August 2012 Newsletter

Does Your Business Need Financing

Whether you are an existing business that has weathered the recent recession, or a new startup business getting started in a tough environment, you may need a business loan or other infusion of cash to operate your business.  In the past, that meant a trip to a large commercial bank, an appointment with a banker, and the negotiation of a loan agreement that was (hopefully) satisfactory to both parties.

Today, securing a commercial loan with a large bank still can be difficult and cumbersome.  The loan process has difficult hurdles for businesses to navigate and strict standards for lending which can be time consuming.  Not surprising, according to the FDIC Data compiled by Kassar of Multifunding, “the collective bank loan balances of small businesses have fallen more than 10 percent over the past four years to $610 billion in June of 2011 from $681 billion in June of 2007.”

While large banks sharply cut lending to small businesses, community banks are actually providing more loans.  Since 2007, small-business loan volume at smaller banks grew by $17 billion as of June 2011.

“The disparity is not going away any time soon,” Kassar says.  At a smaller bank, loan officers work on site with the business owners to help clarity any questionable parts of an application.  Bigger banks have a more “rigid” process and generally work only with the most credit-worthy borrowers. (Posted by Catherine Clifford, January 3, 2012, Entrepreneur, “Top Sources of Small-Business Financing in 2012.”)

Do not despair; there are some financing options that are worth exploring to help secure your financing needs.

  1.  Credit Unions – Besides the local community bank, Credit Unions can be a great source for your funding needs.  Credit Unions function much like banks, but they are member-owned.  A survey conducted by Pepperdine University’s Graziadio School of Business and Management, and in partnership with Dunn & Bradstreet Credibility Corp., in June 2012, surveyed 6,000 business owners from across the nation, with company annual revenues between $5 million to $100 million.  They found that 68% of those business owners seeking financing in the next six months said they would go after a bank loan, 40% said they will use a business credit card and 36% will look at a credit union or community bank.
  2. SBA (Small Business Administration) – SBA has had substantial growth in business lending.  Lending in 2011, increased by 35% over 2010.
  3. Asset-Backed Lending – Borrowing money against receivables, purchase orders and equipment financing are forms of asset-backed lending.
  4. PAYgrow – PAYgrow allows borrowers to float payroll obligations for up to 60 days for a simple finance fee up to a predetermined credit limit.
  5. Venture Capital Firms – These lending firms also have decreased lending during the economic downturn.
  6. Angel Investors – Angel Investors are typically high net worth individuals who help fund start-up companies for a percentage of the company.  Angel investors are looking for the next new great product or new technology.
  7. Community Development Financial Institution Fund – The U.S. Department of Treasury has the CDFI Fund (Community Development Financial Institution Fund), which was created for the purpose of promoting economic revitalization and community development through investment in and assistance to community development financial institutions (CDFIs). The CDFI Fund was established by the Riegle Community Development and Regulatory Improvement Act of 1994.  Since its creation, the CDFI Fund has awarded over $1.4 billion to community development organizations and financial institutions.
  8. Crowdfunding – This is a new source of business financing and the Jobs Act recently passed by Congress in April 2012, has made equity-based crowdfunding legal in the U.S.  Crowdfunding is a collective of people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations.  This is still in the infancy stage, but has gained a lot of traction.  There are numerous Websites online.

Managing the Family and Medical Leave Act (FMLA)

All Four Point HR PEO clients have a great benefit for eligible employees.  (Eligible employees will have worked at least 12 months for the client company, and at least 1250 hours in the last 12 months.)

Assuming an employee meets these criteria, they may request up to 12 weeks of FMLA leave for:

  • Their own serious health condition, or to care for a family member with a serious health condition
  • The birth or adoption of a child, or foster child, and bonding time with the child, and
  • Care of a military service member, or to assist a covered, active military member who is the employee’s spouse, son, daughter or parent.

If an employee is faced with any of the above situations in their personal lives, their job is protected under the Family and Medical Leave Act.   This means that as long as employees do not exhaust their 12 weeks of FMLA, they must be returned to the same job or one similar to it.  This benefit is intended to lessen the stress that an employee may otherwise feel, if forced to choose between work and family.

It’s important to remember that time off cannot be held against an employee in any employment actions that include:  hiring, potential promotions, or any kind of Corrective Action.  Additionally, employers should know employees might take FMLA leave as either a single block of time or in multiple, smaller blocks of time – if medically necessary.

It is important to note that FMLA leave is UNPAID LEAVE, however, if an employee has sick, vacation or general PTO time available, employees may use this time to continue to be paid.  Additionally, employers must maintain health insurance during the leave of absence, with employees making the same payments they would normally make for those benefits.

An employee requesting FMLA leave must follow the parameters below:

  • An employee must give the employer notice time as soon as it is reasonably possible for the employee to do so. The employee should give this notice at least 30 days in advance if the leave is foreseeable.
  • An employee does not have to provide a diagnosis to the employer, but does need to provide enough information to show that the requested leave of absence is due to an FMLA protected condition.
    • There are very specific communication guidelines that both the employee and employer must follow during this process:  Employers must notify employees within 5 business days of the first leave request whether or not the employee is eligible for FMLA leave.
    • When an employer gives an employee eligibility notification they must also give notice of rights and responsibilities to the employee.

These first two requirements are accomplished by completing FMLA Form WH-381 (Notice of Eligibility and Rights and Responsibilities)

    • In most cases, an employee must provide a completed medical certification form to the employer with in 15 calendar days showing their serious health condition.

This requirement is most easily fulfilled by completing FMLA From WH-380-E.  (Certification of Health Care provider for Employee’s Serious Health Condition)

    • Finally, the employer must provide FMLA approval with in 5 business days (after the receipt of WH 380-E.)  At this point the employee’s leave is protected, and when the employee returns the employer MUST return the employee to the same or nearly identical job.

The approval Form WH – 382 allows the employer to approve or not approve the FMLA leave, and states any additional parameters associated with the leave.

  • A Medical Certification Form is required only if the employer requires it.  If the form is required, then the following information must be provided:
    • Contact Information for the Health Care Provider
    • When the serious health condition began
    • How long the condition is expected to last
    • Appropriate medical fats about the condition
    • Whether you are unable to work /or your family member is in need of care and
    • Whether you need a continuous leave or intermittent leave.

If any of the above information is missing an employee has 7 calendar days to complete the form and return it to the employer.

  • Assuming all facts and information are provided appropriately, and the FMLA leave is approved, there are many parameters that the employer would be expected to follow when the employee returns.  The employee must be placed in the same or a nearly identical job that:
    • Has the same or substantially the same job responsibilities and status
    • Includes the same general level of skill, effort and authority as the previous job
    • Offers identical pay, overtime/or bonuses and benefits, and
    • Ensures the same general work schedule and location.

If for any reason, an employee exhausts their FMLA leave entitlement of 12 weeks, the employer is NOT required to restore the employee to the same or a similar position.

There are a number of specific circumstances that have been clarified by the Department of Labor, and many additional forms for each possible use of FMLA.

Four Point HR will process all of these forms for our clients and will guide employers though any difficult questions or challenges. So, clients may offer this incredible benefit to employees and Four Point HR will take on most of the paperwork associated with FMLA.

We are happy to assist at any time.  Please call 404-419-0230 with any questions you may have, or to inform us that you have an employee who wishes to take FMLA leave.  Due to the short time frames surrounding FMLA paperwork, please contact Four Point HR as soon as you receive the request for FMLA leave.

OSHA’s Campaign to Prevent Heat Illness in Outdoor Workers

On June 20, 2012 OSHA rolled out a new campaign to prevent heat illness in outdoor workers. OSHA’s nationwide outreach campaign is designed to raise awareness among workers and employers about the hazards of working outdoors in hot weather. Every year, thousands of employees become ill from exposure to heat and several die from it.

OSHA is also teaming up with the National Oceanic and Atmospheric Administration (NOAA) on weather service alerts that can be accessed through their website. The service alerts application can be downloaded, so your staff will receive the alerts while they are working. NOAA heat watch website page includes worker safety precautions when extreme heat alerts are issued.  Illness from heat exposures is preventable by understanding who is affected, what heat illness is, and how heat illness can be prevented.

Who is affected?

Workers exposed to hot and humid conditions are at risk of heat illness, especially those doing heavy work tasks or using bulky protective clothing and equipment. Some workers might be at greater risk than others if they have not built up a tolerance to hot conditions. This would include worker that work inside of buildings that do not have a cooling system.

What is heat illness?

The body normally cools itself by sweating. During hot weather, especially with high humidity, sweating isn’t enough. Body temperature can rise to dangerous levels if precautions are not taken. Heat illnesses range from heat rash and heat cramps to heat exhaustion and heat stroke. Heat stroke can result in death and requires immediate medical attention.

How can heat illness be prevented?

To prevent heat related illnesses you will need to remember three simple words water, rest and shade. Drinking water often, taking breaks, and limiting time in the heat can help prevent heat illness. Employers should include these prevention steps in worksite training and plans. Gradually build up to heavy work in hot conditions. This helps you build tolerance to the heat – or become acclimated. Employers should take steps that help workers become acclimated, especially workers who are new to working outdoors in the heat or have been away from work for a week or more. Gradually increase workloads and allow more frequent breaks during the first week of work. Also, it’s important to know and look out for the symptoms of heat illness in yourself and others during hot weather.

OSHA’s educational resources page on preventing heat illness in outdoor works, gives workers and employers information about heat illnesses and how to prevent them. There are also training tools for employers to use and posters to display at their worksites. Many of the new resources target vulnerable workers with limited English proficiency.

Source: OSHA at www.osha.gov

Does Your Company Need a General Business Counsel?

As your company grows, you will likely encounter a variety of legal matters that require the assistance of an attorney.  If employing an in-house counsel is not a feasible option, engaging a general business counsel can be a cost-effective, high quality alternative for handling a wide range of legal issues.  By taking the time to become familiar with your business, its culture, and its management, a general business counsel can help your company develop strategies tailored to its particular legal needs.  In addition, a general business counsel can help you anticipate potential sources of liability and legal conflict and can help you, in turn, to minimize each.

Developing preemptive legal strategies with your general business counsel is not solely a way to avoid legal pitfalls, but it is also an excellent way to help you grow your business and increase its revenues and long-term viability.  There are several ways that a general business counsel can help protect and grow your business, including:

  • Helping you choose and form the proper legal entity for your business;
  • Maintaining and updating your company’s corporate records and organizational documents;
  • Advising officers, Board members and shareholders with respect to corporate governance and compliance issues;
  • Advising your company on various special matters, including litigation and employee/contractor classification matters;
  • Performing due diligence on, and documenting proposed investments, the purchase and sale of businesses, and other complex transactions;
  • Providing general advice related to litigation avoidance and profit maximization; and
  • Negotiating contracts to achieve favorable terms and limit liabilities.

Having enforceable and carefully drafted contracts will help your company end legal conflicts quickly, inexpensively, and favorably and will also help deter frivolous lawsuits and other legal actions against your company.  In addition, adding a general business counsel’s experience to your company’s team of advisors can not only help your business thrive, but will also provide its key players with a certain peace of mind and a sense of confidence that they are operating within a protected and well thought-out legal framework.

A general business counsel should be flexible in its approach to billing.  Companies need to be able to predictably budget for attorney’s fees and a general business counsel can work with you to devise a billing method that fits your company’s legal needs and that won’t surprise you with excessive or unexpected charges.  A general business counsel is normally amenable to a retainer (monthly) fee or flat fee billing for most projects.

The foregoing are just some of the ways that a general business counsel can help your company grow and be better protected. If you would like to learn more about how a general business counsel can be of assistance to your company, please contact Zachary M. Eastman, Esq., whose offices are located in Midtown, Atlanta, at (404) 876-8900 or via e-mail at eastman@zmelaw.com.

What to Expect When You Are Interviewing

More employers are looking for new staff members due to turnover in the workplace and some bright spots in the economy.  Employee tenure is not what it once was and staff turns over due to job dissatisfaction, better opportunities, higher pay, move to another city, etc.

If you are replacing or adding staff, are you prepared, as the employer, for the questions you might receive from prospective employees?  If you find a great candidate who can start immediately, are you prepared to explain how your company offers benefits that other companies lack, continues to grow each year, has advancement opportunities, etc.?  Do you know exactly what kind of talent you are looking for and can deduce from the answers in the interview if that particular interviewee would be right for the position?  In today’s economy, high employment rates can add stress to the hiring process as one position might bring in a high number of potential candidates.  Below are some questions to expect when interviewing:

  1. Where do you see the company in five years?  Is your company growing and at what rate?  Employees want to join an organization with stability and be assured the company will be around for a long time.  Is the company planning on opening a new location, hiring new staff, increasing benefits currently offered, etc.?
  2. Does this position offer growth within the company?   Employees need to know that they are moving into a position that will grow, expand and offer advancement. Does the company offer training or encourage employees to take classes to increase their knowledge in areas they might be lacking?  Can they move up from their position to management?  How open is the company to change?
  3. What are the most important benefits of the company?  Does your company offer flex time, 401(k) with an employer match, insurance, paid time off, paid parking, a gym, etc?  Is there an open-door policy for employees?  Does the company participate in outside activities to help others in the community?  Is the environment warm and friendly?  Be prepared to share all the positive aspects, as these are big sellers for potential employees.
  4. What skills are you looking for in this position?  Be completely honest with this question and list all skills pertinent to the job.  It is important you find someone who can easily fill the position; not someone who requires a lot of training if the changeover is happening within a short period of time.  For the most part, employees want to step into a job comfortably and feel secure in their talent to handle that particular job.
  5. How will I be evaluated?  Let the potential candidate know how often their job performance will be assessed by management and what to expect.  Give the timeframe so they know deadlines and can prepare. Is high job performance rewarded?

These are just a few of the questions that might come up in the interview process but gives you an idea of what to anticipate and the importance of preparation for both the candidate and the interviewer. The way the candidates react to these questions can tell you a lot so listen carefully to their answers.  Really discuss these items when they come up and find out exactly what the interviewee is looking for and if they would be a good fit.  The goal is to find long-term employees who will complement the company and be a true asset.

The Supreme Court Has Spoken

As we learned recently, the Supreme Court upheld the individual mandate, relieving insurance companies of what would have been a heavy burden under the 2010 health care reform law, the Affordable Care Act (ACA).

Insurers have insisted on the mandate in exchange for the universal coverage regardless of pre-existing conditions.  Without requiring everyone to buy coverage or pay penalty, the young and healthy would be more likely to drop out of the risk pool, leaving the oldest and sickest that carriers had to cover.

The mandate starts in 2014, requiring everyone to have “minimum essential coverage” or face a penalty that phases in between 2014 and 2016.  It’s been noted several groups are exempted, mostly for religious, cultural or economic reasons.

The individual mandate has been the center of attention, mainly in the run-up to the presidential election, even though the mandate was initially a conservative concept.  It had been extremely unpopular, with polls showing a majority of Americans opposing the mandate even though they tend to like some aspects of the ACA.

Apparently the majority of justices decided to consider the penalty a tax, which allowed Chief Justice John Roberts to join with the liberal justices to uphold the federal government’s right to tax, according to media reports.

The tax debate was something of a western gunfight because the Obama administration and the ACA crafters stayed away from calling the penalty a tax.  The structure was patterned largely on the Massachusetts law, which is the only state with a mandate and penalty.

Without the mandate and penalty, the insurance risk pool would have become less unpredictable and premiums would have risen steeply, according to advocates of the mandate.  But on the flipside, other argued that a minimum of people would stay out of the pool, about 10% of the population, according to the more cool-headed estimates.

Key players have been proceeding with the ACA even as the Supreme Court was deciding a group of cases.  State regulators, for example, have been trying to figure out how health insurance exchanges will work, with National Association of Insurance Commissioners (NAIC) subgroups meeting even this week to work out details.

Four Point Agency will continue to update our clients on the ACA.

Four Point HR in the Community

Four Point HR is active in the communities we serve. We sponsor a baseball team of 11-12 year olds in Pensacola who play at NEP Ballpark for the USSSA Baseball League. Go Phillies!