Credit Cards & Nursing Mothers – What Do They Have In Common?

The answer to the question posed above is that both are the subject of little known federal regulations that could create big problems for business owners who run afoul of them.  The more recent regulation concerns credit cards.  As of January 1, 2013, any business that accepts credit cards for the payment of bills must make sure that the legal name and tax ID number that it supplied to its credit card processor exactly matches the legal name and tax ID number for the business that is on file with the IRS.  If a business has given its trade name or an incomplete version of its full legal name to a credit card processing company, all credit card transactions with that company are subject to a 28 percent withholding tax until the inconsistency is corrected.  This penalty should give all business owners a powerful incentive to make sure the information they have provided to their credit card processor exactly matches the information on file with the IRS.  

Nursing mothers were the subject of an obscure provision of the Patient Protection and Affordable Care Act, otherwise known as Obamacare.  That provision amended the Fair Labor Standards Act (“FLSA”) to require employers of nursing mothers who are subject to the overtime pay requirements of FLSA (known as nonexempt employees) to give such mothers “reasonable break time . . . to express breast milk for her nursing child for 1 year after the child’s birth.”  Such break time must be given whenever the “employee has need to express the milk.”  Employers are also required to provide “a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.”

Fortunately, employers with less than 50 employees are not required to comply with the above rule if to do so “would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.”  Of course, what constitutes “undue hardship” can be very much in the eye of the beholder.  To date, the U.S. Department of Labor has not issued any guidelines for making this determination.  So to be safe, all employers should do their best to comply with this new rule, if and when a nursing mother nonexempt employee requests time at work to express breast milk. (Click here for more information about this new rule).  


How Safe is Your Agency’s Data?

The subject of internet hacking has become a hot topic again, with the recent revelations about the activities of the Chinese military.  Although you may not have to worry about being targeted by the Chinese military, there are plenty of other people operating on the internet who you should be worried about.  The cover story for this month’s issue of IA Magazine focuses on what insurance agencies are doing to protect their data.  It contains many helpful suggestions, from the basic – install firewalls on each computer and the server – to the more complex – store all your data in the cloud on protected servers.  (Click here for the complete article.)

One of the first and most important steps an agency can take is to develop a policy for how its employees are to use e-mail and the internet for work purposes and then educate them on how to safely use those tools.  The policy should address whether e-mail and the internet can be used for non-business purposes while the employee is at work and if so, when and to what extent.  Another subject that should be covered is how employees are to use social media while at work, i.e., what type of information can be posted, by whom, and when.  How portable electronic devices (e.g., smart phones, iPads) are to be used and what data can be kept on them should be addressed, as well. 

Addressing the security of your agency’s and its customers’ data can appear to be an overwhelming task.  Fortunately, the Agents Council on Technology has developed a model data security plan for agencies and other materials that address what agencies can do to better protect their computer systems and the data on them. Click here to go to ACT’s data security webpage on which you will find many resources to help you with this important task.

Checklists – How They Can Help You

This blog was suggested  by a call I received on the Free Legal Service program that I operate for the Big I.  The caller was concerned that he may have exposure for an E&O claim  because he had not asked his customer whether it wanted D&O insurance coverage in addition to professional malpractice coverage.  There  had been a claim that was not covered by the malpractice policy, but may have been covered by a D&O policy.  The caller had not asked the customer if it wanted such a policy because the agent who had previously handled the account had been told it was not wanted.  That had been three years ago and the previous agent had not documented this fact.

Even if the customer’s previous rejection of the D&O coverage had been documented, three years had passed and the customer’s situation may well have changed in a way that made such coverage a good idea.  If the caller had created a checklist of the coverages that his customer may need to use at renewal and then documented the customer’s response to each coverage, he would not now have to worry about an E&O claim.  The use of checklists for this purpose is not limited to commercial lines customers.  The same type of situation could occur with a homeowner’s or automobile policy.   There are many different types of coverages that can be included in such policies.

A side benefit of creating such a checklist for each customer is the potential to sell the customer additional insurance coverages at renewal and if you include it on the checklist, to cross sell personal lines coverages to your commercial lines customers and vice versa.

The New Workers Compensation Form: How Can It Be Notarized?

A recent call on the Free Legal Services Program that I operate for members of the Big I posed an interesting question.  What are the obligations of a notary public when asked to notarize the new Form WC-10 that became effective on January 1, 2013?  As many of my readers are probably aware, that form is used for the election or rejection of workers compensation coverage by officers of corporations, members of limited liability companies, sole proprietors, and partners of partnerships.  As of January 1, 2013, the execution of that form must be notarized.

My caller, who was also a notary, had been presented with a telefax copy of a signed form WC-10 by one of his customers and had been asked to notarize that document.  My gut reaction to whether that could be legally done was no, if for no other reason than the signature he was being asked to notarize was not an original one.  However, if the signature had been an original one would that have made a difference?  My research revealed that the Georgia code section on notary publics provides that a notary “shall confirm the identity of the document signer, oath taker, or affirmant based on personal knowledge or on satisfactory evidence.”  I also came across a Georgia Supreme Court decision that seemed to indicate that the person signing the document in question must appear in person before the notary.

My caller pointed out the practical difficulty of requiring every customer who signs the new form WC-10 to appear in person before him before he could notarize the form.  Requiring the customer to have the form notarized before returning it to him also had its practical difficulties.  But it appears to me that, to be safe, one of these two things should be done.  For those agents who are also notary publics or have one in your offices, the violation of the notary public law is a misdemeanor, which can be punished by up to a year in jail and/or a fine of up to $1,000.00.  It is also questionable whether the form WC-10 would be considered valid if it is not properly notarized, so the customer may also have the basis for an E&O claim.

I would like to hear from you about your experiences with the new form WC-10.  What are your customers asking you to do and how are you responding to their requests?  Post a comment and lets have a discussion.