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How to Treat Your Interns Right

May 23rd, 2012 :: Rieva Lesonsky

By Rieva Lesonsky

The end of the school year is here, and that means it’s time for many small businesses to turn to a valuable labor source: interns. Hiring college students to work in your business, learning the ropes, is a rite of passage for students and small business owners alike, and can give you access to the energy, enthusiasm and tech skills of young people who can contribute a lot to your business.

But a growing number of companies, emboldened by the recession, are taking more than they’re giving from their interns. The New York Times recently reported on the growing practice of companies offering unpaid internships, having interns work 12 hours or more and using them solely for “grunt work” like fetching lunch and filing.

These aren’t just college students, either. The Times reports a growing number of college graduates are clamoring for internships in a tough labor market where the jobless rate for college grads age 24 and under is now 9.4 percent.

Are you exploiting your interns? Yes, entry-level work has always involved some degree of fetching and carrying, but if your internships aren’t offering anything of value, you could be running afoul of the law.

The major area to consider is whether your internships are paid or unpaid. State labor laws regulate this, so you first need to determine whether your state requires paying interns. If your state does allow unpaid internships, you also need to comply with federal Labor Department regulations.

In general, this means that:

Unpaid interns must gain some type of vocational education from the internship.
The internship is for the benefit of the interns.
Interns can’t be used as substitutes for regular employees; instead, they have to be supervised by employees.
The employer cannot derive immediate benefit from the intern’s work.

An unpaid internship may seem like a lot of trouble for you in the beginning, but if you handle it right, you can end up training someone who could become a valuable employee in the future. Stay on the right side of the law, and your company will be a desirable place for interns. Run afoul of the law, and you could ruin more than your business’s reputation.

Image by Flickr user Jessica Mullens (Creative Commons)

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Tags: business law, Compliance, small business, Workforce
Posted in Business Law, Compliance, Small Business, small business, Workforce | No Comments »

How Businesses Will Handle Rising Health Insurance Costs

April 18th, 2012 :: Rieva Lesonsky

By Rieva Lesonsky

It remains to be seen whether all or part of President Obama’s Patient Portability and Affordable Care Act (PPACA) will be struck down by the Supreme Court, and how any changes to the law would affect small business owners. But as we wait to hear the Court’s ruling, one thing is certain: The cost of providing health insurance is going up. Unless you’ve got money to burn, this is a concern. How can your small business contain the rising costs?

Towers Watson/National Business Group’s annual survey of how large businesses about how they are handling the rising cost of health insurance offers some insights that can help small companies, too. Here’s what you can expect for 2012 and beyond:

There’s good news and bad news. Health care costs are increasing, but at least the rate of increase is fairly stable—5.9 percent in 2012 as opposed to 5.4 percent last year. The average cost per employee of providing health insurance will reach $11,664 in 2012, up from $10,982 last year.

Both employees and employers are sharing the burden of these cost increases. Employees’ share of costs have increased 40 percent compared to five years ago, while employers’ share of costs has increased by 34 percent.

What are employers doing to keep costs from spiraling out of control? In general, big businesses in the survey were planning some big changes to their health care benefits in the coming years. The key trends:

40 percent are focusing on developing a company culture where employees are accountable for their own health.
40 percent are focusing on reviewing their overall benefits mix.

Making Employees Responsible: Companies that encourage employees to take accountability not only for their health but also for the cost of the health care services they use have had a much lower increase in their average health-care cost—just 2.2 percent over the past four years. These companies are providing employees with more information about the costs of different choices, restricting access to narrower networks of providers, and providing incentives to promote healthy lifestyles.

More than two-thirds of respondents in the survey already offer incentives, but in the future, companies say they are more likely to add penalties for unhealthy behavior. (Twenty percent of respondents already use penalties.)

Reviewing Benefits Mix: With the future of the PPACA still uncertain, 34 percent of companies are closely monitoring the outcome of the court’s decision and focusing on compliance. The current options for employers under the PPACA include discontinuing health insurance for employees, offering insurance to only part of your staff, or giving employees a defined contribution they can use to purchase insurance from state Exchanges.

The survey found just 3 percent of employers are somewhat to very likely to discontinue health care plans for active employees in 2014 or 2015 without providing a financial subsidy. But 45 percent of employers are somewhat to very likely to offer coverage to only a portion of their workforce and direct the others to buy insurance through Exchanges.

Other tactics businesses will use to cut costs include increasing employee contributions for dependent or spousal coverage, and adding Account-Based Health Plans (ABHPs) that enable employees to put aside money for health care costs. Fifty-nine percent of companies currently offer an ABHP today, and 11 percent plan to do so next year.

What tactics will you use to keep costs of health coverage low?

Image by Flickr user Images of Money (Creative Commons)

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Tags: business law, health insurance, small business, Workforce
Posted in Accounting and Taxes, Business Law, Compliance, Small Business, small business, Workforce | No Comments »

Small Biz Resource Tip: Docracy

March 27th, 2012 :: Maria Valdez Haubrich

Docracy

Crowdsourcing has a new offspring in the form of Docracy, an online legal document stockroom populated by the site’s community. Hoping to help you save on costly legal fees, Docracy currently has more than 100 document templates to choose from, including employee agreements, sales contracts and nondisclosure forms. Docracy also bundles important documents for freelancers and startups, in case there are documents you don’t even know you need. Crowdsourcing means the community shares and updates the documents, which are available for free download in either PDF or Word format. If you like the form as is, you can fill it in and save it online.

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Tags: business law, Compliance, small business resources
Posted in Business Law, Compliance, Resources, Small Business, small business | No Comments »

The New Risk to Your Business From Employees’ Social Media Use

December 28th, 2011 :: Rieva Lesonsky

By Rieva Lesonsky

I know you’ve heard about the risks to your business’s reputation from employees using social media irresponsibly. Whether it’s an employee who gives a flippant response on your company’s Facebook page, accidentally reveals future business strategies or posts criticism of your company on his or her own personal accounts, there are many ways social media can go haywire. But now there’s a new worry: Employees who run social media accounts for your business could quit your company—and take their “followers” with them when they enter competitive businesses.

CFO.com recently reported on a California case in which an employee who managed a company Twitter account left the company and took the account—and its 17,000 followers—with him. (He just switched the account into his own name.) The company valued the followers at $42,000 and sued the ex-employee for stealing company property and causing “damages to its business, reputation and goodwill, including lost users and user opportunities.”

A federal court denied the employee’s motion to dismiss the suit, which is moving forward. However, the company has some hurdles to jump to prove its case. First, they’ll have to prove they owned the account and went through the proper measures to protect it, such as keeping the password confidential. They’ll also have to prove the monetary value of the account.

With social media being such an informal mode of marketing, it’s easy to see how this type of situation could arise. You have an employee start a Facebook or Twitter account, he or she gets good at it and catches on—and you never put anything in writing as to your ownership of the account or restrictions on it. CFO.com notes that social media can now be considered part of a company’s “goodwill” and, as such, needs to be valued and protected like any other form of goodwill.

CFO.com suggests three steps to protect your business from such a situation:

Review all the social media accounts your company uses and which employees manage them.
Update your written social media policies (you do have them, right?) to reflect your ownership of the accounts and set parameters.
Finally, regularly monitor and measure the ROI on your social media accounts to that, if worse comes to worst, you’ll be able to put a monetary value on the accounts.

Your own attorney can give you specific advice on protecting your accounts. As social media becomes an ever more important part of a small business’s marketing mix, cases like these will only grow in number. Take the right steps to make sure you never find yourself in the middle of one.

Image by Flickr user David Drexler (Creative Commons)

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Tags: business law, small business, social media, Workforce
Posted in Business Law, Compliance, Marketing, Small Business, small business, Social Media, social media, Technology, Workforce | 1 Comment »

New Connecticut Law Requires Paid Sick Leave. Will the Trend Spread?

June 27th, 2011 :: Rieva Lesonsky

By Rieva Lesonsky

Do you have service employees, such as waiters, food service workers or hairdressers, who come in contact with the public? Then you need to know about a major change that will affect you (if you’re in Connecticut) and may affect you in the future if your state follows suit.

After passionate debate, Connecticut is becoming the first state in the nation to require businesses to provide paid sick leave to workers, reports The Wall Street Journal. Legislators debated for 11 hours before passing the bill, which will take effect at the beginning of 2012 after being signed into law.

The bill does not affect all small businesses—only those in the service sector and with more than 50 employees. Only hourly workers are covered, and they only receive one hour of paid sick leave for each 40 hours worked, with a maximum of 5 days per year. Employees are also required to have worked at least 10 hours per week during the previous quarter in order to receive the paid sick leave. In addition, manufacturers, nonprofit organizations are exempt, along with salaried employees, independent contractors, temporary employees and day laborers. Nonetheless, estimates are that some 200,000 to 400,000 workers in the state will be affected by the legislation.

Although Connecticut is the first state to pass such a law, San Francisco, Washington, DC, and Milwaukee have passed mandatory paid sick-leave legislation in the past few years, and similar legislation is pending in California, Massachusetts, Philadelphia and Denver. Will the concept of paid sick leave spread beyond these cities and states?

According to statistics cited by the National Partnership for Women and Families, a backer of the new law, approximately 40 million U.S. workers have no paid sick leave. Among low-wage workers, more than 80 percent do not have paid sick leave.

Many business organizations opposed the legislation, saying it would place an unfair burden on employers. But consider what happens when sick employees are forced to come to work or lose pay. (In some cases, they may even fear losing their jobs). First, it goes without saying they’re likely to infect co-workers (and you), hurting productivity overall.

More importantly, workers who come in contact with customers (as these service workers do) could spread infection, leading to bad publicity for your business. In the worst-case scenario, they could even lead to a lawsuit. For many businesses, protecting yourself against that possibility would be worth the cost of paid sick leave.

Image by Flickr user Jade Jackson (Creative Commons)

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Tags: business law, employment law, small business, Workforce
Posted in Business Law, Compliance, Small Business, small business, Workforce | 1 Comment »