EG Welcomes New President and CEO, Mark Wilbur

Changes are afoot at Employers Group. On February 20, 2007, Rod Hagenbuch, Employers Group Chairman of the Board, announced that the board selected Mark Wilbur as EG’s new President and CEO. William R. Dahlman recently retired after nearly 11 years as President and CEO. All of us appreciate Bill’s many years of leadership and wish him the best!

Introducing Mark Wilbur
For the last three-plus years, Mark was the Associate Dean of the Marshall School of Business at the University of Southern California (USC), leading many programs for consultants and technical experts in operations and service enhancement, and business process reengineering. Previously, Mark was a Partner in Advanced Technology and Customer Relationship Management at Arthur Andersen Business Consulting, developing revenue improvement solutions for clients across the U.S., Asia and Europe.

Mark’s professional experience and expertise are in customer relationship management, organizational change efforts, customer service enhancement, and operations and service integration. He’s served some of California’s most prized companies, including most of the major entertainment companies. Mark earned his BA and MBA from USC and is also a Certified Public Accountant. On the personal side, he is supported by his wife Therese and their two daughters, Marie (age 10) and Izabel (age 7), who “keep him running 24/7!”

What’s on the horizon?
Mark officially takes over the EG helm on March 19, 2007, but he’s already outlined his vision for the organization. “I’m very excited to be here,” he says. “Employers Group is a unique organization, with a fascinating history of helping California businesses manage their people. I see this as a time of re-energizing to better support and meet our members’ needs. I look forward to bringing a new strategic direction and delivering a more personalized level of service to our members, while enhancing the quality of all member services. We will find more ways to leverage our already extensive HR knowledge and competencies for the benefit of our members.”

Based on feedback Mark gleaned in conversations with many of our members, a new organizational operating structure will emphasize the importance of everyone’s role at EG. He promises that every member will have a single point of contact with a professional staff person, a contact that can be counted on for all services—in addition to the continued availability of the highly valued consultant Helpline. Lastly, a new marketing strategy is in the works to improve the association’s visibility as the HR leader for California employers.

“Our members are at the heart of who we are and what we do in the HR arena,” says Mark. “It is our responsibility to deliver the finest services possible to meet their growing and changing needs.”

Karen Ackley is Vice President, specializing in Employee Benefit Consultation, at Bolton & Company Insurance Br-ok ers. She has expertise in various aspects of the insurance industry in her more than 20 years of industry involvement. Karen's primary emphasis is in the medium-to-large size employer arena, providing consultation in all areas of employee benefits.

Nationally, Consumer Directed Health Plans (CDHP) represent a small but ever-increasing share of the healthcare insurance market, however, it remains a rarity in California—a state that typically leads the nation in new healthcare strategies.

What is a CDHP?
Simply put, a CDHP is a high deductible health plan (HDHP) coupled with a tax-advantaged account to pay for first dollar medical care expenses. The most common CDHP’s are Health Reimbursement Accounts (HRA’s) and Health Savings Accounts (HSA’s). CDHP’s were designed to engage consumers more directly and actively in their healthcare choices, thereby reducing escalating healthcare costs.

• A Health Savings Account (HSA) is a tax-exempt account established for the purpose of paying medical expenses in combination with a high-deductible health plan. HSA's are portable and monies contributed to an HSA accumulate in the employee's account year to year. The annual maximum contribution to an HSA is $2,850 for single coverage and $5,650 for family coverage in 2007. If those dollars are not used for medical care, they can become a supplement to an employee's retirement account or can pay for qualified medical expenses in future years.
  
  
• A Health Reimbursement Arrangement (HRA) is an employer-funded tax-sheltered account used to reimburse employees for qualified medical expenses. HRA’s are only funded by the employer and can be deducted as a business expense when actual distributions are made. An employee may only qualify for funds from an HRA while employed by the employer and are subject to the terms of the governing plan document.

Pricing
In California, the current pricing of CDHP’s may not jumpstart participation growth, particularly in Southern California. Here, the region is still primarily dominated by managed care plans and rates are lower than in Central and Northern California. The difference in premium costs for a CDHP and a typical HMO plan may not be enough to attract employees to the CDHP. However, with the double-digit healthcare increases, California employers have experienced in the last several years, it’s likely that could change. According to a survey conducted by the Kaiser Family Foundation and the Health Research and Educational Trust (HRET), in 2006 HMO premiums for single coverage in California caught up with those in the rest of the country. Historically, HMO premiums in California were significantly less than the national average.

Insurance providers
There are six statewide fully-insured major market carriers in California, all of which offer a variety of high deductible plans. In response to the changing needs of the marketplace, Kaiser Permanente has launched their new HSA product in California effective January 2007. Kaiser began introducing HSA plans in 2005 in Colorado, Georgia, the Mid-Atlantic States, and the Pacific Northwest. Enrollment in Colorado more than doubled from 2005 to 2006.
Recognizing their member’s dilemma with escalating healthcare costs, the California Manufactures and Technology Association (CMTA) has established a new health benefits program. Although the CMTA offers an array of benefit plans, they have seen some success in their HDHP coupled with an HRA.

Tax savings
While contributions to an HSA are exempt from federal income taxes, they are currently subject to California income taxes. HSA’s are shielded from state income taxes in most of the country, but seven states, including California, have declined to provide an exemption. Recently, Governor Schwarzenegger has proposed to change that. In his new plan to reform California healthcare coverage, Schwarzenegger also wants to create tax breaks for HSA’s by aligning state laws with federal laws and allowing pretax contributions to HSA’s.

Recent HSA improvements
The Tax Relief and Health Care Act of 2006 will make HSA’s an even better deal in 2007. In part, this Act includes key provisions affecting HSA’s that will increase the contribution limits, eliminate contribution penalties for mid-year enrollees and allow consumers to convert existing health reimbursement arrangements (HRA’s) and flexible spending arrangements (FSAs) into HSA’s. In addition, American’s Health Insurance Plans is now lobbying for further adjustments in the laws governing HSA’s. This includes rules allowing them to cover maintenance drugs before the deductible is met, allowing HSA savings to buy Medigap policies, and allowing family policies to have lower individual deductibles.

Controversies and challenges
Debates and uncertainties about health savings accounts have been plentiful ever since the tax-advantaged savings approach was introduced as part of Medicare prescription drug plan that took effect in January 2004. A major criticism is that they only appeal to the young, healthy and wealthy. However, recent studies show that while people enrolled in CDHP’s tend to be healthier and wealthier, they did not tend to be younger.

Critics also question whether CDHP’s can contain healthcare costs and utilization, without discouraging consumers from seeking needed care. Conversely, recent studies indicate the opposite is true. According to Cigna’s year-long study, most CDHP participants are becoming more cost conscious, benefit financially from their plans and are still getting appropriate care. The rate for preventive care use was higher for CDHP’s than traditional plan participants. This isn’t surprising since most consumer-directed plans waive the deductible for preventive care, and these plans often provide financial incentives for consumers to enroll in disease management programs, health-risk appraisals, and wellness initiatives.

A study just released by the Employee Benefits Research Institute and the Commonwealth Fund found that many of the consumers insured by CDHP’s can't afford to fund the health savings accounts that make these high-deductible plans work. Only 20% of employees enroll when there is no contribution from employers. These findings hint at disturbing trends that may risk the success of their HSA if the employer under funds the plan.

Impact on California
According to the employer survey released November 26, 2006 by the California HealthCare Foundation, six percent of California employers offered a HSA eligible account in 2006 and 5% reported that they will very likely offer a CDHP in 2007. However slight, it appears that the trend in the California healthcare market indicates that an increasing number of employers will begin to offer employees consumer-driven-cost-sharing health plans in an effort to curb costs. Employers are increasing the amount that employees contribute towards the cost of their coverage and increasing benefit co-insurance amounts. With HMO hospital deductibles of $1,500 becoming more common, offering a CDHP may not be too far off in the distant future.

In summary
Employers who pay the majority of their employees’ healthcare costs, have an enormous stake in engaging their employees in their own healthcare - from the lifestyle decisions they make to the health care they seek out. Employers considering CDHP’s must carefully consider the challenges associated with this plan. They will significantly increase their chances for success by focusing on which healthcare account is the most appropriate, what consumer-decision support tools are available, how to effectively communicate and evaluate the plan, and how to encourage participation

Although the advantages of HRA’s and HSA’s can be significant, employers will want to do their homework prior to setting them up. The type of consumer directed health plan that best fits your organization will depend on your corporate structure, the accompanying administrative requirements and the overall objectives of your group health insurance plan.

While supporters and cynics continue to debate whether these plans are really working, they offer an intriguing option for increasing the efficiency of healthcare and reducing health care costs. Time will tell whether these products will relieve California employers’ healthcare woes.

(Editor’s Note: Bolton & Company is one of Employers Group’s preferred partners for insurance services. For more information or to reach the author of this article, contact Katherin Scott, kscott@employersgroup.com.)

Religion at Work (Part 2)

By Tanya Butler, M.S., Helpline Consultant

This is a continuation of the article on this topic in the February 2007 Employers Group newsletter (Legal Bulletin section), and covers the issues dealing with demands for religious accommodations.

Demands for religious accommodation
Not only do employers have a duty not to allow religious discrimination or harassment but they also face a legal obligation to accommodate the religious beliefs and practices of their employees. However, that obligation is not absolute or open-ended.

Failure to accommodate claims
To establish a claim that an employer failed to accommodate religious belief or practice, an employee must prove that: they have a bona fide religious belief that conflicts with an employment requirement; the employer was made aware of the conflict; and the employee was subjected to an adverse action, such as termination, for not complying with the employment requirement.

If a plaintiff proves these three elements, an employer, to avoid liability, must show that: it offered a reasonable accommodation (even if the accommodation was not necessarily the first choice of the employee); or no accommodation is possible that would not cause an undue hardship to the employer.

“Reasonable accommodation,” according to the Americans with Disabilities Act (ADA), “in the context of religious issues, is an arrangement that allows the employee to comply with an employment requirement while acting consistently with his religious beliefs.”

Undue hardship
Many religious accommodation claims turn on the question of whether an employer would face an “undue hardship” in accommodating an employee’s religious beliefs and practices. Although the term “undue hardship” appears in both the ADA and in the Title VII provisions about religion, the term has been applied quite differently in the two contexts.

In the disability setting, the burden on an employer of a proposed accommodation would have to be significant in order to constitute an undue hardship, and undue hardships within the meaning of the ADA are uncommon. According to the ADA, the “term ‘undue hardship’ means an action requiring significant difficulty or expense when considered in light of factors” such as the overall financial resources of the employer.

In the context of accommodating an employee’s religious beliefs and practices, however, the courts have given the phrase a significantly different meaning. Many types and levels of burden can constitute an undue hardship in the religious accommodation setting. Something that imposes a more than de minimus cost on an employer is an undue hardship. A cost can be economic, such as lost business or the cost of paying additional workers (or overtime to current employees).
A cost can also be non-economic, such as compromising a neutral scheduling or job-assignment system (which would affect other employees), impairing customer service or customer relations, compromising the integrity of a manufacturing process, or compromising the safety of the employee in question or other employees.

Handling workplace religion issues
Employers who become aware that an employee wants an accommodation of his religious beliefs or practices should have a discussion with that employee to explore possible accommodations. Employers should have written policies prohibiting discrimination and harassment, and those policies should explicitly include religion as one of the protected categories. These policies should include a procedure by which employees who have issues of discrimination or harassment can report the problem and seek a resolution.

Tips for Impacting your Workers’ Comp Bottom Line

Diana B. Henderson is the founder and president of The Henderson Group, a workers’ compensation and disability management consulting and training firm. She has worked in both the corporate and service provider communities over her 25-year career.

In the past five years, there have been numerous reforms to California’s workers’ compensation system. By virtue of these reforms, chances are that you have been experiencing dramatic decreases in the cost of your workers’ compensation insurance. The time is now for you to take advantage of these cost savings and reforms, developing good habits that will stand the test of time and assist in riding out any future wave of premium increases. The following is a summary of tips for impacting your workers’ compensation bottom line.

Timely reporting
Intuitively, we would all agree that prompt reporting of claims and timely providing of benefits should lead to lower overall cost and lower litigation rates. That fact has been proven in a study done by Glen-Roberts Pitruzzello, ACAS, an actuary and pricing analyst with The Hartford Financial Services Group and published in the National Council on Compensation Insurance’s (NCCI) Summer Issues Report (2000). Here are some of his findings:

• Injuries reported two weeks after the injury cost 18% more than those reported within seven days. Injuries reported between the 4th and 5th week are 45% more expensive.
  
  
• Back injuries are 35% more expensive if not reported within the first week with soft tissue strains and sprains at 13% more expensive.
  
  
• Twenty-two percent of injuries reported within 10 days are litigated compared to 47% when reported more than 31 days following the injury.

By providing adequate and accurate information immediately at the time of reporting, you can assist the claims handler in adjusting the claim and providing the appropriate benefits to the injured worker. In order to properly calculate compensation rates, timely and accurate wage statements should be provided to the claims handler. This will minimize the potential for either the under-payment or overpayment of benefits.

Employers who complete internal investigation documents such as incident/accident reports and employee accident statements and send these documents to the claims handler are providing invaluable assistance in the adjusting of the claim.

Questionable claims need immediate attention so that the investigation activities can be completed within the 90-day window for making a compensability decision. The employer’s date of knowledge is the trigger for the 90-day clock to begin. It can be knowledge from any source; the employee, a family member, a physician, or even an attorney. Immediate reporting of these questionable claims is also imperative.

Take control
SB899, signed into law on April 19, 2004, has provided an alternative mechanism for managing medical utilization and costs in California using Medical Provider Networks (MPNs) beginning January 1, 2005. Consult with your carrier regarding the MPN and your role in the implementation process. The lack of proper implementation can result in loss of medical control. Note that some carriers have made the implementation and use of MPNs mandatory while others have made them optional.

Employees do have the right to pre-designate their own personal physician thereby taking control of their own medical treatment. In addition, those employees who work for employers who do not utilize the MPN process will also have the right to pre-notice their employer of their desire to utilize a chiropractor or acupuncturist for medical care. The right to pre-designate and/or pre-notice was to have expired on April 30, 2007, however AB 2068 signed by Gov. Schwarzenegger on September 30, 2006 has extended this right to December 31, 2009 and has repealed the limit on the maximum percentage of employees that may pre-designate.

Whether you control medical treatment for only 30 days or for the life of the claim through the MPN process, you do have some basic and simple regulatory requirements to follow in order to assert and maintain such medical control. These can be found in the California Code of Regulations, 8 CCR §9880. The first requirement is to ensure that you display the requisite informational posters and, second, to distribute required pamphlets.

The poster entitled “Notice to Employees -Injuries Caused by Work“ must be posted in a conspicuous place frequented by all employees. The California Division of Workers’ Compensation (DWC) has an English and Spanish version that can be downloaded and printed from this website link: http://www.dir.ca.gov/dwc/DWCProp-Regs/ClaimForm_Poster%20_Final.doc

AB749, effective January 1, 2003, requires that all employers provide information regarding workers’ compensation benefits to their new hires. You can easily fulfill this requirement via a pamphlet entitled “Facts About Workers’ Compensation,” published by the California Workers’ Compensation Institute and approved by the DWC. This information must be provided no later than end of the new hires’ first pay period.

Your insurance carrier or claims administrator may also be able to provide these documents to you. Just remember, absent the requisite poster and pamphlet, even the most basic form of medical control is lost.

Return to work
Per AB749 and SB899, incentives are now available to you for providing transitional and permanent return to work opportunities. Additionally, productivity, morale and the overall cost of a claim can be positively impacted by using return to work programs.

If you employ 50 or fewer full time employees, beginning August 18, 2006, the DWC may reimburse you for the cost of new tools, equipment, furniture or modifications made in order to bring an injured worker back to temporary modified or permanent modified/alternative work. This reimbursement incentive can be as much as $1,250 for the cost of temporary work modifications and up to $2,500 for permanent work modifications (less any amount previously paid). The rebate form can be found on this website link: www.dir.ca.gov/dwc/forms/DWC_AD-10005_August2006.pdf

If you employ more than 50 full time employees, the cost of a claim can be impacted either negatively or positively depending upon the ability to offer a return-to-work opportunity for a worker injured on or after January 1, 2005. This is done via a 15% reduction or a 15% increase for each payment of permanent disability indemnity. The reduction is applied if return to work is offered. Conversely, the increase is applied if return to work is unavailable and/or NOT offered.

Time is of the essence in making a return to work decision and must be made within 60 days of the employee reaching a permanent and stationary status (also referred to as Maximum Medical Improvement).

Stay engaged and connected
Maintain and insist on high levels of communication with your injured worker and the claims handler in order to meet the numerous time constraints within the law. Continually monitor and review the status of every open claim from inception to conclusion. Provide any requested information expeditiously to the claims handler. If you lack the expertise, do not hesitate to consult with experts to assist in managing this bottom line expense. It is well worth the investment.

(Editor’s note: For information about Diana’s consulting/training services, contact Employers Group’s Vice President of Consulting Services, Leslie Hollis, at 800-748-8484 or lhollis@employersgroup.com.)

Understanding Experience Modification Rates

If workers’ compensation rates are going down, why are my premiums going up? We asked EG’s insurance partner Bolton & Company to explain the role that experience modification rates play.
Most of the insurance carriers have announced that the “average” workers’ compensation rates are once again going to be lower in 2007, but many businesses may find that their “costs” for workers’ compensation will be going up. How can this happen? As the expression goes, “the devil is in the details”.

Workers’ compensation costs are based on your payroll, your classification, and your experience modification. The wild card in the equation for 2007 is the way the experience modification is calculated.

If you’ve ever seen your Experience Modification Worksheet (you and your broker should be reviewing this worksheet annually), it is made up of the data that will determine the experience modification for the upcoming policy year. The worksheet shows the reported payroll, the claims experience, and the Workers’ Compensation Insurance Rating Bureau’s (WCIRB) factors that determine your experience modification. For the 2007 experience modifications, the policy years that will be used will be 2005, 2004 and 2003.

The “factor” that will have the most dramatic impact on 2007 experience modifications as compared to 2006 is the “Expected Loss Rate.” The Expected Loss Rate represents the average losses per $100 of payroll estimated for the renewing policy year for employers within the same classification category. As a result of legislative reforms, the “expected losses” (and the ELR factor) will be lower and therefore mathematically, any claims within the reporting period will have a more substantial impact on the modification, as compared to 2006.

In a recent review, we compared the impact of the Expected Loss Rate factors against a number of companies’ modifications. When the 2006 Expected Loss Rate factor was compared to the 2007 Expected Loss Rate (using the same payrolls and claim information), we saw a difference (increase) of 10%-17% in the experience modification! For many businesses that have struggled with managing their claim history, this increase in the modifications will likely be more than any decrease in a classification’s rate.

Of course, if you have managed your safety program, claims administration and have seen the benefits of the reforms, this change in the Expected Loss Rate shouldn’t have a significant impact on your experience modification. But, if your claims frequency hasn’t changed, the change in the calculation factors will have a significant impact on the price of your Workers’ Compensation coverage.

It is important to recognize that while we do not have control over the fluctuations in Workers’ Comp rates or the WCIRB rating factors, we do have control over our safety program and the management of the existing open claims. This is the area that all businesses (with the help of their insurance broker) should focus their attention on and allocate the resources to first try and prevent accidents, but if an accident does occur, manage the claim process until the claim is closed.

(Editor’s Note: If you have any questions, you can reach Bolton & Company by contacting Katherin Scott at EG, kscott@employersgroup.com,(213) 765-3949.)

Editor’s Note: As a result of numerous questions the Helpline receives about POLYGRAPHS, Helpline Consultant Tanya Butler, M.S., compiled the following information for this special report. Look for the return of the CAPITOL REVIEW section in next month’s issue of the newsletter.

The underlying theory about polygraphs is that when people lie they get measurably nervous it. The heartbeat increases, blood pressure goes up, breathing rhythms change, perspiration increases, etc. A baseline for these physiological characteristics is established by asking the subject questions that have answers the investigator knows. Deviation from the baseline for truthfulness is taken as sign of lying.

The Employee Polygraph Protection Act of 1988 (EPPA), (29 USC §2001 et seq.; 29 CFR Part 801), generally prevents employers from using lie detector tests, either for pre-employment screening or during the course of employment, with certain exemptions. Employers generally may not require or request any employee or job applicant to take a lie detector test, or discharge, discipline, or discriminate against an employee or job applicant for refusing to take a test or for exercising other rights under the Act.

In addition, employers are required to display the EPPA poster in the workplace for their employees. The law does not cover federal, state, and local governments. The Employment Standards Administration's Wage and Hour Division (WHD) within the U.S. Department of Labor (DOL) enforces the EPPA.

In California, and many other states, results of polygraph tests are inadmissible as evidence in court. The law does not preempt any provision of any state or local law or any collective bargaining agreement that is more restrictive with respect to lie detector test.

California Labor Code 432.2 prohibits mandatory polygraphing in private employment. “(a) No employer shall demand or require any applicant for employment or prospective employment or any employee to submit to or take a polygraph, lie detector or similar test or examination as a condition of employment or continued employment. The prohibition of this section does not apply to the federal government or any agency thereof or the state government or any agency or local subdivision thereof, including, but not limited to, counties, cities and counties, cities, districts, authorities, and agencies.”

Basic requirements
The EPPA prohibits most private employers from using lie detector tests, either for pre employment screening or during the course of employment.

Employers generally may not require or request any employee or job applicant to take a lie detector test, or discharge, discipline, or discriminate against an employee or job applicant for refusing to take a test or for exercising other rights under the Act.

Employers may not use or inquire about the results of a lie detector test or discharge or discriminate against an employee or job applicant on the basis of the results of a test, or for filing a complaint, or for participating in a proceeding under the Act.

Subject to restrictions, the Act permits polygraph (a type of lie detector) tests to be administered to certain job applicants of security service firms (armored car, alarm, and guard) and of pharmaceutical manufacturers, distributors, and dispensers.

Subject to restrictions, the Act also permits polygraph testing of certain employees of private firms who are reasonably suspected of involvement in a workplace incident (theft, embezzlement, etc.) that resulted in specific economic loss or injury to the employer.

Where polygraph examinations are allowed, they are subject to strict standards for the conduct of the test, including the pretest, testing, and post testing phases. An examiner must be licensed and bonded or have professional liability coverage. The Act strictly limits the disclosure of information obtained during a polygraph test.

“…(b) The Act also extends to all employees of covered employers regardless of their citizenship status, and to foreign corporations operating in the United States. Moreover, the provisions of the Act extend to any actions relating to the administration of lie detector, including polygraph, tests which occur within the territorial jurisdiction of the United States, e.g., the preparation of paperwork by a foreign corporation in a Miami office relating to a polygraph test that is to be administered on the high seas or in some foreign location (29 CFR 801.3).”

Employee rights
The EPPA provides that employees have a right to employment opportunities without being subjected to lie detector tests, unless a specific exemption applies. The Act also provides employees the right to file a lawsuit for violations of the Act. In addition, the Wage and Hour Division of the Department of Labor's Employment Standards Administration accepts complaints of alleged EPPA violations.

Are Employers Immune from Employee Computer Misuse?

By Jim Kuns, J.D., Senior Helpline Consultant

Employers generally permit employees to use company computers from time to time for personal reasons. However, if the employees misbehave on the Internet while using the company’s computers, should the employer be held responsible for the damages caused? A California Appeal Court recently decided that an employer may be immune from an employee’s misuse of the company’s computers under the Communications Decency Act of 1996 (CDA) - see Delfino v. Agilent Technologies, Inc. (2006).

Mary Day and Michelangelo Delfino brought suit against Agilent (the company) and Cameron Moore, one of Agilent’s former employees. According to the case, while Moore was an employee at the company, he used its computer system to post messages on the Internet, which supported Varian, a former employer of Day and Delfino, with whom they were engaged in a lawsuit. Moore’s postings reportedly started an online battle between Delfino and Day, and Moore, which became very serious and threatening.
The FBI got involved with the case, and the company and the FBI identified Cameron Moore as the initiator of the postings at the company. In the emails attributed to Moore, one using the pseudonym “crack smoking jesus”) read: “I arranged for you to have a visitor. Have they [sic ] been there yet? If not, then they will visit soon. Don't say I didn't warn you. Criminal matters are handled less carefully than civil matters.”

Another email sent by the pseudonym dr_dweezil@yahoo.com said, “It’s coming [expletive], and you won't see it. I seriously hope you have health insurance because you're going to get your ass stomped by me and some friends. The best part will be you won't be able to prove it was me. I already have proof I was somewhere else. You can look forward to all your fingers getting broken, several kicks to the ribs and mouth, break some teeth, and a cracked head. Also, your car will be trashed and your computer destroyed. Maybe set your place on fire so you can be evicted. If your [expletive] is there, she'll take a little ride to the parts of San Jose where they don't speak [E]nglish ... Die, [expletive]. You'll wish you had.”

The company investigated the matter, and then discharged Moore. Day and Delfino sued the company for intentional and negligent infliction of emotional distress because the company had permitted Moore to use their computer for his threatening messages. In its defense the company claimed it was immune from this type of suit under the CDA. It argues that Day & Delfino sought to impose “derivative liability” for Moore’s Internet communications, where the company was only a provider of an interactive computer service.

Section 230(c)(1) of the CDA states “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

Section 230(e)(3) of the law notes, “Nothing in this section shall be construed to prevent any state from enforcing any state law that is consistent with this section. No cause of action may be brought and no liability may be imposed under any state or local law that is inconsistent with this section.”

The CDA was enacted in 1996 with a primary goal of controlling the exposure of minors to indecent material on the Internet. An important purpose of the law was to “…encourage [Internet] service providers to self-regulate the dissemination of offensive materials over their services.” Zeran v. America Online, Inc., 4th Cir. (1997).

The law additionally adds that it is the policy of the United States “…to remove disincentives for the development and utilization of blocking and filtering technologies that empower parents to restrict their children's access to objectionable or inappropriate online material.” For that reason the court concluded that Section 230(c)(2) “immunizes from liability” an interactive computer service provider or user who makes good faith efforts to restrict access to material deemed objectionable. Additionally, the law was designed to avoid a chilling effect on free speech on the Internet.

Zeran is currently the main case that deals with immunity under Section 230 to interactive computer service providers. In that case Zeran claimed that America Online, Inc. (AOL) was too slow in removing messages that were defamatory on an AOL bulletin board, and didn’t screen for other such postings later. AOL was clearly understood to be an information content provider under the CDA.

The court in Zeran concluded that the CDA provided AOL (as an interactive computer service provider) with immunity from the Zeran’s claims. The court determined that the CDA's immunity provisions were the result of Congressional recognition of “…the threat that tort-based lawsuits pose to freedom of speech in the new and burgeoning Internet medium.” And the desire of Congress “to encourage service providers to self-regulate the dissemination of offensive material over their services.” The court held Section 230(c)(1) conferred “broad immunity” that is applicable to all interactive computer service providers, whether or not they were publishers or distributors of the alleged offensive matter authored by the information content provider.

In determining whether Agilent was immune from liability under the Section 230 of the CDA the court utilized a three elements test: (1) the company must be a provider or user of an interactive computer service; (2) the company is claimed to be a publisher or speaker of information; and (3) the objectionable information published was provided by another information content provider.
As to number (1), the court found that Agilent was a provider of an interactive computer service noting that a broad view of that term includes a wide range of cyberspace services, not just Internet service providers. In (2), the court also found Agilent was accused by Day and Delfino of knowingly publishing the information by allowing Moore to send his messages, and in (3), the information was provided by another content provider - Moore. In this case the court ruled against Day and Delfino and considered Agilent immune. All Employers should have written policies regarding Internet use, and maintain the right to monitor employees’ emails and Internet use.

But They Seemed So Good in the Interview!

Herbert M. Greenberg, Ph.D. is the founder, president and CEO of Caliper, an international management consulting firm. A recognized authority on the relationship between personality and job performance, Dr. Greenberg developed the Caliper Profile, a proprietary personality assessment that identifies the potential, motivations and strengths of applicants and employees. Over the past four decades, Caliper has assessed the management, sales and service potential of more than two million individuals for more than 25,000 companies around the world.

How often, after hiring someone who does not work out, have you thought to yourself, “But they seemed so good in the interview?” While interviews can provide valuable input during the hiring process, they often confuse as much as clarify. Part of the problem is the inherent limitation of interviews.

Instead of lending insight, interviews can often become a form of theatre in which all of the actors are tripping over one another, trying to put their best feet forward. The employers are busy attempting to leave a favorable impression of themselves and of their company, while the applicants are trying to mold themselves into whatever they perceive is desired. Meanwhile, it must be kept in mind that any bookstore worth its salt has a shelf full of guides for playing this game to the hilt. And anyone serious about applying for a job has read at least one of these guides.

Getting below the surface
So, job interviews are replete with people trying to leave the best first impression. The result, all too often, is what we call “Interview Stars,” those individuals whose best performance occurs during the interview. These Stars are able to convey a favorable first impression, but it wears thin very quickly. The difficulty that employers encounter is how to delve below the surface to get a clear understanding of an individual's true motivations.

A first step is to conduct a personality assessment, which can provide insights into an individual's strengths, limitations and motivations. For example, a comprehensive, in-depth personality assessment can provide insight to whether someone is assertive, confident and a self-starter. It can also tell you if the individual you’re considering has the relationship-building skills, problem-solving capabilities, and work ethic necessary for success in your organization. As one client puts it, “Personality testing gives me a six-month head start in really knowing who I’m hiring.”

Second, and equally important, is to compile a list of the key attributes that are going to be required for the individual to succeed in the job, and to work effectively with their manager. For instance, for a sales position, persuasiveness, service-orientation, independence, reasoning ability, empathy, and the ability to bounce back from rejection are increasingly important as customers seek quality. Once these attributes are identified, develop some questions that will help you determine the extent to which each applicant possesses these traits and if they can effectively make use of them in the job at hand.

Identifying traits through effective interviewing
When trying to determine if an individual is confident and assertive, ask them to tell you about an individual who can influence them. Ask them to tell you about a time when they had to go against the rules. Ask them what the best suggestion they ever made was. Then listen. As their stories unfold, you will learn much more about them - rather than simply reviewing their resume, as so often is what happens in interviews.

In assessing an individual’s problem solving and decision making abilities, ask, “If you could change a policy at your present company, what would it be?” Ask them what are the easiest kinds of decisions to make? What are the hardest? Then, again, listen.

There are many other questions to pursue to help assess an individual's level of independence, initiative, sales skills, caution, energy, leadership, organizational ability, communication skills, ability to follow directions, and service orientation. These questions can be windows into an individual's personality. Coupled with the findings from a valid personality test, an effective interview can provide you with an accurate read on an individual's motivations - before you bring them on board.

Conclusion
To hire effectively, first and foremost, you need to identify the qualities needed for success in a particular position. Then, through valid personality testing and comprehensive interviewing, you will be able to delve below the surface and get a clear understanding of an individual's strengths, limitations and motivations, and thus, the suitability to your job opening.

(Editor’s Note: Employers Group has partnered with Caliper to provide its assessment services to our members. For more information, contact Katherin Scott at Employers Group, 213.765.3949, or email kscott@employersgroup.com.)

When to Suspect Workplace Violence

By Mark Nelson, J.D., Helpline Consultant

When does an employee’s behavior compel you to consider the possibility of workplace violence? The short answer is: whenever the thought is more than a fleeting one. That declaration may sound like an overstatement and perhaps it is. But the obvious concern is that when you witness behavior that is inappropriate enough to give you or anyone pause, you ignore those incidents at your peril. In other words, trust your instincts when they tell you something is not right.

One very important qualification when calling out any abnormal behavior is, of course, when it signals a potential disability. Keep in mind, however, even disability law takes exception to behavior that presents a direct threat to the health and safety of your employees.

When you’re called on to investigate behavior that an employee found disturbing, investigate the behavior; don’t “armchair” diagnose any imagined underlying conditions. If an employee puts you on notice of a disability that requires accommodation, have the employee clarify any restrictions via a doctor’s note and follow the interactive process afforded individuals under disability law. Thus, even if the behavior leads you to suspect an employee has a mental disability, invite them to draw the connection between the behavior and medical condition, but don’t make the connection for them.
Below are some further considerations to assist you in analyzing when you may have a potential workplace violence matter:

Implement a zero-tolerance policy with clearly defined complaint procedures
It is an absolute necessity for the company to make an unequivocal declaration of its prohibition against violence or threats of violence. Moreover, employees must be held responsible for reporting suspicious behavior, including veiled threats they may overhear. When in doubt, employees should report. Finally, the company must be consistent with how it investigates and doles out discipline for behavior that violates the policy. Implementing a zero-tolerance policy that is seldom or inconsistently enforced does not constitute a zero-tolerance policy at all.

Train your supervisors to know what to look for and how to respond
In most workplace environments, your supervisors are the individuals most likely to witness the conduct or field a complaint from a subordinate who did. Supervisors must know how to respond, including: when and how to report suspicious behavior to HR; when and how to remove the employee during a confrontation; and what not to do under any circumstances (e.g., false imprisonment, defamation, etc.). Ideally, while everyone should receive training, the level afforded your supervisors must be comprehensive.

Make criminal background checks part of the hiring process
Criminal background checks are rapidly becoming the standard in the hiring process. Know the laws for the states for which you operate. Communicate with any third parties you retain to conduct the background checks to insure they provide you only the information they’re allowed to compile or you’re permitted to receive (e.g., in California, no convictions older than seven years). In addition, ensure you exclude from your job application any convictions about which you’re prohibited from inquiring (e.g., in California, minor marijuana convictions older than two years, etc.).

Carefully investigate all allegations of suspect behavior
As with any investigations into alleged inappropriate behavior, careful consideration should be given to: who will conduct the investigation; whether they have the time or expertise to do it; who will serve as the witness; and whether the complaint involves violent behavior or, alternatively, whether the allegations are based on a suspicion of violent tendencies that have yet to materialize.

If you are dealing solely with an employee’s (well-founded) hunch, there may be little you can actually investigate but a lot that concerns you; consult legal counsel, as indicated below. If you think an individual may become combative during questioning, have security measures in place before you call in the individual.

When to involve legal counsel, the authorities or outside specialists
Because investigations based on suspicious behavior alone (i.e., no alleged violent outbursts) can often leave you with more questions than answers, involve your legal counsel or any other specialists in the field, including the authorities. Don’t ignore a well-founded hunch simply because you can’t determine the employee’s behavior was enough of a disruption to warrant a disciplinary response.

If the actions made someone uncomfortable enough to complain, they warrant your time. That said, intervening without sufficient grounds can lead to significant problems (e.g., defamation, “regarded as disabled” claims, etc.). Your legal counsel, in concert with a workplace violence specialist, can tell what can and should be done.

(Editor’s Note: Employers Group offers an online training course on How to Recognize and Prevent Workplace Violence, as well as a public training workshop on “Workplace Security.” For more information about these courses, email training@employersgroup.com.)

Are your Employees Looking for a New Job this Year?

By Jennifer Shin, Research Marketing & Communications Coordinator

Any intelligent employer knows that as the heart and soul of a business, good em-ployees are essential. Consequently, hiring and retaining good employees is a challenge that all employers face. However, as many businesses are looking to become more competitive by expanding their operations in 2007, retaining and recruiting good employees has, for many employers, moved from difficult to nearly hopeless.

Some signs your workers are ready to jump ship
According to a recently released survey from Careerjournal.com, 75 percent of U.S. workers said they were resolved to leave their current job for a better one in 2007. The study, taken from 462 employees and 367 HR professionals, also shows that 12 percent of workers voluntarily resigned this year. And further, according to the 2006 U.S. Job Retention Poll, managers are more likely to stick around than the people they’re managing.

So what are some signs that your employees might be ready to leave? Here are some key signs your employees are looking for a new job:

• They start dressing better
• Lunch and break-times are taken at different times
• They’re less productive
• They seem "quiet" or "down"
• They request vacation time one day at a time
• They are "sick" more often
• They stop championing their positions
• They stop volunteering
• They get more incoming phone calls than usual

Benefits and work/life balance play a huge part in retention and recruitment
Fifty-three percent of workers surveyed said they are seeking better compensation and benefits, while another 27 percent said that better career opportunities are beckoning them. Just 4 percent reported that they wish for a promotion, dislike their commute or dislike their boss.

Consequently, with numbers showing that a majority of employees are dissatisfied with their benefits package, there’s little surprise that employers are reassessing their benefits and compensation packages, as well as increasing their recruitment efforts for 2007. According to Employers Group’s 2007 Human Resources Practices and Benefits Survey (HRPBS) providing career-development opportunities and well-being benefits are among the best employee retention strategies.

For example, 35.6 percent of employers claim that in 2007 they will offer flex time compared to the 32.7 reported in 2005, while employee education assistance programs also continue to become more popular among employers, rising from to 64.8 percent for production, service and maintenance employees from 64.1 percent in 2005.

Some questions are too costly not to ask
In many firms, employee benefit offerings vary little from year to year. HR professionals often tailor their employees’ benefits package based on the market trends, and unfortunately a common side effect is the mindset that what worked fine five or 10 years ago suits us well now too. Benefits play a critical role in the lives of employees and their families by assisting in health needs, future financial security, needed absences from work, and more. A quick and easy way to assess your benefits is to simply attach a benefits section to your existing annual employee satisfaction survey. An employee benefit survey will assist you in creating and comparing annual survey reports on employer practices (time off, bonuses, flexible schedules, group life insurance, etc.), but also help you determine what is ultimately the missing link in your benefits package.

About Employers Group surveys
As an employer, we know determining competitive and attractive benefit packages can be a daunting task. In addition to next year’s low unemployment levels, shortage of skilled workers, and labor market pressures, retaining and recruiting employees will be more difficult than ever. The 2007 Human Resources Practices & Benefits Survey can help!

Topics include:

• Education Reimbursement
• Relocation Policies
• Child Care
• Recruitment Practices
• Wage & Shift Differentials
• Overtime Compensation
• Leave of Absence
• Bereavement Pay
• Jury Duty
• Witness Pay
• Sick Leave/Disability
• Bonus Awards - Attendance, Referral, Length of Service etc.
• Alternative Work Week Schedules

For more survey information or benefits questions, please call us at 213.765.3935 or email: surveys@employersgroup.com.