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Welcome to the Fall 2006 edition of the Alcott Advisor. This month's feature article is actually a collection of statistics for small business related to employee costs, failure & survival rates, and contributions to the economy.

Also in this issue is an article about the crackdown on the use of illegal immigrants by small business. Every small business should be aware of the risks they face if they are not compliant in this area.

In addition, we have re-printed an article that originally appeared in the Hauppauge Reporter that discusses the growing problem of employee identity theft.

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 or call 631-420-0100.


Preventing Risks Associated with Employee Identity Theft
Identity theft has taken center stage among crimes against consumers. For businesses, the combined finnancial losses associated with it are estimated at $47 billion. Effective June, 2005, The Fair and Accurate Credit Transactions Act (FACTA), and its attendant regulations, imposed obligations on employers to combat identity theft.

The critical portion of FACTA for this author's purpose is the "FACTA Disposal Rule." Specifically, employers who utilize consumer reports for employment purposes must institute policies and procedures to dispose of the reports and/or the personal information contained therein. The FCRA (to which FACTA is an amendment) defines the term "employment purposes" -- when used in connection with a consumer report -- to be "a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee." As such, any time an employer contracts with a third party to perform background checks on prospective or current employees these regulations are implicated.

The FACTA Disposal Rule applies to the disposal of both paper and electronic information. Specifically, it requires that employers utilizing consumer reports take reasonable measures to protect against unauthorized access to or use of the information. The regulations require non-specific procedures for discarding such information which are "reasonable and appropriate."

Click here to read more


Small Businesses Targeted by Immigration and Customs Enforcement
Late in July, the U.S. Immigration and Customs Enforcement (ICE) decided to emphasize its intention with respect to curtailing the influx of illegal immigrants. However, they did not go after the obvious large enterprises utilizing illegal workers. Instead, ICE targeted smaller businesses for which the penalties are obviously harder felt. ICE gave as its reason for taking down the little guys instead of bigger targets as the former being less expensive and easier to target. An outcry of "not fair" has been heard across the nation and, in particular, from small business advocates.

The bottom line is that ICE does have an enforcement strategy to target all violators of the immigration law for hiring illegal aliens. All employers must be vigilant and compliant in this area and understand the potential costs for immigration violations.

Here's what employers can expect if they "knowingly and recklessly employ illegal aliens:"
  • Criminal charges
  • Seizing of their illegally-derived assets
  • Potential charges of money laundering violations, which could bring prison sentences of up to 20 years
  • Worksite enforcement penalties
Click here to read more


Statistics Substantiate Small Business Challenges and Opportunities
Every small business owner knows that every day poses new challenges and opportunities. How a company responds to both often dictates their future successes or failures. Statistics from several sources bear this out. We thought small business owners -- and their advisors and various business partners -- would be interested in hearing some of the latest statistics concerning this vital segment of the nation's economy. The statistics are organized based on some common issues shared by many smaller companies.

Employee-related costs:
  • Small firms with fewer than 20 employees spend 45% more per employee than larger firms to comply with federal regulations (Source: "The Impact of Federal Regulations on Small Firms, an Advocacy-funded study by W. Mark Crain, 9/05). For small firms with fewer than 20 employees, their per employee cost to comply with all federal regulations is $7,647 versus firms with 500+ employees whose per employee cost for compliance with federal regulations is $5,282.
  • Small businesses pay more than 45% of the total U.S. payroll. (Note in this statistic, small businesses are defined as every company with up to 500 employees)(SBA)
  • The number one small business issue is the cost and availability of health insurance. (Source: National Federation of Independent Businesses/NFIB)
  • Insurers of small health plans have higher administrative expenses than those that insure large groups. (NFIB)
Click here to read more


Kristyn J. Golombek has joined Alcott as a Benefits Specialist,
serving in the Western Division in Buffalo, New York.
Ms. Golombek will be responsible for the day-to-day administration of Alcott's various employee benefit plans -- including medical, dental, vision, life and disability insurance, as well as other ancillary benefits. Her role will also encompass benefits orientation and enrollment processes, COBRA administration and maintaining ongoing contact with Alcott's clients and associates.

Directly prior to joining The Alcott Group, Ms. Golombek served as a Human Resource Assistant with Multisorb Technologies, Inc. (Buffalo, NY). In addition to her position at Multisorb, Ms. Golombek was a Staffing Coordinator/Recruiter with Spherion Staffing (Williamsville, NY) and a Human Resources Representative with ClientLogic Corporation (Buffalo, NY).

Ms. Golombek graduated from the University at Buffalo, State University of New York with a Bachelor of Science in Business Management. She concentrated in Human Resource Management and Marketing. She is a December 2006 candidate for a Master in Business Administration from Medaille College. Her higher education also includes Human Resource training for the Professional in Human Resources (PHR) certification at Cornell University-Great Lakes Region, School of Industrial and Labor Relations.

Ms. Golombek is a national member of the Society for Human Resource Management (SHRM) and a member of the Niagara Frontier Chapter of SHRM. She is a past SHRM Scholarship recipient.

She resides in Buffalo, NY.

The Alcott Group Announces the Appointment of Paulina Donofrio, PHR as Human Resources Representative Farmingdale, NY, Buffalo, NY
The Alcott Group (Farmingdale and Buffalo, NY), one of New York State's most prominent Professional Employer Organizations (PEO) with divisions on Long Island and in Buffalo, NY, recently announced that Paulina Donofrio, PHR has joined the Company as a Human Resources Representative. Ms. Donofrio will be involved in various HR functions on behalf of Alcott's over 350 affiliated companies/clients and their employees totaling in excess of 4,500. Her responsibilities will include: COBRA administration; Family Medical Leave/Disability administration; processing employment verifications, letters and W-2 duplicates; coordination of multi-state unemployment claims/hearings with third-party administrators; maintaining personnel records and responding to client and employee HR inquiries. She brings over seven years of experience across diverse areas of human resources.

Directly prior to joining Alcott, Ms. Donofrio served as a Human Resources Assistant with Barnes & Noble (Secaucus, NJ), where her responsibilities ranged from new hire and benefits enrollment orientations to staff recruitment, payroll processing and inquires, and maintaining up-to-date organizational charts and spreadsheets. Her career also included a position as Human Resources Assistant with Lord and Taylor (Paramus, NJ).

Ms. Donofrio holds the prestigious PHR certification, which is awarded by the Human Resource Certification Institute, an organization affiliated with the Society for Human Resource Management (SHRM). This credential signifies that she possesses the theoretical knowledge and practical experience necessary to pass a rigorous examination demonstrating her high proficiency within the field of human resource management.

Ms. Donofrio holds a Bachelor's degree in Business Administration-Management from William Paterson College (Wayne, NJ).

She resides in Hauppauge, NY.


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