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Empowering Central New York: The Crucial Role of Manufacturing

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By: James A. D’Agostino, CEO, MEP Center Director

Central New York is a region rich in history, culture, and natural beauty. Amidst the picturesque landscapes and vibrant communities, manufacturing stands as a cornerstone of the local economy, driving growth, innovation, and opportunity. As we explore the unique regional economic landscape, one quickly sees that manufacturing plays a pivotal role in shaping our prosperity. And, with the arrival of Micron Technology and its supply chain, the influence of manufacturing will only continue to grow.

Central New York’s manufacturing sector serves as a vital source of employment, providing jobs that sustain numerous families and communities. From the production of aerospace and defense components to advanced medical devices and beyond, manufacturers in Central New York offer a diverse array of career opportunities. These jobs not only offer stability and some of the most competitive wages in the area, but they also foster a sense of pride in contributing to the region’s economic vitality. Manufacturing also fuels a culture of innovation and technological advancement within the region. Central New York boasts a rich ecosystem of research institutions that collaborate closely with manufacturers in a multitude of industries to drive innovation forward. Whether it’s developing cutting-edge materials, refining manufacturing processes, or pioneering new technologies, Central New York’s manufacturers are at the forefront of innovation, propelling the region into the future.

Manufacturing also serves as a magnet for investment and talent, bolstering Central New York’s economic development efforts. The region’s strategic location, robust infrastructure, and skilled workforce make it an attractive destination for businesses looking to establish or expand their operations. From multinational corporations to homegrown startups, manufacturers in Central New York benefit from a supportive business environment that fosters growth and prosperity. Importantly, manufacturing plays a crucial role in driving exports and enhancing Central New York’s competitiveness in the global marketplace. The region’s manufacturers produce a wide range of goods, from precision machinery to specialty foods, that are in demand both domestically and internationally. By exporting goods to markets around the world, Central New York’s manufacturers not only generate revenue but also raise the profile of the region as a hub of innovation and quality craftsmanship.

Additionally, manufacturing contributes to Central New York’s resilience and self-sufficiency, particularly in times of crisis. The COVID-19 pandemic underscored the importance of localized supply chains and the need for regions to be self-reliant. Central New York’s manufacturing sector rose to the challenge, pivoting production to meet the urgent needs of healthcare providers, essential workers, and the community at large. This agility and adaptability demonstrate the inherent strength of Central New York’s manufacturing base and its ability to weather adversity. Manufacturing continues to play a vital role in developing the skilled workforce that the region needs to thrive in the 21st century economy. Through partnerships with educational institutions, apprenticeship programs, and workforce development initiatives, manufacturers in Central New York are investing in the next generation of talent. By equipping individuals with the technical skills and knowledge needed to succeed in modern manufacturing settings, Central New York is ensuring that its workforce remains competitive and resilient.

As most of us locals already know, manufacturing is not just an industry in Central New York; it is a driving force behind the region’s prosperity and resilience. From creating jobs and fostering innovation to driving exports and empowering communities, manufacturing touches every aspect of life in Central New York. As the region looks to the future, including the exciting arrival of Micron Technology, continued investments in manufacturing will be essential to building an even more vibrant and sustainable economy that benefits all of us. By harnessing the power of manufacturing, Central New York can unlock new opportunities, spur innovation, and chart a course towards an even brighter tomorrow.

TDO is a consulting and training organization based in Liverpool, New York. Our mission is to grow the local economy by helping Central New York manufacturers and technology companies drive operational excellence and cultural transformation to reach their full potential. TDO’s support of the local mission generated $265 million in economic impacts in the last contract period supporting jobs, investments, cost savings, and profitable growth. If you are a small or mid-size manufacturer and would like to talk further, TDO’s team is fully certified to help. Reach out today to learn more and schedule a free consultation.

Do You Know Why You Buy The Insurance You Buy?

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This is a very valid question given that very often when we speak with executives, they question what insurance coverage they have—and why they need it at all. We often buy insurance simply because that is what we have done in the past. In other cases, it may be because someone such as a lender or customer is requiring it. It’s important to understand that insurance is meant to finance risk. As such, it is a valuable exercise to consider the risks you want to mitigate with insurance and make sure you are purchasing the coverage that will help you a achieve that goal.

A simple example: Property Insurance is often purchased to replace the building, and Business Interruption Insurance to pay for lost profits while the building is being rebuilt after a disaster occurs. However, for most companies, the real goal is to retain their clients that might leave if they cannot be provided with services or products while facilities are being rebuilt. Therefore, a more focused approach is to work out a plan to continue providing your services or products during your rebuilding process, and purchase Extra Expense coverage to cover the extra expenses incurred to implement this plan.

Business leaders must also consider the ramifications of expanding litigation and legal system abuse. Unfortunately, this increases the chances of being sued even if you are not at fault.  Defending these cases can be expensive. Insurance is a strategy to pay for the cost of defense as well as any damages for which you may be liable.

Flood is another example of risk that is changing so we may need to alter our normal response to planning for flood as well as how we think about purchasing this coverage. Flood is typically only purchased in high-hazard flood zones like low areas near rivers and lakes. The world today is dominated by short periods of extreme rainfall that creates run-off and short-term flooding in areas that normally do not flood. Many more people are at risk that were never at risk before.  Questions to ask:  Are you in the path of rainwater run-off? Do you have methods of reducing the impact of flood? Should you purchase the Flood Insurance coverage?

Many businesses rely on controlled environments that, if they fail, can create loss. Some examples include cleanrooms that can take months to recertify if the environmental controls systems fail; or crop/food/livestock storage areas in which the food or animal could perish if the environmental controls systems fail. The leading risk for environmental control systems failure is human or computer error. Both are excluded from standard business interruption insurance. An insurance solution is to seek coverage that is customized to include these causes of loss, thereby protecting those specific risks.

Most liability insurance is based upon providing coverage when you cause property damage or bodily injury. But what if you cause financial harm only? That is where coverage such as Professional Liability and Directors and Officers coverage can be an important consideration.

Insurance names are not always what they appear. The name General Liability Insurance would suggest it covers General Liability. That is not the case. Many things are specifically excluded in this policy. It is important to understand if these exclusions are relevant to you and your business. For example, imagine a business that owned a truck that was used solely on its property. Owners often believe they do not need to purchase Automobile Liability coverage because their vehicle is not being registered and used on public roads. Many GL policies exclude the liability associated with vehicles that are meant to be driven on public roads. So, if an employee were to accidentally run over someone on the property, the loss could be excluded on the GL policy.

According to FEMA, 40 percent of businesses never reopen after disasters and another 25 percent fail within one year. The U.S. Small Business Administration found that over 90% of companies fail within two years of being hit by a disaster. These are truly alarming statistics that imply that companies can do better at risk management planning.

No matter how knowledgeable and experienced your insurance broker is they cannot provide you with the most effective risk management solutions without working closely with you to understand the specific risks associated with your business, your plans to mitigate that risk and your priorities in financing the risk either directly or with insurance.

Lippes Mathias LLP Combines with Syracuse-Based Health Care Firm CCBLaw

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Lippes Mathias LLP Combines with Syracuse-Based Health Care Firm CCBLaw, Expands Lippes’ National Footprint to Include Every Major City in New York. The combination creates one of the largest New York health care teams outside of New York City.

Lippes Mathias today announced it has combined with CCBLaw, a Syracuse-based law firm with a respected national reputation for providing innovative legal services to clients in the areas of health care, business, labor and employment and real estate. Eleven attorneys, with two set to be admitted on June 17, as well as eight staff members, will join Lippes Mathias as part of the move.

With this combination, Lippes Mathias now has 197 total attorneys with 158 staff and 15 offices across the country.

“When we execute our growth vision, we continue to emphasize the right cultural synergies, and the match with CCBLaw is no exception,” Kevin J. Cross, Lippes Mathias’ managing partner and chairman, said. “The new Lippes attorneys bring exceptional experience and capabilities that pair perfectly with our health care team—creating one of the largest health care practices outside of New York City. I’m proud to note that this expansion also marks a significant milestone in Lippes Mathias’ growth story as our national footprint of 15 locations now reaches every major New York market.”

CCBLaw, one of only two Central New York law firms ranked Metro Tier I in health care law by Best Law Firms, provides legal and consulting services to health care clients, including group medical practices, private practice physicians, dentists, and allied health professionals, hospitals, ACOs, physician organizations, independent practice associations, ambulatory surgery centers, and other facilities throughout the United States.

“This is the right move at the right time, compounding value and opportunity for both groups,” Michael J. Compagni, former CCBLaw managing member and new Syracuse office leader, said. “Our entire team is excited to join Lippes Mathias—well-known and regarded for its people-first approach to the business of law. Lippes’ emphasis on culture creates an environment where attorneys and staff thrive. We’re thrilled to be a part of a growing firm that is doing it differently.”


Marc S. Beckman, a founding member of CCBLaw, will co-lead Lippes Mathias’ health care practice team alongside Brigid M. Maloney, partner, Lippes Mathias.

“Since we have been representing so many practices with respect to private equity-backed transactions in the health care field, we wanted to align ourselves with a firm such as Lippes that will benefit our clients by allowing us to bring greater breadth and depth to our team,” Beckman said. “Our footprint has always been larger than Central New York, and together with the diverse practice areas, resources, infrastructure, and geographical footprint of Lippes, this mutually beneficial integration allows us to provide a broader scope of legal services to our clients long into the future.”

Former CCBLaw attorneys are nationally recognized for their extensive background in complex federal regulatory and statutory issues, including the federal physician self-referral prohibition or Stark regulations, fraud and abuse and anti-kickback laws, professional license defense as well as compliance and repayment actions involving both entitlement programs and third-party payors. The team regularly handles mergers and acquisitions of professional practices, establishment of ambulatory surgical centers, development of joint ventures among healthcare providers (including both private practices and hospital systems), development and maintenance of large group practices, space sharing arrangements, employment matters including litigation and employee leases, professional services agreements, exclusive provider agreements, and telehealth arrangements. On numerous occasions, the team has successfully defended clients in government and third-party payor audits and investigations and in settlement negotiations of reimbursement issues with Medicare, Medicaid, TRICARE, and all other third-party payors.

Former CCBLaw attorneys and staff will continue to work out of their office space at 507 Plum St. in Syracuse. For more information about the combination or to learn more about Lippes Mathias’ health care services, call (716) 853-5100 or visit lippes.com.               

About Lippes Mathias LLP
Lippes Mathias is a full-service law firm with nearly 200 attorneys serving clients regionally, nationally, and internationally. With offices in Buffalo, Clarence, Albany, Long Island, New York, Rochester, Saratoga Springs and Syracuse, N.Y.; Greater Toronto Area; Chicago, Ill.; Jacksonville, Fla.; Cleveland, Ohio; San Antonio, Texas; Oklahoma City, Okla. and Washington, D.C., the firm represents publicly and privately owned companies, private equity and venture capital firms, real estate developers, financial institutions, municipalities, governmental entities, and individuals.

The Importance of Culture in Health Care

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Kathy Ruscitto

A few months ago I had the opportunity to hear two physicians talk about their careers as they received recognition. Dr. Kara Kort, a surgeon, and Dr. James Tucker, a family physician.

Both are esteemed by their patients and colleagues. They are passionate about the profession they chose and the work they do as physicians and leaders in their disciplines.

As they spoke, the words, tone, and tears they shared all spoke to service to others. They chose medicine to help people.

In his remarks Dr. Tucker thanked to his patients for letting him be part of their villages, lives and families.

Dr. Kort talked about how being vulnerable in her own life experiences , enabled her to help patients at critical points in their lives.

Health professionals often choose their career to contribute to improving  the  health of others. Clinicians  value their  professional expertise, training, the ability to give their patients high quality care , and collegiality across a health care system.

The reality is they are facing complex systems that require automation, long hours to balance their complex demands, and frustrated patients with payer barriers. We knew we were going to face a large segment of retirements across physicians and nurses, COVID accelerated those trends. The current system feels broken to many clinicians and patients.

In an article in Medscape, Drs. Toprol, Verghese and Pearl discuss Physicians’ roles in accelerating  system changes to improve patient care. They all suggest some of the challenge is clinician resistance to letting go of old culture, and adopting new more efficient options like telemedicine. Changes that allow patient access and follow up during workforce shortages is better than delayed, or no care at all.

Other experts feel the most important investment we can  make is a shift away from fee for service care to value based care, aligning incentives around patient outcomes. 

While these examples may be part of structural system redesign, shared culture is equally important.

Medicine is a team sport. It requires collaboration across a spectrum of disciplines, workforces, and payers. We must listen and value the input of the health professionals if we are to rebuild our health systems culture and workforce to continue to provide high quality patient centered care. System redesign alone, in the absence of shared culture will not resolve our issues.

Right care, right time, right place, right cost is often included in marketing and headlines these days. The underlying assumption being we have a shared culture of achieving this care. 

As you plan retreats , strategy and future goal sessions, spend time discussing culture and clinician input into our future in health care. It is the most important thing we need to do to meet our challenges.

Resources:

Healing the Professional Culture of Medicine – Mayo Clinic Proceedings

To End Burnout, Doctors Must Change the Culture of Medicine

https://hbr.org/2022/09/5-steps-to-restore-trust-in-u-s-health-care

 

G.M. Crisalli & Associates, Inc.: Celebrating 35 Years of Excellence in Construction Contracting

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By Elizabeth Landry

When Gary Crisalli first began his own general contracting business in Syracuse in 1989, he was working out of a two-bedroom apartment in Solvay. After the first year and for the next seven years, he and his team operated the business out of a residential home they had renovated to meet their business needs before finally settling into their long-term and current location on Hiawatha Boulevard West. From humble beginnings, Crisalli took on projects in almost every industry, growing the business’s portfolio and demonstrating its commitment to excellence while meeting the needs of a diverse array of clients.

Today, G.M. Crisalli & Associates, Inc. (GMCA) is one of the top general contractors in Central NY, having completed approximately 1,700 projects over the course of the business. With a team of about forty people, the organization works on projects across the entire Northeastern United States, from Wisconsin to Maine to Maryland.

As the company celebrates its 35-year anniversary this year, this important milestone serves as a time to reflect on the growth and accomplishments over the years and to look ahead to the many projects still to come. Between Crisalli, President and Owner, and Rocco Paone, Associate, who joined the company in 1991, the team at GMCA has over one hundred combined years of experience in construction contracting and has achieved much success by focusing on meeting the needs of clients for every project, every time.

Diverse Clients and Industries

Working as a mason when he was just sixteen, and through his college years, Crisalli worked with a large engineering firm, an architectural firm and a construction contracting company before venturing out on his own. Obtaining such valuable field and office experience in his teens and early twenties allowed GMCA to take on any job in many different industries from the first day of business.

“I’ve been telling people since the day we went into business that we build everything except roads and bridges,” said Crisalli. “Due to a past client that Rocco had worked with, GMCA obtained a contract on a very large construction site in our first year. The Solvay cogeneration power plant in Solvay. We were contracted to do a small job at first. The contract exponentially grew as we performed our base contract.  We were asked to work in many areas of the plant. We ended up being there for three years doing anything they wanted us to do, from asbestos abatement to assisting with the walk-down and commissioning of the boilers. That project was a blessing to our company, but it was also a project we knew we could perform well. From day one we did anything that was requested of our company by our client.  The company philosophy is to acquire the knowledge, expertise, and experience to meet any of our client’s construction needs. That philosophy got us in the door and has retained our relationships in many different industries.”

The team at GMCA has completed projects for clients in both the public and private sectors, in industries including education, military, commercial, industrial, medical, retail and grocery, as well as building restaurants and places of worship. Having completed numerous original-build and renovation projects for such a diverse range of clients, Crisalli has a long list of favorite jobs the team has worked on over the years, starting with brick removal and replacement for Onondaga County at the Civic Center in 1991. That same year, the team built the first neuro angiogram room at Upstate Medical Center, which led to numerous build and renovation projects for the health center in the following decades. In 1996, GMCA built the flagship Franklin Covey store in New York City across from the Rockefeller Center. In the early-to-mid 2000s, the company assisted with the building and construction management of the Clarence Jordan Vision Center for Mercy Works in Syracuse, the Island Health & Fitness Center in Ithaca, the Abundant Life Discipleship Training Center and the FedEx distribution center, both in East Syracuse, various five-story college housing projects, and Athletic clubs.  One of the most unique projects GMCA has completed is building the penguin exhibit at the Rosamond Gifford Zoo.

Perhaps the most stand-out project in Crisalli’s list of favorites is the Blodgett Dream Center, a sprawling, one-of-a-kind library located within one of the most impoverished schools in the Syracuse City School District. “Many different artisans worked on this project,” Crisalli explained. “It has a spaceship with twenty-nine computers, a Renaissance-themed area with beautiful arches, a prehistoric-themed space with dinosaurs, a Roman Amphitheater where James Earl Jones read to the Blodgett children on the opening day of the library, and a beautiful Egyptian-themed tiled wall entrance and greeting area. 

Adapting to Change

To continue meeting the diverse range of client needs over the years, the GMCA team has been able to adapt to many different settings and requirements. For Paone, working with such a wide range of clients has been one of the most enjoyable aspects of the business.

“Probably what’s been most exciting for me is meeting so many good customers and diverse clients over the years,” said Paone. “We’ve worked with so many different types of clients and we always strive to adapt to their individual wants and needs. We’ve done a tremendous amount of work in medical institutions and hospitals, which have many layers of requirements, as compared to a client who’s planning a building that’s coming out of the ground. Having the ability to adapt to our clients’ needs and re-educating ourselves for every different project has been so important.”

Alongside diverse client needs, GMCA has been successful in adapting to changes within the industries themselves, related to software, technology, communications and more. Crisalli explained how general societal changes have a large impact on contracting, procurement, and managing projects across industries.

“The construction industry has changed a lot over the years,” Crisalli explained. “Everything moves faster now because of the advancements in communications. Society has changed overall as far as how we communicate with each other from purchasing, procurement of subcontractors, materials, regulations, building systems, construction equipment and processes, just about every aspect of building for our clients.   It has been interesting keeping up with all the changes. The different changes over the years have, in turn, altered the way we approach building in many different ways and areas of the industry.  It’s all a little different than when we started out.  The building process must adapt to our client’s needs. It’s more important to plan and schedule all these items immediately following contract procurement.  Our team obtains all the knowledge necessary to plan out the entire building: pre-construction, construction, and turnover phases in the preconstruction phase of the project, prior to putting a shovel in the ground. This practice has led us in making the construction process efficient and successful.”

“The company’s greatest single asset are the people who meet, adapt, and succeed in navigating the changes to our industry. We are very successful because of our staff of smart, knowledgeable, service-oriented people.” Crisalli continued.

Of course, to keep up with all the moving parts within the contracting space as well as the diverse needs of clients, GMCA’s team needs to remain highly knowledgeable and adaptable.  This makes all the difference with clients and ongoing success. Due to a general shortage of skilled trades, this need can sometimes be challenging, but according to Crisalli, GMCA has been successful in this area because of its focus on ongoing training and education, as well as a unique company culture that combats the stress that often comes along with working in construction.

“Over the years, the training processes that we use have changed completely. Now, we train our team on software as well as procedure, making sure everyone has the skills they need to successfully execute jobs. Not only do we train our employees on our own software programs, but we also train them on our clients’ various software programs to help us assimilate into different markets. Although we make sure the team has the knowledge and training to succeed on every site, the construction industry culture can sometimes be stressful. Many of our employees have been with us for over 10 years, and they appreciate that we try to alleviate stress through working as a team and humor. We have a small company atmosphere that works. Someone is always willing to help when another person’s workload suddenly increases.   I really think that helps,” said Crisalli.

Charitable Giving in the Community

Another important aspect of the company culture at GMCA is a great sense of pride in supporting the causes of several organizations and charities throughout many communities. The company facilitated a golf tournament to support Mercy Works’ at The Clarence Jordan Vision Center last year, raising approximately $50,000. Crisalli is a past president of the Baldwin Fund, and GMCA continues to support this charity.  The company has also supported the Fellowship of Christian Athletes (FCA) every year, as well as local organizations such as In My Father’s Kitchen and Francis House.

One charitable organization that’s especially meaningful to Crisalli is Marvelous Ways International in Lakeland, Florida. GMCA supports a golf tournament for this organization each year, which was founded by a couple from Central New York, Mark and Christin Haywood. Marvelous Ways International uses different developmental programs, teams of trained individuals and innovative technology to help monitor and improve outcomes for impoverished youth in Nicaragua, Costa Rica, and Honduras. “This organization helps kids who don’t have many great options in life to succeed. They give these children and teens a hope for the future by monitoring and guiding them through these youthful years and assisting each individual allowing them to choose a path for a successful life. It’s working out well and really making a difference in the life story of many who had few options for success. I am proud we can volunteer our time and resources to help make a positive difference in the lives of others,” said Crisalli.

Looking to the Future

Having worked with an impressive list of diverse clients for 35 years and always leaning into re-evaluation of the business, learning and constructive change along the way, GMCA is moving into the future with a goal of continued progress, growth, and adaptability.

“We always try to take a snapshot of what our economy is doing – what’s hot and what’s not,” said Paone. “We’ll continue to adapt our business corresponding with changes in the economy. Everyone knows the buzzword in Syracuse – Micron – and we’re certainly keeping our eye on that industry so we can adapt our business to service that industry successfully.”

Although change is always certain, especially in the construction contracting marketplace, one thing that will continue to remain constant for GMCA is its centralized mission of focusing on client needs above all else.

“Having been in business for 35 years is a real blessing. During that time, we’ve instilled in our team a sense of slow but steady growth, and conveyed the importance of covering our bases so we can ensure the best possible outcomes for our clients,” said Crisalli. “In our industry, it really comes down to this: if you please your clients, you’ll always succeed.”

CECL Explained: What Construction Companies Need to Know

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Kaitlyn H. Axenfeld, CPA/CFF, CFE

The CECL model’s main change from current accounting rules is a requirement to incorporate forward-looking information while estimating credit losses. Construction companies typically have several types of financial assets that are subject to the ASU, including contract receivables, contract retainage and contract assets. You will now be required to forecast the total expected credit losses of these types of financial assets over the entirety of the asset’s life rather than when the loss meets the probable threshold or when incurred. This forecast is based on a wider scope of data that includes past events, current conditions, and reasonable and supportable estimates for the future. As a result, companies will have to invest more time in reviewing past write-offs, past bad debts, creditworthiness, etc., to calculate a reasonable and fair estimate for future bad debts.

A common approach to estimating future bad debts is to review aging categories for receivables. These aging categories can then be assigned reserve percentages based on delinquency, prior bad debts, knowledge of who owes what, etc. Those values are then combined to determine an entity’s allowance or reserve for bad debts.

When estimating future bad debts for financial assets subject to ASC 326, management should also evaluate and consider consumer credit risk scores, credit ratings, credit risk grades, debt-to-value ratios, collateral, collection experience, or other internal metrics.

The new standard requires enhanced disclosures to provide transparency on credit risk management, methodology, and the impact on financial statements. This enables financial statement users to assess the credit quality of financial assets and understand changes in expected credit losses over time.  

For each class of financial assets, a reporting entity should describe the credit quality indicator that it is using and then disclose the amortized cost basis of the asset, grouped by indicator.

Footnotes on an ongoing basis are required to include:

  • A description of how expected loss estimates are developed.
  • The entity’s accounting policies and methodology to estimate the allowance for credit losses.
  • Factors that influenced management’s current estimate and relevant risk characteristics.
  • Changes in the factors influencing management’s current estimate of expected credit losses and the reasons for those changes.
  • Changes to the entity’s accounting policies and reasons for significant changes in the amount of write-offs, if applicable.

CECL may not have a significant impact on a company’s allowance for credit loss, but it will require management to make new judgments and calculations to comply with the new standard. Entities should also consider updating their policies and procedures to ensure the necessary data is accurately captured. Once implemented, CECL will require ongoing monitoring to ensure that the methods and assumptions used for the initial credit loss calculations continue to reflect current conditions and variables. Forecasting should be a continuous process, and those factors will continue to evolve. 

It is also important to consider the impact of CECL when entering into new transactions or relationships, as well as when economic conditions change. CECL could negatively impact liquidity measures and ratios, which could affect lending, bonding, and other insurance.

 

Kaitlyn H. Axenfeld, CPA/CFF, CFE, is an audit partner at Dannible & McKee, LLP, a public accounting firm with offices in Syracuse, Auburn, Binghamton and Schenectady, NY, and Tampa, FL. The firm has specialized in providing tax, audit, accounting, and advisory services since its inception in 1978. For more information on this topic, you may contact Kaitlyn at (315) 472-9127 or visit online at www.dmcpas.com.

Membership has its Benefits – SBE and Workers’ Compensation Insurance Safety Group #469

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Steven Bell, Vice President, Underwriting & Sales

To compete in the ever-changing and competitive landscape of the construction ndustry requires a low-cost, reliable, and comprehensive workers’ compensation insurance solution. In keeping with SBE’s mission of providing members with valuable programs and services, Lovell worked with employers in the construction industry in 1960 to create a workers’ compensation insurance safety group program. With over 64 years of history, this fully insured program known as Safety Group #469 – The NYS Construction Industry, operates on a non-profit basis, providing low upfront costs while delivering financial returns through dividends. Since its inception, Safety Group #469, has returned over $620 million in cash dividends to membership.   

What is a Workers’ Compensation Safety Group?

Safety Groups were established in New York State to serve the business community.  Safety groups are a collection of businesses who are in the same trade or industry who group together to reduce their workers’ compensation costs.  This grouping enables the members of a safety group to spread the risk of loss from the individual policyholder to all members of the group. These fully insured, not-for-profit programs combine members’ annual workers’ compensation premiums and then deduct the costs of claims and administrative charges.   Any money left over after accounting for these expenses is available for payment of a dividend.  To reduce the cost of workers’ compensation insurance, safety group managers encourage and assist members in instituting measures to prevent accidents and make the workplace as safe as possible.

Who is eligible for Workers’ Compensation Safety Group #469?

All SBE members with primary business operations in New York State are potentially eligible for Safety Group #469.  In business, occasional losses are inevitable. To ensure the success of the program, it is imperative that group members as a whole achieve good loss results.  Although eligibility extends to all members with primary operations in New York State, qualification is based on historical loss trends, underscoring the significance of a steadfast dedication to safety practices.

Recognizing the diverse footprint of businesses in the construction industry, the program can extend workers’ compensation insurance coverage to other states. This coverage enables members to manage their workers’ compensation insurance through a single invoice, simplifying the complexities associated with overseeing coverage in multiple states.

How does Membership in Safety Group #469 Benefit Construction Industry Employers?

Joining Safety Group #469 presents construction industry employers with a host of compelling advantages. Members enjoy an advance discount of up to 32.5% on their workers’ compensation insurance costs. In addition, any underwriting profits that the group earns are available to pay dividends.  The dividend for the most recent year was 27.5% of premium.    The combination of these dividends and discounts makes the program virtually unbeatable in the marketplace.  The benefits of membership are more than just financial; the safety group also provides access to industry leading safety, claim and underwriting expertise.  

 

How is Workers’ Compensation Safety Group #469 managed?

Group #469 is managed by Lovell Safety Management Co., LLC and by a committee of its members. Lovell Safety Management Co., LLC has been the market leader in managing workers’ compensation safety groups since 1936. As safety group manager for Group #469, Lovell provides comprehensive services to ensure the program’s success.    

Lovell’s team of experts provide loss prevention services to control losses, claims management services to mitigate the cost of claims, and underwriting services to ensure each member is priced at the lowest possible cost.    These services produce underwriting profits that get returned to members through upfront discounts and dividend payments. 

Summary:

The strategic partnership between the SBE and Lovell Safety Management Co., LLC serves as a testament to SBE’s commitment to providing unparalleled benefits for members. The combination of the SBE’s and Lovell’s respective expertise ensures that members can navigate the complexities of workers’ compensation insurance and the construction industry with confidence.

To learn more about Safety Group #469, please contact Lovell directly at 1-800-556-8355.

Overview of OSHA Updates in 2024

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As of January 2024, OSHA released an update to the maximum penalty costs to adjust for the cost-of-living increases over the past few years as well as changes to some of their National Emphasis Program’s. Below, we’ll outline some of those changes.

Penalty Cost Adjustments

Changes to maximum penalty costs to violations in serious, other than serious, and posting violations categories increased to $16,131 per violation. Failure to abate violations are $16,131 per day (generally limited to 30 days) beyond the abatement date. Willful or repeated violations are $161,323 for each violation. The higher gravity of the violation, the higher the cost of the fine will be. 

Types of OSHA Citations:

  • Serious: Violation of situations in which a hazardous condition could lead to death or serious harm of an employee.
  • Other Than Serious: Violation of situations in which a hazardous condition could lead to a direct and/immediate injury/illness but would not cause death or serious harm to the employee. This category also covers failures in recordkeeping, posting and electronic reporting.
  • Failure to Abate: Violation in which previously cited hazards were not brought into compliance since the previous inspection.
  • Willful: Employer intentionally disregards OSHA requirements or demonstrates indifference to health & safety of employees.
  • Repeated: Violation of a previously cited hazard. These violations were corrected at one point in time but found again in a new inspection.

It is important to note that in January of 2023, OSHA issued an expansion on their Instance-By-Instance (IBI) citations which outlines that if an employer has multiple violations, those citation fees will be individualized instead of grouped together as they might have been in the past. To give an example, if a company has multiple work sites with the same hazards identified, OSHA will cite each site with the violation, not the company as a whole. This can lead to very hefty fees for a company. 

What is an NEP?

A National Emphasis Program (NEP) is a temporary specific hazard awareness program which OSHA focuses their resources on. These hazards can be seen in the general industry or can be in targeted industries. For example, in 2021 OSHA issued an NEP on Covid-19 which covered general industry, and then was revised to focus on the healthcare industry as they were at the most risk for exposure. The NEPs will provide directives for employers to follow to ensure workers are protected from the focused hazard. OSHA inspections will typically focus on industries with the highest exposures to the hazard identified in the NEP.

What is an LEP?

In addition to a National Emphasis Program, Regional OSHA offices can develop Local Emphasis Programs (LEP) as well. For example, as of October 2023, Region II which covers NJ, NY, Puerto Rico, and VI, implemented an LEP focused on construction work sites with a purpose “to identify and reduce or eliminate hazards at local construction projects.” This LEP outlines that programmed (OSHA planned) inspections will be determined through collecting local information regarding construction projects and will identify which establishments (addresses) they will inspect. OSHA will also continue their Unprogrammed (unplanned) inspections after a trigger such as a fatality or catastrophe, complaints, or referrals.

What are the current NEPs and LEPs in place that could impact a construction site?

In addition to the LEP of Construction Work Sites:

  • NEP – Combustible Dust – started in January 2023 with no expiration date.
  • NEP – Falls – started in May 2023 with no expiration date.
  • NEP – Outdoor & Indoor Heat-Related Hazard – started in April 2022 with a planned expiration of April 2025.
  • NEP – Respirable Crystalline Silica – started in February 2020 with no expiration date.
  • LEP – Noise Hazards – started October 2019 with a planned expiration date of Sept 2024.

This names a few, but there can be more depending on the type of construction a business is doing. The OSHA.gov website lists out all the NEPs and LEPs and provides resources to comply with these emphasis programs.

An employer may not be able to avoid an OSHA inspection, but there are things that can be done to ensure the process runs as smoothly as possible. Have a plan for the event which outlines who should meet with the inspector, how to determine what the inspector needs to see and what information needs to be provided immediately.  As always, OneGroup is available to help put a plan together and/or work on safety related programs to ensure employee health and safety is prioritized. For more information contact Brett Findlay at, BFindlay@OneGroup.com, Megan Coville at MCoville@OneGroup.com, or Paula DeStefano at PDeStefano@OneGroup.com.

 

Need to spell out first time

Employment Laws Taking Effect in the Spring of 2024 That Will Impact Your Business.

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By: Sarah Smith

A. Social Media Protection Act

The Social Media Protection Act, which comes into effect on March 12, 2024, aims to establish regulations and safeguards to protect users’ privacy rights on social media platforms. It seeks to ensure that individuals have control over their personal information shared online.

Under this new act employers are prohibited from requesting, requiring, or coercing any current employee or applicant for employment to:

1) Disclose their usernames and passwords for accessing personal social media accounts.

2) Access their personal social media accounts in the presence of an employer.

3) Reproduce in any manner photographs, videos, or other information contained within a personal social media account.

Employers are prohibited from retaliating against an employee or applicant who refuses to disclose any prohibited information related to their personal social media accounts.  

The act does not prohibit employers from accessing an employee’s public social media information.  This act does not prohibit employers from requiring employees to disclose any username and password used by an employee to access employer provided social media accounts, as long as the employee was given notice of the employer’s right to request this information.

This act also allows employers to access an employee’s electronic communications on a device paid for by an employer, where the provision of, or payment for, such device is conditioned upon the employer’s right to access the device and the employee was notified and consented to such access.  Please note that the act prohibits employers from accessing any personal social media accounts contained on employer provided devices. 

Employers should review and update their social media policies to provide the required employee notices and ensure that their current policies do not require access to personal social media accounts.

B. Increased Wage Protections

Effective March 13, 2024, wage protections under Labor Law §§ 190 et. al. will be increased. The Department of Labor (“DOL”) previously rejected wage theft claims from executive, administrative, or professional employees making more than $900 a week. Employees above this earnings threshold were solely limited to pursuing a private action in civil court.

This change to the Labor Law seeks to correct this inflexible approach by increasing the weekly wage threshold from $900 to $1,300 per week. As such, executive, administrative, and professional employees making $1,300 or less per week will no longer be confined to commencing a lawsuit in civil court to recover owed wages and may bring an action with the DOL.

In addition to increasing the weekly wage threshold, the following provisions will also apply to executive, administrative, and professional employees making less than $1,300 per week:

1) Frequency of Pay (Labor Law §191): non-manual workers making less than $1,300.00 a week need to be paid no less than biweekly.

2) Cash payments of wages (Labor Law §192): Requires employers to obtain advance

employee consent for payment by direct deposit.

3) Benefits or wage supplements (Labor Law §198-c): Requires employers to timely pay

all amounts and benefits owed to employees under company policy and sets forth penalties for an employer’s non-compliance.

Though this act does not alter the salary thresholds for classifying employees as exempt from overtime, the DOL has updated their regulations to increase the salary threshold to be classified as an exempt employee. 

Certain executive and administrative employees who meet both the duty and salary requirements are exempt from overtime pay requirements. The salary threshold for classifying an employee as exempt from overtime has been increased as follows: 

  1. In New York City, Westchester, Nassau, and Suffolk Counties from $1,125.00/week to $1200.00/week ($62,400.00/year),
  2. In the rest of New York State from $1064.25/week to $1,124.20/week ($58,458.40/year).

 If an employee’s salary does not meet the new threshold, the employer will not be able to claim the overtime exemption for that employee, which could result in increased labor costs.

The above changes will provide increased wage protections for employees. The above changes will allow DOL to commence wage theft investigations for any individual making less than $1,300.00 a week.  The above changes to Labor Law §§190 et. al. and the increased salary threshold for overtime may lead to an increase in DOL audits and wage theft litigation. Employers should review their payroll practices to ensure compliance with these changes to avoid potential litigation.

For more information, contact Sheats & Bailey, PLLC; a law firm dedicated to serving the construction industry.  Tel: (315) 676-7314.  www.TheConstructionLaw.com.

The information provided above is not intended to serve as specific legal advice for any particular situation.  Competent legal and experienced counsel should be consulted.

 

Succession Planning…

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Earl R. Hall, Executive Director – Syracuse Builders Exchange

Succession planning is never easy and generally not a topic construction industry employers want to think about – until they have to.  In my tenure as Executive Director of New York’s largest construction industry Association, I have assisted employers during their succession planning exercise, which has provided perspective on our members and what options they evaluate as they prepare to assure their business continues. 

Hanging up one’s hard hat for the last time should be a rewarding experience.  Whether you are a business owner, superintendent, foreman or journeyman, reflecting on your career and the industry you leave behind will generate a wide range of emotions.  For business owners, knowing you have a succession plan will provide peace of mind, financial security, and a sense of accomplishment, especially if family is involved in the plan.

Professionals such as accountants, attorneys, bankers, and investment advisors should be engaged during the due diligence process.  Obtaining professional advice is essential in developing a plan, identifying potential options, and avoiding unforeseen issues which might adversely impact the execution of a succession plan.   Additionally, such advisors will help one navigate how to implement the succession plan and what role, if any, the business owner will have during and/or after the transition.

Understanding the assets and liabilities of the business is essential, keeping in mind the company’s greatest assets may be the leadership team and employees.  Identifying potential successors to transition the business in many cases comes from within, so explore such options with those within the company, including employees and family members.  Communicating with those employees and/or family members will provide valuable feedback relative to interest in exploring a succession plan.  From there one can determine whether or not a business consultant or broker may be necessary to identify additional external options.

When to begin exploring a succession plan may vary depending on a range of unique facts and circumstances, so developing a plan with an adequate time frame is essential to obtain goals and objectives.  Planning for the unexpected is being proactive, so working with the company’s executive leadership team, family members and professionals will provide an initial strategic road map for the future.  While there is no certain age to begin succession planning, one should always have at a minimum a business plan in place which would address the “unexpected” event that would impact the ownership of a business.

While the process of succession planning may be similar for all construction industry employers, those employers’ signatory to one or more construction collective bargaining agreements must be aware of potential issues.  Such issues may impact one’s ability to sell the business and/or transition the business to family members.

Union contractors will need to evaluate the termination dates of all collective bargaining agreements and determine how such agreement may or may not impact a succession plan.  Generally, in a business transition or new ownership situation, existing collective bargaining agreements are also transitioned to the new owners of the business, unless the agreements have been properly terminated. Obtaining advice from an attorney familiar with the construction industry and labor agreements will be critical to assist in the decision-making process.

In determining whether or not terminating one or more collective agreements is necessary to effectuate the succession plan, one should consider the impact of any employer withdrawal liability relative to a signatory union’s pension fund or funds.  Determining the employer’s unfunded withdrawal liability should be done by requesting the union pension fund actuary calculate the employer’s withdrawal liability in the event such is triggered by terminating the collective bargaining agreement.  This disclosure may impact the decision-making process or impede one’s ability to implement a preferred or potential succession plan.

Developing a succession plan can be an arduous exercise; however, it is necessary if the desire is to continue the business in the unlikely event of an unexpected matter or while considering retirement.  Surrounding yourself with a great support team of professionals and other invested individuals who care about the employer will pay dividends during the succession planning process.