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Contents
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 ata@alcottgroup.com or call 631-420-0100.
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EMPLOYEE IDENTITY THEFT RISKS
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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
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IMMIGRATION ENFORCEMENT
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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:"
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Criminal charges
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Seizing of their illegally-derived assets
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Potential charges of money laundering violations, which could bring prison sentences of up to 20 years
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Worksite enforcement penalties
Click here to read more
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SMALL BUSINESS STATISTICS
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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:
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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.
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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)
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The number one small business issue is the cost and availability of health insurance. (Source: National
Federation of Independent Businesses/NFIB)
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Insurers of small health plans have higher administrative expenses than those that insure large groups. (NFIB)
Click here to read more
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WHO'S NEW AT ALCOTT?
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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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Complimentary HR Strategy Evaluation:
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Alcott's on-site evaluation will help you create an actionable plan for addressing one of your most critical business
processes. Click here to
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