Wisconsin Business Voice July 2016

July 2016: Issue 19

Official magazine of Wisconsin’s Chamber

COOLEST

THING

MADE IN

WISCONSIN

www.madeinwis.com Details p. 3

Inside: Affordable Care Act: Reporting Requirements Causing Headaches for Employers p. 22-25 Legislative Wrap-up p. 6 Guest Column from Sen. Russ Feingold p. 31 Developing Wisconsin's Workforce p. 40

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First Business is proud to have received an outstanding 97% in our annual client satisfaction survey. This phenomenal score is a testament to the wonderful relationships that exist between our staff and clients.

We’d like to thank our clients for this great compliment, and our staff who works hard each day to go above and beyond in delivering outstanding client satisfaction.

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These results are based on a survey conducted by an independent third party expert.

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WISCONSIN

BUSINESS VOICE From the Editor

In this issue…

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Foreign Markets and Workers are Critical for Wisconsin’s Economy KURT BAUER, WMC

Reports of the Middle Class’s Death are Greatly Exaggerated SCOTT MANLEY, WMC

I was sitting in my office a couple weeks ago and my email inbox started to fill with dozens of requests from people asking to be added to our mailing lists.

This is always awesome but this was particularly so – they were all from the same company!

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One of our members sent a note to their entire team encouraging them to engage with us – we have newsletters and emails with information for executives, team leaders, government relations experts, HR specialists, marketing and communications gurus, safety and health professionals and more. And there’s no limit to how many people in your organization can receive information from us – the more the merrier!

Is Self-Funding Healthcare Right for You? 12

CHERYL DEMARS, THE ALLIANCE

It’s easy – just send this link to everyone in your organization who could benefit from some of the information we’re sharing and we’ll add them to the list. www.wmc.org/subscriptions WMC membership is an investment in your company and the future of the Badger State. We will keep you informed as things arise that affect your business – and now you can encourage all your employees to stay informed too.

And if you’re not a member, you can still try out our other communications through a trial subscription at the same link.

Have a great summer!

2015-16 Legislative Wrap-up Wisconsin’s Department of Financial Institutions

SECY. LON ROBERTS, WISCONSIN DEPARTMENT OF FINANCIAL INSTITUTIONS

Rule Changes – Bad for Employers and 10 Overtime Workers

CHRIS READER, WMC

Dementia Friendly Employers Toolkit 18

SECY. KITTY RHOADES, WISCONSIN DEPARTMENT OF HEALTH SERVICES

Rethinking the Hiring Model 20

JOHN PFEIFER, MERCURY MARINE

22-25

THE AFFORDABLE CARE ACT: REPORTING REQUIREMENTS CREATE GROWING BURDEN FOR WISCONSIN BUSINESSES

Manufacturing & Agricultural Tax Credit 26 The Benefits Wisconsin

JASON CULOTTA, WMC

Celebrating Safety Excellence in Wisconsin 28

JANIE RITTER, WMC/WISCONSIN SAFETY COUNCIL Together, We Can Fix Washington 31

RUSS FEINGOLD Want to Export an Agricultural Product?

32

JEN PINO-GALLAGHER, WISCONSIN DEPARTMENT OF AGRICULTURE, TRADE AND CONSUMER PROTECTION

Act 21: The Demise of Implied Authority 34

LUCAS VEBBER, WMC Editor, Wisconsin Business Voice kpettersen@wmc.org

Business World – Free Enterprise in Action!

36

STEVE BENZSCHAWEL, WMC/WISCONSIN BUSINESS WORLD

Cybersecurity Battle Plan: Simple Steps to 38 The Shore-up Your Defenses

Wisconsin Business Voice is published quarterly by Wisconsin Manufacturers & Commerce. WMC is Wisconsin’s chamber of commerce, manufacturers’ association, and safety council representing businesses of all sizes and from every sector of the economy. WMC's address is 501 E. Washington Avenue, Madison, WI 53703, (608) 258-3400. This publication is proudly printed on paper made in Wisconsin.

Kurt R. Bauer, WMC President/CEO Katy Pettersen, Editor (kpettersen@wmc.org) Jane Sutter, Designer (jsutter@wmc.org)

BRAD LUTGEN, SIKICH LLP

Developing Wisconsin’s Workforce 40

S. MARK TYLER, OEM FABRICATORS, INC. Affordable Care Act 42

REP. DEBRA KOLSTE (D – JANESVILLE) AND SEN. LEAH VUKMIR (R – BROOKFIELD)

Doing Business in Winnesota 44

BLAKE FRY, HUDSON AREA CHAMBER OF COMMERCE

Foreign Markets and Workers are Critical for Wisconsin's Economy Kurt R. Bauer, WMC President/CEO

T

here are a lot of ways Washington can screw up Wisconsin's economy.

The Obama Administration's horribly ill-conceived Clean Power Plan (CPP) immediately comes to mind. If implemented, CPP will punish our coal-dependent manufacturing-based economy by mandating billions of dollars of new investment that will have to be paid for by dramatically raising residential and commercial electricity rates. This will make Wisconsin a more expensive place to live and a less competitive place for business.

policy response would be to support common sense reforms that make our nation's business climate more globally competitive. A good place to start is to cut the U.S. corporate income tax rate, which at 35 percent is the highest in the industrialized world.

Reversing the expansion of the regulatory state and tapping into America's plentiful domestic energy resources would also lower the cost of doing business and spark more economic activity and job growth. The looming economic threat of the $19 trillion national debt and trillions more in unfunded entitlement obligations should be commanding far more attention from the presidential candidates.

Another bad idea that could be coming Wisconsin's way, Wisconsin companies also need comprehensive federal depending on the results of the presidential election, immigration reform. About 70 percent of state business is trade protectionism. The presumptive nominees for leaders from all sectors report they are having trouble both the Republican and Democratic parties, hiring employees. Wisconsin's worker Donald Trump and Hilary Clinton, as “The U.S. and Wisconsin shortage is projected to get much worse well as Democrat/Socialist contender in coming years because there just economies can't prosper as Bernie Sanders have all said they want aren't enough generation X-ers and an island. We need foreign to wall-off the U.S. economy from the millennials in our state to replace the rest of the world. markets and we need foreign baby boomers who are at or reaching retirement age.

Trump, Clinton and Sanders claim workers.� protectionism will save American jobs, but the data shows the exact opposite is true. For example, 95 percent of the world's consumers live outside the U.S. By 2050, only 4.1 percent of the world's population will live in North America. Most of the planet's population and middle class wealth will expand in Asia, which is why exports are so critical for a manufacturing and agricultural state like Wisconsin that makes, grows and processes things.

If the U.S. rejects international free trade agreements then Wisconsin products will be cut off from the world's most lucrative markets and good-paying jobs will be lost.

If the presidential candidates are worried about losing American jobs to foreign competition the far better

One critical solution is to attract legal foreign immigrants, as we have done in Wisconsin since the 1840s. But Trump's anti-immigration rhetoric would wall-off our state from much needed workers in the same way he wants to wall-off our products from foreign markets.

When unshackled from bad federal policies, the U.S. economy and the American worker can out-compete any other nation on earth. But the U.S. and Wisconsin economies can't prosper as an island. We need foreign markets and we need foreign workers. I hope the candidates for president come to that realization. BV

Follow Kurt on Twitter @Kurt_R_Bauer 2

Sponsored by

What’s the Coolest Thing Made in Wisconsin?

We’re running a contest to find out!

WMC has asked Gov. Walker to declare October as Manufacturing Month every year since 2012. The goal has been to celebrate Wisconsin’s largest business sector (20 percent of Wisconsin’s GDP) and to promote manufacturing careers given the worker shortage in that sector.

To create more excitement and buzz around Manufacturing Month, this year we’re launching a contest to determine the Coolest Thing Made in Wisconsin! We want manufacturers of every stripe to pitch their product on social media and we want people (especially young people) to start a conversation and to vote.

The list of possibilities is long and the more we talk about it, the more we educate people about what is made in Wisconsin which creates awareness of Wisconsin’s manufacturing prowess and the career options available to young people.

WMC plans to announce the winner of the Coolest Thing Made in Wisconsin at the WMC Foundation State of Wisconsin Business Event October 18 at the Monona Terrace Community & Convention Center in Madison.

Here’s how the contest works…

1. Anyone can nominate 2. The first round of 4. the The company with 3. voting The final round of a product Made in winning product voting will take place will highlight Wisconsin from July 1 through August 31.

Online nomination forms can be found at www.madeinwis.com.

September 2-12 and will narrow the field of contestants to the Top 3 Coolest Things. Videos will be created of each of the finalists.

the Top 3 with videos and take place October 1-15.

will be revealed at the WMC Foundation State of Wisconsin Business event Tuesday, October 18.

Follow us to stay up-to-date on the contest!

WI_Mfg_Commerce

@WisconsinMC

WisconsinMC

Visit www.madeinwis.com to submit your nominations!

Questions?

Contact Alicia Bork, abork@wmc.org, 608.661.6923.

WMC

Search #madeinwis to join the online conversation

COOLEST

THING

MADE IN

WISCONSIN

FREE ENTERPRISE Scott Manley WMC Senior Vice President of Government Relations

Reports of the Middle Class’s Death are Greatly Exaggerated T he middle class is “shrinking,” screamed the headline from The New York Times. The middle class has been “hollowed out” according to the breathless claims of a recent Pew Research Center study. And a headline in The Atlantic despairingly asked the question “Can the Middle Class be Saved?”

The political left is increasingly pushing the narrative that the middle class is losing ground financially. Unsurprisingly, their antidote for this purported economic malady is government intervention and socialist-style income redistribution.

Their tactic is simple: convince the majority of Americans they are worse off financially and propose to “even the score” with buzzword policies like “income equality” and “fair share” taxation.

We see these efforts in very real terms with proposals to raise the minimum wage to $15 per hour, require employers to give paid sick leave and pay overtime wages to a larger swath of workers, and in proposals to raise taxes on “the rich” so government can further entitle a dependency class reliant upon the good graces of government handouts.

The Democratic candidates for president consistently give voice to the middle class misery narrative in their stump speeches. Bernie Sanders lamented "there is far too little discussion in Washington about the collapse of the middle class, almost no discussion at all about the incredible income inequality and wealth inequality in this country.” For her part, Hillary Clinton continually champions her vision of a “growth and fairness economy” that will lift middle-class wages, expand social services and increase taxes on the wealthiest Americans.

It’s an aggressive manifesto for higher taxes, bigger government and more entitlements – all in the name of rescuing the middle class.

But it begs the question – is the middle class really doing that badly? The short answer is no.

The most commonly cited data used to support the narrative of the shrinking middle class is the 2015 Pew Research Center study entitled “The American Middle Class is Losing Ground.” The Pew study defined the middle class as having income of at least twothirds the median, and no more than twice the median. Using that definition, Pew found the middle class has shrunk from 61 percent of adults in 1971 to 50 percent of adults in 2015.

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Without closely examining the data, you might conclude the middle class is shrinking because millions of Americans have slid from the middle class into a lower economic strata – or perhaps into poverty. Indeed, the left’s narrative says the middle class is shrinking because families are moving down the economic ladder to a worse financial position – and the best way to combat this inequality is higher taxes and government wealth redistribution programs.

The actual data, however, belies this narrative.

The data shows the middle class shrunk from 61 percent of Americans to 50 percent over the last four decades because middle class adults generally moved up the economic ladder to a higher economic tier – not downward.

Specifically, from 1971 to 2015 nearly twice as many people (7 percent) moved up the economic ladder as those who moved down (4 percent). And as Scott Winship recently noted in a National Review article, the four percent who moved into the lower income group actually saw their median income increase by 42 percent.

We should be celebrating the fact that fewer people occupy the middle class (as Pew defines it) because more Americans have been lifted into a higher income category. Instead, we see the left cynically mischaracterizing the data to advance an agenda for higher taxes and a larger, more intrusive federal government.

The two Democratic candidates for president have spent the last nine months attempting to outdo one another on the question of who will more fundamentally change our economic system in the U.S. They would do well to remember the advice of Milton Friedman who famously said the following with respect to the ability of free market economies to improve the lives of people:

“So that the record of history is absolutely crystal clear, there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free enterprise system.” BV Follow Scott on Twitter @ManleyWMC

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14000524 7/9/15

2015-16 LEGISLATIV WMC is the voice of the business community at the state Capitol. Our team spends thousands of hours each year talking with lawmakers to advance a free market and pro-jobs agenda. The 2015-16 legislative session has drawn to a close and our efforts resulted in some significant victories for businesses. Following is a list of some of those victories that will positively impact WMC members.

Right to Work. WMC’s advocacy helped Wisconsin become the 25th Right to Work state so employees can no longer be fired for not paying union dues. It also means employers should no longer feel obligated to serve as a labor union’s collection agency for dues.

Alternative Minimum Tax Reform. Wisconsin federalized the alternative minimum tax exemption amounts and exemption phase-out provisions starting in tax year 2017, which will dramatically reduce the number of taxpayers hit with a state tax liability.

Day of Rest in Seven. This reform allows workers in manufacturing and retail to work seven consecutive days without first getting permission from the state Department of Workforce Development. Manufacturers will have more flexibility with scheduling and workers will have an easier time working voluntary overtime hours.

Taxpayer Fairness. We took an important step forward toward fairness in the administration of our tax laws by federalizing the economic substance statute and limiting the broad production of documents penalties during the audit process.

Campaign Finance Reform. Made necessary changes to conform state law to the Constitution per recent court decisions. These changes help guarantee the free speech rights of businesses to participate in the political process.

Unemployment Reform. Recent reforms have resulted in a healthy balance in the Unemployment Insurance (UI) trust fund and will result in yet another unemployment tax cut for employers – a total of $135 million in savings for businesses in 2016 and 2017. Other pro-business reforms passed this session include defining “suitable work,” setting standards for determining when a claimant has “good cause” to refuse a job offer and strengthening laws against concealing wages when making a UI claim.

Worker’s Compensation Reform. Major pro-business items in a comprehensive reform law include disallowing benefits if an injured worker is terminated for misconduct while back at work on light duty, disallowing benefits if an injured worker is injured because they are in violation of a company drug or alcohol policy, and clarifying that an employer is only liable for the percentage of a disability that was caused while an injured worker actually worked for that employer and not for pre-existing damage from prior injuries.

Nuclear Moratorium Repeal. Repealed the state’s moratorium against building a new nuclear power facility, which had been in place for three decades. This change will allow nuclear power to once again become part of the conversation regarding Wisconsin’s energy future.

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E SESSION WRAP-UP While pushing for passage of pro-growth bills is an important aspect of what WMC does for businesses, it is equally important that we work to block bad bills from becoming law. WMC serves as the firewall between businesses and harmful proposals the labor unions, trial lawyers and radical environmentalists are pushing at the Capitol. The following are examples of bills WMC opposed that died this session. These misguided proposals would have hurt Wisconsin’s business climate and saddled businesses with higher costs and additional regulatory burdens.

Minimum Wage Hike. Looking to join their counterparts in Seattle and San Francisco, liberals from Madison and Milwaukee sought to impose a job-killing $15 per hour minimum wage. WMC stood against this and other misguided efforts to increase the minimum wage and kept intact a statewide prohibition on local municipalities (like Madison) from passing their own minimum wage.

Paid Sick Leave. Gov. Walker signed a law in 2011 with support from WMC to prohibit local municipalities from enacting sick leave mandates on local employers. This session, lawmakers attempted to require all employers in the state provide paid sick leave. While many employers already choose to provide varying amounts of sick leave, for many others such a requirement would be a jobs killer. WMC successfully stopped the proposal.

Repeal Act 10 Reforms. This misguided bill would have repealed Gov. Walker’s collective bargaining reforms that have saved taxpayers $5 billion, saved teaching jobs and allowed local governments the flexibility to innovate.

Family Medical Leave Expansion. This bill would have drastically expanded Family Medical Leave Act (FMLA) requirements in Wisconsin by applying the law to all businesses with at least 25 employees and requiring leave to care for grandparents, grandchildren and siblings. The bill also would have required employers to provide paid FMLA leave by creating a new government-run insurance program. WMC defeated this costly burden on employers.

Harmful Well Regulations. Stopped legislation that would have given expansive new authority to the DNR over the high capacity well regulatory process. This unprecedented legislation would have subjected businesses to new lawsuits, led to the creation of new regulations and injected politics and the legislative process into environmental permitting decisions. This bill put hundreds of millions of dollars of investment at risk and would have discouraged future development in our state.

Expensive Energy Mandate. This legislation would have tripled the state’s mandate for renewable energy, driving up electricity costs and making Wisconsin less competitive. This costly legislation was proposed at a time of significant regulatory uncertainty at the federal level and would have further burdened every Wisconsinite who pays an electric bill.

Anti-Sand Mining Bills. This series of bills would have put an expensive and unwarranted regulatory burden on our state’s industrial sand industry. Stealing a page out of the radical environmentalist playbook, these bills would have required costly and ineffective new monitors and other expensive new regulatory mandates in an effort to stifle growth in the industry.

U.S. Chamber Scorecard for First Session of 114th Congress Senate: • Baldwin – 30% • Johnson – 82%

House: • Ryan – 89% • Pocan – 29% • Kind – 49% • Moore – 34% • Sensenbrenner – 79% • Grothman – 80% • Duffy – 86% • Ribble – 87%

Wisconsin Business Voice

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Wisconsin’s Department of Financial Institutions:

Service to Business Community Extends Beyond Banks, Credit Unions

By Lon E. Roberts

T

o many people in the private sector, the name “Department of Financial Institutions” is synonymous with banks and credit unions. Certainly, regulating those financial institutions is an important part of DFI’s mission. But DFI’s reach into the business community extends well beyond the oversight of 182 statechartered banks and 144 state-chartered credit unions.

At the direction of Gov. Walker, each state Cabinet agency now uses a “dashboard” to measure its performance on several key performance metrics on a quarterly basis. DFI, for example, has made a concerted effort For example, DFI also: in recent years to increase the • Regulates a host of other financial services activities including number of business forms that can be automatically filed online. mortgage banking, payday lending, collection agencies, loan The rationale is that electronic auto-filing of documents gives companies and sales finance companies. business owners the quickest possible turnaround • Serves as the filing office for new The goal is for state time on their documents being filed with DFI. and existing business entities in It’s more efficient and more effective. As of agencies to provide more Wisconsin, from corporations to March 31, the percentage of business forms limited partnerships to limited efficient, effective service to that were electronically filed with DFI was 82 liability companies. As of April 30, percent, up from 73 percent compared to the their stakeholders. there were 423,378 business entities prior quarter.

The dashboards for all state agencies registered with DFI – an increase of can be found online at www.performance.wi.gov.

59,009, or 16 percent – since Gov. Scott Walker took office in 2011.

In addition to improving customer service, DFI is constantly looking for other ways to better serve our stakeholders. For • Registers and monitors the activities of more than 141,000 securities professionals registered in Wisconsin. example, in January, DFI began issuing apostilles – certificates needed to authenticate the origin of a public document issued in • Examines and files documents under the Uniform Commercial Wisconsin for use in a foreign country. Some examples of such Code and maintains the database of statewide UCC lien filings, public documents are corporate documents, birth certificates, of which there currently are more than 520,000. school transcripts and trademarks. In Wisconsin, this service • Issues notary public commissions and maintains the statewide previously had been available only through the Office of the database of more than 82,000 active notaries public.

Secretary of State and federal courts.

• Administers the Wisconsin Consumer Act, which regulates Having spent more than 40 years in the private sector, I had consumer credit transactions and debt collection, and resolves many opportunities to view the work of DFI from the outside complaints filed under the law. looking in. Now that I am on the inside looking out, I can tell you • Promotes personal financial literacy through our Office of DFI is committed – and will remain committed – to continuous Financial Literacy and the newly created position of Student improvement in the level of service we provide to our stakeholders.

Debt Specialist, who will spearhead efforts to help prepare BV students and parents for decisions related to student loans for post-secondary education.

If you are a member of Wisconsin Manufacturers & Commerce, you undoubtedly are among the hundreds of thousands of customers that DFI serves each year. Improving the level of customer service we provide has been an ongoing effort at all state agencies since Gov. Walker took office. The goal is for state agencies to provide more efficient, effective service to their stakeholders.

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Lon Roberts was named DFI Secretary in February 2016. Prior to his appointment, he spent more than 40 years with the Ruder Ware law firm in Wausau, including 11 years as the firm’s president.

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Wisconsin Business Voice

9

LABOR LAW Chris Reader WMC Director of Health & Human Resources Policy

Overtime Rule Changes – Bad for Employers and Workers I n April, President Obama’s Department of Labor (DOL) moved forward with extensive changes to our nation’s overtime regulations. The stated intent of the Obama Administration is to raise the wages of approximately four million workers. The reality of the new edict, however, will not be good for impacted employers, workers or the economy.

The aggressive change, which goes live on December 1, 2016, makes all employees who earn $47,476 or less entitled to overtime for hours worked above 40 hours per week, up from the previous threshold of $23,600. While the old threshold had admittedly not been raised in a number of years, doubling it overnight could have dire consequences.

With the effective date of December 1 looming, employers need to act now to implement compliance plans. Specific plans to comply with the new edict will vary according to individual circumstances.

Any employee who is currently salaried and falls between the two thresholds will need to have their situation evaluated and adjusted.

Options employers have include: • Switch exempt workers from salaried to hourly and have workers start punching a time clock.

• Along with the switch from salary to hourly, decide if the new hourly wages will account for expected overtime or if workers will be prohibited from working over 40 hours per week.

• Raise the salary of employees to comply with the new $47,476 threshold.

• Split job duties, effectively making a salary position into two part-time positions.

In addition to deciding what to do with individual employee wage and salary levels, employers also have to figure out where within their budget the extra money for higher wages will come from.

Overall, the rule is expected to cost employers over $1 billion annually. While that does mean additional money in the hands of a small percentage of workers, it also likely means benefit cuts elsewhere, reduced pay for many, reduced status from salaried to hourly and less money for investment by the employer into R&D, expansions and new hires.

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Beyond the direct cost of the overtime changes, there is also the cost of technology for compliance. Employers will likely need new software systems to track the time of these new non-traditional hourly workers. How do you track when someone reads an email, does research or makes a sales pitch? Without an upgrade, employees who routinely answered such emails or who took a sales call on Saturday may now be prohibited from doing so.

Employers from all corners of the economy – manufacturers, retailers, restaurants, colleges and universities, municipalities, nonprofits and many more – are greatly and rightfully concerned with the impact the changes will have on their organizations. Despite this widespread opposition, the Administration moved forward with the changes. Congress now has the ability to pass a law nullifying the rule, and employers urge the Wisconsin delegation to do so. Ultimately, however, President Obama has the final say and will likely veto any attempt by Republicans in Congress to undo this misguided rule.

The Administration simply doesn’t comprehend that you can’t force more money into the economy. Every time they interfere in private compensation packages, be it with overtime rules and employment arrangements, leave law mandates or the minimum wage, they are forcing employers to shift finite resources, often to the detriment of workers and the economy. In this case, they are forcing a massive re-classification of workers and at the end of the day the likely result, after millions are spent on compliance, is that the overall amount of wage and benefit packages of individual employees will be unchanged. That’s because, unlike bureaucrats at the Department of Labor who have never created a job or met a payroll, employers face slim margins and tight finances. They don’t have more money to move into compensation packages simply because DOL thinks they should. BV Follow Chris on Twitter @ReaderWMC

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Is Self-Funding Healthcare Right for You?

By Cheryl DeMars

S

elf-funding can change your approach to employer health benefits by giving you more savings, more control and more information about your health benefits.

So how do you know whether self-funding is right for you?

Answering these 10 questions can help you decide.

1) What does your data say? Historical claims data is important to know whether self-funding will benefit your company, yet employers often have difficulty accessing indepth data unless they’re self-funded. A broker with selffunding expertise can help you gather and analyze your data to learn whether self-funding has the potential to pay off for you. Data can also help you design cost-effective benefits that improve workers’ health to capture greater productivity.

2) Are you big enough to self-fund? A growing number of employers with less than 100 employees are self-funding.

The bigger the employer, the more likely it is that they’ll self-fund. See chart below.

Percentage of Covered Workers in Partially or Completely Self-Funded Plans, by Firm Size, 2015 100%

94%*

90%

83%*

82%*

80% 70%

63%

60%

56%*

50% 40% 30%

29%*

20%

17%*

10% 0%

50-199 Workers

200-999 Workers

1,000-4,999 Workers

5,000 or More Workers

All Small All Large Firms (3-199 Firms Workers) (200 or More) Workers

ALL FIRMS

* Estimate is statistically different from estimate for the previous year shown (p<.05).

SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2015.

3) Are you ready for a bigger administrative role? Self-funded employers play a hands-on role and partner with a thirdparty administrator (TPA) to handle claims processing and other tasks. Self-funded employers also have additional legal and fiduciary responsibilities related to proving they have the financial stability to sustain self-funded health benefits.

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4) Are you willing to assume some risk? Self-funding rewards employers with savings partly drawn from profits that would otherwise go to the insurer. Savings can be as high as 12 percent annually, according to an article published in the March 9, 2015 issue of BenefitsPRO magazine. Yet there’s also the risk that your health plan costs will be higher than expected. Stop-loss insurance helps mitigate this risk. If your claims history typically shows a worsethan-average experience, self-funding may not be right for you.

5) Can you find the right adviser? A great broker or consultant can be invaluable in designing a cost-effective benefit plan that achieves your goals while minimizing financial risk. A thorough request-for-proposal (RFP) process can help you find an experienced self-funding adviser who is the right fit for your organization.

6) Are you preparing for the Cadillac tax? Self-funding’s flexibility can help you design a consumer-directed health plan (CDHP) that meets employee needs while avoiding the 40 percent excise tax, also known as the Cadillac tax. This tax requires employers to pay 40 percent of the value of employer-sponsored health coverage that exceeds certain benefit thresholds when it takes effect in 2020. It’s also worth noting that self-funded plans do not pay the health insurance tax (HIT) the ACA imposes on fullyinsured plans, which is likely to be passed along to fullyinsured customers.

7) Do you prefer a holistic approach to employee health?

Companies focused on employee wellness are a good match for self-funding. They reap the benefits of their investments in employee health in terms of reduced health care costs and increased productivity, both of which benefit the bottom line.

8) Do you want to encourage “consumerism?”

“Consumerism” means involving people in decisions about their care, such as choosing doctors and hospitals based on cost and quality. Self-funding can help make health care “transparent” by providing the data needed for these comparisons. Promoting health care consumerism is one way to help employees transition to high-deductible health plans (HDHPs).

9) Are you looking for better ways to buy health care? Selffunding can help you pay doctors, hospitals and clinics on the basis of performance. For example, self-funded employers who use The Alliance’s QualityPath program guide employees to high-quality doctors and hospitals that provide selected surgeries for a lower, bundled price that includes a warranty.

The Alliance Members by Super Sector

This is an example of the variety of the industries containing employers who choose to self-fund.

250

200

150

30% Manufacturing

11% Wholesale Trade 9% Professional, Scientific and Technical Services

OUR EMPLOYERS SAY IT BEST

9% Retail Trade 100

7% Finance and Insurance 6% Health Care and Social Assistance 5% Construction

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4% Educational Services

When we decided to self-fund, we looked for a network that would provide us an opportunity to control costs to move us

0 3% Agriculture, Forestry, Fishing and Hunting

forward.

3% Information 3% Transportation and Warehousing 2% Government/Public Administration

â&#x20AC;&#x201D; Tim Wolff, Colony Brands Member Since 1996

2% Other Services (except Public Administration) 2% Administrative, Support, Waste Management and Remediation Services 1% Utilities 1% Accomodation and Food Services 1% Management of Companies and Enterprises 1% Mining, Quarrying, and Oil and Gas Extraction 1% Real Estate and Rental and Leasing

10) Do you want more control and more flexibility in plan design? Every self-funded plan is a little different because every company is different.

If you want a plan that recognizes the unique demands of your business and your workforce, self-funding may be a good fit. BV Cheryl DeMars is President and CEO of The Alliance, a member cooperative of more than 240 self-funded employers and insurance trusts covering more than 100,000 individuals.

The Alliance gives you a large network of doctors and hospitals, data to analyze your spending, and strategies to manage your trend.

WANT TO LEARN MORE? Call Calvin Rigsby at 800.223.4139 x6643 or your broker.

WMC at Home and on the Road

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WMC's Kurt Bauer and members of the WMC Government Relations team met with Wisconsin Attorney General Brad Schimel.

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The Wisconsin Safety Council recognized Johnsonville’s Riverside team for achieving one year without any lost time injuries.

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WMC’s Kurt Bauer joined Gov. Scott Walker on a panel at the U.S. Chamber of Commerce.

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U.S. Representative Glenn Grothman (R-WI 6th District) spoke to the WMC Board of Directors. He is pictured here, center, with John Pfeifer, Mercury Marine; Rick Parks, Society Insurance; Bob Kamphuis, Mayville Engineering Company, Inc.; and Tod Linstroth, Michael Best & Friedrich LLP.

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Gov. Walker signed AB 819 into law, allowing positive changes to Wisconsin’s Unemployment Insurance laws. WMC’s Scott Manley and Chris Reader are pictured left of Gov. Walker.

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Former Green Bay Packers defensive tackle Gilbert Brown presented WMC’s Jason Culotta with a signed Aaron Rodgers helmet on behalf of the Wisconsin Association of Campground Owners for his work on AB 174 which protects campground owners from civil liability in some cases.

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“We are proud to be represented by an organization that is as passionate about positively improving the state of Wisconsin as we are. Being a member of WMC affords us the ability to focus on the daily operations of our business while they work for us on the legislative front to ensure our growth is not inhibited by anti-business laws or regulations.”

Louie Gentine, Chairman, CEO and Owner Sargento Foods Inc.

Not a member?

Join today. www.wmc.org/membership

BV Gigante

Wisconsin Business Voice

15

Australia Provides Opportunities for Wisconsin Exporters A ustralia has a strong and well-developed manufacturing and services economy along with a vast reservoir of natural resources, and thus presents countless opportunities for Wisconsin companies across a broad range of industry sectors.

As the 12th-largest economy in the world, Australia boasted a GDP of $1.5 trillion in 2015 and is experiencing economic growth for the 23rd year in a row. Furthermore, nearly all tariffs on U.S.manufactured goods entering the country were eliminated with the 2005 U.S.-Australia Free Trade Agreement. Australia is the seventhlargest export market globally for Wisconsin and the third-largest in the Asia-Pacific region.

Australia’s wealth of natural resources contributes to its robust mining and agricultural sectors. The mining industry requires highquality industrial machinery of the type in which many Wisconsin companies specialize. Although Australia already imports about 70 percent of its mining equipment, the country will need more equipment as projects move to the production phase. The agriculture sector provides opportunities for Wisconsin agriculture and food production exporters. Australia is strategically positioned close to Asian markets that are driving fast-growing global food demand, an industry that requires innovation across all aspects of the production and the supply chain.

Opportunities also exist for companies that provide services related to road building, road safety and traffic management, as Australian government agencies are allotting funds to improve their road network’s safety and efficiency.

Additionally, the majority of medical technology products used in Australia are imported, with the

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U.S. being the number-one import source. Wisconsin is already a leader in medical equipment exports, making this a promising opportunity for further growth. BV Visit the Wisconsin Economic Development Corporation’s website www.InWisconsin.com/exporting for more information on exporting to Australia or other parts of the world.

INTERNATIONAL GROWTH OPPORTUNITIES IN AUSTRALIA

Top Wisconsin 2015 Top2015 Wisconsin Export Export Categories to Australia Categories to Australia

– 43% IndustrialIndustrial MachineryMachinery – 43% Parts – 17% Vehicles &Vehicles Parts – & 17% & Scientific Instruments – 9% Medical &Medical Scientific Instruments – 9% – 8% ElectricalElectrical MachineryMachinery – 8% Others – 23% All OthersAll – 23%

Population: 22.5 million (4x greater than WI)

2015 WI Exports: $583.5 million

Area: 7.7 million sq km (46x larger than WI)

WI Export Rank: 8

GDP: $1.5 trillion

U.S. Export 2015 Top2015 U.S. Top Export Categories to Australia Categories to Australia

– 19% IndustrialIndustrial MachineryMachinery – 19% Parts – 13% Vehicles &Vehicles Parts – & 13% Aircraft/Spacecraft – 12% Aircraft/Spacecraft – 12% – 8% ElectricalElectrical MachineryMachinery – 8% & Scientific Instruments – 8% Medical &Medical Scientific Instruments – 8% Pharmaceutical – 3% Pharmaceutical Products –Products 3% Others – 37% All OthersAll – 37%

Key Industries: Industrial machinery, vehicles and parts, medical and scientific instruments, electrical machinery, paper, plastics, iron/steel, pharmaceutical products, beverages

To learn more about growing your business in Australia, visit InWisconsin.com/Exporting or call 855-INWIBIZ (toll free).

________________________________________________

Dementia Friendly Employers Toolkit: Because a Productive Workforce is Good Business

By Kitty Rhoades

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ne of the greatest challenges for Wisconsin employers today is finding and retaining skilled, motivated and engaged workers. As our population ages, one of the growing obstacles facing employees across the state is the stress of juggling work and the responsibility of caring for a loved one living with memory loss or behavioral changes due to dementia.

One in six employees is also working at least part-time to care for someone with dementia. The stress of this “double-duty” can lead to problems with job performance, affect physical and mental health, and create financial strain. Employees as caregivers sometimes find they can no longer perform their job duties at all.

Recognizing that turnover costs employers an estimated one and a half times the employee’s annual salary, there is a major incentive to take steps to help them, help you.

This is why we, the Department of Health Services, created the Dementia Friendly Employers Toolkit, as part of our DementiaCapable Wisconsin initiative. This online resource offers a variety of options for employers to address issues that arise for employees who are also caretakers. These cost-effective solutions can lead to happier, healthier employees who are then more productive.

Addressing and recognizing the challenges your caregiver

“WMC is at the forefront of tackling and understanding workforce shortages in the manufacturing industry. They advocate for the importance of technical college education, workforce training opportunities and the investment in development programs to lessen the skills gap. Manufacturing has always been a pillar of Wisconsin’s economy and I am happy to support WMC as an organization to ensure manufacturing continues to be a thriving industry in this state.”

Mark Tyler, President, OEM Fabricators, Inc. Not a member?

Join today. www.wmc.org/ membership

employees face can also be the difference in retaining your quality, skilled workers.

The benefits of being a Dementia Friendly Employer include:

• Reduced costs of recruiting, hiring and training new employees • Reduced health insurance costs

• Less absenteeism and fewer work schedule disruptions • Improved morale, productivity and engagement • Fewer accidents related to employee stress

• Enhanced positive image and community reputation

As Secretary of the Department of Health Services, which employs more than 6,000 people statewide, I am reaching out to all of our people and sharing these resources, and I am encouraging Secretaries of all of the state agencies to do the same. To our fellow employers - please visit our website to learn more about our Dementia-Capable Wisconsin initiative and the Dementia Friendly Employers Toolkit: www.dhs.wisconsin.gov/dementia/ employers.htm. BV Kitty Rhoades, Secretary of the Wisconsin Department of Health Services

Editor’s Note: Secretary Rhoades passed away on June 18.

She had served as Secretary of the state Department of Health Services since February 2013. Prior to that Rhoades was deputy secretary at DHS since joining the Walker Administration in 2011. She served in the state Assembly from 1999 until 2010 representing northwestern Wisconsin. She was a friend of the business community having worked for the Hudson Chamber of Commerce prior to being elected to the Legislature. She was a dedicated public servant and will be sorely missed.

Save the Date

Business Day in Madison March 1, 2017

Monona Terrace Community & Convention Center

www.businessdayinmadison.com 18

Third Annual Wisconsin Business Achievement Award

Nominations are due August 15, 2016

2016 WMC Foundation Golf Outing Thursday, August 18

SentryWorld, Stevens Point

Register today - www.wmc.org/golf

Rethinking the Hiring Model

By John Pfeifer

A

t Mercury Marine our mission is woven into the fabric of our global business. Fueled by our passion for the water and our customer’s boating experience, we provide the most reliable and intuitive propulsion solutions and are committed to be the best partner for our stakeholders.

That mission applies to our customers, our stakeholders and most importantly, our global employee base. At Mercury Marine, we are very proud of the culture we have created and continue to promote our Mission, Vision & Values. Those values include integrity, customer centricity, sustainability, product and service leadership, and employee engagement and guide our business decisions to shape the culture at Mercury Marine.

Mercury Marine’s Values: Integrity. We will conduct ourselves at the highest level of ethical standards. We do what we say, and say what we do.

Product & Service Leadership. We provide innovative, high quality products and services that deliver reliable, easy-to-use solutions and drive passion for our brand.

Customer Centricity. Everything we do, in every part of the company, is focused on delighting our customers.

Sustainability. We promote the sustainable use of resources in both the development and manufacture of products, and in the communities and environments where our products are produced and used.

Employee Engagement. We foster a culture that engages everyone in driving company and personal success.

Mercury Marine in Fond du Lac.

But despite our winning culture, manufacturers around Wisconsin, including us, have found it hard to attract and retain qualified employees.

We don’t have a jobs shortage in Wisconsin; we have a shortage of qualified workers in manufacturing. As of April 2016, Mercury has 75 job openings at our global headquarters in Fond du Lac. The message is clear – Mercury Marine is hiring, but we need to rethink our hiring model.

That’s why we have instilled a new values-based hiring system. Traditionally, we looked for a candidate who has the technical skills necessary to succeed in one of the thousands of jobs we have at Mercury. But

that hiring model is broken. We offer very competitive wages and a culture where our employees are encouraged to grow and be a part of our global family.

What we came to find, as so many other manufacturers do, is that you can teach welding, machining and tooling. What you can’t teach are values. Honesty, respectability and integrity are values successful people possess no matter what vocation you choose.

Knowing that, we decided to change the way we attract and hire employees at Mercury.

In 2013, our human resources department instilled a values-based hiring model that has been very successful and helped attract and retain the type of employee we are looking for. We have also increased our veterans hiring program, marketing job openings to veterans and encouraging them to apply to any and all open positions at Mercury. All veterans who apply for positions at Mercury Marine receive an interview.

We will hire employees who have the values we are looking for and teach them the skills they need to be successful. What we have found is by flipping the hiring model upside down, we are creating a culture where our current employees are more engaged and we hope to attract the top talent in the state of Wisconsin. Our model will continue to evolve and in doing so, we hope to find employees who share our Mission, Vision and Values and are committed to learning and having a long and successful career in manufacturing at Mercury Marine. BV John Pfeifer is President of Mercury Marine in Fond du Lac

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Export Achievement Awards “I am a member of WMC because WMC is the voice for my small business at our state and local government.

WMC’s agenda involves protecting business owner’s rights and improving the business and tax climate of the state of Wisconsin. I make time to attend and support WMC because of their commitment to meaningful and purposeful agendas that generate results.”

Gregory Clement, President, Argon Industries Milwaukee

Not a member?

Join today. www.wmc.org/ membership

Three Wisconsin companies were recognized with 2016 Governor’s Export Achievement Awards which recognize success in global business development. Ever-Green-View Farms LLC from Sheboygan County, H.O. Bostrom and Hydro-Thermal Corporation, both of Waukesha, were this year’s recipients for achieving significant growth or implementing innovative strategies in exporting. Nominees were evaluated on measurable export growth, innovation and their contributions to Wisconsin’s trade development and economy.

“These three businesses exemplify the type of success that many Wisconsin businesses are achieving by entering or expanding in overseas markets,” said Gov. Scott Walker.

“With 95 percent of the world’s population located outside of the United States, exporting provides tremendous opportunities for Wisconsin companies of all industries and all sizes.”

Wisconsin Business Voice

21

THE AFFORDA

ABLE CARE ACT ACA Reporting Requirements Create Growing Burden for Wisconsin Businesses

By Mark Crawford

S

ince the complex Affordable Care Act (ACA) came into existence in 2010, it has created considerable angst and confusion regarding its compliance and reporting requirements. Increasingly, businesses are investing more time and money in meeting these requirements, which translate into a big hit to the bottom line. These rules also continue to evolve – for example, after many changes and delays, employer penalties (employer shared responsibility) went into effect in 2015 for employers with 100 or more employees and this year also applies to employers with 50-99 employees. These companies must now offer coverage to full-time employees; further, the coverage must also be “affordable” in order to avoid federal penalties.

Sections 6055 and 6056 of the ACA require employers to report their offers of coverage, and coverage status for employees, to the employee and the federal government via Form 1095, which employers sent to their employees early this year. The original deadline was January 31; however, because the federal government expects a lot of confusion from employers and carriers, it extended the dates to March 31 for forms to employees and either May 31 (if filing by mail) or June 30 (if filing electronically) for filing the forms with the IRS. “This was good news for many employers, as software vendors and payroll companies had to create new

solutions for these forms,” states Karen J.W. Breitnauer, a senior compliance attorney with M3 Insurance in Madison.

To make this go smoothly, employers need to understand their employer shared responsibility requirements, make offers of coverage to the a p p ro p r i a t e employees and gather all the appropriate enrollment data for All of this is, of course, highly the forms to the IRS. frustrating for businesses.

“These complicated forms have imposed a new learning curve on employers due to complex codes that must be inserted in various boxes based on various circumstances,” states Charlie Stevens, a partner and employee benefits attorney with Michael Best & Friedrich LLP in Milwaukee. “There are still places where the forms and instructions are confusing. We anticipate that, following this first year of reporting, there will be further changes to the forms.”

All of this is, of course, highly frustrating for businesses.

“We have spent untold time and money making sure we are compliant with all the ACA regulations since its inception,” relates Thomas Rewolinksi, president and CEO of Western States Envelope and Label in Butler. “This year’s reporting requirements were just another in a long line of requirements; however, they are especially onerous in Wisconsin Business Voice

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that now we have to report for each employee by month, whether we provide coverage or not, and if there isn’t coverage, why not. We ended up using a third party to put this information in a reportable format. It was still a huge costly effort to get the information to them in a format they could use.”

Challenges Abound

The biggest challenge for businesses is the sheer size of the task involved in gathering the required information from multiple sources to prepare the filing. Hours data is required from payroll systems and health insurance offers and coverage information is needed from the HR information systems and/or insurance companies or agencies that provide the coverage.

It was often very trying to decipher what codes in line 14 and 16 on the 1095C needed to be used,” says Pat Kelly, healthcare reform compliance director for Hausmann-Johnson Insurance in Madison.

“Depending on each employee, there are different codes that can be used. It is also possible that each employee has more than one applicable code in line 14 and 16 over the 12-month period. Many employers used a third party to produce the form such as a payroll vendor, benefit administration system, do-it-yourself reporting software or tracking-only vendor. Some got it right and others did not.”

“Since it was the first year of the new reporting process, some vendors had quirks to work out,” added Breitnauer. “Many of our clients, even those who hired vendors to process the filings, had to spend extra effort making sure the reporting went properly.”

In fact, there are so many possibilities for different interpretations and inadvertent errors by HR departments and third-party vendors that the IRS has indicated it will not impose penalties for errors that occurred when employers attempted “good faith” compliance.

Software vendors also faced some tough challenges. For example, they did not receive final guidance to get their software ready for market until November. “The IRS,” notes Pamela R. Branshaw, CPA and partner with Wipfli in Eau Claire, “still has not issued full guidance to software vendors on how to resubmit corrected forms if an electronic filing is rejected by the IRS.”

Another problem is that some software vendors did not build intelligence into their systems to calculate the proper coding for the forms – the software only produces the forms and the electronic files to submit to the IRS and the employer is left to figure out the proper coding to put on the forms for each employee for each month of the year. “Other software vendors allowed the employer to produce the paper forms to mail to the employees by March 31.

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Now, however, the employers are discovering the software does not do the electronic filing, so they are scrambling to find a means to get their electronic filing completed,” she adds. “Other employers are concerned with the HIPAA (Health Insurance Portability and Accountability Act) implications of all this health information gathering – guidance is needed from Health and Human Services.”

Cost of Compliance

Major costs of compliance include training HR and administrative staff on the new requirements and/or contracting third-party vendors to provide assistance. Many businesses hired additional staff, reassigned existing staff (taking them away from other duties) and hired outside experts to help understand and submit new IRS forms and provide software. Getting it right is important: “If the information required by these forms is not accurately reported, undeserved penalties could be imposed and in some cases for large employers, in the millions of dollars,” states Stevens.

The biggest challenge for Mayville Engineering Company in Mayville was tracking the data throughout the year and selecting a vendor to produce the reports. The company partnered with its online benefits enrollment vendor to take on this additional work then stretched its existing payroll and benefits staff to validate the data tracking process with the vendor. “We were on time, but the additional cost to track the data monthly, as well as prepare the reports, cost us approximately $15,000 for the year, not including the additional time spent fielding employee calls with questions,” stated Cliff Sanderson, vice president of human resources for Mayville Engineering Company.

“I would like to know the costs for all the hours spent over the last year by CFOs, HR departments and others who needed to stop what they normally do to handle the reporting task,” adds Kelly.

“I’m sure there will be some benchmarking coming out on this.”

On the Horizon

Because no large-scale changes in the ACA are expected in the near future, ACA mandates on employers will likely remain in effect, including reporting obligations. With implementation under way and 2016 being a presidential election year, it is unlikely any meaningful changes will happen soon. Employers should expect reporting for 2016 will be very much the same as it was for 2015. In the meantime, hopefully reporting will become more streamlined as employers and the IRS get used to these new forms.

For most businesses, Branshaw recommends “outsourcing as much of this work as possible rather than making internal investments,

until we know if these filing requirements are here to stay. Large companies have spent a lot upgrading payroll and HRIS software to handle the filing. If software was purchased with intelligence built-in to do the coding, companies should be in good shape going forward.

They just need to make sure the vendors are keeping up with the changes that are occurring constantly.”

Not all software vendors were adequately prepared for handling these reports, creating operational inefficiencies that added more costs for the business owner. Therefore selecting the right vendor is essential for making compliance much easier and cost-effective. Kelly partners with the Benefit Advisors Network (BAN), a national, credentialed network of independent benefit advisory and consulting companies, to vet vendors allowing Hausmann-Johnson to make credible referrals.

“Bigger is not always better” when it comes to selecting a third-party vendor, cautions Sanderson. “We focused on a balance between cost and ability to be nimble and meet our unique reporting needs,” he says. “Our selection process put us with a mid-size provider that has been able to adapt to our changing benefits platform, wellness discount programming and various geographic locations with unique open enrollment preferences, as well as handle the ACA reporting.

Connecting with your vendor early and often to ensure they are

getting the necessary data from payroll to provide both these forms is critical to success.”

History tells us, regardless of which party is in charge, federal government tends to move slowly. “We advise our clients to focus on the basics of the law and the items they are responsible for,” states Breitnauer. “This means being prepared as if the law will not see major changes in the near future so they can meet their requirements as mandated by the law. Staying compliant isn’t glamorous, but it’s a great risk management strategy to avoid fines and meet your legal responsibilities.”

“Be sure to seek clarification with respect to unusual employment and coverage scenarios the IRS may not have contemplated in creating their coding system,” adds Stevens.

“Although the ACA is a noble endeavor, it places additional administrative burden and costs on employers, with no return on that investment,” says Sanderson. “We’ve always provided credible coverage at a better-than-industry-standard employee contribution rates. We’ve also developed and implemented a robust wellness initiative designed to take cost out of our health care spend, yet our efforts get thwarted with these additional reporting costs.” BV Crawford is a Madison-based freelance writer.

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ATTORNEYS AT LAW 411 E. Wisconsin Ave. Milwaukee, WI 53202 (414) 273-3910 lindner-marsack.com

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Wisconsin Business Voice

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TAXES Jason Culotta WMC Senior Director of Government Relations

The Manufacturing & Agriculture Tax Credit Benefits Wisconsin I n early 2011, policymakers wanted to take significant action that would encourage job growth in Wisconsin but were uncomfortable with the idea prevalent in many states of offering huge incentives to large businesses to lure them in. The concept of a credit to encourage production in the state was an agreeable alternative that complemented the state’s top two industries, manufacturing and agriculture.

Recent attention has been given to the full implementation of the Manufacturing and Agriculture Credit (MAC) this year, some casting doubt on the credit’s value. Since the MAC was adopted in 2011, Wisconsin manufacturing jobs have grown by over 40,000 while manufacturers were expected to have saved about $100 million by claiming the credit in 2014.

The MAC was adopted during the 2011 state budget process and began to partially take effect in 2013. It can be claimed on production that occurs in Wisconsin and may offset the income tax liability of a manufacturing or agricultural producer.

Potential claimants include traditional C-corporations that pay corporate income taxes and also “pass-through” entities like LLCs and S-corporations (where the partners or members of the company are allocated both earnings and tax liability) which pay personal income taxes.

Now fully implemented for 2016 and beyond, the credit may be claimed on 7.5 percent of the state’s flat 7.9 percent corporate income tax rate or the top personal income tax bracket of 7.65 percent, yielding an effective rate of 0.4 percent or 0.15 percent, respectively, for manufacturers or farmers who produce in Wisconsin.

Other states are also acting to lower the tax burden on manufacturers, with Gov. Andrew Cuomo (D-New York) eliminating corporate income taxes on manufacturers and Indiana repeatedly reducing the personal income tax to a rate of just 3.3 percent this year (for all payers).

We at WMC are aware of multi-state companies consolidating operations that chose to maintain and expand in-state due to the

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MAC as well as local businesses that choose to expand here – and not elsewhere – for the same reason. The economic impact of these decisions can only be quantified after employment and revenue numbers are formally reported.

Has there been a tangible impact on jobs? Absolutely!

According to the U.S. Bureau of Labor Statistics, Wisconsin manufacturing employed 507,600 people in December 2005 but dropped to just 433,700 at the conclusion of the Doyle Administration in December 2010. During March 2016, 474,500 Wisconsinites worked in manufacturing, an increase of 40,800.

Interestingly, Indiana and Wisconsin are the only two states with more employees in manufacturing than government.

What has the cost of the credit been?

As of February 2016 (the most recent data available), the state Department of Revenue reported there are 9,200 manufacturers in the state. About 5,000 claimed the MAC in 2013 (the first year it began to phase-in) yielding about $50 million of relief. The amount of relief is projected to roughly double for 2014. The final date for 2014 data to be reported is in September 2016, so complete information on the credit’s value will not be available until then.

Of course, earnings are not the only activity on which businesses are assessed. With some exceptions, levies are applied to sales, real property (buildings and land) and personal property (moveable items), as well as unemployment insurance.

A Midwest site selector who is a fan of the MAC recently told me the real value of the credit is in the income tax collections derived from those employed by businesses claiming it.

As employment rebounds, the MAC, along with other recently enacted pro-growth policies, is having the intended effect of sourcing production – and jobs – to Wisconsin. BV

Follow Jason on Twitter @JGCulotta

www.atcllc.com

MOVING ENERGY INTO THE FUTURE Electricity powers our world. Each day, light switches are flipped, computers are powered up and factories hum with activity. Electricity enables automation, convenience, productivity and opportunity.

At American Transmission Co., we’re hard at work keeping the lights on and planning today for how the electric grid of our future will deliver reliable, affordable and environmentally responsible power.

Read more at www.atcllc.com/PowerForward

State of Wisconsin Business Event Tuesday, October 18, 2016 Monona Terrace Community & Convention Center, Madison

Stay tuned for more information at www.wmc.org/sowb

• Wisconsin’s Chamber of Commerce • Wisconsin Manufacturers' Association • Wisconsin Safety Council

Not a member?

Join today!

www.wmc.org/membership

SAFETY EXCELLENCE Janie Ritter Director of Wisconsin Safety Council

Celebrating Safety Excellence in Wisconsin And the Winners Are…

F

or the past 22 years, the Wisconsin Safety Council has partnered with the Wisconsin Department of Workforce Development to present Corporate Safety Awards to Wisconsin businesses who display exemplary safety records and excellence in safety and health management. These companies make safety a top priority and have gone to extensive measures to assure the most valuable asset – their employees – are safe on the job. It takes dedication and effort from every employee to achieve such admirable successes.

The awards process starts with companies submitting data from their OSHA 300 logs at the beginning of each year for the year past. In 2015, we had 125 companies apply and 84 of the applicants moved past the statistical phase to the second phase of judging where the companies answer a series of subjective questions pertaining to their workplace safety and health programs. Winners were selected in four categories and by size, with a total of 15 winners. Awards were presented at the annual Wisconsin Safety & Health Conference and Expo this spring at the Kalahari Resort in Wisconsin Dells.

Our state is fortunate to have so many companies who value safety and have developed a culture of safety within their organization.

But a few companies went above and beyond in 2015 – here are some of the highlights of things companies are doing: Agropur Inc. successfully implemented Job Hazard Analysis in determining ergonomic risk per job function.

Alliant Energy employs two human performance enhancement experts and ergonomists for their workers.

Colony Brands, Inc. has four facilities and 69 departments which achieved zero accidents.

Cummins Emission Solutions has had no lost time injuries for over two years.

Kwik Trip Dairy implemented training on the dangers of chemical exposures.

Lakehead Painting Company, Inc. implemented extraordinary investments in technology and equipment to ensure employees’ ergonomics are assessed before physical problems arise.

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Mercury Marine saw a 25 percent reduction in total recordable injury rates and a 50 percent reduction in lost time injury.

Phillips-Medisize-Custom updated manufacturing instructions, installed shielding for moving robots and guarding cages.

Phillips Medisize, Phillips Medical implemented team stretching, product line rotations and an internal compliance audit system.

Teel Plastics, Inc. offers free on-site physical therapy and teaches safe lifting techniques which lowered their risk of workrelated injuries by 20 percent in just two months.

Tweet/Garot Mechanical, Inc. decreased their OSHA incident rate to 2.01, the lowest rate in the history of their company.

USG Interiors, Inc. achieved 5,000 safe work days and 15 years without a lost time injury.

USG Structural Technologies, LLC completed 1,600 safety activities in 2015 and has never suffered a lost-time injury.

Viking Gas Transmission saw a measured increased in employee involvement in their safety programs.

We Energies employees participate in daily safety tailgates which detail information about potential hazards that could arise on a particular day and the steps they can take to eliminate them.

It is my pleasure to recognize these great Wisconsin companies.

They have much to be proud of ! If your company is interested in applying for a 2016 Wisconsin Corporate Safety Award, look for more information and application form on our website, www. wisafetycouncil.org. Applications will be available January 1, 2017.

BV

Follow WSC on Twitter @WISafetyCouncil

22nd Annual

Wisconsin Corporate Safety

Awards

Celebrating Safety in Wisconsin www.wisafetycouncil.org

2016 Wisconsin Safety Council Safety Training

Chapter of

The Wisconsin Safety Council, a program of the WMC Foundation, is Wisconsin's leading provider of safety training and programming. WSC offers training throughout the year at locations across the state.

FOX VALLEY/GREEN BAY AREA SAFETY TRAINING September 20

Incident Investigation: A Root Cause Analysis

September 21

Safety Metrics – Celebrate Success (AM) Focus on Competency (PM)

September 29

Effective Team Safety

October 7

Safety on the Lakeshore Autumn Conference & Expo

October 11

Safety Inspections

November 2-3

OSHA 10-Hour Voluntary Compliance for General Industry

MADISON AREA SAFETY TRAINING August 1-3

Instructor Development Course (IDC): First Aid/ CPE/AED

August 9

Coaching the Emergency Vehicle Operator (CEVO): Ambulance and Fire

August 15-18

Principles of Occupational Safety & Health (POSH)

August 22-25

OSHA 30-Hour Voluntary Compliance for General Industry

September 7

Ergonomics: Managing for Results

August - December

www.wisafetycouncil.org

October 4

RCRA Compliance for Hazardous Waste Generators Overview (AM) DOT Hazmat Transportation Refresher (PM)

MILWAUKEE AREA SAFETY TRAINING August 30

Creating a World Class Safety Culture

October 10

October 19

October 18

December 5-8

Conducting Effective Safety Training Coaching the Lift Truck Operator, Train-the-Trainer

November 7

Supervisor Development: Safety & Health Fundamentals

December 12

Effective Team Safety

September 12

Confined Space, Train-theTrainer (AM) Lockout/Tagout, Train-theTrainer (PM)

September 26-29

Safety Management Techniques (SMT)

WAUSAU AREA SAFETY TRAINING August 10

Coaching the Lift Truck Operator, Train-the-Trainer

Coaching the Lift Truck Operator, Train-the-Trainer

CELEB

OSHA 30-Hour Voluntary Compliance for General Industry

SAVE THE DATE! 75th Annual Wisconsin Safety & Health Conference and Expo

R AT I N

YEARS W IS CO NS IN CO NF ER EN SA FE TY & HE ALTH CE /E XP OS IT IO N

2017 AP RI L

KA LAH AR

10 -1 2,

I RE SO RT,

20 17

WI SC ON

SIN DE LLS

April 10-12, 2017 Kalahari Resort, Wisconsin Dells

Save the Date “WMC not only advocates for businesses, but highlights us for a job well done. Their support of the Manufacturer of the Year Awards, Corporate Safety Awards and other award programs offer companies recognition both through statewide media and the distribution of Wisconsin Business Voice which is sent to over 17,000 contacts throughout the state.”

Jay Smith, Chairman & CEO, Teel Plastics, Inc.

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Join today. www.wmc.org/ membership

December 8, 2016 Monona Terrace, Madison

www.futurewi.org 30

G

Together, We Can Fix Washington

By Russ Feingold

S

ince I announced my campaign for U.S. Senate last year, I’ve traveled to all of Wisconsin’s 72 counties, twice. I believe that’s the only way to do this job – you’ve got to get out and listen to the families and businesses owners of Wisconsin to find out what their needs are.

and a responsive government must constantly assess whether they should stay on the books. As I’ve traveled, some have suggested the idea of a regulatory PAYGO approach, where we try to ensure any new regulations are “offset” with the elimination of an unnecessary or duplicative regulation.

But as people work to balance their checkbooks and grow their businesses, I’m also hearing that people want to see common sense policies and smart investments from Congress, and government reform that protects taxpayer dollars.

Next, I believe it’s time to drop the political fighting and find ways to improve large laws like Dodd-Frank and the ACA. We have cottage industries built around the idea that these laws will one day get repealed, when our best path forward is to start working together, in a bipartisan way, to resolve the ways they need to be changed.

This year, when I hit the road, I put a special emphasis on visiting innovative businesses all across the state. Here’s what I’m hearing: whether it’s business owners or the families I’m talking to, nearly everyone tells me they’re still struggling to make ends meet.

Sometimes that means meeting payroll and paying for health care, or it could mean paying your mortgage or your student loans.

First, Washington can’t put everything on the government credit card. Instead, Congress needs to make some tough decisions so we can afford the things people really need government to accomplish.

I look forward to this kind of work – I’ve always been a deficit hawk, back to when I first ran for Senate in 1992 when I put out an 82-point plan for reducing our deficit. And when I served in the Senate I was the biggest proponent of pay-as-you-go (PAYGO) principles because if government is going to pay for something, whether that’s military action or investments in infrastructure, it needs to show the American people how it’s going to pay for it.

Second, Congress must undertake a thorough review of the regulatory system. Many regulations have outlived their purpose

Washington should also improve regulatory “look back” requirements that create opportunities for “retrospective” costbenefit analyses, which can help us better understand both the true cost of regulations and whether or not they are working toward their intended purpose.

I also hear from Wisconsinites that it’s time to bring some bipartisanship back to the U.S. Senate. If you only watch cable news, you might think America is so divided on the issues they could never come together to get anything done. But when you get outside the bubble of Washington D.C. politics, talk radio and cable news, you discover that’s not the case.

For example, people across Wisconsin, Republicans and Democrats, agree it’s finally time to fix and improve our state’s infrastructure. In fact, up to 15 percent of our state’s bridges are currently defective.

This issue affects everyone – business owners who need to ship their goods, industries dependent on tourism, and even families who are burdened by increased car repair costs.

It’s also time to make a commitment to universal high speed internet access because there’s absolutely no reason Wisconsinites living in rural areas shouldn’t have the same competitive edge as those living in cities.

Finally, members of both political parties can agree it’s long past time to address comprehensive immigration reform. Frankly, it’s embarrassing that outside political forces have kept us from getting this done. Businesses, labor organizations, civil rights groups and the military all desperately want us to pass full reform of our immigration laws. We simply cannot allow a few vocal ideologues and partisan opportunists to stand in the way.

Here in Wisconsin, we’re used to contentious, tough elections.

But the idea that a political, zero-sum competition applies to the legislative process is wrong and unsustainable. Together, we can fix the way Washington works. BV

Russ Feingold is a candidate for the U.S. Senate in 2016.

Russ Feingold with WMC's Kurt Bauer.

Wisconsin Business Voice

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Want to Export an Agricultural Product?

The International Trade Team Can Help!

By Jen Pino-Gallagher

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call to the International Agribusiness Center at the Department of Agriculture, Trade and Consumer Protection (DATCP) often begins with, “I produce a product here in Wisconsin and have been selling domestically for years. I want to export – can you help?”

The simple answer from one of our four agricultural trade experts is “Yes”!

How a company proceeds from wanting to export to actually entering international commerce depends on many factors. Is the company in a position to export product? Do they have an export plan which determines the product and the potential market?

Does the company have a clear understanding of the importing country’s rules and regulations? Agricultural export transactions are complicated, but DATCP’s International Trade Team helps guide companies through the process to ensure successful transactions.

The mission of the International Trade Team is to provide Wisconsin’s agribusinesses access to international markets and increase export sales. The International Trade Team is celebrating 50 years of providing trade expansion and market development.

Last year alone, we assisted in securing over $20 million in export sales. We led trade missions to China, Vietnam, Mexico, Chile and the Middle East where we introduced Wisconsin agribusinesses to global purchasers. June 12-17 we supported Gov. Scott Walker and DATCP Secretary Ben Brancel as they led an agricultural business mission to Jalisco, Mexico.

International Trade Team consultants Jennifer Lu, Ashwini Rao, Lisa Stout and Enrique Gandara are experienced professionals each specializing in a unique product sector and geography. They work with companies to identify the best prospective markets. They develop export sales opportunities via outbound trade missions and incoming buyer delegations. The team also serves as a front door to the robust network of state services available through the Wisconsin Economic Development Corporation (WEDC) and the export plan development program (ExporTech) offered by the Wisconsin Manufacturing Extension Partnership (WMEP).

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The complex challenges involved in exporting an agricultural product often seem overwhelming for beginning exporters.

However, the potential for increased revenue and market diversification far outweigh the challenges and risks. Every week on average $70 million worth of food and agricultural products exit our state for international markets. This demonstrates the fact that thousands of Wisconsin’s agribusinesses are successfully exporting. In 2015, Wisconsin’s agribusinesses exported $3.2 billion of products to over 140 different markets. International agricultural trade is extremely vital to Wisconsin’s economy. Wisconsin leads the nation in many export categories. Most Wisconsin citizens might think ag exports include only commodities like soybeans and corn. But, our ag exports go far beyond the raw commodities.

Wisconsin is a food manufacturing powerhouse. Our trade team works daily with food manufacturers throughout the state who, through their innovative manufacturing techniques and quality products, have placed our state in the lead for exports of processed products like canned sweetcorn, dried cranberries, sausages and mustard flours.

The world’s population is now nearing seven billion people and 96 percent of those consumers live outside of our borders. This creates an enormous marketplace for Wisconsin products!

Exporting can open the world to Wisconsin companies. The International Trade Team at DATCP provides the expertise required to build a successful presence in the global marketplace.

BV

Jen Pino-Gallagher is the Bureau Director at the Department of Agriculture, Trade and Consumer Protection. To learn more about Wisconsin’s international markets or DATCP’s export services contact them at international@wisconsin.gov or (800) 462-5237.

MADE IN WISCONSIN …the Sky High Edition

2300 South Street Racine, WI 53404 (262) 583-4500 Year Established: 1996 www.deltahawkengines.com

Created to answer the general aviation industry’s call for a “clean sheet” compression-ignition engine, DeltaHawk developed a prototype engine running on a static velocity airframe just one year after the company was formed. Today, DeltaHawk continues to exceed the general aviation industry’s needs by creating the smallest, lightest and most reliable multi-fuel engine on the market. Beyond general aviation, DeltaHawk manufactures heavy-fuel piston engines for use in drones, land vehicles, generators, compressors, marine use and mineral exploration.

Gulfsteam produces some of the most advanced business aircraft and has dynamic global product support and service. Gulfstream’s Appleton facility is staffed by more than 930 employees, including approximately 425 technicians. The 315,587 square-foot facility meets operators’ most advanced maintenance needs and doubles as a completion center for large-cabin Gulfstream aircraft which enables the facility to have a broad range of expertise. Gulfstream Appleton is the home to major inspections, avionics installations and modifications, interior installations, structural repairs and more.

N117 W18607 Fulton Dr. Germantown, WI 53022 (262) 253-4990 Year Established: 1987 www.klhindustries.com

W6365 Discovery Drive Appleton, WI 54914 (920) 735-7000 www.gulfstream.com

As a preferred supplier for aerospace machining, KLH has the manufacturing expertise to deliver high standards of aerospace INDUSTRIES, INC. machining. They establish top-tier services by providing on-time delivery, in-process communication and strong design for manufacturability skills. KLH procedures and processes follow industry standards and therefore are capable of manufacturing components that aid in the guidance, navigation, control and communication of new or existing aerospace designs. Their proficiencies are broad and specialize in wire, hole-drilling, CNC milling and turning, waterjet cutting and dimensional CMM inspection services.

Located near Milwaukee, Weldall Manufacturing is a full service large scale welding and large fabrication manufacturer specializing in medium to large weldments, precision CNC machining and other heavy duty equipment fabrication projects. Thanks to their skilled workforce and capital intensive equipment, they were able to construct 12 main tower panels for use on the next era of space exploration; NASA’s Space Launch System (SLS). The towers are more than 200’ tall and 27’ wide and will be used for structural testing on the SLS intertank and engine sections. SLS will launch four-astronaut crews in the Orion spacecraft on missions to explore deep-space destinations such as Mars. And to think something used in space exploration is made in Wisconsin – that’s out of this world!

2001 S. Prairie Avenue Waukesha, WI 53189 (262) 544-1155 Year Established: 1973 www.weldallmfg.com

PERMITTING Lucas Vebber WMC Director of Environmental & Energy Policy

Act 21: The Demise of Implied Authority

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ince taking office in 2011, legislative republicans and Gov. Walker have enacted a number of significant reforms into law.

One key reform – 2011 Act 21 – is still being fully implemented and the complete effects of this reform have not yet been felt.

Due to recent victories in the courts and a formal opinion from Wisconsin’s Attorney General, the benefits of this important reform are becoming clearer every day.

Following the New Chester case, to help further clarify the law, the State Assembly requested an opinion from the Attorney General asking a series of questions related to high capacity wells and DNR’s authority in a post-Act 21 world. In May, Attorney General Schimel responded to this request with a formal opinion. That important opinion made clear that Act 21 limited agency authority and like the judge in the New Chester case, said agencies must show explicit authority in order to take a regulatory action.

Since passage of Act 21, WMC has been actively engaged in litigation in support of the law, defending it from attacks by antibusiness groups who want more regulations and an ever-growing state bureaucracy. Last fall, WMC won a tremendous victory in the New Chester v. Wisconsin DNR case which involved a company challenging permit conditions using the new Act 21 language on the grounds that those conditions were not explicitly authorized.

WMC intervened in support of the company and to defend Act 21.

A judge in Outagamie County agreed with WMC’s position and ordered the unauthorized conditions removed from the permit. The state did not appeal and this past spring DNR issued the permit without the unauthorized conditions.

Permit applicants should not be afraid to question state regulators regarding the explicit authority being relied upon to take action.

While anti-business groups will continue to fight Act 21 in the courts and in the state Capitol, WMC will be there to defend this common sense reform and continue working to ensure Act 21 is being fully implemented throughout state government. BV

Act 21 was a landmark regulatory reform law. WMC was involved in drafting this law and actively supported it as So what does this mean for the regulated community? it went through the legislative process.

By eliminating “implied authority,” Act 21 While anti-business groups Originally included as part of Gov. provides both state regulators and permit Walker’s first special session call, holders with greater certainty as to exactly will continue to fight Act 21 in this act reformed the administrative regulatory actions may be taken and the courts and in the state capitol – what rules promulgation process and put what permit conditions are permissible. some very clear walls around state WMC will be there to defend this While the New Chester case and the agency authority. Specifically, Act Attorney General opinion both dealt with common sense reform.

21 stated that state agencies cannot facts specific to DNR, Act 21 applied to all take regulatory action unless such action is agencies and the requirements for explicit authority explicitly required or permitted by statute or rule. That is, agencies apply to all state regulatory actions. cannot rely on “implied” authority to make regulatory decisions.

State agencies are created by the Legislature and have only those This important reform has provided clarity and certainty to both powers explicitly granted to them. Act 21, recent litigation and state regulators and permit holders as to the state’s authority. the opinion of the Attorney General all support this conclusion.

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Follow Lucas on Twitter @VebberWMC

The Business Friend of the Environment Awards highlight the Wisconsin companies doing great things in the areas of sustainability, innovative technology and environmental stewardship. The goal of this awards program is to demonstrate to state policymakers, businesses and the public that sound environmental practices are good for Wisconsin and its business environment.

SUSTAINABILITY

Felss Rotaform LLC

InPro

Menard, Inc.

ENVIRONMENTAL STEWARDSHIP

Precision Machine, Inc.

Eden Stone Company, Inc.

UW Health

ENVIRONMENTAL INNOVATION

Fox River Fiber

Empire Screen Printing, Inc.

Harley-Davidson Motor Company

www.wmc.org/bfoe Wisconsin Business Voice

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BUSINESS & EDUCATION Steve Benzschawel Director of Wisconsin Business World®

Business World – Free Enterprise in Action!

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his summer, high school students from all corners of Wisconsin will come to Business World for a handson experience in entrepreneurship. Hosted at Edgewood College in Madison and St. Norbert College in De Pere, our programs continue to educate and inspire the next generation of entrepreneurs and business leaders.

their future employment aspirations. The pillars of the Business World curriculum are experience, employability and acumen. We prepare students to be career-ready through hands-on experience, taught by business professionals who have seen first-hand what skills the younger generation needs to become ready for the workplace.

The Business World curriculum is designed to meet the needs of today’s busy teenage students by engaging them in activities that educate them about today’s workplace and get them thinking about

Students come to camp to learn about business and the workplace and leave with so much more. They leave with more confidence, more ambition to try new things and a lot more friends! For over 30 years, Business World has given students across Wisconsin the chance to learn about business, explore college life and prepare for the workplace and the economy of tomorrow.

If you combined the Shark Tank TV Show and a four-day overnight summer camp on a college campus, you would have Business World. In four fast-paced days, students form companies, elect executives, create a product, develop a brand and marketing campaign, exhibit at a trade show, perform a commercial skit, compete in an online market simulation and present a formal business plan to a panel of judges in a fast-paced competition.

This program is perfect for business-minded students, but it is also a special opportunity for college-bound students who will experience life on a college campus on their own, with no parents, teachers or the imposed structure of high school life. And thanks to the support of the business community, this is also an opportunity for some families that may struggle financially to enroll their children in summer enrichment activities.

It is not too late to sign your son or daughter up for our final session of camp this summer. We will be on the campus of Edgewood College in Madison July 10-13 so make sure the teenagers in your life know about Business World! BV

Follow Steve on Twitter @wibusinessworld

Business World interns David Rautio and Ryan Malliet at the June program at St. Norbert College in De Pere.

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1966 - 2016

Since 1966, it has been our privilege and good fortune to work with many Wisconsin-based manufacturers, helping them achieve amazing heights. Our clients have been local, regional, national and global —

WE’RE CONTROL FREAKS Our customized process control solutions for manufacturers keep plants online and efficient.

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Where engineering, information technology and business intersect to provide creative solutions for continuous process control automation.

Manufacturing Advantage Conference & Technology Showcase September 28-29, 2016 University of Wisconsin - Stout Campus Menomonie, Wisconsin www.uwstout.edu/profed/mfg

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FOR COMPLETE PRODUCT AND SERVICE INFORMATION, VISIT TRIDENTAUTOMATION.COM OR CALL 920.759.7477

The Cybersecurity Battle Plan: Simple Steps to Shore-up Your Defenses

By Brad Lutgen

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Train your People

We recently surveyed manufacturers and distributors for our 2016 Manufacturing Report and found only 33 percent of respondents perform annual penetration testing. This means the majority of companies are operating in the blind, unaware of their vulnerabilities and at serious risk of a breach at a time when the FBI estimates over $400 billion in intellectual property leaves the country annually because of cyberattacks.

As a result, it’s crucial that a company not only train its employees on cybersecurity best practices (e.g. don’t open suspicious emails, lock your computer when stepping away from your desk, etc.), but also conduct ongoing testing of its employees. This includes sending mock phishing emails to employees in different departments to assess their security awareness.

isconsin businesses face cyberthreats every day – everything from malware to phishing emails to state-sponsored attacks – but many continue to operate as if they are not a target. This is an especially acute issue in the manufacturing industry where many companies have not taken steps to secure their confidential information and intellectual property.

Beyond manufacturing, other common targets are financial institutions, restaurants and hotels, and the health care industry.

Though the threats are expanding – Symantec recently reported more than 430 million new unique pieces of malware were discovered in 2015 – there are some basic steps companies can take today to strengthen their defenses and ensure they protect their most important company and employee information.

Start with the Basics

Through our computer forensics work, we have seen that many breaches take place on basic exploits that most companies can easily prevent by properly configuring their current toolset. From correctly setting up firewalls to updating patches, companies can reduce their exposure to many of the threats they face with minimal investment of time and money.

Once a company accounts for the basics, it can then begin taking steps to adopt a more robust security posture. To start, a company should complete a risk assessment. This will help determine the largest threats to the organization, allowing the management team to make the most educated decisions on the areas of the company to target for security testing and the proper solutions to implement.

Annual or biannual penetration testing, in which trained security professionals manually attempt to break into the company’s system, is another crucial step to identifying vulnerabilities. Monthly vulnerability scanning is also important to help keep security systems up-to-date and ensure the company guards against new threats.

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While updating and testing the IT system minimizes the threat of a breach, companies also need to keep their people in mind.

Spearphishing attacks, which are hyper-targeted emails from cybercriminals that attempt to dupe employees into divulging sensitive information, are a growing threat.

Prepare for the Worst

Even with proper defenses in place, companies should still prepare for the worst to minimize damage should they ever fall victim to a breach. The best way to prepare is to have an updated incident response plan in place that accounts for the security, legal and communications issues that will arise.

A security team can quickly stop the attack and protect the company from any further damage, legal advisors can help the company comply with government regulations, and a communications team can help the company preserve its reputation by telling a clear, honest story to customers and the press. A proactive approach to post-breach action and communication will help the company stop the breach in its tracks and prevent longterm damage to its customer relationships.

Cyberattacks pose a major threat to Wisconsin companies, but guarding against them doesn’t have to be daunting or overly complex. By taking a few simple steps and committing to building a strong security posture, leaders can reduce their companies’ exposure so they can focus on effectively serving customers and growing their business. BV Brad Lutgen is a partner in the security and compliance practice at Sikich LLP, a professional services firm.

Work is our passion.

Providing fast and flexible custom staffing solutions in this demanding business climate isn’t easy. But at QPS, we’ve never been one to shy away from hard work.

Light Industrial to Skilled Trades, Office/Clerical to Professional, we take pride in going the extra mile to match the right candidate with the right job. It’s one more reason why hundreds of Wisconsin companies are so passionate about partnering with QPS.

The WMC Foundation is dedicated to building a better future for Wisconsin by providing business and economics education, workforce development initiatives, local chambers of commerce support, safety training programs and business best practices.

Thanks to these Foundation Sponsors for your support throughout 2016

Developing Wisconsin’s Workforce

By S. Mark Tyler

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ow can one not be fearful of the demographic data? With meager growth, the data says we will be 300,000 people short of what we need to meet Wisconsin’s workforce needs in the next ten years. Not far into the future we will certainly face a people gap and reminisce about the good old days when we only had a skills gap. Yet even given these scary demographics, I am excited about all that is happening in Wisconsin to address our workforce needs. We have mechanisms in place to engage and prepare nearly everyone in Wisconsin’s workforce.

I can’t begin to address all that is happening in Wisconsin in this short article – each of these areas could easily warrant a deep dive, but I’ll stick to a high level discussion focusing on some of the major players and their efforts.

In Wisconsin our K-12 system is where it starts – one could argue it should be earlier, but that’s for a later discussion. The focus on “Every Child a Graduate, College and Career Ready” is a primary theme of Superintendent Evers and our K-12 System. Academic and Career Planning (ACP) and Career Pathways are both great examples of the work currently in play helping guide our students.

The ACP process will be the law of the land (required in all school districts) in the 2017-18 school year. ACP will help students, beginning in the sixth grade, understand what they like and where they excel. It will hone their interests and understanding of opportunities and help them understand what is required to prepare for those opportunities. The overall objective is to have every student ready for a career or post-secondary experience by the time they graduate.

Another great thing happening in our high schools is the rapid growth of Technical College and University credits earned while still in high school. This past year high school students earned 115,847 technical college credits. By the way – this is delivered to students without tuition, saving Wisconsin families between $15-20 million dollars in tuition. This also accelerates the students’ “time to employment” so they are earning faster. The University has a similar program with reduced tuition (not free). In this program, 30,681 credits were earned in the 2013-14 school year, and the savings on tuition was between $3-6 million dollars.

The new Workforce Investment and Opportunity Act, which is overseen by the Governor’s Council on Workforce Investment and delivered throughout the state by our regional Workforce 40

Investment Boards, is actively helping the unemployed retool and find great employment. These boards also work with displaced workers, vocational rehabilitation and with the assistance of our Technical Colleges, deliver Adult Basic Education.

Wisconsin’s Department of Workforce Development (DWD) works across a broad array of initiatives, but one that stands out today is their redesign and modernization of the Job Center of Wisconsin website. It is incredibly user friendly for both job seekers and employers. In addition to what you would expect for job posting and search capabilities, it also has the ability to search based on skills and training so everyone has a better chance of finding that great match. It also contains labor market information helpful to an employer looking to add a position who can now see what others are paying in their area.

DWD’s Fast Forward program provides funding for rapid deployment of skills development to fill immediate needs of business. There are many examples of companies competing for talent, but coming together, training a cohort of potential employees, then collectively hiring the cohort. “Fast Forward” to great job opportunities!

Wisconsin’s Technical Colleges continue setting the national bar with performance and graduate outcomes. Ninety-three percent of graduates are employed within six months and 86 percent of those remaining are continuing their education. That’s a 99 percent engagement rate for graduates who are employed or continuing to prepare for their career! The average starting salary for two-year degrees is $36,252, with Associates Degrees topping $40,000.

There is no question that “Job Degrees” from Wisconsin’s Technical Colleges are highly valued by employers.

Wisconsin’s University System awards about 27,000 Bachelor’s Degrees annually and consistently contributes tremendous value to our economy. UW Madison is one of the nation’s top research universities and earlier this year UW Milwaukee was classified “R1: Doctoral University - Highest Research Activity” institution as well.

There are many examples of positive change occurring at the UW System. The Northwestern Wisconsin Engineering Consortium was established last year by UW River Falls, UW Stout and UW Eau Claire with three new engineering programs launched and a few more already queued-up.

UW Green Bay is partnering with Northeast Wisconsin Technical College and Green Bay Schools in their Turbo-Charged Project.

This effort aims to have Green Bay High School graduates earning fifteen post-secondary credits by the time they graduate.

UW System President Ray Cross is working on a talent development initiative using a web-based Talent Initiative Portal that will leverage student / business relationships and encourage these connections while students are still in school. This will make it easier for students and businesses to connect for internships, job shadows and other professional experiences.

There has been plenty of press on student debt these days with our nation’s students now owing well over a trillion dollars. Wisconsin Association of Independent Colleges and Universities do an excellent job of working with their students in understanding debt.

Their students have a default rate of 4.4 percent while Wisconsin averages 9.2 percent and the nation is at 11.8 percent.

FabLabs are an incredible tool to get students interested in manufacturing, design and connecting with business – areas critical to the growth of our state’s future workforce. The Wisconsin Economic Development Corporation recently invested in 25 FabLabs across the state. Wisconsin already has more FabLabs than other states and will lead the nation with these innovative learning and collaboration spaces.

The Governor’s Council on Workforce Investment (CWI) has members and committee members representing nearly all components of Wisconsin’s economy and geography. CWI is working on a multi-faceted strategic plan and identifying and sharing best practices. In addition to its federally mandated role

with the federal Workforce Innovation and Opportunity Act, it acts in an advisory role to the Governor on workforce issues.

The WMC Foundation has orchestrated The Future Wisconsin Project, where workforce development is a major priority. The Project is a broad coalition sponsored by Wisconsin Manufacturers & Commerce, Wisconsin Department of Workforce Development, Wisconsin Economic Development Corporation, Wisconsin Department of Public Instruction, Wisconsin Technical College System, University of Wisconsin System and Wisconsin Association of Independent Colleges and Universities. This is a first-of-its-kind effort intended to chart the course for Wisconsin’s future.

Gov. Walker and Lt. Gov. Kleefisch are both fully engaged in bringing volume to the workforce development discussion as well.

It is difficult to pick up a paper or access social media without catching a story of one or the other at an educational institution or business, promoting partnerships.

As I indicated earlier, I only skimmed the surface of some of the major efforts happening in Wisconsin to actively develop our workforce. There are countless examples of efforts within communities, schools and other organizations developing incredible programs to help address needs in their local areas. As part of WMC’s commitment to address workforce development and its overarching need in Wisconsin, Wisconsin Business Voice will continue to encourage and highlight efforts in Wisconsin that are impacting our collective success.

I’m excited about all that is happening in Wisconsin and am confident in our future workforce. BV

S. Mark Tyler is President of OEM Fabricators, Inc., a member of the Wisconsin Technical College System Board, UW Regent, Chair of the Governor’s Council on Workforce Investment and member of the WMC Board of Directors.

Wisconsin Business Voice

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Affordable

By Rep. Debra Kolste (D – Janesville)

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he Patient Protection and Affordable Care Act (i.e. the ACA, Obamacare) enrolled the first consumers in Health Insurance Marketplaces in fall 2013 and the benefits have been indisputable.

The uninsured rate in Wisconsin has fallen from 12.2 to 8.6 percent; those with pre-existing conditions are no longer denied coverage or charged exorbitant premiums by insurance companies; preventative services are covered without deductibles or co-pays; insurance companies are required to spend the bulk of premium costs on medical care rather than administrative expenses; and medical debt is now far less likely to cause bankruptcy.

Health insurance plans are also now required to cover mental health and drug abuse rehabilitation treatment. Young adults can stay on a parent’s health insurance plan to age 26.

The impact of the Affordable Care Act on businesses has been overwhelmingly positive and the dire warnings from its detractors have rung hollow. The ACA, which requires businesses with 50 or more full-time employees to make health insurance coverage available, has not been a job killer.

In fact, a recent study showed the opposite. If anything, the likelihood of exiting the labor force was higher in states like Wisconsin that did not expand Medicaid compared to states that did expand Medicaid.

The evidence seems to substantiate the claims of several small business owners I spoke with, including Christy Schwan, owner and president of Stellarus Benefits. Stellarus provides benefits consulting to more than 400 employers of all sizes and industries throughout Wisconsin and the Midwest.

“I haven’t seen any of our clients reduce hours for employees or shift them from full-time to part-time because of costs associated with the ACA,” said Schwan. “Those decisions have more to do with the economy and how their business is performing.”

While Schwan acknowledges the burden and cost of reporting has increased for large employers under the ACA, it has also helped to stabilize costs for businesses with fewer than 50 employees.

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“It used to be that one sick employee could destroy the bottom line for a small business because medical underwriting allowed insurers to base the company’s rates off the health status of your workforce,” said Schwan. “Small businesses may actually see their rates decrease now, regardless of the medical conditions of their staff.”

In a statewide survey of Wisconsin adults conducted by the Robert Wood Johnson Foundation, the Harvard T.H. Chan School of Public Health and National Public Radio, 63 percent of respondents said the cost they personally pay for health care was reasonable. In summing up, the authors stated “many [Wisconsinites] believe the care they personally receive is excellent, and most believe their personal costs are reasonable.”

Wisconsin could receive additional benefits from the ACA if we would join 32 other states accepting federal funds for expanding Medicaid. Accepting this money would expand coverage for 80,000 people and save taxpayers over $300 million a year. It would also create over 11,000 health care jobs which would have an immediate impact on our economy.

As a legislator, I am keenly aware that no single piece of health care legislation, no matter how broad, can combat all the problems within an industry as complex as health care.

However, we must recognize the good aspects of the law and the benefits it has had for state residents. The answer to solving some of the problems faced by individuals and businesses is to continue innovating and improving upon the ACA. It would be an enormous mistake to repeal it and lose the ground that has been gained.

Let’s skip the ideological and political responses to the ACA and continue moving Wisconsin health care policy forward.

BV

Representative Debra Kolste represents Wisconsin’s 44th Assembly District. She was on the 2015 Wisconsin Assembly Committee on Health.

e Care Act

By Sen. Leah Vukmir (R – Brookfield)

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he Affordable Care Act has imposed hurdles and challenges in many states. Wisconsin, however, has chosen a path that has resulted in a superior class of health care. Access to affordable care when needed is a vital element of a successful health care system. Under the Republican-controlled legislature, Wisconsin enacted policies that reflect state and consumeroriented priorities. As a consequence, we have increased access, located efficiencies and improved the overall quality of care in Wisconsin.

The Affordable Care Act, which was aimed at expanding access for many Americans by creating federally mandated health insurance marketplaces, would have left Wisconsin financially vulnerable over the next decade. Inefficiencies, in conjunction with high costs, remain the primary problems burdening our nation’s health care system. The ACA failed to address these issues and created additional complications for the economy and small businesses. Imposing onerous regulations on the businesses that drive our economy is not the proper method for increasing productivity, stimulating the economy or improving compensation rates for Wisconsinites.

Rather than expose Wisconsin taxpayers to the adverse impact of the Affordable Care Act, Gov. Walker opted not to create a state exchange or accept Medicaid expansion. Instead we created a state-based policy alternative that enhanced Medicaid coverage while refining the value of care. The rejection of federal subsidies was undoubtedly the right choice for Wisconsin. It is simply a misnomer that those states who declined the Medicaid expansion are struggling to provide sufficient access to health care! In fact, in a recent study conducted by SmartAsset, a New York City financial planning firm, “Wisconsin ranks as the sixth best state in terms of access to health care, nearly 93 percent of Wisconsinites have health insurance, the seventh-highest percentage of any state.”

An additional study conducted by the Commonwealth Fund, a private foundation that supports research on health and social issues, cited Wisconsin as being tied for fourth in the nation in terms of preventative care and coordinated treatment. This past session the legislature passed several initiatives that improved the coordination of care between patients, their physicians and providers. For example, Act 375 increases physical therapy patients’ access to needed x-rays.

Rather than being referred to another health care provider, physical therapists will be able to order x-rays for their patients, streamlining the treatment process and reducing costs.

Further efforts that assisted in advancing health care modernization included Act 287 and Act 288, both of which ensure information regarding health care and health insurance are presented in a transparent and accessible way.

As Senate Chairman of the Committee on Health and Human Services in addition to being a nurse practitioner, I’m proud of what we’ve accomplished in Wisconsin thus far and I look forward to continuing to make positive strides in the future. Notwithstanding challenges, Wisconsin hospitals and health care systems are among the best in the nation and we will continue to demonstrate excellence. BV Senator Leah Vukmir represents Wisconsin’s 5th Senate District. She is the Senate Chairman of the Committee on Health and Human Services.

Wisconsin Business Voice

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CHAMBER CORNER

Doing Business in Winnesota

By Blake Fry

I

n Wisconsin’s fastest growing county the daily newspaper is the St. Paul Pioneer Press, Packers games are preempted on television if the Vikings are playing, there is no chance of ordering a cream puff, and fourth graders take field trips to the state Capitol, in St. Paul, Minnesota.

Is St. Croix County’s location in the Minneapolis-St. Paul metropolitan area the reason behind the county’s rapid population and economic growth? The answer is in part yes, but there are other equally important factors.

Sixty percent of working adults living in Hudson drive across the border to Minnesota each day for work. Many are employed at one of the 16 Fortune 500 companies in the Twin Cities, particularly 3M, whose world headquarters are located just 12 miles from Hudson.

Receiving recognition from the site selectors of the great potential St. Croix County offers for business growth was especially rewarding and is something worth recognizing. With the new and rapid growth of businesses in St. Croix County, there would be great benefit from a larger variety of outstanding conferences and trainings offered throughout the state. Closer proximity of these events would encourage the astounding talent located in the western portion of the state to further their professional development – in Wisconsin!

Welcome to life in St. Croix County, or as we affectionately call it, Winnesota (copyright former Wisconsin Department of Health Services Secretary and Hudson Area Chamber President – Kitty Rhoades). While we are proud Wisconsinites, it is hard to not feel close ties to Minnesota when in the hour it takes to drive from Hudson (St. Croix County’s largest population center) to Eau Claire, one can arrive at the Mall of America, Target Field, or U.S. Bank Stadium with time to spare.

Before you think of Hudson and St. Croix County as simply a bedroom community for Minneapolis-St. Paul, consider that more people drive to Hudson for work each day than leave. Many coming to Hudson work in the service and hospitality sectors, but a growing number are employed by a diverse collection of high-tech manufacturers and distributors.

CHAMBER FUN FACT Milwaukee Summerfest

As a Wisconsinite, you have likely heard of Summerfest, the 11-day music festival on the shores of Lake Michigan in Milwaukee. But did you know it’s the largest music festival in the world? Summerfest attracts between 800,000 and 1,000,000 people each year, promoting itself as "The World's Largest Music Festival", a title certified by the Guinness World Records since 1999.

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In June 2015, Momentum West, the ten-county regional economic development organization of West Central Wisconsin, arranged a familiarity tour for six members of the Site Selectors Guild. The tour concluded with lunch on the banks of the St. Croix River in Hudson. During the meal, the site selectors summed up their visit by stating our area has the best of both worlds. We benefit from world class entertainment, arts, sports and transportation services in the Twin Cities, but we offer a more favorable business climate and amazing natural beauty on our side of the state line.

The next time you are tempted to dismiss Hudson and St. Croix County as “outstate,” think instead of ways you and your business can benefit by partnering or expanding into this area. Better yet, pay us a visit and witness the momentum and energy we are generating. We and our 3.5 million neighbors will be happy to see you. BV

Blake Fry is president of the Hudson Area Chamber of Commerce & Tourism Bureau.

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