KERN Journal Business
Vol. 4, No. 2
April / May 2015
McCarthy talks business Page 20
Legal and Human Resources Issue
New mandatory sick leave policy coming in July By John R. Szewczyk
nder the Healthy Workplace, Healthy Families Act of 2014 (AB 1522) [Labor Code Section 245 et. seq.], commencing as of July 1, California employers will be obligated to provide all of their employees, including part-time and temporary employees, with paid sick leave. Employers need to immediately undertake measures to ensure that they will be in compliance with this new statutory scheme. Basic requirements/accrual rate At a minimum, sick leave will accrue at the rate of at least one hour of paid leave for every thirty (30) hours worked. Accrual begins on the first day of employment or July 1, whichever is later. John R. Szewczyk An employer may limit the amount of paid sick leave an employee can use in one year to 24 hours or three days. Without adopting any accrual cap, a full time employee would earn in excess of eight days sick leave per year. Accrued paid sick leave may also be carried over to the next year, but an employContinued on page 12
Kern Business Journal P.O. Bin 440 Bakersfield, CA 93302
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PHOTO COURTESY OF MERCY HOSPITAL
“Leading by example is a powerful tool,” says Bruce Peters, president and CEO of Mercy Hospitals Bakersfield, back row in plaid shirt. Recognizing employees for their acts of human kindness and holding them up as examples is heart of Mercy’s Applause Recognition Program. See story on page 6.
Money management: Financial wellness programs pay off for employee and employer. Page 26
Risk management ERM addresses traditional risk management, plus dynamic and speculative risks. Page 34
KERN BUSINESS JOURNAL
relationship built on quality, value, and service is a natural fit for us, and that is exactly what we have with Valley Republic Bank.” Laura Barnes President Associated Builders and Contractors, Inc. Central California Chapter Laura Barnes is President of the Central California Chapter of the Associated Builders and Contractors, Inc. (ABC), an association that represents and trains employees for contractors throughout the central valley. ABC chose Valley Republic Bank because they share the same values and dedication to customer service. They are proud to call Valley Republic’s staff their financial advisors…and friends.
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April / May 2015
April / May 2015
Journal KERN Business Showcasing Kern County business and industry April / May 2015 Vol. 4, No. 2 Kern Business Journal is a bimonthly publication of The Bakersfield Californian. Copies are available from The Bakersfield Californian, Kern Economic Development Corp. and Greater Bakersfield Chamber of Commerce. Publisher Ginger Moorhouse President/CEO Richard Beene Senior Vice President Revenue and Marketing John Wells Editor Olivia Garcia Assistant Managing Editor Mark Nessia Art Director Glenn Hammett To submit a story firstname.lastname@example.org To advertise Gunter Copeland, Interactive Sales Manager email@example.com 661-395-7385 To subscribe 661-392-5777
KERN BUSINESS JOURNAL
Understanding legal, human resource related issues affecting local businesses
hen our team first considered this issue’s theme of legal and human resources, we initially thought we would have plenty of legal topics to address than human resources. Turns out we were wrong. We uncovered just as many critical issues concerning human resources, Olivia Garcia particularly new laws taking effect this year affecting businesses and employees. I’ll briefly list some examples: Holly Culhane, president of the Bakersfield-based human resources consulting firm P.A.S.
Associates and P.A.S. Investigations, noted how “companies are providing ‘outplacement’ services, which help displaced workers find new jobs. This is not a job placement service, but rather a program that helps displaced workers with tough tasks such as evaluating career options, preparing for job interviews and updating their resumes.” She added how such services offer a safety net to help workers move on with new endeavors. Robin Paggi, who is the training coordinator at Worklogic HR, shared an interesting piece looking at factors that motivate employees. Turns out, money isn’t everything. And it reminded me of another Kern Business Journal article written by Bruce Peters, president and CEO of Mercy Hospitals in Bakersfield. In
Business at-a-glance Farm Bureau urges water export from delta The Kern County Farm Bureau sent a letter to the State Water Resources Control Board urging the board to increase the water export from the delta to the San Joaquin Valley. The letter was written on behalf of 1,400 agricultural members of Kern County by KCFB President Greg Wegis and strongly supports the petition request filed by the United States Bureau of Reclamation and the California Department of Water Resources. The petition requested an increase in export pumping under certain flow conditions in the delta and appears to proactively look at the current conditions and forecasts based on hydrology to lessen the impacts from the 2014 drought operations. The majority of the Central Valley depends on the State Water Project and the Central Valley Project as the main sources supporting the farming industry, but the lack of surface water being delivered has caused Kern County agriculture, as a whole, to depend more and more on groundwater pumping. The increased flow would help
the farming industry continue to employ residents of disadvantaged communities in Kern County. Nearly 60,000 jobs in Kern County are in agriculture, with approximately 55,000 related to crop production. An estimated 20 percent reduction in irrigated acreage, farm sales and agricultural employment could result if careful planning and mitigation issues are not put in place.
CALIFORNIAN FILE PHOTO
Kern County Farm Bureau president Greg Wegis addresses an overflow crowd during the Rally for Water for the Central Valley.
Kern County growers and ranchers depend on surface water deliveries to keep their production sustainable while creating thousands of jobs for the economy, which is why the Kern County Farm Bureau supports the effort to increase delta water export to the Central Valley. — Kern Business Journal
Hard-working residents in Bakersfield Bakersfield was ranked the No. 2 hardest-working city in California, according to Wallet Hub, which examined 116 of the most populated U.S. cities in honor of Employee Appreciation Day on March 6. The analysis used seven key factors, including labor force participation rate, average weekly work hours and number of workers with multiple jobs. Bakersfield’s labor force participation rate was 70.98 percent with an average workweek of 38.9 hours. Only San Francisco ranked higher in California with a 79.06 percent labor force participation rate and a 39.6-hour average workweek. Anchorage, Alaska, ranked No. 1
A new mandatory sick leave policy takes effect in California in July. Read the story beginning on page 1.
his column, he highlighted the Applause Recognition program and Standing Ovation awards that recognizes employees for goodwill not gone unnoticed by others. “Leading by example is a powerful tool that inspires the staff of every organization. But when the example comes from coworkers, it seems to send a more powerful message,” Peters wrote. As for law, there is plenty to explore inside this year. John R. Szewczyk, an attorney and shareholder in Clifford & Brown, informs Kern Business Journal readers on the new mandatory sick leave policy in California that begins in July. Vanessa Franco Chavez, an
associate attorney in the Klein, DeNatale, Goldner Employment Counseling and Litigation department, discusses another change in law this year: mandatory training on abusive conduct. This training would be required for supervisory employees. And if you want to know what’s being done on contractor fraud and abuse, then you will want to read an article by David Wolf, a deputy district attorney with the Kern County District Attorney’s Office. There are plenty of other articles that capture changes in the workplace and improvement efforts by businesses.
overall with a 79.21 labor force participation rate and an average workweek of 40.7 hours. Virginia Beach, Virginia (77.8 percent, 40.1 hours); Plano, Texas (78.65 percent, 40.6 hours); Cheyenne, Wyoming (78.08 percent, 39.8 hours); and Irving, Texas (78.52 percent, 40.1 hours), rounded out the top five. Wallet Hub was launched in February 2012 by Evolution Finance as a one-stop destination to help consumers and small-business owners make better financial decisions and save money. — Kern Business Journal
The study was conducted from November 2014 to December 2014. Kaiser Permanente was founded in 1945 with a mission to provide high-quality, affordable health care services and has approximately 9.6 million members in eight states and the District of Columbia. — Kern Business Journal
Kaiser Permanente California ranks highest in J.D. Power member satisfaction study Kaiser Permanente has been given the highest ranking for customer satisfaction in California for the eighth consecutive year according to the J.D. Power 2015 U.S. Member Health Plan Study. Kaiser Permanente scored higher than six other health plans in California with 778 points on a scale of 1,000 – 97 points higher than the second-highest rated health plan score. Kaiser Permanente scored the highest in overall member satisfaction, coverage and benefits, cost, provider choice, customer service, and information and communication.
Olivia Garcia is editor of the Kern Business Journal.
Sierra Bancorp appoints new CEO Kevin McPhaill was appointed president and CEO by the board of directors of Sierra Bancorp, the holding company for Bank of the Sierra. McPhaill’s appointment was effective April 1, the same day founding bank President James C. Holly retired. Holly will continue to serve on the board of directors as vice chairman. McPhaill grew up in Tulare County, earning his undergraduate degree from Fresno Pacific University and his MBA at Fresno State. McPhaill also graduated from the Graduate School of Banking at Southern Methodist University. McPhaill has nearly 25 years of banking experience, including 14 years with Bank of the Sierra, most recently serving as president and COO. — Kern Business Journal
KERN BUSINESS JOURNAL
April / May 2015
April / May Events
Greater Bakersfield Chamber of Commerce April 17, 24 – Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. April 21 – Website Launch Party; 4-6 p.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. April 23 – Mixer; 5:30-7:30 p.m.; Bland Solar, 8200 Stockdale Highway, Suite C-2B. May 1, 8, 15, 29 – Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St.
May 4 – Good Morning Bakersfield; check-in/networking, 6:30 a.m.; program, 7-8:30 a.m.; Cost is $35 for members; $75 for nonmembers. DoubleTree by Hilton, 3100 Camino Del Rio Court. May 12 – Seminar; check-in/networking, 11:30 a.m.; seminar, noon to 1 p.m.; Cost is $20 for members; $40 for nonmembers; Greater Bakersfield Chamber of Commerce, 1725 Eye St. May 25 – Chamber Closed – Memorial Day.
Kern County Hispanic Chamber of Commerce Cinco de Mayo Celebration, Private Residence – TBA. Doors open at 5 p.m.; 6 p.m. – midnight. For details on event or location, please call 633-5495.
Activities for April and May: April 22 — KCHCC Earth Day Luncheon at California State University Bakersfield’s Solario de Fortaleza Facility, 9000 Stockdale Highway. 11:30 a.m. – 1:00 p.m. For more info, call 633-5495. April 23 — KCHCC Grand Opening & Ribbon Cutting Ceremony at AC Broadcasting (Mundo Fox), 8331 Kern Canyon Road. Arrival 5:30 a.m.; Ribbon Cutting 6 p.m. For more info, call 633-5495. April 25 — The Kern County Hispanic Chamber of Commerce will have booth at the Kern Green Event, 7:30 a.m. - 1 p.m., Yokuts Park. For more info, call 633-5495.
May 7 — KCHCC Small Business Luncheon. Doubletree by Hilton, 3100 Camino del Rio Court. 11:30 am – 1:00 p.m. For more info, call 633-5495. May 31 — KCHCC proudly presents its 16th Latino Food Festival & Menudo Cook Off at the Kern County Fair Grounds, 1142 S. P St. 7 a.m. – 7 p.m. For more info, call 633-5495. For more information about the KCHCC Fall Business Academy, call 661-633-5495. — Jay Tamsi
May 1 — KCHCC presents its 13th annual
May 27 – Social Media Therapy, check-in/networking, 11:30 a.m.; seminar, noon to 1 p.m.; Cost is $20 for members; $40 for nonmembers; Greater Bakersfield Chamber of Commerce, 1725 Eye St. May 30 – Beautiful Bakersfield Awards; DoubleTree by Hilton, 3100 Camino Del Rio Court. To register for any of these events or for more information, please visit bakersfieldchamber.org or call 327-4421.
North of the River Chamber of Commerce Join the NOR Chamber of Commerce Monday, May 4, at the Links at RiverLakes Ranch for the annual golf tournament. The four-player scramble-style tournament kicks off promptly at 1 p.m. Your team registration includes greens fees, snacks for the cart and a full Cinco de Mayo-themed dinner and awards ceremony. There will be opportunities throughout the tournament to win additional prizes, including hole-in-one, longest drive, straightest drive, putting contest, closest to the hole and club throwing. Team fees are $425 with single golfer fees of $100. Sponsorship opportunities are still available by contacting the NOR Chamber office at 873-4709.
The NOR Chamber of Commerce is always seeking new members. Meet the organization the second Thursday of every month at Hodel’s Country Dining for the monthly luncheon to decide if the NOR Chamber of Commerce is right for you. A $20 fee for members and a $25 for nonmembers includes a full lunch from Hodel’s, an opportunity to meet and mingle with NOR Chamber of Commerce members and small-business owners, and seminars about issues affecting business in Kern County. For more information on the golf tournament, monthly luncheons or the NOR Chamber of Commerce, log onto norchamber.org.
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PHOTO BY HENRY A. BARRIOS
Mento Buru gets the people dancing at last year’s Kern County Hispanic Chamber of Commerce Menudo Cook-off at the Kern County Fairgrounds. The event allows local businesses to connect with Kern County’s Latino consumer base.
April / May 2015
KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
April / May 2015
Legal and Human Resources
‘Applause Recognition’ inspires Mercy Hospitals staff By Bruce Peters
oses Lopez works in Dignity Health Mercy Hospitals’ transport department. One night, Lopez found a homeless man in the downtown Bakersfield hospital’s restroom wrapping his feet in paper towels. Lopez asked the man, known only as Steve, what happened to his shoes. Steve responded that he had fallen asleep and Bruce Peters someone stole his shoes. Lopez took him to his locker and gave Steve his extra pair of shoes and socks. “Moses is a super kind-hearted person,” Steve wrote on a “Bravo” card he left at the hospital. “I thought I should repay him by writing this thank-you note.” Crystal Hugen works in Mercy’s emergency room. When Jennifer, a patient, came in with a severe kidney infection, Hugen gave her more than high-quality
“Recognition is a basic human need. One of Mercy Hospitals’ core values involves recognizing the goodness in our people.” — Sister Judy Morasci, head of Mercy Hospitals' recognition committee care. She gave Jennifer compassion. “I have never had such a sweet and caring, loving nurse” as Hugen, Jennifer wrote on a card. “She is so talented and made me feel so at ease, even though I was in excruciating pain,” the patient wrote. Lopez and Hugen are just two Mercy employees who have received Applause Recognition Program “Standing Ovation” awards that highlight their dedication and concern for patients and coworkers. Leading by example is a powerful tool
PHOTO COURTESY OF MERCY HOSPITAL
Transportation coworkers join Bruce Peters, president and CEO, and Tyler Heddin, chief operating officer of Mercy Hospitals Bakersfield, in celebrating Moses Lopez’s recognition.
that inspires the staff of every organization. But when the example comes from coworkers, it seems to send a more powerful message. Patients don’t thank us for taking a good X-ray or providing a good wound wrap or IV administration. Patients thank us when there is a human touch involved in the delivery of care. That is our mission. That is what this program is all about. The Applause Recognition Program works simply: “Bravo” cards are located in boxes on all hospital floors. Anyone – patients, families, employees, doctors, etc. – can fill out a form. All employees, as well as volunteers, contract staff, and security and correctional officers in the guarded unit are eligible to be recognized. Each week, the cards are collected and nominations reviewed. Exemplary nominations result in “Standing Ovation” awards, which hospital vice presidents present to the employees in their departments. Accompanied by a gift basket, the
nomination is read to the employee and coworkers. A photograph and nomination details are published in the weekly newsletter. Standing Ovation winners are considered for annual awards, such as the Values in Action and the Sister Mary Baptist Russell awards. Bravo cards not selected for Standing Ovation awards are forwarded to the employees’ managers and read during daily “huddle” meetings. These recognized employees are given tokens, which can be redeemed for hospital promotional gifts. “Recognition is a basic human need,” notes Sister Judy Morasci, Mercy Hospitals’ vice president of Mission Integration and head of the hospitals’ recognition committee. “One of Mercy Hospitals’ core values involves recognizing the goodness in our people.” Employee input has helped make the Applause Recognition program a success. The program rolled out in 2013, replacing a more “traditional” employee of the month program. Research conducted by
human resources, the recognition committee and the Mercy Foundation as well as an employee survey revealed the desire to recognize more employees in a more timely manner. The earlier program included a monthly awards ceremony held in the cafeteria. Many employees were unable to attend and participation was poor. Standing Ovation awards are presented to employees during their normal work hours, in their work units and in front of their peers. The Applause Recognition program is evolving and soon will include employees at Mercy’s sister hospital, Bakersfield Memorial Hospital. With this program being one of the best parts of my job, I try to attend most of the Standing Ovation award presentations. I am proud of the culture of caring that Mercy employees have embraced and that this program is helping encourage.
Bruce Peters is the president and CEO of Mercy Hospitals in Bakersfield.
April / May 2015
KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
April / May 2015
5 things every employer should know By James Yoro and Beatriz Trejo
esponsible employers and responsible employees want the same thing: to work in a safe and healthy environment. But despite the best efforts of all involved, accidents can and do happen, and a work injury is an unfortunate incident for all parties involved. The workers’ compensation system is based on a trade-off between employees and employers – employees are supposed to promptly receive the benefits for on-the-job injuries, and in return, the workers’ compensation benefits are the exclusive remedy for injured employees against their employer. An employer should respond quickly and appropriately to an employee’s work injury claim so as not to unnecessarily delay the provision of the needed benefits. But the process can be more complicated than that. Here are five things employers should consider when dealing with on-the-job injuries: 1) The employer has a duty to investigate. The law requires that when an employer has been made aware of any facts, which would lead to a conclusion that an injury has occurred on the job, the employer must investigate the incident. Being made aware of the incident can be any reporting or complaint made to a supervisor, foreman, manager, administrator or any person of authority. 2) Provide a “claim form” to the employee.
Unless the injury resulted in first aid only, within one day of having knowledge of the injury, the employer must provide a “claim form” to the injured worker. Once an injured employee completes and returns the claim form to his or her employer, workers’ compensation benefits should start flowing quickly if the injury is industrial.
3) Workers’ compensation is a no-fault system. An injured worker will be entitled to workers’ compensation for injuries arising out of, and in the course of, employment. The injured worker does not need to prove that anyone was at fault for the accident. 4) Workers’ compensation is a benefit delivery system.
PHOTO BY MICHAEL LOPEZ
Beatriz Trejo, left, associate attorney, and James Yoro, senior partner, of Chain | Cohn | Stiles.
There are five types of benefits to which the injured worker may be entitled: temporary disability, permanent disability, medical treatment, vocational rehabilitation services and death benefits. 5) There are two ways to settle a workers’ compensation case. Once the case is ripe for settlement, the case may be settled by way of “Stipulation with Request for Award,” where the employee is paid a small weekly benefit ($230 to $270) for the percentage of permanent disability that a doctor has assigned to the injured worker and is also entitled to any continuing reasonable and necessary medical treatment. However, the medical treatment is still under the control of the employer’s insurance company. The other type of settlement is called a “Compromise and
Release.” In this case, the employer, through its insurance carrier, negotiates to buy out the insurance carrier’s obligation to the injured worker for benefits and future medical care for a lump sum settlement paid to the employee. For more information on workers’ compensation, including five more important tips every employer should keep in mind when dealing with an employee making a workers’ compensation claim, go to chainlaw.com and click on the workers’ compensation specialized site. James Yoro is senior partner at Chain | Cohn | Stiles, where he manages the law firm’s workers’ compensation practice, and has nearly 40 years of experience in his field. Beatriz Trejo is an associate attorney in the workers’ compensation department at Chain | Cohn | Stiles.
Boomers’ mass exodus on horizon By Diana Greenlee
olks waiting with their ears to the ground for a stampede of baby boomers moving out of the workforce may be in for a shock. According to CSUB Center for Career Education and Community Engagement Director Markel Quarles, the retirement of the group born between 1946 and 1964 will be different than previous generations. “A lot of boomers are staying in the workforce a little longer,” he said. The director says the boomers have held more small
businesses than other cohorts, so folks will see more of them for sale. Economic factors and better health may also allow more of them to continue to work on their own terms. “The way they (boomers) navigate the workforce is different,” said Quarles. “They may work on a contract or project basis or part time.” Some of the vocational trades may experience a gap, according to Quarles. In the near future, skilled workers such as welders, carpenters and electricians may be even more in demand. The director said succession planning could mitigate some of the deficits.
“We have people on the payroll who have intellectual capital; they have built relationships,” he said. “(The challenge) is how to maintain continuity and that knowledge base.” Danette Scarry, marketing director for America’s Job Force, part of a collaborative of 13 agencies, including Employer’s Training Resource, the Employment Development Department and Department of Rehabilitation, says the group has been meeting for more than a year in anticipation of personnel reallocation resulting from Continued on page 9
April / May 2015
KERN BUSINESS JOURNAL
South Street Digital, Inc. Continued from page 8 mass retirements. “I do know we’ve had forum meetings with different educators and employers to help them figure out skill gaps,” she said. Although they haven’t pinpointed a particular industry that may be hardest hit once boomers jump ship, their goal at America’s Job Force is to meet the needs of a shifting workforce and respond when any industry is faltering. She said the oilfields were thriving until the recent decline in oil prices, which created a glut in oilfield workers. Now many will retrain for other industries. “At one point before the oilfields plummeted, we had heavy hiring of oilfield workers,” she said. Apple One staffing consultant Whittany Bennett agrees with Scarry. Oil is on the downside for now, but retirements, relocations and growing businesses have created a need for additional staff, particularly in medical, agricultural and accounting areas. The consultant said they screen candidates, enabling them to provide employees who are skilled enough to pick up the slack on the fly in a transitioning workforce. She said Apple One provides workers on a temporary basis, enabling managers and staff to try out the arrangement before the relationship becomes more committed. “It’s nice for both employer and employee,” she said. “And it gives the employer a chance to evaluate the employee.” The youngest baby boomers are about 50 years old today, according to Quarles, so only time will tell what the next 15 years will bring. Not since Y2K has an event garnered such suspense, but the effects may be less pronounced than anticipated. Said Quarles, “The mass exodus will look a lot different than we expected.”
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April / May 2015
New in 2015: Mandatory training on abusive conduct for supervisory employees By Vanessa Franco Chavez
nder California’s Fair Employment and Housing Act (FEHA), California employers with 50 or more employees are required to provide two hours of sexual harassment and discrimination training to all supervisory employees every two years and within six months of the time they become a supervisor. (Cal. Gov. Code, § 12950.1) In 2014, Gov. Jerry Brown signed Assembly Bill 2053, requiring that this training also include a component on the prevention of “abusive conduct,” beginning Jan. 1, 2015. Assembly Bill 2053 adds a training requirement, but does not prohibit abusive conduct in the workplace. Although the new law does not provide guidance on what and how to cover abusive conduct in the biennial sexual harassment training, it defines “abusive conduct” and provides examples of what qualifies. According to the new law, abusive conduct is defined as “conduct of an employer or employee in the workplace, with malice, that a reasonable person
would find hostile, offensive and unrelated to an employer’s legitimate business interests.” “Repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance” might constitute abusive conduct. Unless someone’s behavior is especially severe and egregious, a single act of any of the above does not constitute abusive conduct. Unlike sexual harassment and discrimination, abusive conduct is “status-blind” because it is not tied to a protected characteristic, such as race, color, religion, sex, gender, sexual orientation, marital status, national origin, ancestry, disability or age. To comply with the new law, employers should update their sexual harassment training curriculum to include abusive conduct. The training should be aimed at helping supervisors recognize abusive conduct and respond to employees who raise concerns about abusive conduct in
the workplace. The training should be conducted by trainers or educators with experience in the subject and offer supervisors practical examples and guidance on how to appropriately address situations that involve abusive conduct. Even though abusive conduct is not prohibited under the new law, employers may also consider trying to minimize abusive conduct in the workplace. Employers might adopt policies prohibiting
such behavior in the workplace and create a complaint procedure for reporting and investigating abusive conduct. Based on a national survey by the Workplace Bullying Institute, which advocates for legislative action such as Assembly Bill 2053, 27 percent of the American public have or are directly experiencing abusive conduct in the workplace and 72 percent of the American public know of workplace bullying. According to the same survey, nonwhite groups and women reported being affected by bullying in the workplace at rates higher than their white or male counterparts. Because the line between illegal harassment and discriminatory conduct, on the one hand, and abusive conduct, on the other, can be easily blurred, taking these additional steps will generally promote a safe work environment and also minimize litigation related to illegal misconduct. Vanessa Franco Chavez is an associate attorney in the Klein, DeNatale, Goldner Employment Counseling and Litigation department.
April / May 2015
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April / May 2015
Continued from page 1 er can elect to cap such accruals at 48 hours or six days. Usage Employees are allowed to use accrued paid sick days beginning on the 90th day of employment, though the accrual of the time commences upon their initial date of employment. The employee may also request paid sick days in writing or verbally. An employee is allowed to take paid leave for the employeeâ€™s own account, or on account of assisting with a family member. Sick leave can also be taken by an employee who is a victim of domestic violence, sexual assault or stalking. Additional employer obligations There are other employer obligations that arise under the new statute. Employers must: 1. Display a poster addressing paid sick leave in a location where employees can read it easily. 2. Provide writtenÂ notice to employees of their sick leave rights at the time of hire. 3. Show how many days of sick leave an employee has available on each pay stub or any document issued the same day as a paycheck. 4. Maintain records showing how many hours have been earned and used for three years. 5. Not retaliate or discriminate against an employee who requests or uses paid sick days as permitted by law. In order to ensure compliance with this statutory scheme, employers should review their current sick leave policies and take steps to bring these policies into compli-
ance with the law. Employers must also take steps to comply with the law in communications with new hires and in tracking the accrual of sick leave on employee paycheck stubs. Most importantly, if an employer does not want to provide unlimited accruals of sick time, the employer will have to fix a cap on accruals and notify its employees of this policy. As there are nuances of the law that space does not permit to be addressed in this article, employers are urged
to consult with their attorneys or HR specialists to ensure that they fully understand their obligations and rights under the law. John R. Szewczyk is an attorney and shareholder in Clifford & Brown. He has over 30 years experience in all facets of employment law representing employers. He handles transactional matters as well as litigation in state and federal courts and before various different governmental agencies.
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FOR SALE Phase I of Parcel Map 10606
Finished lots ready for industrial or commercial development. Located within the City of Bakersfield, Parcel Map 10606 is developed into several industrially-zoned lots that allow for a variety of commercial and industrial uses. This offering of lots features finished improvements such as streets, curbs, gutters, sidewalks, utility stubs, and more. Several lots are available ranging in sizes from 9,600 square feet up to 25,398 square feet. Woodmere Drive is highly accessible from both Ashe Road to the west and Stine Road to the east. Seller will consider offers for a build-to-suit or ownerfinancing. Click on the link below for lot availability, sizes, and prices.
FOR SALE 26 Lots on Costajo Road
Approved Vesting Tentative Tract 6417 features 26 proposed buildable single-family lots south of Bakersfield. Average lot size of 1.12 acres. Tract 6417 is one of the final tracts to be approved prior to the County of Kern enacting a minimum six-acre lot for homes serviced by septic tanks. Property is zoned E(1)RS in the County of Kern. Property is on the SWC Costajo Road and Shafter Road, South of Bakersfield. Highway 99 south to Bear Mountain Boulevard, North on Costajo to Property.
April / May 2015
KERN BUSINESS JOURNAL
Responsible beverage service training: Making our community safer By Linda Eviston
lcohol can, at times, be alluring, beguiling and enthralling for some people. Indeed, alcohol can offer the comforts of a relationship, the hypnotic feelings of a great accomplishment and the perceived strength of a Marvel superhero. As appealing as those descriptions may be, however, most of us have witnessed the terrible devastation that alcohol can wreak on an indiLinda Eviston vidual or a family. While alcohol can be mesmerizing, it can transform wonderful human beings into offensive, belligerent individuals and, at worst, violent miscreants. If you have watched or read the news in Kern County during the past year, you are likely disturbed by the number of DUI fatalities and DUI injuries. What you may be less aware of, however, is the frequency
of underage youth who obtain alcohol. Most people have a friend, family member or neighbor whose life has been devastated by alcohol. Because alcohol can be a bright, shiny lure for teens or alcoholics, there are community solutions that put barriers in front of sales to minors or already intoxicated. In order to avoid the sales of alcohol to intoxicated persons as well as minors, Responsible Beverage Service training has been developed and implemented. Developed jointly by the Alcohol Beverage Control and a statewide advisory committee, RBS curriculum is a community-based approach designed to reduce the risks associated with retail alcohol environments. The goal of RBS is to reduce alcohol-related problems by educating an establishmentâ€™s staff on the sales and service of alcohol and holding them accountable if their establishment violates state and local laws. What are the risks to an alcohol establishment? Whether it is an on-site retail environment (bar, restaurant, pub or tavern) or an off-site establishment (mini-mart, liquor store or grocery store)
or special events (fairs, festivals), any business that has an alcohol license is at risk of selling to a minor and/or selling to an individual who is already inebriated. In either case, ABC has the power to fine the licensee, suspend or even revoke the license. While license revocation is highly unlikely, fines happen frequently. ABC has considerable authority when an alcohol license is issued to insure that the community is not endangered by
any actions of the licensee. ABC works in partnership with licensees to help the licensee avoid missteps that may endanger the community. STEPS, a longtime DUI service provider, sought out a program that prevented DUIs from occurring. RBS, an evidence-based practice, was identified to reduce the number of intoxicated drivers on the road. Many techniques are available to help servers size up patrons to determine that they are of legal age and able to drive without creating problems. Servers are provided methods to pace the service of alcohol so patrons donâ€™t become intoxicated. There are a number of techniques to identify false identification cards, stop service and help patrons get home safely. The training has also proven highly effective with retail alcohol (off-site licensee) establishments. When RBS training occurs, each student must be present during the entire training and take and pass a written test. Each passing student receives a card certifying that he or she has successfully completed RBS training. STEPS provides the training in both English and Spanish and has traveled to multiple sites both within and outside Kern County so that employees can receive the training onsite. Linda Eviston is the executive director for STEPS, a nonprofit DUI education and prevention program. She can be contacted through the website at steps-inc.com or through the STEPS Facebook page.
KERN BUSINESS JOURNAL
How to get most from military veteran employees By Chad Storlie
he message, “Hire veterans,” has been a hot tagline for years. Federal agencies, nonprofits and corporations benefit immediately by hiring veterans because military veteran employees are attentive, possess leadership skills, work well on teams, have a global perspective, take initiative and can adapt well to changing conditions. There are other immediate benefits companies can receive when they challenge military veterans to adapt their skill sets to meet today’s business challenges. The solution is to challenge veterans to higher levels of performance in the organization. Veterans fought in Iraq, Afghanistan, Grenada, Panama, Vietnam and other locations across the globe and they performed their military duties while simultaneously training teams, maintaining equipment, operating in grueling conditions and safeguarding resources. The military knows that challenging people is how you derive optimal performance from individuals and teams. Business, government and nonprofits can also reap these same rewards from this talented group. The following five-step process is a basic framework for how to identify and issue challenges so military veterans can help exceed the goals of the organization. Hire veterans for potential and leadership What should you look for when hiring a veteran? First, find military veterans who have shown a great deal of independence, initiative, creativity, learning, leadership, teaching ability, international experience and technical expertise and who have had a fast career progression. Second, worry less about prior rank, branch of service and formal education level. Instead, look for someone who has the traits you want in a leader in your organization in three to five years. Third, do not worry about the veteran’s office skills. You can easily teach him or her how to use Microsoft Excel or other office programs. What you cannot teach as easily are leadership and initiative. Use those translated military skills to build your organization.
Train to high standards Training is what the military services do when they have a new recruit. They bring the person in, set the standards of performance and train him or her in how to meet and exceed the standards. You should train veterans in three areas: corporate culture, the technical requirements of their position and formal education requirements. Corporate culture training is a must have for new employees because it teaches veterans so much about your organization, how things are done and it shows them where their military values and your organization overlap. Military veterans love hands-on, task-oriented training, and they enjoy seeing the larger picture. Training someone for a logistics position? Show them the ordering system in the morning and then have them assist with customer deliveries in the afternoon. Connecting all systems together and demonstrating the larger purpose will make your training program a success. Finally, when you are training do not forget about the value of a college-level degree and other certifications. Veterans need to know about the educational requirements for positions three to five years in the future so they can complete any formal education requirements. Challenge with additional responsibilities Veterans love to be challenged. Indeed, the desire for a greater range of challenges is a big reason many military veterans leave the service. Identify the challenges for your department and let the military veterans start attacking the small ones. As they work on and successfully complete the small challenges, they are training and adapting to be successful at the larger challenge you give them next. Schedule frequent check-ins to answer questions and assess progress. Translate military skill sets to your organization’s greatest needs By challenging veterans, you will force them to adapt their military experiences and training to your organization’s needs. One of the greatest benefits to veterans is that their military experience can be directly used to make your
April / May 2015
organization better. Military skill sets in leadership, planning, competitive analysis, safety, procedures and coaching can be put into practice immediately. When a veteran translates his or her military skills to benefit your agency, it is a huge win. Military skill sets must be translated in a way that supports and supplements an agency’s mission, charter, regulations and operations. Coach, listen and support to grow veteran employees Veterans are used to reviewing what they have done, receiving coaching for personal improvement and seeking out additional training to improve their performance. Give veterans timely, specific and actionable feedback in a private setting and a constructive manner. Listen to their suggestions about how to improve the department’s operations, and give them additional training to improve their weak points. Use the “battle buddy” concept and pair the military veteran with a co-worker in another department. That will give the veteran an independent person to answer questions about the department’s culture and norms. Do not coddle veterans or treat them differently. Set a high standard of performance, and give them the resources to excel at their jobs. Military veteran employees and military skills pay off for organizations Corporations, agencies and departments that challenge their military veteran employees will get the best of their present and future performance. The use of the Five-Step Military veteran process of hire, train, challenge, translate and coach, as well as translating and applying universal military skill sets to your organization accomplishes two vital tasks. First, it gets military veterans training, engaged quickly and early in your organization’s culture and operations, and seeks to have veterans work on some of your more pressing problems. Second, by focusing on translating and applying military skills to your organization you show veterans that you want and demand that they bring the full value of their military experience and training to create greater value for your organization, stakeholders and customers. Chad Storlie is author of two books, “Combat Leader to Corporate Leader” and “Battlefield to Business Success.” An adjunct lecturer of marketing at Creighton University in Omaha, Nebraska, Storlie is a retired U.S. Army Special Forces officer with over 20 years of active and reserve service in infantry, Special Forces and joint headquarters units.
April / May 2015
KERN BUSINESS JOURNAL
Interns, volunteers now protected from discrimination, harassment By Holly Culhane
ederal and state labor regulators, including those in California, have long scrutinized the use of unpaid interns and volunteers. Now California has joined New York, Oregon and the District of Columbia in protecting interns and volunteers from discrimination and harassment. Federal and California laws require the use of unpaid interns only in training arrangements that comply with specific guidelines, which can be found at dol.gov and jobs.ca.gov. But now in California, unpaid interns and volunteers no longer can be considered free labor that can be used and sometimes abused as a company and its managers see fit. California lawmakers recently passed and Gov. Jerry Brown signed into law a bill that extends civil rights protections specifically to unpaid interns and volunteers. As of the start of January, unpaid interns and volunteers are protected from workplace discrimination and harassment. Most of us would have thought this would have been a “no-brainer,” particularly in light of recent federal and state laws that have been extended to protect workers in an increasing number of protected classes, which are defined by gender,
“No one should give up their basic civil rights just because they are willing to forgo pay for the experience.” — Nancy Skinner Bay Area assemblywoman
sexual orientation, age, race, religion, etc. But a recent federal court ruling in New York uncovered a loophole in federal law and most states’ laws that left unpaid interns and volunteers open to abuse. The case involved a Syracuse University student who contended she was sexually harassed, kissed and groped by a supervisor at her media company internship. She alleged that the supervisor retaliated against her when she rebuffed his advances. A New York federal judge ruled that Title VII of the 1964 Civil Rights Act, which protects employees from workplace
discrimination, including sexual harassment, does not apply to unpaid interns because they are not “employees.” In California, a state judge recently ruled that California’s Fair Employment and Housing Act does not apply to “volunteers.” Introducing the 2014 bill that extends the California act to unpaid interns and volunteers, Bay Area Assemblywoman Nancy Skinner noted that the recent Great Recession forced an increasing number of young people to rely on unpaid work experience, such as internships and volunteer positions, to build their resumes to complete for jobs. “No one should give up their basic civil rights just because they are willing to forgo pay for the experience,” Skinner told her legislative colleagues. “Interns and volunteers deserve a safe, fair workplace and the same legal protections against discrimination and harassment as everyone else.” A 2008 survey by the National Association of Colleges and Employees revealed that half of all graduating students had held internships while in college. Intern Bridge, a consulting firm, reported in 2012 that an overwhelming majority of these unpaid internships were held by women. Based on this new law, California employers should: • Expand their policies prohibiting discrimination and harassment to include unpaid interns and volunteers. The new law also requires employers to reasonably accommodate the bona fide religious beliefs of unpaid interns. • Inform interns and volunteers of their rights and the procedure for reporting harassment or discrimination in the workplace. • Include the treatment of unpaid interns and volunteers in any required supervisory training that covers discrimination, sexual harassment and abusive behavior. • Recognize that employers may be held liable if volunteers or unpaid interns engage in harassing conduct. The benefits for a company to have unpaid interns and volunteers are many. They include nurturing future industry professionals and “test driving” potential employees. But, as demonstrated by the ramifications that lead to this new law, internship and volunteer programs must be thoughtfully and carefully administered. Holly Culhane is president of the Bakersfield-based human resources consulting firm P.A.S. Associates and P.A.S. Investigations. She can be contacted through her website PASassociates.com and through the P.A.S. Facebook page. This article was originally published on Jan. 7 in The Bakersfield Californian.
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April / May 2015
Tom Anton’s volunteers show appreciation for troops Story and photos by Dianne Hardisty
hat began as a oneman campaign more than two decades ago to show appreciation for the U.S. military has grown into a movement of many. Bakersfield attorney Tom Anton’s Cooks from the Valley, which several times a year fields an army of volunteer cooks, has so far barbecued 157,198 Harris Ranch steaks for troops stationed aboard ships, in military hospitals, at large and small bases, and in remote outposts. “We buy the steak, cook them and clean up,” explained Anton. “Anyone can give money. This is something we can do for the military that is allowing us to live today like it was Sept. 10, 2001 (before the terrorist attacks on New York and Washington, D.C.). They are keeping us safe.” The barbecues began in the 1980s, with Anton renting a limousine and hauling boxes of prime cut steaks to a ship docked in Hawaii, where he barbecued for a bunch of sailors. More of these small barbecues followed until
“This is something we can do for the military that is allowing us to live today like it was Sept. 10, 2001 (before the terrorist attacks on New York and Washington, D.C.).” — Tom Anton, Cooks from the Valley
the terrorist attacks in 2001, when Anton’s friends and business associates flocked to the cause. The effort has grown to involve hundreds of local volunteer cooks and the logistical support of the military. Many of the cooks are military veterans and their spouses. Several make repeated trips with the group. They are all passionate about showing their appreciation for the sacrifices the troops are making. During a 2010 trip, Bakersfield realtor and volunteer cook David Gay noted that when he returned from service during the Vietnam War he
“crawled home” after his discharge in 1970. He and the other cooks are determined to treat those fighting today’s wars differently. At its 2015 state conference in March, the Daughters of the American Revolution bestowed its Medal of Honor on Anton for his Cooks from the Valley barbecues. Anton “truly believes that every individual in military service is important and deserves our respect and sincerest support,” wrote Linda Brenner, regent of the DAR’s Bakersfield chapter, which nominated Anton for the prestigious award. “Cooks from the Valley has partnered with business, community groups and individuals,” wrote Brenner, who accompanied the Cooks from the Valley last November for Veterans Day barbecues for troops in the USS George Washington Naval Carrier Fleet; Yokosuka, Japan; and Pearl Harbor. Anton is quick to share credit with the many people – mostly from Kern County, with a few coming from other states – who have volunteered their time and helped pay for the steaks that are flown by military aircraft to the troops. Each volunteer pays about $4,000 as his and her share of buying the steaks. They also pay their own lodging and meal expenses. Many companies donate supplies for the barbecues. As an example, The Garlic Co. in Bakersfield has donated thousands of dollars’ worth of spices to season the steaks. “A lot of people deserve recognition,” said Anton. Anton is planning a Cooks from the Valley barbecue in May in the Middle East, which will include a barbecue in Afghanistan. Forty-eight volunteer cooks and 18,000 steaks will be flown in for the barbecue. On July 4, a barbecue will be held at Lemoore Naval Air Station, north of Bakersfield. Long used as the operations base for Cooks from the Valley, Lemoore will finally be getting its own appreciation barbecue. On Sept. 11, a barbecue will be held on the East Coast for Navy Seal teams.
With the temperature behind the grills climbing to about 130 degrees, Cooks from the Valley volunteers barbecued Harris Ranch steaks for troops on July 4, 2010, in Bahrain, the headquarters of the U.S. Navy’s Fifth Fleet.
Become a cook People interested in volunteering for an upcoming Cooks from the Valley barbecue should contact Victoria Harrison at Victoria@tantonlaw.com or 327-7051.
Dianne Hardisty and her husband, John Hardisty, accompanied Anton on his 2010 trip to Bahrain to barbecue for the troops on July 4.
Tom Anton discusses the details of a July 4 barbecue in Bahrain with Adm. William Gortney, the thencommanding officer of the U.S. Navy’s Fifth Fleet.
April / May 2015
KERN BUSINESS JOURNAL
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KERN BUSINESS JOURNAL
April / May 2015
PHOTO COURTESY OF ROLL GLOBAL
American Tire Distributors’ 1-million-square-foot distribution center in the Paramount Logistics Park will soon begin operation.
Kern County set to grow ‘distribution center’ industry By Dianne Hardisty
ern County has long been dependent on oil production and agriculture to fuel its economy. But with logistics and warehousing emerging as powerhouses, the local economy is no longer a “two-trick pony,” concludes R. Brent Green, Shafter’s business development director. Kern is becoming home to some of the nation’s largest distribution centers, which put the products of online merchandisers, as well as brick-and-mortar stores within reach of millions of consumers. The logical places to locate distribution centers are near West Coast ports, especially the Los Angeles-Long Beach and Oakland ports. But these ports and the roads that surround them are plagued by traffic congestion. Land zoned for industrial development in the Southern California basin is being gobbled up and real estate prices are skyrocketing. Adding to development costs are new fees and regulations cash-strapped Inland Empire cities are layering on builders. Developers now are looking for al-
ternative locations. Increasingly, they are turning their eyes toward Kern County, which is less than 100 miles from the Port of Los Angeles-Long Beach and 230 miles from the Port of Oakland. “The Tejon Ranch Commerce Center has several advantages,” said Barry Zoeller, Tejon’s vice president of corporate communications and marketing. “It’s great being located right on Interstate 5” and able to serve 97 percent of California consumers within a single day’s truck turnaround. Tejon Ranch Commerce Center is home to such mega-distribution centers as Caterpillar Logistics Inc., IKEA, Famous Footwear and Dollar General. The company is engaged in confidential discussion with other developers for future projects. Tejon Ranch officials use Kern County’s “business friendly” regulatory environment and streamlined permitting processes as selling points. As an example, they note that from “deal to delivery,” Tejon was able to get the Caterpillar parts center permitted and built in just eight months. Also attractive is Kern County’s relatively low land prices,
PHOTO COURTESY OF TEJON RANCH
Tejon Ranch Commerce Center’s location on Interstate 5 puts distribution centers within a single day’s truck turnaround from 97 percent of California’s consumers.
wages and transportation costs. Just a few miles north of Tejon on Highway 99 is the city of Shafter, where Roll Global’s Paramount Logistics Park is located. Shafter is developing an intermodal rail facility to serve industrial clients, including those in the Paramount Logistics Park. This year, around 4 million square feet of distribution center space will come on line in the Paramount Logistics Park, with the massive Ross for Less and American Tire distribution centers, as well as a FedEx ground hub beginning operation. Shafter also is home to Target, State Farm, Hillman Group, Formica, Baker Hughes, Schlumberger and Weatherford. John Guinn, Roll Global’s vice
president of forward planning, said his company is in talks with at least three confidential clients interested in bringing additional projects to Shafter. The city’s location along two rail lines and a major highway, as well as the intermodal rail facility, enhance Paramount Logistics Park’s attraction. Shafter’s Green reports the city has completed installation of 17,500 feet of railroad track, with 9,000 feet uninterrupted by grade crossings. This allows an entire unit train to be pulled off the main rail line and delivered to industrial tenants. In the intermodal rail facility, conContinued on page 19
April / May 2015
KERN BUSINESS JOURNAL
Continued from page 18 tainers loaded with products are brought via rail to Shafter. Container cars are offloaded at a distribution center within the Paramount Logistics Park and reloaded with local products for a return trip to the ports. Container cars also may be placed on trucks for hauling to West Coast markets. Until additional rail improvements are made, the offloading of containers from ships in the ports still is dependent on truck hauling. Increased regulation of trucking in California and a shortage of long-haul truck drivers are posing challenges. “I’d love to tell you it is all roses,” said Green. “But there are challenges. We would get even more distribution centers if these trucking problems did not exist.” But some help may be on the way. Bloomberg News recently reported trucking lines are hiring laid-off U.S. oil workers to help fill an estimated shortage of 35,000 long-haul drivers. Bob Costello, an economist with American Trucking Associations, reported his industry has more freight than can be hauled because of the driver shortage. The pool of former oil workers is expected to help pick up the load. Shafter’s facility, which can accom-
PHOTO COURTESY OF ROLL GLOBAL
A labeled aerial photograph shows the location of tenant companies in the Paramount Logistics Park. The City of Shafter has completed laying 17,500 feet of track to create an intermodal rail facility that serves distribution centers and other companies in the park.
modate both rail and trucking, is helping the city and Paramount Logistics Park cash in on the state and nation’s improving economy, noted Chris Minus, Shafter’s logistics consultant. If railroad companies would agree to extend lines, Shafter’s intermodal rail facility could help reduce truck congestion and pollution around Los
Angeles-Long Beach and Oakland ports. Farther north on Highway 99 is Delano, Kern County’s second largest city. More than 900 acres in the city are designated industrial. It is home to such distribution centers as Sears Logistics Services and Paramount Citrus. In Delano, Railex also operates a refriger-
ated truck-to-rail transfer facility, which is especially designed for fresh produce warehousing and handling. “There is a lot of interest out there now. Some very significant things could be coming down the line,” said Minus. “Kern County is certainly on [developers’] shortlist.”
KERN BUSINESS JOURNAL
April / May 2015
Bakersfield’s Rep. Kevin McCarthy
The challenges of leading a House divided By Dianne Hardisty
lected last year to serve as majority leader of the U.S. House of Representatives, Rep. Kevin McCarthy, R-Bakersfield, recently responded to the Kern Business Journal’s questions posed by reporter Dianne Hardisty. Q: What can Californians expect from Congress in the way of drought relief aid? A: Our historic drought is hurting California’s economy and quality of life. Given the dire circumstances, it is unfathomable that officials in Sacramento and Washington continue to put the well-being of fish over the well-being of people. The House of Representatives acted twice last year and passed legislation that would increase water deliveries to our communities. At the end of the year, as the wet season was approaching, House Republicans acted in good faith and moved toward the position of our Senate Democrat California colleagues. Unfortunately Sens. Feinstein and Boxer refused to agree to this emergency deal. The House will continue to work toward a long-term solution to solve the man-made water crisis in California. I have already begun working with Sen. Lisa Murkowski, chairwoman of the Senate Natural Resources Committee, and Sen. Feinstein on legislation that can pass the House and Senate and reach the president’s desk. After years of Senate inaction, our state cannot afford anymore delay. We need water. Recent surveys indicate California business leaders want immigration reform, but they want Congress to produce it. What, if any, immigration reform do you see from the 114th Congress? A: Our immigration system is broken. And until the root of the problem is addressed, illegal immigration will only be perpetuated and no reform can be achieved. We must secure our borders and put in place real, measurable enforcement mechanisms that stop illegal
PHOTO BY HENRY A. BARRIOS
Looking relaxed and rested, Rep. Kevin McCarthy, R-Bakersfield, speaks with Californian City Editor Christine Bedell in his office in Washington, D.C. last summer.
immigration. Unfortunately, the president’s latest executive action does nothing to solve the problem and may only exacerbate our broken system. Will Congress extend the authorization for the ExportImport Bank that will expire this summer? A: I do not believe the government should pick winners and losers in business and reward politically connected corporations. When the ExportImport Bank was last reauthorized, it included reforms to the bank that still have not been addressed. Once again, this administration is simply ignoring laws that the Congress passes. I am continuing to work with the House Financial Services Committee and listening to different sides in our community to determine the ultimate future of
the Export-Import Bank. Q: In December, President Obama and Cuba’s Castro agreed to “repair ties” between the two countries. Will Congress now lift the decades-old embargo? A: The president’s policy is rewarding the Cuban regime’s policies of human rights abuses and repression of freedom. Given the president’s failed record of assurances from foreign states that they have reformed their ways, it is difficult to have confidence that his new policy will result in a better and freer life for the Cuban people. Q: Will Congress be able to reform the tax code? A: Our tax code is burdensome for our families and small businesses. Republicans believe that a simpler and fairer
tax code can get our economy moving by allowing our jobproducers to compete on a levelplaying field with foreign companies. Unless the entire code is reformed, small businesses will continue to be placed at a disadvantage, and individuals and families will have less takehome pay. We need to provide certainty for our small businesses that serve as the engine to our economy. Just recently, the House passed America’s Small Business Tax Relief Act, which would create stability for small businesses by making permanent increased smallbusiness expensing in Section 179 of the tax code. These are commonsense measures that I will continue to work on. Q: Will Congress increase the federal tax on gasoline to help pay for
transportation improvements? A: Raising the gas tax hurts middle-class families and small businesses the most. For years, gasoline prices have been a strain on budgets and have made it more costly to deliver goods that are important to growing our economy. Thanks to innovation, increased U.S. production has helped drive gasoline prices down. With individuals finally seeing some relief at the pump, raising gas taxes on all of us is the wrong answer. But we do need to improve our infrastructure and there are other ways to fund needed transportation improvements. We should look at generating funding for these infrastructure improvements through revenue from new energy exploration and reforming Continued on page 21
April / May 2015
Continued from page 20 our tax code to spur capital to return to the United States. Q: Will Congress lift the ban on exporting U.S. oil as some Republican legislators, primarily from Texas, are proposing? A: I am supportive of lifting the export ban on crude oil. Our country is undergoing an energy renaissance and North America is now the world’s largest energy producer. To continue producing energy, creating jobs and lowering prices, it is important our energy can move throughout the global market freely. However, I also believe that we should do more to build the energy infrastructure to process and distribute our energy domestically. These kinds of improvements would allow for a manufacturing renaissance here at home, replacing what we currently import with American-made goods. Q: Cynics contend con-
KERN BUSINESS JOURNAL
gressional stalemate may be helping U.S. businesses by at least giving companies some “constant” to rely on. Will the increasingly divided 114th Congress be able to produce any bipartisan legislation? A: President Reagan famously once said, “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” Four years ago, the American people rejected the policies from the Democratcontrolled Congress and White House; we are still digging our way out of the hole they put us in. But to reverse policies that kill jobs and place more burdens on our small businesses, Congress must act. The House has passed several bills to reform the way government works that have garnered bipartisan support and I look forward to the Senate taking action on these bills. The House will continue to act in a bipartisan manner to align the priorities of the American people to that of their government.
“I do not believe the government should pick winners and losers in business and reward politically connected corporations.”
April 18th | 4-7 pm 3URFHHGV%HQHÀW
(Kern County Cancer Foundation)
at Motor City Lexus, 5101 Gasoline Alley Dr. HELP IN OUR FIGHT TO SAVE A LIFE! Join us as we host Wine Tasting from 10 California Wineries including Grey Wolf, J. Lohr and Madorom and Craft Beer from local Breweries. There will be both Live and Silent Auction items available for bidding, including but not limited to, a trip to Ireland, a diamond necklace, a Bed & Breakfast Getaway and a Croad Winery Tour. You’ll even have the chance to win beautiful Gift Baskets. We’ll also have Local Restaurants like Café Med, Luigi’s, the Crest Bar & Grill, Salty’s BBQ and many more that will keep everyone’s taste buds begging for more.
CALL 635-2300 TO PURCHASE TICKETS — $60each or 4/ $200
KERN BUSINESS JOURNAL
April / May 2015
PHOTO BY FELIX ADAMO
Keynote speaker Chip Yates begins his presentation among the crowd at the Kern County Economic Summit.
Summit examines pain in oil, agriculture and related industries By John Cox The Bakersfield Californian
ocal business and government leaders got a close look at the cracks forming in Kern County's economy as a result of drought and sharply lower oil prices. At an annual meeting that was much less optimistic than in recent years, economists and local specialists predicted substantial reductions in the county's agricultural output and continuing pain in its oil fields. Either situation could improve independently of local efforts. But short of sudden snowstorms or international unrest to lift petroleum markets, a Cal State Bakersfield economist said Kern stands to lose 7,000 jobs in oil, ag and related industries. "It looks to us like 2015 equals 2013" in terms of overall employment, CSUB economist Mark Evans told a large gathering at the Kern County Economic Summit. He forecast the county's jobless rate would climb this year to about 11.8 percent from 2014's average of 10.4 percent. A panel of local water experts warned that the amount of agricultural land now in production in Kern could shrink by a fifth because of water expenses driven higher by the drought. Such a reduction would cost the county some 12,400 farm jobs and $631 million per year in income to growers. Panelist Jon Parker, manager of the Kern Water Bank Authority, expressed hope that local oil producers could help by expanding the amount of "produced water" – the salty fluid that comes up from the ground along with oil – that gets blended with freshwater or is otherwise treated and used to irrigate crops. He called such expansion "possible, but it isn't a total solution."
Lois Henry, the panel's moderator and a columnist at The Californian, said local growers may soon be forced to rethink not only what they grow, and how much, but whether to farm at all. "At the end of the day, the question comes down to ... what are we going to look like agriculturally?" she said. Bakersfield oilman Gene Voiland opened his explanation of what's going on in the industry with a disclaimer: He doesn't know where barrel prices are headed next after falling by about 50 percent between June and January. That said, he predicted a wave of consolidations as some oil producers call it quits and others see lower business valuations as an opportunity to grow through acquisitions. Through the current uncertainty run several "wild cards," he said, including politics, regulation and transportation. Each has the potential to make production harder or easier locally, he explained. Consumers, Voiland advised, should react to the low oil prices by saving money or even splurging. "If you want to go to Europe, go to Europe," he said. But oil producers need to spend the downturn focusing on shoring up their finances, avoiding layoffs whenever possible because of the problems that rehiring creates, and learning to "live with" low prices. "Hope for an oil price recovery, but you can't count on it," he said. Voiland, the only oil industry representative to take the podium Wednesday, said "substantial" oil activity continues locally at the current level of about $50 per barrel. The difference is that little reinvestment will take place until prices recover – and he declined to say when that might happen or what it might look like. "Will it go to $100 (per barrel)?" he asked. "Who knows. The market is saying $70, $75."
PHOTO BY LOUIS AMESTOY
Nyakundi Michieka, an assistant economics professor at Cal State Bakersfield, gives a talk about air quality at the 2015 Kern County Economic Summit.
Perhaps the summit's brightest news was voiced by a North Carolina-based economist, Sarah House, who is vice president at Wells Fargo Securities LLC. She said the United States looks positioned to "stand alone" amid international weakness and stagnation. Although the recent decrease in oil and gas capital expenditures has had a big effect, she said, government and consumer spending is providing a welcome boost. In the third quarter of this year, the national labor market will probably improve to about 5 percent unemployment – the equivalent of "full employment," she said. House said wage growth, a factor that has largely gone missing through the national economic recovery, will also begin to pick up later this year. This article was originally published March 26 in The Bakersfield Californian.
April / May 2015
KERN BUSINESS JOURNAL
Guiding principle promotes excellence By Janelle Schneider
he San Joaquin Valley Air Pollution Control District has a unique strategy. It’s the key to the exemplary customer service, efficiency and high morale throughout the district’s three regional offices. It’s as ingrained in the organization’s culture as the district’s logo. It costs nothing but it reaps immeasurable rewards in both internal and external excellence and efficiency. And it’s being noticed by other agencies and organizations throughout the valley. It’s STAR: service, teamwork, attitude and respect. STAR is the guiding principal permeating evJanelle Schneider ery district activity and objective. The district has long been committed to establishing and maintaining a staff that not only produces high-quality technical work, but also provides exceptional customer service to the public, the
regulated community and others while conducting business. For years, the STAR work culture program has been aimed at creating an atmosphere in which providing exceptional service, demonstrating effective teamwork, maintaining a positive attitude and showing respect to others are an intrinsic part of each employee’s job. . Key elements of STAR include: • Providing excellent customer service • Empowering employees to identify and solve problems • Setting and maintaining high standards of employee performance, attitude and behavior • Ongoing training • Consistently recognizing and reinforcing positive employee contributions STAR begins with an unshakeable belief at all levels of leadership that employee welfare and well-being are essential to an agency’s achievement of excellence. In fact, this culture is fully embedded in the district’s daily operation, from identifying strong STAR
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qualities in applicants in recruitment and promotion decisions, to expectations of excellence in ongoing interactions between staff members, customers or members of the public, to strong and sincere employee empowerment and recognition components. Finally, STAR requires ongoing attention and invigoration to maintain its successes and momentum. The success of STAR is visible within and outside of the district. The district regularly receives positive feedback from stakeholders on the customer service received and often takes requests from elected officials, other agencies and members of the regulated community for the district to share with them the strategy of how they can help their own agencies enjoy the success of the STAR culture. The district welcomes inquiries about STAR at firstname.lastname@example.org. Janelle Schneider is an outreach and communications representative with the San Joaquin Valley Air Pollution Control District. Previously, she was a newspaper editor and reporter.
How to build and maintain STAR • Communicate expectations clearly and routinely • Use employee recognition to reward good behavior and to communicate expectations • Build an environment where employees take pride in working for the agency • Create a safe environment for employees to offer suggestions for change and improvement • Follow through with addressing employee suggestions in a timely manner • Train employees and provide the necessary tools to meet and exceed expectations • Hold employees accountable • Infuse constant energy in STAR to keep it fresh • Make STAR an intrinsic part of each employee’s job • Create an environment where employees are not put in silos and, instead, see themselves working for the agency as a whole • Provide freedom and encouragement to constructively critique the work of others • Serve as a role model
KERN BUSINESS JOURNAL
April / May 2015
Business Profile: Rabobank
PHOTO COURTESY OF RABOBANK
Rabobank’s Riverlakes Financial Services Center, located at 3800 Riverlakes Drive.
Applying for a small-business loan Ryan Dawson, Vice President, Business Banking Market Manager, Rabobank N.A.
hether you want to kick-start a new business or expand an existing one, small-business financing can make the difference between realizing a dream and coming to a standstill. Several options are available. First, a business loan, which can be used for a variety of business purposes, can offer the borrower a fixed rate and term for a specific loan amount. Another option is a revolving or non-revolving business line of credit; this type of business loan offers short-term financing and can be used as a tool to manage cash flow and expenses including working capital. A third option is a business credit card, which offers an alternative and convenient way to pay regular business expenses. With these and other financing options, getting started may seem overwhelming. But with some research and preparation, applying and getting approved for small-business financing doesn’t have to be complicated. A great place to start looking is at a local community bank, where loan officers more commonly interact with the underwriters and can closely review each loan application on a case-by-case basis. Many banks also offer loans in conjunction with the U.S. Small Business Administration. Not only does the SBA offer its own loan and grant programs, its website (sba.gov), also provides an array of materials to prepare
you for your new venture — from tips for creating a business plan to discussion boards on filing taxes. Whichever way you go, the next step is to gather the required documents before initiating an application. Different lenders will have different requirements, but you will typically need to present your current resume and personal financial statement, bank statements, a business plan, projection of income and expenses, personal and business tax returns and — most importantly — a detailed plan for repayment. Be prepared to outline the collateral that will secure your loan (i.e., real estate and/or savings) as well; lenders will evaluate that information, along with other factors, to decide if it’s safe to lend to your business. It is also important for you to explain why you need a loan and to demonstrate your ability to repay the loan. Once you have completed the application that your lender provides you, double-check it for errors and omitted sections, and ensure that all required attachments and forms are completed. Upon submitting your application, it’s a good idea to stay in touch with your lender so that you can respond quickly if more information is requested. After a lender receives a completed application, it can take up to 30 days for you to learn if it was accepted or not, though you may hear sooner, depending on the size and type of loan. If your application is declined because it was incomplete, your lender can advise you on areas that need improvement before you reapply. If you’re approved, make sure you understand all the terms, and consult with your
legal adviser if necessary, before signing on the dotted line. Overall, it’s important to do your homework and find a loan that works best for your particular business. Being prepared will not only speed up the process, it will also improve your odds of getting approved. While the entire process will take some time, the end results can be well worth the wait. For more information about small-business financing options, contact a local Rabobank business banker or visit RabobankAmerica.com. Tracie Gregorio 5151 Stockdale Highway 661-833-7263 Lucy Trancoso 3800 Riverlakes Drive 661-334-6903 Pamela Clement 900 Truxtun Ave, Ste 2100 661-324-6259 This article was provided to you by Rabobank N.A. as a general educational piece and does not constitute legal or business advice. Please consult with your legal adviser to determine if small business financing is the right option for you. Rabobank N.A. is an Equal Housing Lender and Member FDIC.
April / May 2015
KERN BUSINESS JOURNAL
What do you call a bank
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Learn more at www.RabobankAmerica.com/375 *Prime Rate as published by the Wall Street Journal on date of application. 1. Subject to credit approval. Certain restrictions apply. Promotional offer is for applications received during offer period only. Minimum of $5,000 advance on line of credit at time of account opening. Line of credit matures after 12 months. Offer not applicable to consumer lines of credit. 2. Rabobank Merchant Services are provided by First Data Merchant Services Corporation and subject to their approval. This program is only valid for new merchant accounts and cannot be combined with other offers. Current merchants who close their accounts and re-open them may not participate in this offer. Rebate is for actual processing costs up to $100. 3. Subject to approval. To receive pre-funded ACH bonus, you must enroll in pre-funded ACH through business online banking and submit one batch within 60 days of account opening. $1,000 checking account balance must be maintained for 60 days. 4. Reward points can be redeemed as a cash deposit to a checking or savings account or as a statement credit to your credit card account. First purchase bonus points will be applied 6 to 8 weeks after first purchase and are not awarded for balance transfers or cash advances. The creditor and issuer of this credit card is Elan Financial Services, pursuant to a license fromVisa U.S.A. Inc. 5. Offer for Merchant Card Services ends May 31, 2015. Offers for business line of credit and pre-funded ACH end June 27, 2015. No expiration on Business Visa速 Credit Card offer. Rabobank, N.A. Member FDIC.
KERN BUSINESS JOURNAL
April / May 2015
For every $1 spent, companies get $3 in return By Steven Van Metre
financial planning client, whom I will call Michael, works for a mid-size Bakersfield company. He is in his 50s. He and his wife have been slow starters when it comes to saving for retirement. They both also are compulsive spenders. Michael is viewed as one of the top managers at his company. He seems organized and disciplined. His boss and co-workers consider him to be a “together” type of guy. What his boss Steven Van Metre does not know is that Michael and his wife have maxed out their credit cards. Those big vacations he and his family have been taking are being paid for in installments over time. Keeping appearances up is becoming a strain. This financial strain is taking its toll on Michael’s health and work performance. He is calling in sick more often. When he is at work, he often is distracted by calls from bill collectors.
Michael sought my help in setting up retirement savings accounts for him and his wife. During a session last fall, he confided that he feels overwhelmed and fears his boss may realize his performance has slipped. Clearly, Michael needed more than investment advice. He needed counseling. “Does your employer have a financial wellness program,” I asked. If such a program existed, Michael had not heard about it. And even if it did exist, he was not sure he would use it. He did not want his boss to find out about his problems. My advice: “Ask your company’s human resources specialist about a financial wellness program. If one exists, use it.” Not all companies offer employees financial wellness programs. But for purely bottom-line reasons – if not out of concern for workers’ well being – these programs pay off. According to a recent study by the Consumer Financial Protection Bureau, for every dollar a company spends on a financial wellness program, it sees a $3 return from reduced absenteeism and workers’ compensation costs and increased staff productivity. A financial wellness program is not investment advice. Rather it is a financial education program focused on helping
employees change financial behaviors and create sound financial plans. Some key components of an effective financial wellness program include: Communication. Companies should publicize the existence and details about their financial wellness programs. Workers should take advantage of all of the services. Confidentiality. Michael did not want his boss to know about his financial problems. Workers must be assured of confidentiality. Individual financial wellness sessions often are held away from the work site. Customized sessions. While group sessions are useful to cover broad topics, each worker’s circumstance is different. Customized individual counseling sessions
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given by certified financial planners should be part of the program. Multiple sessions. Financial wellness is not an “event.” It is a process. Counseling likely will take several sessions. Retirement planning. The focus of a financial wellness program should be short term (dealing with immediate debt) and long term (saving for the future.) An aging worker who is trapped in a job because he or she cannot afford to retire can become a liability if it affects his or her job performance. As it turned out, Michael’s company had recently contracted with a local certified financial planner to set up a financial wellness program. Assured of its confidentiality, Michael and his wife are now receiving help in evaluating their expenses, setting up a budget and reducing their debt. I continue to advise Michael on how to invest his savings. Slowly but surely, we are seeing his budgeting efforts pay off in him having more discretionary funds to invest. Steven Van Metre is a Bakersfield financial planner who specializes in retirement income strategies and teaches a course on retirement planning for the Levan Institute for Lifelong Learning at Bakersfield College. His website is svmfinancial.com.
April / May 2015
KERN BUSINESS JOURNAL
Bakersfield’s tourism sector shows continued strength
Years of Community Action!
1965 - 2015
By David Lyman
everal indicators point to ongoing growth in the Bakersfield travel and tourism sector during the past year. The key indicator is the continued rise in Bakersfield hotel tax revenues, otherwise known as the Transient Occupancy Tax, or TOT. Stronger than expected performance during the first six months of the current fiscal year caused the city of Bakersfield’s Finance Department to revise upward its estimated TOT revenues. While initial projections were for $8.46 million, data through December 2014 have resulted in a rise in estimated TOT revenue to $9.1 million for fiscal year 201415. TOT revenues for the current fiscal year are now estimated to David Lyman be 3.1 percent higher than in FY 2013-14. The rise in TOT revenues is a function of both higher occupancy levels and higher room rates that local hotels could charge due to a stronger economy. Bakersfield hotels have consistently reported year-overyear increases in occupancy, ADR (Average Daily Rate) and RevPAR (Revenue per Available Room) – three key indicators in the hospitality industry. Another sign of a strengthening Bakersfield market is the imminent opening of a new hotel property. The Marriott Towne Place Suites Bakersfield West began construction last year and is scheduled to open in May 2015 on Granite Falls Drive, adding 95 rooms to the local inventory. According to the developer, this property is a West Coast prototype for the TownePlace Suites brand. In addition to hotel performance, several other indicators point to a strong local tourism sector. For example, attendance at the Kern County Museum was up almost 9 percent in the period July 2014 and January
2015 compared with the same period the year before. The museum continues to add new exhibits and attractions, including a special “Insiders Tour” for those who attended the National Street Rods Plus event in Bakersfield last April. The tour offered a one-of-a-kind behind-the-scenes glimpse of classic and unique vehicles that the museum owns but are not yet available for public viewing. At Buck Owens’ Crystal Palace, revenue was up 3.63 percent in 2014 over 2013. The Crystal Palace is consistently nominated as “Nightclub of the Year” by the Academy of Country Music and attracts visitors from throughout the world who arrive individually, in small groups and in tour buses. Attendance at the Holiday Lights at CALM, the California Living Museum, was up 7 percent over 2013, with more than 53,000 visitors. CALM expects an increase in attendance this year with the opening of both a California Coast room and a new zip line/challenge course. Murray Family Farms has seen a doubling of the number of tour buses stopping there, now averaging between 15 to 20 each day. At the Kern County Fair, carnival sales were up 5 percent and food concessionaires were up 8.53 percent over 2013. On Amtrak’s San Joaquin route linking Bakersfield with Oakland and Sacramento, ridership topped 1.2 million passengers for the second year in a row. Plus, for the first three months of Amtrak’s 2015 fiscal year (October-January), San Joaquin ridership was up 7,000 passengers over the same period the year before. In addition, the Bakersfield Amtrak station handled 521,423 passengers last year, ranking it the 22nd busiest station in the country, ahead of stations like Fresno at No. 30 and Santa Barbara at No. 38. There are approximately 525 Amtrak stations nationwide.
David Lyman is manager of the Bakersfield Convention and Visitors Bureau.
Community Action Partnership of Kern is turning 50! Join us as a sponsor or attendee at our 2015 Humanitarian Awards Banquet.
Humanitarian of the Year:
President and Founder of Grimm Family Education Foundation
Barbara Grimm Marshall
Community Partner of the Year: Valley Faith Fellowship Keynote Speaker:
Kern County Superior Court Judge
The Honorable Jose R. Benavides
Thursday, May 7, 2015 | 6 pm
Bakersfield Marriott at the Convention Center 801 Truxtun Ave., Bakersfield, CA
• Public Recognition; display of corporate banner at banquet • 2 page color ad in program and exclusive logo placement on cover, and other event materials • Reserved seating for 16 • Recognition on CAPK’s website and Facebook
• Public Recognition • 1 page color ad in program; prominent logo placement on event materials • Reserved seating for 16 • Recognition on CAPK’s website and Facebook
• 1/2 page color ad in program; placement of logo on event materials • Reserved seating for 8 • Recognition on CAPK’s website and Facebook
• 1/4 page color ad in program; placement of logo on event materials • Reserved seating for 8 • Recognition on CAPK’s website and Facebook
Table Sponsor $1,000 per table • Reserved seating for 8 • Table sponsor signage • 1/8 page ad in program
Single Event Tickets $80 per person Tickets/sponsorship opportunities: Marco Paredes (661) 379-8195 email@example.com or visit:
KERN BUSINESS JOURNAL
April / May 2015
Kern County’s commitment to customer service gives us an edge in business recruitment By Cheryl Scott
ecruiting new businesses to a community is not a job for the faint of heart. It takes hard work, lots of time, and most importantly, a commitment to customer service that spans all organizations participating in the recruitment effort. In the world of economic development, “customer service” can mean a lot of different things. With that in mind, one of the best things we have to offer in Kern County is Cheryl Scott the entire recruitment team’s focus to shepherding the project from beginning to end. Assisting a customer from start to finish takes more time, and it definitely takes more commitment, but it’s also where the cream (and Kern County) rises to the top. The journey for many of our clients often begins at their office desk or even in their armchair at home. That’s because, thanks to technology, executives often begin vetting communities by scouring websites and looking for a region that could be the right fit for their new or expanding business. In fact, 90 percent of the selection process is usually conducted before an economic development corporation is even contacted. That’s why Kern Economic Development Corporation has developed a website that provides the data and information executives need, including details on sites that are ready and waiting for new projects. Our weekly updated website also serves as a key resource to keep potential clients and local residents informed of Kern County’s benefits. The next step in the journey is often a face-to-face gathering between the client and our local representatives. At a recent meeting with a defense contractor looking to relocate 80 jobs to California, it was interesting to see what they found most appealing. These particular clients were especially interested in mitigating costs associated with training
PHOTO COURTESY OF KEDC
Caterpillar’s parts distribution center at Tejon Ranch Commerce Center.
new employees. They were happy to learn that on-the-job training funds could be used to reimburse the company for a portion of their new employees’ wages during training. The real smile came, though, when they learned a member of our team, America’s Job Center, would walk the client through the process and handle the contract preparation, saving the clients’ executive team time and energy. It wasn’t just the program that was appealing, it was the personal assistance we could provide that made the difference. That personal touch isn’t found in every community. After the deal is sealed, it’s time to make good on our promises and do what we said we’d do. Kern County and our individual communities are arguably the most business friendly in the state. It costs less to do business here (93 percent of the national average), and projects can be moved along quickly to meet the
company’s requirements (43 EIRs have been filed since 2010 – most counties filed merely a handful, and only Los Angeles County came close with 28). When Caterpillar was looking to replace its Hayward location with a larger facility, it needed a quick turnaround, room for expansion, and a plentiful and skilled employee pool. Just eight months after inking the deal, the 400,000-square-foot parts distribution facility was fully operational at the Tejon Ranch Commerce Center. But still, even after the company is up and running, the customer service is there. Kern EDC and our partners may not have all the answers ourselves, but we can bring together the problem solvers. It’s a continuing and important process. Businesses are customers, too, and providing them excellent customer service is what sets them up for success in our community. And it’s what sets Kern County
PHOTO COURTESY OF KEDC
Re. Kevin McCarthy addresses the crowd at Caterpillar’s grand opening/ribbon cutting event.
apart from its competitors across the state and beyond. Cheryl Scott is vice president of the Kern Economic Development Corporation. She is a Kern
County native who is passionate about promoting the region and supporting local business. She can be reached at 862-5150 and more information about Kern EDC can be found at kedc.com.
April / May 2015
KERN BUSINESS JOURNAL
Employers are offering more incentives to employees to participate in wellness programs.
Employer incentives for U.S. worker wellness programs set record By Sharon Begley Reuters
mployers have ratcheted up the financial incentives they offer workers to participate in wellness programs to a record $693 per employee, on average, this year from $594 in 2014 and $430 five years ago. And fewer employers are imposing penalties such as charging more for insurance if workers do not participate or achieve goals such as losing weight. However, the findings â€” from a survey of 121 representative U.S. employers by Fidelity Investments and the National Business Group on Health â€” come as workplace wellness programs are increasingly coming under scrutiny. The Equal Employment Opportunity Commission took legal action last year against three companies, including Honeywell International Inc, alleging their wellness programs violated federal antidiscrimination laws. Congress is now involved and bills have been introduced allow company practices, and even classify as "voluntary" programs that penalize workers. Although businesses insist the programs are popular with workers, a guide for employers released this month by prowellness groups lists "employee morale" as one of their "tangential costs," as well as "company reputation" and "legal challenges." "If employees love these programs, how come companies need to bribe them
to participate?" asked healthcare consultant Al Lewis, a critic of claims that wellness programs cut medical spending by employers. "This jump in incentives shows the report is right: morale takes a hit from workplace wellness programs." Robert Kennedy, who leads Fidelity's health consulting practice, rejected that claim, saying high incentives reflect "employers' broad interest in employees' health." The survey found that 79 percent of employers offer wellness programs, which can include health questionnaires, blood tests and other "biometric" screening, and smoking cessation and weight-loss classes. Companies with more than 20,000 employees are offering an average of $878 this year to induce workers to participate. Companies with 5,000 to 20,000 workers are offering $661, up from $493 in 2014. The incentives take the form of cash, reduced insurance premiums or contributions to a healthcare account. To get more employees to participate, some employers began designing incentives as penalties, but in now falling out favor. Only 6 percent of employers said they penalize workers for not answering health risk assessments, down from 11 percent in 2014. Five percent penalize them for not getting a biometric screening, down from 12 percent. The inducements still fall short, however. Only 47 percent of employees took part in all the wellness activities offered by employers, even with the rewards.
KERN BUSINESS JOURNAL
April / May 2015
Small Business Development Center
From Egypt’s pyramids rises a tour company By Kelly Bearden
ot many couples can say that it was “love at first sight” when they met in the shade of a pyramid in Egypt. But that was the case for Anita Hasle and Maher Abdelwahab when they met while working as young tour guides in the Middle East. Abdelwahab, who had majored in ancient Egyptology and minored in hieroglyphics, was working for an Egyptian company. Hasle was accompanying tour groups from Scandinavia when they met in 1997. The couple’s relationship grew into marriage and parenthood. It also led to them working together Kelly Bearden for international tour companies bringing groups to the Middle East. But regional unrest, particularly the 1997 “Luxor Massacre,” a terrorist attack on a major Egyptian tourist attraction that left 62 people dead and many more injured, prompted the couple to move to Hasle’s native country, Norway, and open their own travel company. After the Arab Spring in 2011, a friend convinced the couple to move their business to Bakersfield, where Abdelwahab earned a master’s in business administration from CSUB. Their tour company, Atlantis Tours (in Norway known as Atlantis Reiser), can be found on the web at atlantistours.us. A sampling of some of the local company’s upcoming offerings includes a mid-summer tour of Scan-
Maher Abdelwahab and Anita Hasle of Atlantis Tours.
dinavia for mostly U.S. clients and a fall “California Dreaming and Ghost Town” tour that will include iconic stops along Route 66, the Grand Canyon, Las Vegas and several California cities, including Bakersfield, for mostly European clients. Abdelwahab and Hasle are seasoned hands at organizing and leading tour groups through Europe, the Middle East, Asia and other unique destinations. They also have a client base that includes thousands of people in Europe and in the Middle East who have participated in their tours over two decades. But moving Atlantis Tours to a new country poses challenges that the Small Business Development Center at California State University, Bakersfield, is helping the couple address. A primary focus of for SBDC consultants is helping Atlantis Tours develop and implement a
marketing plan. “They are taking us step-by-step through the process of developing a marketing plan,” explained Abdelwahab. “We need to get our name out in front of a new audience. We need to reach people who want to travel, but want to have all the details of their travels handled. “Our company offers accompanied tours – often to places where English is not spoken, or is not the primary language. We speak many of the languages in the countries where we tour. We also speak the languages of our clients. For example, for our European clients, we speak many European languages and Norwegian. “We do not want to be a big company,” Abdelwahab said. “Rather we want to fill a niche for people who want to travel with personalized care.” Added Hasle, “The best part of our business is customer satisfaction. Many times, guests send us flowers thanking us for providing a lovely holiday. That is what keeps us going.” The Small Business Development Center at CSUB is one of five service centers overseen by the University of California, Merced SBDC Regional Network, which is a partnership between the university and the U.S. Small Business Administration. The center at CSUB assists entrepreneurs and smallbusiness owners in Kern, Mono and Inyo counties by providing free one-on-one consulting, small-business training and research. For more information, go to csub. edu/sbdc.
Kelly Bearden is the director of the Small Business Development Center at Cal State Bakersfield.
Take advantage of legal resources at Kern County Library By Katherine Ross
e’re not lawyers, but we still have a lot to offer to those wishing to do a little research of their own. Kern County Library subscribes to Ebsco’s Legal Information Reference Center database (now accessible on many hand-held devices), and we have a few good legal books, some of which may be checked out. Ebsco Legal Information Reference Center database (briefly mentioned in Kern Business Journal’s December issue) is available both inside and outside the library. Library cardholders can access the resource through our website at kerncountylibrary.org/HTML/resref/alpha. html by scrolling halfway down the database list. In addition to the usual search box, there are basic categories, such as business and corporations; immigration and travel; and rights and disputes. There’s also a section to browse popular legal forms, divided by subjects, includ-
ing human resources. The database draws content from over 200 of the most popular Nolo Press legal books, written in easy-tounderstand terms. Titles include “Employer’s Legal Handbook”; “IRAs, 401(k)’s, & other Retirement Plans”; and “Manager’s Legal Handbook.” These can be retrieved by using the Publications tab to search for a title or by searching for keywords. For example, a simple search on employee benefits yields 64 results, taken from over a dozen different Nolo Press books. If you want to read the actual laws, whether state or federal, our library website has all the websites you need: kerncountylibrary.org/ HTML/resref/california.html (for California listings – under the subject heading “government”) – and kerncountylibrary.org/HTML/ resref/government.html for an exhaustive federal listing of federal sites, under the
Code, California Family Laws & Rules, and California Employment Laws for in-house use. A print copy of all other laws may be viewed at the nearby Kern County Law Library, on the third floor of the 1415 Truxtun Ave. courthouse. A few Nolo Press books are available at your local library for home checkouts as well. If you haven’t taken a look at your local library lately, you might be pleasantly surprised at what we offer. We’re making it easier than ever to read and find out for yourself. And if you don’t have a library card, getting one is easy – just visit your nearest public library. subject heading “legislative branch.” Beale Memorial Library has a print copy of the current California Penal
Katherine Ross is a librarian at the Beale Memorial Library, main branch of the Kern County Library system.
April / May 2015
KERN BUSINESS JOURNAL
Focus groups provide valuable marketing information By Maureen Buscher-Dang
love focus groups. Done right, they provide key insights and valuable customer input. A business can make adjustments that may yield an increase in clients and a positive increase in customer satisfaction levels. STEPS is a local nonprofit driving under the influence school. It recently decided to use focus groups to evaluate the strengths and weaknesses of its program in an effort to improve customer service. It learned there was a definite need for more Saturday afternoon classes. “We had no idea there was an unmet client need for more SaturMaureen day classes,” noted Linda Eviston, Buscher-Dang executive director at STEPS. “The following week, we changed our schedule. The feedback we received was invaluable.” Focus groups are a type of qualitative research. Typically, eight to 12 people are gathered together in a group for 60 to 90 minutes and are paid to discuss their opinions, attitudes, beliefs and perceptions. A useful tool, focus groups can be used to glean information from consumers regarding targeted topics such as an existing or potentially new service or product, an advertising campaign, hot button issues for a political candidate and more. Here are some tips for effective focus groups: Determine and create your objectives. What do you want to accomplish? What actions will you take
with the information? Attorneys have long used focus groups in a longer “mock trial” format to determine a variety of issues. Wayne McClean, a past president of Consumer Attorneys of Los Angeles and California Trial Lawyers Association has frequently used focus groups. He finds value in watching how people discuss issues and make decisions. “You can discover weak points in a case and develop themes, words and phrases that resonate with a jury,” said McClean. When a defense attorney offered $25,000 to settle a wrongful death case, McClean used a focus group to determine the value range of the case. He went to trial and his client received a $9.4 million verdict. Ask the right questions with a discussion guide. The guide is used to facilitate discussion and to
stay on target. Figure out what you want to know and create questions designed to provide those answers. Consider how long your focus group will last and limit the number of questions. If it’s 60 to 90 minutes, most likely it will only be 10 to 15 questions. Use mostly open-ended questions for probing: What does XYZ Company do really well? What one thing does XYZ Company really need to improve? What is the most important reason for choosing a program like ABC Services? Gather a representative group of participants. This is the most critical element and it is best to seek assistance from a marketing professional. However, if you want to do it yourself, start talking to people like Tim Terrio, president of TERRIO Physical Therapy & Fitness, did. To recruit eight mothers, Terrio asked around among people he knew for help. He wanted to test a pilot program, “Moms Strong,” and needed a variety of ages, ethnicities and socioeconomic levels. “It worked out really well and the program was a success,” said Terrio. “I still use seven mothers to bounce ideas off of from time to time.” Shut up and listen. It is hard to sit and simply listen, especially when participants in a focus group share negative thoughts and opinions. We become defensive and want to explain “our side.” Businesses gain by embracing criticism and looking for the benefit. More importantly, they profit the most when ideas and suggestions for improvement are implemented. For more in-depth information on focus groups, go to referenceforbusiness.com. Maureen Buscher-Dang conducts focus groups and is a Bakersfield public relations and marketing consultant.
California pension reform measure to target Calpers By Tim Reid Reuters
ballot measure campaign to cut California’s public pensions will be launched in May by a coalition of politicians and business people led by former San Jose Mayor Chuck Reed, with the state’s largest retirement system a prime target. The measure would take aim at California’s $300 billion giant Calpers, which has a near-iron grip on the state’s pensions. Calpers, America’s largest public pension fund and administrator of pensions for more than 3,000 state and local agencies, has long argued that pensions cannot be touched or renegotiated, even in bankruptcy. “Calpers has dedicated itself to preserving the status quo and making it difficult for anybody to reform pensions,” Reed said in an interview. “This is one way to take on Calpers, and yes, Calpers will push back.” Calpers spokeswoman Rosanna Westmoreland said: “Pensions are an integral part of deferred compensation for public
employees and a valuable recruitment and retention tool for employers.” The measure will be closely watched by reformers and their union opponents in other states, in an ongoing national battle between those who say public pensions are putting intolerable strains on budgets and those who argue pension cuts unfairly penalize retirees and workers. For most California cities, their largest debt is pension liability, a significant factor in the recent bankruptcies of Vallejo, Stockton and San Bernardino. Calpers has said it will increase pension contributions for most cities by up to 50 percent in the coming years. Reed, a Democrat, abandoned a similar statewide ballot initiative in 2014, claiming that Kamala Harris, California’s Democratic attorney general, had approved wording of the initiative that was biased and union-friendly. But he vowed to fight on after leaving office in December, and in an interview with Reuters, confirmed for the first time the launch of the initiative and its timing, while noting that a major motive was to challenge Calpers’ grip.
Reed says the push will seek to place a simpler, more legally watertight pension reform measure on California’s November 2016 ballot, giving mayors and other local government executives the authority to renegotiate contracts. To win a place on the 2016 ballot, backers of the initiative will have to obtain the signatures of 585,000 registered voters, or 8 percent of the number of voters in California’s last gubernatorial election, in this case 2014. Reed and his allies have been huddling with legal advisers for months to devise a voter initiative that is simpler and less vulnerable to court challenges than last year’s effort. They have also been buoyed by a ruling in the recent municipal bankruptcy of Stockton, whose judge said California’s public pensions are not inviolate. As San Jose mayor, Reed helped pass a pension reform measure for his city, parts of which have been struck down after union lawsuits. Reed is working with other pension reform advocates, including former San Diego Republican council member Carl
DeMaio, the primary backer of a pension reform initiative in San Diego that was approved by voters in 2012, and the Ventura County Taxpayers Association’s David Grau. “We have done a lot of legal work to make sure this initiative is bulletproof,” DeMaio said. “Because the unions are going to throw the kitchen sink at us.” The group is talking to potential financial backers, Reed said. Last year, Reed took $200,000 from a group funded by Texas hedge fund billionaire John Arnold and they could partner again this time round, he said. Karol Denniston, a public finance attorney and pension expert at Squire Patton Boggs in San Francisco, said voters should be working for legal change to provide more options than municipal bankruptcy: “Right now Calpers has no program for financially distressed cities,” Denniston said. Dave Low, executive director of the California School Employees Association, said the group would campaign to defeat the measure and was “confident we can defeat it.”
KERN BUSINESS JOURNAL
The economic and community impact of volunteerism By Jose M. Granados
ore than 143,000 Kern County adults volunteered in the past 12 months according to statistics by Scarborough Research. If a dollar value is assigned to the hours volunteered in a year, it adds up to more than $350 million. Clearly, volunteers make a significant impact in the local economy and the community. In addition to the free labor, there are many benefits for the organizations they serve, the community and the volunteers themselves. Nationally, the number of people volunteering has been stagnant in the last few years. However, as a labor force, volunteers are still very significant. Since last September, more than 54.1 million adults said they volunteered in the past 12 months, according to Scarborough Research. That figure is higher if volunteers under the age of 18 are included. The dollar value of volunteerism adds up to more than $173 billion nationally. While the number of hours volunteered in the period of a year range from a few hours to hundreds, most volunteers donate between 40 to 60 hours in a
Volunteering can help unemployed workers maintain and expand their professional contacts and even learn new skills to boost their resumes. year. In California, more than 7.5 million people volunteer annually and the dollar value exceeds $21.1 billion. In Kern County, the demographic characteristics of volunteers defy expectations. One would think that those with significant free time would be more likely to volunteer, but that is not the case. For example, employed adults and students tend to volunteer at higher rates than those who are unemployed, especially chronically unemployed. This is unfortunate as research indicates unemployed individuals who volunteer increase their chances of getting a job. Volunteering can help unemployed workers maintain and expand their professional contacts and even learn new skills to boost their resumes. Additionally, volunteering can help self-esteem, improving their chances of getting hired while making a positive impact in the community. A high number of Kern County volunteers are
white-collar workers. Professionals, sales associates and office workers are all likely to volunteer. Since last September, most Kern County volunteers were age 30 to 60 and employed. In terms of household incomes, adults with household incomes of $100,000 or more are 62 percent more likely to volunteer. Likewise, adults with household incomes of $50,000 to $75,000 are 27 percent more likely to volunteer – see Graphs 1 and 2. In terms of political party affiliation, only 4 percent of Kern County Democrats with household incomes of $100,000 or more volunteer compared with 43 percent of Republicans and 45 percent of independents in the same income bracket. However, lower-income Democrats, those with household incomes under $30,000, are more likely to volunteer compared with Republicans and independents with similar incomes – see Graph 3. People volunteer at a various nonprofit and religious based organizations, but the predominant volunteer interests are in religion, education and social areas. For example, 38 percent of volunteers in the United States volunteer at religious based organizations. Likewise, 26 percent volunteer at organizations related to education and 15 percent for social organizations – see Graph 4. Volunteer assignments and activities vary as well, including fundraising, delivering hot meals to seniors, feeding and housing the homeless, mentoring youths, helping domestic violence victims, as well as search and rescue. The most popular, however, is fundraising – see Graph 5. Lastly, in Kern County, volunteering lags behind the state and the county. However, contrary to the state and national trends, volunteerism in Kern County is growing. In the past five years, it grew by more than 24 percent, from 115,000 adults in 2010 to more than 143,000 in 2014. Still more needs to be done to harness the spirit, creativity and innovation of volunteers. Let’s find ways to achieve greater impact and built opportunities that improve the lives of everyone in Kern County, the state and the country. Jose M. Granados works for TBC Media in the Market Research Department. This market analysis is based upon data from Scarborough Research, Corporation for National and Community Service and U.S. Bureau of Labor Statistics.
April / May 2015
April / May 2015
KERN BUSINESS JOURNAL
Understanding comprehensive estate planning By Larry R. Cox
y grandmother always used to tell me that an ounce of prevention is worth a pound of cure. Boy, was she right when it comes to self-prepared or handwritten wills. Many years ago, I handled the estate of a woman who lived a very modest lifestyle prior to her death. She spent her whole life saving her money. She handwrote her own will, leaving her entire estate of approximately $700,000 to numerous charities. I don’t know whether she was attempting to save on attorneys’ fees or if she was simply unaware of the Larry R. Cox importance of a thorough estate plan. In either case, the result was the same. Her self-prepared will was vague and left many unanswered questions. Lengthy court proceedings were necessary and, as a result, a substantial amount of the money that she intended to go to the charities was spent on court proceedings in an attempt to decipher her intentions. When you have spent a lifetime saving to provide for your family or to donate to your favorite charities, you want to ensure that your assets are prop-
erly distributed to your beneficiaries. While your intended beneficiaries still typically receive your property, even if you pass without a comprehensive estate plan, the distribution may not follow your actual intentions. Furthermore, some of your assets may become unnecessarily tied up in probate, delaying your beneficiaries’ ability to enjoy the legacy you leave for them. The laws of distribution when there is not an enforceable will can lead to unfortunate results. Widows may end up owning their family home with stepchildren who force them to move out and sell, or the surviving child of an unmarried couple, who has lived together for decades but remain unmarried because of social security laws, could lose their home to the heirs of the first to die. The potential pitfalls are not only numerous, but dramatic. California’s Probate Code controls the disposition of property not covered by a valid will. This can include cases where there is no will, cases in which a will is incomplete and does not address all the property in the estate or, in the case of my philanthropic client, when the will is invalid. Here is what generally happens when you pass without an enforceable estate plan: A surviving spouse or domestic partner is entitled to all of the deceased’s non-community property if the person had no surviving parents, siblings,
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children or grandchildren. If the deceased does leave a surviving parent or parents, siblings or half-siblings, or just one surviving child or grandchild, the surviving spouse or domestic partner is entitled to half of the non-community property. The surviving spouse or domestic partner is entitled to one-third of the non-community property if the deceased was survived by more than one child; one child and one or more grandchildren; or grandchildren from two or more predeceased children. Any portion that does not go to a spouse or domestic partner goes first to children and other issue by degrees, then to the parents if there are no descendants, then to siblings and half-siblings if there are no surviving parents. These rules continue from this point and become more complicated as they advance into more remote areas of the family tree. They do not, however, take into account any wishes the deceased expressed – including planned charitable giving – except through a valid will. This is just one of the many reasons that you should consult a skilled professional to protect your life’s work for your intended heirs and beneficiaries.
Larry R. Cox is an estate planning attorney and partner atYoung Wooldridge, LLP.
KERN BUSINESS JOURNAL
April / May 2015
Resolve your legal and HR compliance issues with enterprise risk management By John Pryor
isk management has become increasingly prominent for businesses. A shift from basic “insurance management” to the next level of “traditional risk management” is now part of the culture of most successful organizations. Although business insurance is an essential element, it’s only one of a multitude found in the three segments of risk management: Risk Assessment – Identification and measurement of risks. Risk Control – Steps you can take to mitigate risk (safety, security, fire prevention, cyber-crime prevention, disaster preparedness, business continuity planning, etc.). Risk Finance – Risks either assumed by your business or transferred to others – or a combination of the two – including risk transfers to insurance carriers through a variety of different plans (captives, formal self-insurance, retrospective rating, etc.). This is traditional risk management. It’s focused only on risks that produce a loss – those we call “static” or “pure” risks. The focus is never on risks that can produce either a loss or John Pryor a gain – those we call “dynamic” or “speculative” risks. The goal is to continually reduce your TCOR – total cost of risk. Most firms focus only on reducing insurance premiums. This is important, of course, but it’s only a single dimension of TCOR. Other elements of TCOR to be monitored over time include: • Safety and security program costs. • Fire suppression systems maintenance. • Deductibles or self-insured retentions paid. • Losses sustained from risks intentionally NOT insured (risk assumption). • Losses sustained from risks unintentionally not insured (“surprises” no one likes!). • Legal fees to defend liability claims NOT insured. • Legal fees to draft risk transfer provisions in contracts. • Insurance premiums paid – last but never least.
That’s a quick overview of traditional risk management. The cultural shift required of businesses today is to take your traditional risk management program to the next level of enterprise risk management. This is where you add a multitude of legal and HR issues. ERM or enterprise risk management includes all of the elements of traditional risk management plus dynamic and speculative risks – those that can generate either a loss or a gain. In addition, ERM becomes an integral part of an organization’s strategic planning process beginning with a typical SWOT analysis (strengths, weaknesses, opportunities and threats) and working through mission, vision, and values statements, long-term strategic goals, shorter-term measurable and time-bound operational objectives – all summarized on a single-page balanced score card for monitoring progress over time. What are some of the legal and HR risks you can address through ERM? A recent study by North Carolina State University’s ERM Initiative announced its findings of the top five risks for 2015: • Regulatory change and heightened regulatory scrutiny. This continues to represent the top overall risk for the third consecutive year for most organizations. It obviously includes multiple legal and HR risks. • Economic conditions in domestic and international markets. With the recent major reduction in oil prices, this dynamic risk is accentuated in Kern County. • Concerns about cyberthreats disrupting core operations. Even smaller firms are adversely affected by this risk. Although major companies like Target and Anthem make headlines, hackers find small businesses easier to penetrate. The need for organizations of all sizes to mitigate this risk is paramount. • Succession challenges and the ability to attract and retain talent. This legal and HR risk made the top-five risk list for all sizes of organizations. It’s a need that must be addressed proactively. • Organization’s culture not supporting timely risk identification and escalation. Risk identification and on-going measurement is the first step in the risk management process. It cannot be ignored or minimized. All that follow in managing risks depend on effective risk assessment.
Here is a partial list of unique insurance policies to help you transfer legal and HR risks to a commercial insurer. These very special insurance policies – well beyond conventional liability and workers’ compensation insurance – include Management Liability (formerly “Directors & Officers” Liability); Employment Practices Liability (wrongful termination, sexual harassment, etc.); Employee Benefits Liability; Fiduciary Liability; Cyber Liability; Pollution Liability; Professional Liability; Liquor Law Liability; Spectator Liability; Product Recall Liability and Intellectual Property Liability (plus others as new needs are created). What’s the best way to learn more about legal and HR issues – and solutions – through a risk management system? Here are some suggestions: • Your current insurance broker hopefully has already taken your business from basic “insurance management” to the next level of risk management in all of its dimensions. If so, a “simple” convergence of traditional risk management with your strategic planning process should get ERM well underway. • Otherwise, several resources are available. One quick and easy resource is an article I wrote recently entitled, “Enterprise Risk Management Demystified” – available free on the website of International Risk Management Institute at irmi.com. • Consultants, attorneys and CPAs are always available to help you work through different elements of the overall process. • In addition to a lower TCOR, an objective of all levels of risk management is “a quiet night’s sleep” – an outcome I hope you will enjoy as a result of putting these best practices to work in your organization. John Pryor, CPCU, ARM, is a Bakersfield risk management consultant and author of “Quality Risk Management Fieldbook” that converges risk management with quality management principles, best practices and tools. It is available through Russo’s Book Store locally or Amazon.com and IRMI, the publisher in Dallas.
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April / May 2015
KERN BUSINESS JOURNAL
Service allows residents to check contractor’s background By David E. Wolf
ou are about to let a stranger come into your home to work on your home improvement project. The guy and his workers seem a bit rough, but a friend recommended him. Still, you worry about leaving your spouse and kids as you are about to head off to work. When you get to work, your co-worker helpfully points out: “What if the guy is a rapist?” The receptionist chimes in: “Or a child molester?” Your supervisor adds: “I hope your homeowners insurance is paid up. You know, if any of his workers get hurt and he doesn’t have insurance, they’ll sue you.” The Kern County District Attorney’s Office and the California Contractors State License Board are seeing a shocking number of fraud cases committed by unlicensed, uninsured, incompetent and fake contractors. There are cases where criminals with serious felony records are pretending to be contractors and working inside people’s homes. There is a case where a fake contractor took the victims’ money, put a hole
Admitting you’ve been ripped off may be embarrassing, but if you report it we might be able to arrest and prosecute the perpetrator. in the roof and never came back. There is another case where an unlicensed contractor committed fraud against seven different elderly victims (could be your parents, grandparents, loved ones). Before letting strangers into your home, wouldn’t it be nice if there was an easy way to check to see if that individual had a prior serious conviction (rape, murder, child molest, etc.) and to determine whether this individual has workers’ compensation insurance for their employees? Wouldn’t it be nice if you could tell if this individual knew something about construction? Well, that service does exist, and it is free. Before letting that so-called contractor into your home, run a free CSLB check. CSLB completes a criminal background check on every applicant before issuing a contractor’s license. Using a licensed contractor is worth it and odds are you won’t really spend that much more on a li-
censed contractor; you’ll likely save money because they will do the job right the first time. By doing a CSLB background check, you will be protecting your family and will have all the right answers to your coworkers’ awkward questions. To check to see if someone really has a contractor’s license simply go to: cslb.ca.gov. There is an “instant license check” where you can check by license number, company name or the person’s name. Fraudulent contractors frequently give out a city license number, which doesn’t require a background check or workers’ compensation insurance. My other favorite site is from our local Better Business Bureau, which is located at: bbb.org/central-california-inlandempire. If you forget that site, you can simply Google “Bakersfield BBB” or go to the national Better Business Bureau and enter your town or county. Our local BBB does a great job keeping its information up-todate and the search function is very userfriendly. Not only can you find out about a license, but you can also see problems that others have had. They even report government actions—like prosecutions. What does the BBB charge for all this great information? It is FREE. Hats off to our local BBB office. Finally, did you know that you can go to the Kern County Superior Court website and find out both civil and criminal information about a person? This service is also free. Note, this will not give you any information about cases in any other county or state. The Superior Court website is: kern. courts.ca.gov. Once at this site, click on either the criminal or civil tab near the top. Then click on the search case information found at the top-left column. Be sure to check both the civil and criminal sections. Finally, if you have been a victim, please report it to CSLB, the BBB, your local law enforcement agency and to the district attorney’s fraud hotline: 1-800- 6193039. Admitting you’ve been ripped off may be embarrassing, but if you report it we might be able to arrest and prosecute the perpetrator. We might be able to get you some of your hard-earned money back, and, finally, you might be protecting someone else from also becoming a victim. So let’s look out for one another and keep these unlicensed criminals from preying on our community. David Wolf is a deputy district attorney with the Kern County District Attorney’s Office. He has been a prosecutor for over two decades and has prosecuted crimes ranging from misdemeanors to murder. He is currently assigned to the fraud unit.
KERN BUSINESS JOURNAL
April / May 2015
Data privacy in the enterprise By David A. Milazzo
t’s never fun to take your medicine. And to suggest any type of corporate audit might be the surest way to stop readers from taking part in your article, but here it goes anyway. In late February, Apple CEO Tim Cook went on a bit of a rampage. Being aware of a vast amount of customer information being "trafficked" by corporations, governments and other organizations, he said consumers "don't fully understand what is going on" at present, but "one day they will and will be David A. Milazzo very offended.” He continued: “None of us should accept that a government or company or anybody should have access to all of our private information. This is a basic human right. We all have a right to privacy. We shouldn't give it up.” Creating a tangible framework for privacy has never been more relevant. We’re constantly confronted with organizations succumbing to epic data breaches. Target, Staples, Anthem and Home Depot are all victims of complex attacks, losing control of huge amounts of
customer health and financial data. But to run a successful business, we must certainly collect personal data – private information about our employees, customers and vendors. We are forced to capture dates of birth, social security numbers, credit card and health information. But the sanctity of this data must be of paramount priority to the organization that is in control of it. Treating private information with anything less than the utmost care isn't just morally irresponsible, it’s a major legal liability and potential PR suicide. So where do we store this most private information? How many staff members have access? How and where do we back it up? Do we protect the backup as much as the data itself? These are just a few of the topics that would arise during an examination of an organization’s data practices. In most cases, IT is put at the helm of these data practices. While information will circulate through many departments, in the end it’s placed at the feet of IT to safeguard the company against data loss and leakage. Highly sophisticated network attacks, rather than physical breaches, require IT to act as the first line of defense in our modern, data-driven landscape. The chosen security platforms and the IT team manag-
ing these platforms are essential. Your team is likely working overtime to ensure a secure environment: enforcing strong password policy for all users, managing up-to-theminute anti-malware subscriptions, requiring encrypted VPN connectivity for all remote workers. And while this is an excellent start, each one of these systems has break points that must be fully understood. Security is a fastmoving target with each day bringing entirely new exploits that cybercriminals are thrilled to leverage. We all know it’s possible to lose the forest through the trees – or vice-versa. A compelling solution is to hire an outside firm specializing in security auditing. Nobody likes the idea of an audit – strangers rooting around in your systems to expose weaknesses – but if you’re in charge of data security for your organization, an annual review by a reputable firm could provide more shuteye than popping two Ambien. Investing resources into real solutions for security will not only protect the organization, it’s just the right thing to do. In the end, what’s most worrisome is Cook’s reference to something even more sinister at play: The idea that an organization could take part in the purposeful sale of our private information is truly menacing – and an altogether more difficult pill to swallow. David A. Milazzo is the founder and principal of Bakersfield-based Macroscopic, an Apple enterprise technology consultancy focused on bringing secure Mac and iOS technologies to businesses, schools, agencies and independent professionals. Email at milazzo@ macroscopic.net.
Supervisory training benefits business leaders, employees By Louis Medina
ast December, Community Action Partnership of Kern offered its full-time supervisors, managers and management aspirants, an opportunity to improve their leadership skills through a yearlong supervisory training program. Sixty-two employees applied and 48 were selected to participate. I was one of them. Since January, I have been enjoying learning about the challenging aspects of leadership in the workplace – effective communications, performance management, conflict resolution – and have also gotten much out of my research into Louis Medina how this opportunity came about for a nonprofit, such as CAPK. Dave Teasdale is the director of Economic and Workforce Development programs for the Kern Community College District, a contractor with the State of California’s Employment Training Panel. Created in 1982, the ETP is a funding agency supported through a special payroll tax. The panel funds employee skills training for for-profit employers directly and through its contractors, Teasdale said. In 2014, Gov. Jerry Brown gave
PHOTO COURTESY OF LOUIS MEDINA
Robin Paggi, a trainer with Worklogic HR, stands before a group of Community Action Partnership of Kern employees enrolled in a yearlong supervisory training program funded through special drought-related workforce development assistance administered by the state of California’s Employment Training Panel.
the panel an extra $2 million to help organizations better address economic issues caused by the drought – extending that opportunity to nonprofits and governmental entities, too. According to Teasdale, severely drought-stricken Kern County received 12 percent of the total: $242,000. It is a two-year funding stream; any employee training effort must be completed by September 2016. CAPK is the first local agency to start training its employees under this type of assistance, Teasdale said. It qualified as a recipient because it is engaged in activities that address the drought, such as emergency food distribution, util-
ity assistance, financial empowerment and other services to help the county’s affected residents achieve or retain selfsufficiency. “The nexus is that supervisor and leadership training prepare you to work with populations affected by the drought,” he said. “It doesn’t have to be direct water conservation training, but to help the entity in the community respond to the drought.” Others who have expressed an interest in incumbent employee training include various city and county departments and for-profit farming enterprises, he said. “This is performance-based funding,”
Teasdale continued. “We get reimbursed when the employee has completed training and remained employed for 90 days afterward.” KCCD’s partner in delivering CAPK’s training is Worklogic HR’s locally wellknown training coordinator Robin Paggi, who is also a regular contributor to the Kern Business Journal. “They asked me, ‘Do you have any clients who would take advantage of this training?’” Paggi said. She contacted CAPK’s Director of Human Resources Michele Nowell, who’d been wanting supervisory training for the agency but knew that, as a nonprofit, it did not qualify for the regular funding. The drought assistance, therefore, was a welcome relief. Classes at CAPK are three hours long and take place monthly. “Having a small HR department makes it hard to provide this quality of training, so the opportunity feels like a reward for all of us,” Nowell said. “Robin’s teaching style makes it so every supervisor can apply the information they learn with success.” I can attest that it is a great program and hope other local organizations interested in drought-related employee skills training will contact KCCD’s Dave Teasdale at firstname.lastname@example.org.
Louis Medina is the Outreach and Advocacy Manager for Community Action Partnership of Kern.
April / May 2015
KERN BUSINESS JOURNAL
Dollars and Sense
Knowing the difference between employee, contractor By Joel A. Bock
or a business owner, determining the proper employment status of workers is necessary to ensure compliance with a variety of federal and state laws. Additionally, a worker’s status will impact the manner in which the worker will be allowed to participate in certain retirement, health and fringe benefit plans. While the business owner and worker certainly have flexibility in structuring their working relationship, it is important to realize that the characterization as either an independent contractor or an employee will be based upon the nature of the relationship and is not simply an option to be elected. While no one factor solely deJoel A. Bock termines whether a worker is an independent contractor or an employee, the three primary factors in determining a worker’s status are behavioral, financial and the type of relationship: Behavioral Does the business owner control or have the right to control what the worker does and how he does his job?
Does anyone regularly supervise the worker? If yes, then this is indicative of an employee-employer relationship. Financial Are the business aspects of the worker’s job controlled by the business owner? (These include things like how the worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.) Another factor that indicates an independent contractor would be the opportunity for profit or loss. If it is not likely that the worker could incur a loss (i.e., no entrepreneurial risk), this could indicate an employer-employee relationship. Solely providing services for one company could also be indicative of an employer-employee relationship. Type of relationship The factors for the type of relationship typically fall into the following categories: Employee benefits – Does the business pay for insurance, retirement plan, sick/ vacation days and disability insurance? If yes, then this would indicate an employeremployee relationship.
Give employees a second chance but document performance issues By Robin Paggi
n his article "Hire Slow, Fire Fast" on forbes.com, Patrick Hull tells readers that "if a person that you hire is not working out, don't hesitate to move on quickly... I know many businesses that took time to try and change someone. I haven't seen it be successful. People don't change." I disagree. As an HR consultant, I have coached a number of clients' employees who needed to change their behavior in order to remain employed. Some were able to do it and some weren't, but giving people an opportunity to improve is important for a couple of reasons. The first reason is that people usually are oblivious that their behavior is a problem. Why? Mostly because we don't see ourselves as other people see us. For example, we might think that we're confident and assertive while others think that we're a blowhard. We might think that we're fun and charismatic while others think that we're inappropriate. People are also oblivious that their behavior is a problem because others don't tell them that it is. Employees need to have honest feedback about how their behavior affects the workplace in order to improve. It's amazing what can happen when someone is told specifically what he or she is doing (or not doing) that is problematic. For example, many years ago a manager told me that he refused to promote an employee into a supervisory position because the employee acted strangely. Despite the fact that the employee had applied for a promotion numerous times, the manager never told him why he wasn't being promoted. I encouraged the manager to tell the employee about the spe-
cific behavior that he was exhibiting that was holding him back. A couple of months later, the manager told me that he wanted to promote the employee. With specific feedback and guidance, the employee was able to change the problematic behavior. The employee benefited because he got the promotion he desired and the manager benefited because the employee now behaved in an appropriate manner. The second reason to give employees an opportunity and the tools to improve is, frankly, because it makes employers look better if they have to defend a termination. Firing employees too fast is one of the top 10 things employers do to get sued, according to the article "Hostile Work Environment – 10 Things Bully Bosses do to Cause Lawsuits" on undercoverlawyer.hubpages.com. The author, a defense attorney, says that, "Employers who take a long time to try to improve a negative situation with an employee, and who can show gradually increasing discipline over that time period, are the ones who will look better in court. Juries like it when it looks like the employer went well beyond the minimum legal requirements and tried everything possible to 'save' the employer-employee relationship, but despite the boss's training and coaching the employee just refused to do the work." Obviously, I'm in favor of giving employees a chance to learn new behaviors to improve their performance. However, I'm not in favor of giving employees too many chances. Doing so doesn't inspire employees to be accountable and it can backfire on employers. An excellent example of such backfiring is an unemployment hearing that was documented in the article "Should Employees Be Given Second Chances?" on hrlawmatters.com. Author Tashwanda Pinchback says that,
Permanency of the relationship – Is the worker hired with the expectation that the relationship will continue indefinitely, rather than for a specific project or period? If so, then this is generally considered indicative of an employer-employee relationship. Service provided as key activity of the business – If the worker is providing services that are considered a key aspect of the business and the business has the right to direct and control the worker’s activities, then this would indicate an employer-employee relationship. If a business is deemed to have misclassified a worker as an independent contractor, then the business may be held liable for employment taxes and unpaid overtime for the worker. Additionally, the state of California could impose a variety of fines upon the business. Please consult your tax adviser or attorney to determine how these laws impact your specific situation. Joel A. Bock, CPA, MST is a partner in Daniells Phillips Vaughan & Bock, a Bakersfield accounting firm.
despite committing numerous infractions (stealing time, excessive tardiness and being rude during a counseling session), an employee was offered a different work shift instead of being fired. The employee declined and was subsequently terminated. At the unemployment hearing, the employee said he was fired for not accepting the position. In the employer's defense, the manager presented the list of the numerous infractions the employee had committed, to which the hearing officer asked: * If you have documented evidence that he was stealing time, why didn't you terminate him then? * If arriving to work on time is an essential function of his position, why did you wait until he was tardy 42 times before terminating him? * If he was unprofessional during a counseling session, had already stolen time and demonstrated a pattern of excessive tardiness, why didn't you terminate him at that point? * And why after all of the aforementioned issues with his job performance, did you offer him another position within the company? The employee did not get unemployment benefits; however, this example demonstrates that courts could become suspect of an employer's motive to terminate when the employer allows an employee to repeatedly behave inappropriately without consequences. Something else that causes suspicion is a lack of documentation. If you are giving employees more chances, be very diligent about documenting the performance issues or the delay in termination will generally backfire too. My advice to employers is to give wayward employees the opportunity and tools to improve. If they can't turn their behavior around in a reasonable time period, then guide them toward the door. Robin Paggi is the training coordinator at Worklogic HR Legal Solutions. Reach her at email@example.com. This article was originally published on Feb. 4 in The Bakersfield Californian.
KERN BUSINESS JOURNAL
April / May 2015
‘Outplacement’ helps laid off workers find new jobs By Holly Culhane
lunging world oil prices are prompting U.S. oil producers and service companies, including many in Kern County, to reorganize and trim staffs. Cutbacks are also being made in related industries and by service providers, ranging from supply vendors to local restaurants. The oil industry and mineral-rich Kern County are accustomed to rollercoaster price rides in the market. But that does not make these tough staffing decisions easier or the heartbreak of losing your job any less painful. The good news is many industry observers are predicting the latest downturn will be short-lived Holly Culhane – maybe just a couple of years. But that, in itself, poses challenges for companies that will need to hire skilled workers when they do resume full operations. How can companies make the necessary cutbacks today, while maintaining their reputations for being good employers during the tomorrows ahead? First and foremost, layoffs should be conducted in a thoughtful, legal manner. Beyond that, prudent companies are providing “outplacement” services, which help displaced workers find new jobs. This is not a job placement service, but rather a program that helps displaced workers with tough tasks such as evaluating career options, preparing for job interviews and updating their resumes. Seldom are employees prepared for a layoff. Often
they have not been in the job market for a number of years and may be in an industry that has dwindling job opportunities. Losing a job is said to be among the top three most stressful life events – right behind the death of a loved one and divorce. The good news? An effective outplacement program will provide workers with a safety net to help them adjust and move forward with their careers. If a company’s finances are so tight that employees must be cut from the payroll, paying for an outplacement program for displaced workers may seem like an unnecessary expense. In reality, such a program can benefit both workers and employers alike. Why should employers consider offering outplacement services? • From a humanitarian standpoint, it is only right to help displaced workers who are experiencing a sense of loss, betrayal, anger and fear. • When the economy turns, a company’s reputation
matters. How the employees they may want to rehire exited the company can determine their willingness to return. • Displaced employees, their families and friends also are customers. If a company values its reputation and brand, it wants to be seen as an employer that cares for its workers. • Successful outplacement programs can save companies money. The faster a displaced worker finds a new job, the fewer unemployment benefits a company will be obligated to pay. • Often the “survivors,” the employees who were not laid off, feel guilty and frightened. If the survivors know their displaced former co-workers are receiving help, they will be more likely to focus on their work and maintain their productivity. The key is for a company to contract with an outplaThe key is for a company to contract with an outplacement provider that will give personal and competent attention to displaced workers through individual and group sessions, written resources and online services. Counselors must be accessible, knowledgeable and current on job searching techniques. And, finally, it is not enough that a company simply hire an outplacement contractor. Companies should closely monitor the contractor’s performance and success rate, and displaced workers should be encouraged to use all of the services offered. Holly Culhane is president of the Bakersfieldbased human resources consulting firm P.A.S. Associates and P.A.S. Investigations. She can be contacted through her website PASassociates.com and through the PAS Facebook page.
There’s more to motivating than money By Robin Paggi
appiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort,” said the late President Franklin D. Roosevelt. Easy for him to say; he was filthy rich. However, according to lots of research on the subject, he was right. That’s good news for employers who want their employees to be happy and motivated but don’t have a lot of money to give them. As for the research, Warrington College of Robin Paggi Business professor Tim Judge and colleagues reviewed findings from 92 studies on whether money motivates employees. They concluded that the association between pay and job satisfaction is actually very weak (See “The relationship between
pay and job satisfaction: A meta-analysis of the literature” in the Journal of Vocational Behavior). Ian Larkin, professor of business administration at Harvard Business School, mostly agrees. He was quoted in the article “Inside Employee Motivation: Does Money Really Make a Difference?” on entrepreneur.com, as saying: "Money is highly motivational for people. But saying money is the only thing we should use is also silly. Companies probably think too much about using money as a motivator and too little about other motivators." So, what other motivators are there? In his book “Drive: The Surprising Truth About What Motivates Us,” Daniel H. Pink says that if you want employees to be happy and motivated, focus on their innate needs for autonomy, mastery and purpose. Autonomy People have the need to direct their own lives. Employers can provide autonomy for employees by allowing them a say in what they do (“Would you rather do this task or that task?”), when they
do it (“Would you rather work the day or night shift?”), how they do it (“This is the result I need – you can get there however you want to.”), and whom they do it with (“You can choose who you would like to partner with on this.”). Mastery People have the need to learn and create new things. Employers can help with this by giving employees moderately challenging tasks that allow them to extend themselves and develop more skills. Purpose People have a need to contribute to a cause greater than themselves. Employers
can help with this by having a mission and vision for their organization (besides just making money) and making sure employees know how they contribute to making the mission and vision a reality. In addition to those needs, people have a need to be recognized for their contributions. In response to the question “What two or three things do you most want in a job” in a Harris poll, the most frequent answers were 1) a good salary, 2) job security, and 3) recognition for a job well done. How can employers inexpensively and meaningfully recognize employees? Check out the article “25 Ways to Reward Employees (Without Spending a Dime)” on hrworld.com for some excellent ideas. As the saying goes: Money does not buy happiness. Nor does it buy motivated employees. Robin Paggi is the training coordinator at Worklogic HR where she creates and delivers workshops on topics such as harassment prevention, communication and supervisory skills. She can be reached at rpaggi@worklogiclegal. com or 695-5168.
April / May 2015
KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
April / May 2015
Legal and Human Resources Issue