Presented by Al Corvigno

J&J Snack Foods
Two federal investigations have found that temporary production line workers at J&J Snack foods Corp., were cheated out of their wages by the company and two staffing firms. The DOL found that J&J Snack Foods in N.J. did not properly pay their employees the minimum hourly wages and overtime. As a result they were fined $ 2.1 million for back wages and liquidated damages to 677 workers.

The department’s most recent investigation found 465 workers at J&J’s Swedesboro facility provided by staffing firm Sebastian and Sebastian LLC were paid straight time for overtime hours worked beyond 40 in a work week, which is in violation of federal law. In response, J&J agreed to pay a total of $1,260,254 in back wages and liquidated damages to the impacted workers.

In addition, the department assessed a $20,000 civil penalty for the willful, repeat nature of the violations found in the New Jersey investigation. Earlier in the year, the department found that J&J and Pennpak, a staffing firm that provided workers at the J&J facility in Chambersburg, Pennsylvania, failed to pay their workers at least the federal minimum wage and overtime. In that case, J&J agreed to pay 212 temporary workers $920,000 in back wages and liquidated damages.

DOL Sues Benefit Plan Providers
The U.S. Department of Labor filed a lawsuit in the U.S. Disrict Court of Maryland against Chimes District of Columbia, Inc., affiliated companies, company executives and employee benefit plan providers over allegations that an employee benefit plan sponsored by Chimes paid millions of dollars in excessive fees.

DOL investigations found that Chimes violated the Employee Retirement Income Security Act (ERISA ) when they caused a health and welfare plan to pay excessive fees. They included those paid to the plan’s third-party administrator, FCE Benefits Administrators, Inc. and another company, Benefits Consulting Group (BCG).

The lawsuit also alleged owners Gary Beckman and Stephan Porter, caused the plan to engage in transactions for their own benefit and exercised control over the plan’s contracts with other service providers to increase FCE’s compensation through undisclosed commissions and fees. All of these actions are violations of ERISA.

FCE and BCG pledged $330,000 to the Chimes Foundation, and during 2009 – 2014 paid another $400,000 while BCG also pledged $282,500. In addition, FCE employed a child of Chimes and had BCG’s owner provide discounts to Chimes on other non-plan work. In connection with those payments and other benefits FCE and BCG were retained as service providers for the health and welfare plans, which violates federal law. Both companies are liable for profits earned as a result.

It is troubling that service providers made substantial payments to the plan sponsor, and not surprising that those services were overpriced. The DOL will act vigorously to protect plans where the integrity of the service provider is compromised by unlawful payments to plan fiduciaries. In addition to having the companies pay back any profits including penalties, DOL is asking for the removal of FCE, Beckman, Porter and BCG as fiduciaries or service providers for any ERISA covered plan in the future. All company officers may also face prison time, depending on the legal outcome.

Investigations are time consuming and complicated. It is imperative your personnel are properly trained in the fundamentals of the SCA and how to handle DOL audits and investigations. If you have any questions or would like additional information, please do not hesitate to contact us.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe-benefit obligations and provides your employees with valuable benefits.

Crime Insurance refers to theft of money and/or securities from a business. There are a variety of Crime Insurance categories including:

Employee Dishonesty: Covers theft of money, securities and other property by an employee. These types of losses are commonly carried out through theft of small amounts over time.

Forgery or Alteration: Pays losses incurred through the direct result of forged or altered checks, drafts or Promissory notes.

Money and Securities: Theft or destruction of cash or securities either at your location(s) or in transit.
Computer and Funds Transfer Fraud: Losses due to money transferred, paid or delivered because of fraudulent computer entry. The impacted computer equipment must be owned or operated by the insured.

Money Orders and Counterfeit Currency: Loss incurred from accepting in good faith counterfeit currency or fraudulently issued money orders.

Client Property: Coverage required by a client for money or property in your possession. Financial institutions will often require this coverage for contractors and vendors.

ERISA Compliance: ERISA requires that 401(k) and other types of employee benefit plans be bonded for an amount not less than 10% of the plan’s assets subject to a maximum of $500,000 ($1,000,000 if employer securities are involved). This coverage can be combined with Employee Dishonesty or written inexpensively on a separate ERISA Bond coverage form.

Exposures to crime losses have changed over time. Electronic transactions have reduced the cash exposure for many types of businesses. However, this transition has increased the risk from fraudulent electronic transactions.

Employee Dishonesty or Theft claims continue to be a serious problem for businesses. These losses are well hidden and typically take place in small amounts over a long period of time. The result can be a large loss once the crime is discovered several years into the process.

An effective risk management approach is to combine internal controls with some level of insurance coverages. Good internal financial controls are the best method for preventing and limiting the loss potential from theft. For example, good controls can reduce the opportunity for employee theft and therefore act as a deterrent. Click here to view a prevention guide offered by Chubb. Insurance coverages should also be considered for additional protection. Crime coverages can also be cost effectively obtained as part of a Package or Businessowner’s policy as well as on a stand-alone basis. Please feel free to contact us with any questions regarding this important exposure consideration.

It’s been a great summer of boating and now it is time to begin preparing your boat for winter. If your boat is hauled out for winter storage, here are some suggestions that will help you ensure that your vessel will be ready for safe and reliable cruising next year.

Before Haulout

Anchors and Canvas – Remove canvas covers, deck and cockpit cushions, extra mooring lines, fenders and anything else on deck that should go ashore for winter storage. Rinse your anchor rode with fresh water.

Sails and Rigging – Give the sails a careful inspection to identify any repairs or cleaning that may need to be done by your sailmaker during the winter. Take all your running rigging off the boat (don’t forget to reeve messenger lines) so you can clean it by soaking in a mild detergent solution, then rinsing and drying. Inspect it all for frayed ends, chafing, or other damage. Unstep the mast, at least every few years, so you or your rigger can inspect all the rigging and fittings, especially the ones at the masthead.

Check Your Shore Power – If your boat is equipped with AC shore power, inspect the boat’s shore power receptacles and cables. If you see any sign of darkening of the plastic around one of the prongs, parts are in need of replacement.

Check the LPG/CNG Gas System – If your boat is equipped with a propane (LPG) or compressed natural gas (CNG) system, be sure the valves are turned off at the tanks. Take a close look at everything in the tank locker (tanks, regulator, pressure gauge, solenoid valve, wiring, etc.) to be sure all is properly secured and in good repair.

Fuel Tanks – Simple Rule: Try to run your gas tanks close to empty for winter storage, and your diesel tanks should be nearly full.

Winterizing Systems – If you have harsh winter climates where you store your boat, her systems will need to be winterized. Air conditioning and engine cooling systems, as well as sanitation and domestic water systems should be drained. In some cases it’s not possible to drain all the water out of hoses in hidden spaces, so it may be necessary to add some non-toxic anti-freeze.

Protect the Batteries – Storing the batteries at home will extend their life, since cold weather will cause them to self-discharge more rapidly, and once they’ve spent more than a few weeks in a discharged state, they can’t be trusted. So take them home for winter storage, if possible.

Clean Out, Clean Up – Remove as much gear from the boat as you can, including electronics, lifejackets, binoculars, clothing, cushions, fishing gear, and anything else that could be damaged by moisture and cold weather, or that may be attractive to thieves.

Haul Her Properly – If the yard isn’t familiar with your boat, be sure to let the foreman or the lift operator know where it’s safe to set the straps so nothing on the bottom will be damaged. Also, it’s very important that your boat is blocked properly. You should know ahead of time how the yard will block your boat, and you should insist that they use proper methods and equipment.

After Haulout

Inspect the Bottom – Check all through-hull fittings and scrape inside their openings. Be sure all seawater intakes are clear of obstructions.

Through-Hulls and Zincs – Check all the through-hulls above the waterline. If there are any plastic ones, shine a flashlight into them and look closely for cracks. Transducers and Running Gear – Underwater transducers for depth sounders, fish finders, and knot meters should be inspected. Check propellers for damage and straightness. Check shaft bearings for wear. Inspect swim step supports, trim tabs, thruster grates and boarding ladders.

Outdrive Hints – Those flexible rubber bellows between the drive and the transom don’t last forever. Inspect them carefully! Changing the oil in the drive would also be a good idea.

Don’t forget the plug! – If it’s an open boat and the hull has a drain plug, remember to remove it so rain and melting ice and snow will drain out. In the spring, be sure that plug is in place and tightened securely!

Inside the Boat

Inspect All Seacocks – Make a note of any that felt stiff or rough. It may be time to service or replace them.

Change Engine Oil – It’s a good idea to change the oil just before winter storage, regardless of how recently it was changed the last time. The oil filter should be changed too. Remember, all the things you need to do to the drive engines, you also need to do to the genset as well.

Cooling Systems – Pull the impeller out and inspect it. If the impeller shows signs of wear, make a note to replace it. Even if it’s in good shape, you might want to leave it out of the pump for the winter so the blades won’t take a set. If your engine is due for a coolant change, now is the time to do it.

Don’t Forget Her! – Now that all the chores are done and the boat is snug in the yard for her winter nap, don’t forget her! Plan to drop by the yard every month or so to check on her.

For additional details, please click here read the full Going into Lay-Up brochure.

Concerned about your personal insurance coverage? At Cleary, our experienced Personal Lines department will work with you to evaluate your insurance needs, identify exposures, and create a customized insurance portfolio. Give us a call today at 617-723-0700.

Presented by Doug Greene

Each client, whether they realize it or not, go through three phases of money in their lifetime. It’s important to educate them as to how their money actually works.

Beginning right out of college with their first job starts The Accumulation Phase.  In this phase, they will run through a lot of life experiences (marriage, first home purchase, children, etc.). It is important for them to grow their money to the most they possibly can in the most efficient way possible. There are number of different ways to do this. Just ask Google. It’s our goal to educate them to all of these options without opinion, attitude, or sales hype. Every product has its positives & negatives. It’s not the product that matters, it’s the product plus the strategy that matters.

The first day of retirement is when The Distribution Phase starts. This is where the rubber meets the road. Everything changes once those paychecks stop coming in every week. The goal of this phase is to turn on as much income as possible from all the assets they have accumulated. At the end of the day it doesn’t matter how big the account balance is for these folks. All that matters is how much income can those accounts generate. Again, it’s not the product (401k, IRA, SEP, NQ Account, etc.) but the product plus the strategy that matters!

After retirement (I think we all know what that means!), The Preservation Phase comes into play. How do we pass all of our remaining assets, property, life insurance, etc. in the most efficient manner as possible? How do we get them to our heirs, charities, endowments? This phase needs to be addressed throughout the other phases of money as well. It is important to make sure the least amount as possible goes to other parties that have interest in their wealth (IRS, probate, creditors). One more time, it’s not the product (CRUT, ILIT, SLAT, etc.) that matters. It’s how everything works in lockstep together.

Many non-profit organizations depend on volunteers for various functions and capacities. In some cases volunteers may be involved in strenuous and physical activities that are crucial for operations. Physical injury to the volunteer is a real possibility. It is important for non-profit organizations to understand that injuries to volunteers are not protected by Workers Compensation.

Workers Compensation insurance is a requirement for businesses and is designed to cover an employee’s medical expenses and lost wages as a result of a work related injury. Volunteers are not considered employees under the Workers Compensation laws for most states.

Volunteer Participant Accident insurance was developed to provide some level of medical, disability or death benefits for volunteers. This coverage will respond to injuries sustained by a volunteer during the course of their work for the non-profit. A wide range of benefit levels and options are available. The insurance is an important consideration for providing a level of protection to the volunteers who make operations possible. Let us know if you would like additional information regarding the product.

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700