturday, May 27th starting at South Oyster Bay Road in Hicksville and CNGS' 7th Annual
Golf Outing on September 12th at the Town of Oyster Bay Golf Course. For more information,
visit: www.centralnassau.org.
As a further show of its commitment to the upstate region, The Alcott Group President Louis Basso
and other staff members from the downstate office in Farmingdale were on hand to cheer on the
Alcott-sponsored team for the JP Morgan Corporate Challenge in Buffalo, where the Western New York
Division of Alcott is based.
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