Women Business Owners in the News
NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS California Chapter SUMMER 2002
Dear Friends and Colleagues: NAWBO-California has political influence. Each year, we are increasingly recognized as a force to be considered on issues affecting the overall business community of this great state. A record number of NAWBO members from the state's nine chapters attended our fourth annual legislative action event in April. We focused on educating attendees and informing legislators about our critical bottomline business issues. We informed legislators about how "squeezed" our profit margins are, in the hope that our insights will help ease the state's seeming "anti-business" climate. We took advantage of a great opportunity for bi-partisan women business owners to meet their elected officials face-to-face, inform them of our concerns and provide our unique perspective. This edition of the NAWBO-CA bulletin focuses on two key issues discussed in Sacramento: independent contractors and workers compensation. We also provide an inspiring story of a NAWBO member's success in securing contracts through government procurement outreach. With Governor Davis now requiring that government agencies contract at least 25% of their outsourcing to small business, NAWBO members must be prepared to capture such opportunity. Revolutionary, streamlining changes brought about by Secretary Aileen Adams of the General Services Agency, and her lieutenant, Chloe Hewitt, ensure that more women business owners than ever can compete for contracts. The changes are recognition, at long last, that we are crucial to the overall success of California's economy. Together, we mean business, for every member of every chapter who gets involved. Sincerely,
Betsy Berkhemer-Credaire, President, NAWBO-CA, 2002-2003
NAWBO-CA Devises Plan To Change Independent Contractors Definition By Sharon Gadberry,Ph.D., NAWBO-San Francisco For the past three years, the “Independent Contractor” worker classification has been a hot button issue for NAWBO-California. Many NAWBO members either use independent contractors on large projects or serve as independent contractors themselves, making it an integral part of our business success. Yet, hazy federal and state definitions continue to put us at risk of violation, with substantial fines and interest payments that have literally driven some women-owned companies out of business. NAWBO-CA took the lead during the annual Legislative Action Day on April 8 to propose a new definition of independent contractors. A 14-member, statewide NAWBO taskforce was created and has been working since. Our goal: to write a clear, simple usable definition, find legislators willing to back it, gain support from other business groups statewide for passage and emerge with a definition that helps, not hurts, businesses. The Problem Independent contractors are those in business for themselves who
provide services for others and are NOT legally employees. But under federal and state regulations, no such straightforward definition exists. Instead, legal definitions are complex and the IRS and six state agencies constantly search for “misclassifications.” To avoid penalties, employers accused of misclassifying must meet more than 20 criteria. Businesses typically run afoul of regulations when an independent contractor they previously used decides to file for unemployment benefits. Business owners often may not know specifically what particular condition they have violated. Unlike court hearings that are open to the public, state Employment Development Department investigations and decisions are closed, bureaucratic determinations. A finding of misclassification can mean business owners have to pay at least 20% of FICA taxes retroactively, 100% of FICA and federal unemployment tax, plus 1.5% of the “employee’s” compensation, interest and possibly other penalties. The New Definition The new definition we propose is called Contract Service Provider (CSP). It would consist of a minimum of two “tests,” or a simplicont on pg 3
Women Business Owner Coping With Workers Compensation Changes For 2003 By Mary Gilmore Changes to California’s workers compensation benefits go into effect in January 2003 and business owners can expect no relief. Instead, the new rules are likely to drive up workers compensation insurance costs by exposing more businesses to already-injured workers, who will ultimately be re-injured and file claims again. Thus, it is imperative that employers be more proactive than ever with their workers compensation insurance carriers to make sure injured employees are properly retrained. Under new rules that sped through the state legislature with support from labor and attorneys, injured workers can choose lump-sum payments of $10,000 instead of the existing $16,000 in vocational counseling, training and living expenses typically provided over six months. Cash-strapped workers will likely opt for immediate
Left to right: Rochelle Schneider, Cristi Cristich, Cathy Daughtery, Mary Gilmore and Rachel Owens from the NAWBOOrange County chapter met with state Senator Bob Margett during NAWBO-CA Legislative Action Days.
payment, end up untrained for new jobs and return to their old jobs, facing reinjury and repeat claims. Injured workers will simply be recycled through the system, ultimately driving up costs. Already, insurance premiums are 30% higher than last year. A second bill to “fix” the new law is legislatively dead. So, business-owners
must be pro-active in 2003 to keep costs down. That means if your workers are injured, don’t cut them off. Instead, contact them to see how they are doing, suggest they retrain, refer them to classes or training and use them in new positions at your company. Also, contact the insurance company to have a say in how your dollars are spent on your employee. With the average cost to replace an injured worker at $17,000, your actions could reduce that expenditure, plus, lower the insurance company pay out, keep your premiums from rising, prevent worker re-injury, generate goodwill to avoid worker lawsuits and, ultimately, create a better workplace. Mary Gilmore owns Computer Career Connections, a computer training facility in West Covina and Compton. She can be reached at 626-813-1566 or firstname.lastname@example.org
NAWBO-LA members visited the Senate Chambers. From left to right, Rochelle Schneider; Kathy Renman; Betsy Berkhemer-Credaire, NAWBO-CA President; Renee Fraser, NAWBO-LA incoming president; Sheila Hartman; Tammie Fletcher, NAWBO-CA State Administrator, and Elizabeth Blakely, NAWBO-CA secretary. Mark your calendars for NAWBO-CA Sacramento Day in March 2003!
NAWBO means business. Get involved. For more inform
rs in the News Planning To Succeed With Government Contracts Valencia Roner, president and CEO of VXR Enterprises, a marketing and public relations firm in Culver City, never intended to seek government contracts when she started planning to create a business in June 1999. But the information needed to complete a business plan and a $50,000 Small Business Administration start-up loan application was so detailed, she figured she might as well use it to fill out government certification forms at the same time. As a result, Valencia has secured six government contracts, comprising 60% of her revenues last year and giving her a healthy boost for a relatively new business. “The key to a lot of it is simply follow directions,” Roner said. “Do what they ask you to do, no more, no less.” For Roner, that meant taking the time to fill out in painstaking detail certification forms for the city and
county of Los Angeles, the Metropolitan Transit Authority, the Orange County Transit Authority, and the Southern California Regional Purchasing Council. It also meant trolling web sites to find procurement opportunities, attending pre-bid conferences to ask questions and sticking to 10-minute time limits during presentations and not lugging in charts, PowerPoint presentations and other time-consuming audio visual aids. Going through certification and bidding has provided Valencia with a thorough knowledge of her own business and has allowed her to assemble teams with other businesses to work on contracts. She is now ready, thanks to government contracting, to spread her wings in new directions and is revising her initial business plan. Valencia Roner can be reached at 310-641-1696 or email@example.com.
cont from pg 1 fied list of criteria that an independent contractor would meet in order to be defined as a CSP. The CSP could qualify if they are a certified California small business, and/or possess a valid business license, have insurance coverage self-paid by the contractor, market to multiple potential customers, bill multiple clients and have investments in business assets such as equipment and tools. The Compensation Test would ask: Does the CSP work under a negotiated and specific, written contract or have a recurring monthly retainer agreement for general services? In addition, the CSP must have flexibility in performance times for the contracted work and not be required to “work” during client-specified hours or dates, except for mutually agreed upon joint meetings or scheduled group presentations. Key to this new definition is the removal of the burden of proof from business owners and their operations. The new defini-
tion would help introduce the CSP’s “intent” to be in business into the criteria and avoid restrictive examinations of how the work itself is performed. The Progress NAWBO-CA faces formidable opposition. State officials can point to substantial past abuses of independent contractor laws by large corporations. Big companies have laid off workers and hired them back as independent contractors to perform essentially the same tasks, at the same desks with the same hours, but with no employee benefits. Labor unions,
meanwhile, seem to be opposed to any changes that would make it easier to classify independent contractors. We are receiving limited interest from state legislators and have been all but ignored by labor. We believe a clear definition would be a win-win for labor and for business owners. Once a definition is created with the support of a few key legislators, more supporters will join the battle, such as chambers of commerce, small business associations and labor unions. Our members rely on independent contractors to help us grow, obtain larger projects and do business. The issue is vital to our continued success and we are committed to seeking needed change. Sharon Gadberry, Ph.D., is a Managing Partner, of TMG/Power Marketing, and a founding member, of the NAWBO San Francisco Chapter. She can be reached at 415-403-7002 or Sharon@tmgpm.com.
ation, call 1-888-NAWBO-CA or log on to www.nawbo-ca.org.
Mary Griffin Mary Griffin of Griffin & Associations, a legislative and governmental advocacy firm in Sacramento, was chair of NAWBO-CA’s Legislative Action Days in April. The day consisted of panel discussions on impending legislation affecting small business owners and personal visits with legislators to discuss the hot issues.
Women Business Owners in the News
NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS— California Chapter 1-888-NAWBO-CA www.nawbo-ca.org EXECUTIVE BOARD Betsy Berkhemer-Credaire, President Cristi Cristich, Immediate Past Pres Sharon Gadberry , VP of Public Policy Joan Alleckson, Treasurer Elizabeth Blakley, Secretary Frances Nevarez, VP of Corp Relations
CHAPTERS Desert Cities San Diego Inland Empire San Francisco Los Angeles Silicon Valley Orange County Ventura Sacramento
Save the Date! NAWBO-CA Meeting November 8-9, 2002 San Diego, CA
Printing and mailing generously donated by Union Bank of California NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS— California Chapter 1431 La Colina Tustin, Ca 92780 1-888-NAWBO-CA
NAWBO-CALIFORNIA has the ability to connect all of the nine chapters by “live” video conference through the major city locations of Club Corp. which is a national corporate partner for NAWBO. Betsy Berkhemer-Credaire, new NAWBO-CA President, hopes to utilize the statewide hook-up for key CA Public Policy discussions. Thanks to the City Club in Los Angeles, and its Private Events Management specialist, Ms. Reagan Boyce, a framework has been created to offer full-screen video connections for instant-time “as good as being there” broadcasts to include all chapters, and more. Cities which can be connected are, from north to south: Sacramento, San Francisco, San Jose, Fresno, Bakersfield, Los Angeles, Ventura, Orange County, Inland Empire (San Bernardino), Desert Cities (Indian Wells) and San Diego. To accomplish this incredible feat of technology, each chapter would produce 10-15 participants, at a cost of $35 per individual, which includes continental breakfast and the one-hour video conference. There is also a business-development benefit for each business-owner because she will be seen on the video and introduced to the other women business-owners throughout the state. “Such a communications tool will glue the NAWBO leaders of this state together like never before,” explains Betsy Berkhemer-Credaire. “I am convinced that all chapters—including regional supporters in Bakersfield and Fresno where chapters do not yet exist—will benefit from this technology connection.”
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“NAWBO-CA LIVE” BY VIDEO CONFERENCE Thanks to Club Corp connections