Worcester Business Journal

18 Worcester Business Journal | April 2, 2018 | wbjournal.com Step 3: Execute The most important part of this pro- cess is taking the correct action steps. First, look at how you are handling loss issues. If you find you're having frequent issues, how can you mitigate those losses? If you find large losses are to blame, could they have been avoid- ed? Is there a large loss reserve unpaid? If there are large reserves, be sure someone on your team is following up on the claim at least once a month. A reserve has the same impact as a loss until it is reduced. Align yourself with an occupational clinic for treating injured employees, which can reduce a medical bill by 30 percent on average compared to emergency room visits. Implement a back-to-work program. That way you'll continue to pay them and require they do tasks that are man- ageable for them and are not impeded by their injury. If you have split job functions with- in your company, speak to your insur- er about classification options to make sure that these employees are properly classified. Be prepared to handle any audit issue. Prep yourself, your team, and your company for an audit so that you receive all credits on payroll available to you. By putting proper planning in place, you will be able to control your work- ers' compensation costs, before they control you. W hen your workers' compensation costs skyrocket, it can be both stressful and worrisome, but there are ways to control of the situation. Step 1: Discovery Losses are a very common reason. Examine the frequency versus the severity of your reported losses. Do you have frequent losses on a minor scale? Do you have one or two major losses? Both can impact your premium. Hiring new employees automatically raises your payroll, which is what work- ers' compensation insurance premiums are based upon. Determine if all of your employees are properly classified, as misclassification can cost big money. It's also possible an audit caused a large premium jump. Before the audi- tor arrives for the next audit, make sure you designate a primary contact person for him or her, someone famil- iar with the work done by all depart- ments and all employees, as well as all payroll records. Have all documents available, includ- ing tax forms 941 and 944, and your federal tax return (quarterly and annu- al), payments for contractor services, W-2 and 1099s, payroll records and the company's experience rating worksheet. 10 T H I NG S I know about . . . . . . The new federal tax law By David McLaren McLaren is the managing partner for Shrewsbury tax and forensic accounting firm McLaren & Associates CPAs, P.C. K N O W H O W Are your workers' compensation costs on the rise? W e've all heard about the dis- crepancy between women's work pay in comparison with men's. The Institute for Women's Policy Research in Washington, D.C., said in 2016, female full-time, year-round workers made 80.5 cents for every dol- lar earned by men – a gender wage gap of 20 percent. How can companies management address this inequality? Offer adequate management train- ing. Too often, managers are advancing due to their performance as an individ- ual producer, though the roles have completely different skill sets, says Suzanne Lucas at TheBalance.com. "Most bad managers aren't bad people; they are just poorly trained," writes Lucas. Get every manager trained and hold regular refresher courses … Great companies attract great people, male and female." Managers need to know that you can't punish someone for tak- ing Family Medical Leave Act time, for example, and that they can't treat employees differently based on gender. Adjust your company's concept of effective leadership. There are still biases – even among women regarding themselves – around success and work. FastCompany.com's Sava Berhane cites a 2014 Gallup poll showing 26 percent of men and 39 percent of women still preferred a male boss if they were tak- ing a new job. "Until we can break through those biases – among women as well as men … efforts are doomed," she writes. "Instead, let's start rethink- ing what constitutes effective leader- ship." Another way to do this? Embracing male leaders who don't have traditional masculine leadership traits. Search for hidden bias. Michelle King of Forbes.com spoke with Mike Gamson, senior vice president of LinkedIn Global Solutions. Gamson says there are no quick fixes for gender bias. He suggests over-investing in some groups to diversify recruiting and hir- ing and level the playing field. "Make it a part of your company's DNA. Building a diverse team is important for not only cultivating your workforce, but also for your company's future growth." BY SUSAN SHALHOUB Special to the Worcester Business Journal 10 1: G e n d e r e q u a l i t y 10) Deduction of home mortgage interest. For home mortgages taken after Dec. 15, you can only deduct mortgage interest on the first $750,000 if married and home equity interest is no longer deductible unless to improve your property. 9) State and local taxes. With 2018 tax returns, deductions for state taxes paid, state tax withholding, real estate taxes, excise taxes and sales taxes all combined, are limited to $10,000 if married. 8) Alimony. For any divorce executed after Dec. 31, 2018, alimony is no longer a deduction and is tax free to the recipient. 7) Standard deductions and personal exemptions. The standard deduction has doubled to $24,000 if filing married, and all personal exemption deductions have been repealed. 6) Miscellaneous deductions. You can no longer deduct unreimbursed expenses from work, your accounting fee for preparing your returns, nor your investment fees, nor safe deposit box fees. 5) Alternative Minimum Taxes. Repealed for corporations but for individuals, the exemption rose quite a bit to now equal $109,400 for married couples. 4) C-Corporations. They no longer have graduated rates. It is a flat 21 percent. 3) Flow through entities (sole proprietorships, partnerships, S-Corporations, LLP's and LLC's) now get a deduction of 20 percent of their profit or 20 percent of the individual person's taxable income, whichever is less, unless your taxable income is more than $157,500 single/$315,000 married, then an additional limitation of 50 percent of the company wages is activated. 2) Professional services such as doctors, lawyers, accountants and a whole list of others get another limitation to No. 9 above. The deduction starts to phase out $315,000 married and is gone by $415,000 married for taxable income. 1) Yes, the law is much more complicated than it was before. BY NICK OATES Special to the Worcester Business Journal Step 2: Game plan If you found losses are the main cause of this increase, order a loss his- tory report to determine frequency ver- sus severity, identify open claims and losses, and any losses can be subrogated against someone else. You should check to make sure your payroll numbers are accurate. Any mistake in these num- bers can drive your premium sky-high. If an audit was the culprit, prepare to self-audit your business by verifying both payroll and employee classifica- tions are correct. You'll also need to delete overtime and holiday pay as well as capping the owner's pay. Nick Oates is a work comp specialist with Knight-Dik Insurance in Worcester. Reach him at noates@knightdik.com. W W W

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