All Entries in the "Volume 5, Issue 6" Category

Personnel Practices: Paid Time Off Policies

by C. Alexander Chiulli, Esq. and Kristen M. Whittle, Esq.

In creating benefits packages for their employees, many employers offer some form of paid time off in an effort to attract and retain high-quality workers. According to the Rhode Island Department of Labor and Training’s (DLT) most recent Employee Benefits Report (available at http://www. dlt.ri.gov/lmi/pdf/ebs13.pdf), seventy-six percent of Rhode Island employers provide some combination of vacation, personal, and/or sick leave to their full-time workers, and nearly a quarter of Rhode Island employers provide paid time off to part-time employees. DLT also found that the average number of vacation days made available to full-time employees is 8 days after one year, 11 days after three years, and 17 days after five years of employment. In addition to vacation time, DLT reported that full-time workers in Rhode Island receive an average of 5.7 sick days per year and 8.3 paid holidays per year. The average paid time off plans offered to part-time workers are typically slightly lower than their full-time counterparts. The following is intended as a brief summary of the key features of PTO plans, as addressed under applicable Rhode Island laws and regulations.

Paid Time Off is Not Typically Required.
Under Rhode Island law, private employers are generally not required to grant paid time off (“PTO”) to employees for illness, vacation, or personal reasons. But if an employer promises PTO in its personnel policies or employee handbook, or in an employment contract, then PTO must be provided in accordance with the policy or contract.

Employers have Flexibility.
Rhode Island law provides employers with significant flexibility in deciding how and when employees may accrue PTO. For example, an employer may provide PTO on a monthly basis or determine that PTO is accrued every set amount of hours worked. Though employers are free to devise their own accrual method, a PTO policy should be clear and deliberate, as any ambiguity will likely be construed against the employer.

PTO can be Combined into a Single Policy.
In offering PTO, employers can choose to separate out vacation, personal, and sick time, or to combine different types of paid leave into a single plan without such distinction. DLT has reported that, although combined PTO plans are increasing in popularity, the majority of Rhode Island employers still separate vacation time from sick leave. PTO does not typically encompass time away from work (paid or unpaid) for parental or family medical leave, disability, holidays, or for any other reason provided by law. However, employers may allow employees to substitute PTO for certain types of leave that would otherwise be unpaid.

But Beware of Nuances upon Separation of Employment. Although combined PTO plans may be administratively easier for human resources staff—as opposed to managing distinct vacation, personal, and sick leave policies for numerous employees—there are additional considerations for Rhode Island employers upon an employee’s separation from employment. Specifically, Rhode Island law provides that when an employee separates from employment after completing at least one year of service, the employer must pay the employee all accrued, unused vacation time on the next regular payday. The statute does not apply to sick leave or personal time. Accordingly, unless a PTO policy specifically delineates which portion of an employee’s PTO can be considered vacation time, an employer may be liable to pay an employee all accrued but unused PTO (and not just vacation time) upon separation from employment.

By carefully crafting PTO policies at the outset, employers can take care to avoid giving employees greater benefits than the employer intended to offer. When in doubt, employers should always contact a seasoned professional to assist.

Is Your Business Ready For Rhode Islands New Cyber Security Law?

by Jay Madden

Attacks Hit Small Employers Big
According to a 2015 report from the Insurance Information Institute, cyber hacks increased by an estimated 27.5% from 2014 to 2015, with perpetrators coming from everywhere – politically-motivated criminal across the globe to local disgruntled employees.

While most people have heard about highly-publicized attacks targeted at big companies like retailers and health insurers, large corporations aren’t the only ones who are at risk. Increasingly small- to medium-sized business are the biggest targets. In fact, according to a recent Data Breach Investigations Report by Verizon, 72% of all attacks are now perpetrated on small businesses.

What makes these organizations most vulnerable?
• Lack of time and/or budget to implement adequate security solutions
• No dedicated IT staff
• Lack of awareness
• Belief that they’re too inconsequential, even though they often serve as “backdoors” for cyber criminals into larger and more extended systems
• Lack of proper employee training
• Failure to update technology systems, policies and procedures
• Outsourcing to unqualified vendors

The Growing Costs of the Growing Risk
Cybercrime costs the global economy an estimated $445 billion annually – a figure expected to reach $575 billion within the decade. Since all industries are prone to attack, every business – even small ones – risks significant expenses if a breach occurs, including:
• Legal liability to the injured individual or individuals
• Defense costs of regulatory actions resulting from a breach
• Fines and penalties dues to a breach
• Loss of income and revenue
• Business continuity expenses and costs
• Destruction of electronic data and equipment
• Extortion and ransom threats
• Breach management expenses (including forensics, notification costs, credit monitoring)
• Brand and reputational damage
As a result of these unanticipated costs, according to the National Cyber Security Alliance, 60% of all small businesses are forced to close their doors within six months of a data breach.

RI’s New Legal Requirements
In response to the alarming increase and the serious nature of cybercrime, Rhode Island’s new Identity Theft Protection Act of 2015 requires that businesses, individuals, and state and municipal agencies who store, collect, process, maintain, acquire, use, own or license personal information – meaning a name and one other piece of identifying data such as Social Security number, driver’s license number or even email with required access code – take a number of actions to protect the data.

Specifically, those subject to the law must:
• Implement a risk-based information security program that contains reasonable security procedures and practices to protect the personal information from unauthorized access, use, modification, destruction or disclosure
• Implement a written document retention policy
• Secure written contracts with any third party to whom it discloses the personal information of Rhode Island residents ensuring that the third party has implemented and maintains reasonable security procedures and practices to protect the information
• Notify individuals if it suffers a data breach within forty-five (45) days of confirmation of the breach – one of the shortest notification periods among the various state data breach laws – and notify the Rhode Island Attorney General if the breach involves more than 500 individuals

Penalties for violation of the Act are equally onerous, potentially including a civil suit by the Attorney General and $100 fine per record for reckless violation of the Act and $200 for knowing or willful violation – with no cap

Steps to Compliance
To avoid the fallout of an attack and ensure compliance with Rhode Island’s new law, it’s critical small businesses take several necessary steps to combat the growing threat of a breach. Consider the following actions to prepare:

• Involve all levels of the organization in creating or enhancing a written information security program to protect personal information that’s appropriate for the organization and the type of information it collects.
• Establish a policy for destroying personal information securely after a reasonable retention period, such as by shredding, pulverization, incineration, or erasure.
• Create a model form for a notice that meets the Act’s requirements in case a breach occurs. Provide fields that will allow your company to describe: 1. the incident, how it happened and the number of individuals impacted; 2 the type of information involved; 3 the date(s) of the breach; and 4 when it was discovered. Also, include remediation services that will be offered along with contact information, as well as how a consumer can file or obtain a police report, request a credit freeze and any required fees that may be required by consumer reporting agencies.

Insure For Added Protection
In addition to meeting the state’s legal requirements, small businesses can take additional steps to help prevent catastrophic losses from an attack by performing a threat assessment to understand its potential vulnerabilities. Once a company has a picture of its security exposures, it can transfer much of the risk with an insurance policy tailored to its specific business risks that can mitigate the costs and losses attributable to a cyber event. While many traditional insurance policies don’t offer adequate levels of protection or exclude these types of occurrences, in response to the growing threat, many insurers now offer stand-alone cyber-specific policies. In fact, over sixty different insurance carriers now underwrite some form of cyber insurance that can cover:

• Legal liability (to the injured individual or individuals)
• Loss of income and revenue
• Defense costs of regulatory actions resulting from a breach
• Fines and penalties dues to a breach
• Extortion and ransom threats
• Breach management expenses (including forensics, notification costs, credit monitoring)

As cybercrime continues to evolve, so will a small business’ risk. While Rhode Island’s new law is designed to protect consumers against the threat, companies need to take precautions to protect themselves. Because their survival may very well depend on it. Jay Madden

Rhode Island Single Family Home Sales Are Up Over 35 Percent Since April and Continue to Climb

WARWICK, RI – On the heels of record-breaking activity in the first quarter, the Rhode Island Association of Realtors reported that Rhode Island’s housing sales remained strong in April. Association data portrays a 34.7 percent year-over-year gain in single family home sales activity last month. April’s median sales price rose 21.4 percent to $241,000.

While sales activity has skyrocketed during the early months of 2016, a slowdown in sales under contract in April showed signs of impending market restraint. Pending sales, which were up by more than 16 percent in March from the previous year, and nearly 19 percent in February, increased by just 2.5 percent in April. Pending sales are typically the most current indicator of the market in the months to come.

The number of single family homes for sale also fell by 9.9 percent from the prior year, a sign that sales could be restrained by insufficient supply in the future. Anticipation of a June interest rate hike by the Federal Reserve however, may drive more buyers into the market, helping to maintain sales activity.

“We’ve seen a hyper-active market but there are a number of factors that could affect how long it will last. Rhode Island currently has a five-month supply of homes for sale, which, while slightly favoring sellers, remains nearly balanced between supply and demand. That could easily change however, depending on inventory, interest rates, and even the upcoming elections. My advice to buyers and sellers would be to take advantage of the market as it stands today. With rising homeowner equity and incredibly low mortgage rates, it’s a win-win for everyone,” said Arthur Yatsko, president of the Rhode Island Association of Realtors.

In other sectors of the market, condominium sales also showed significant gains with closed sales increasing 18.5 percent from 12 months earlier and median sales price rising 9.7 percent. Multi-family home sales fell 13.7 percent, though median price increased since last year, rising 9.9 percent from April, 2015 to $180,000. April marked the 16th consecutive month of year-over-year gains in median price in the investordriven, multi-family home market.

Growing Rhode Island’s Food Economy

By Andrew Webb

“Career and technical schools taking part in cooking contests is a great way to collaborate” says Peter Fangiullo, whose Davies Career and Technical Center students won runner-up in a recent cook-off. “Students get bragging rights, a creative challenge and a taste of real-world experience.”

Few could argue that Rhode Island’s economy needs help. Since eating will never move out of state, and with the trend for local, sustainable food production going strong, it just makes sense that the people who in one way or another provide the food we eat work together for mutual benefit and for building up a strong and stable industry.

Everything is in place. RI culinary schools supply top-shelf chefs. RI restaurants hire the chefs who can then buy from RI farmers. Add retail stores buying local foods. Consumer demand for locally sourced food is satisfied. As the consumer market builds, the industry can grow in equal measure. Dollars stay in RI.

Collaboration holds promise to bolster the industry
In one recent example, the Rhode Island Dairy Farms Cooperative initiated a collaboration with its Artisan Cheese Cook-Off, a competition for Rhode Island high school culinary students. The competition brought together students from four RI career and technical high schools to craft dishes made with the cooperative’s Rhody Fresh brand cheese and dairy products.

The students in teacher Raymond Depot’s class at Warwick Area Career and Technical Center won the top prize for their gravy-and-cheese-smothered poutine dish, made with RI-grown potatoes as well as Rhody Fresh Butterkase cheese.

Depot says that educators can do their part to expose culinary students to tastes “outside of their neighborhoods. Once you do, they get excited.” Bringing students closer to the source of their food, is another way he helps students “go with the craft.” A field trip to a Cranston teacher’s micro farm, for example, is a way to “fully appreciate the real animal that goes into the dishes they will make rather than taking for granted a piece of meat wrapped in plastic.”

Student contestants from the CHARIHO Career and Technical Center created mushroom puff pastry. Chef instructor Linda Musch said “They used local mushrooms as well as the RhodyFresh cheese. Students were enthusiastically competitive and proud of their product at the cook-off. We’re also entering a similar cook-off based on locally harvested mussels in May.”

Cooking contests are just one category of innovative thinking that can raise awareness of local food and bring potential partners together to build relationships.

“Buying local” and “sustainable food” define a national trend
Millennials in particular, are playing a big role in moving toward simple, more natural (and pronounceable) ingredients. Their concerns also extend to food sustainability and environmental soundness.

According to the National Restaurant Association, “Environmental sustainability remains among the hottest menu trends.” It also notes, “As the local sourcing trend continues at full speed in 2015, so does the hyper-local sub-trend. Beyond restaurant gardens, hyper-local is extending more fully into house-made, farm-branded and artisan items.”

An example of the home-grown movement is the Matunuck Oyster Bar, which provides a successful model for farm-to-table eating. The highly popular restaurant in South Kingstown farms its own oysters and vegetables – and vacationers with New York, Connecticut and New Jersey license plates line up on the road along with locals waiting to get a table. Others, like Exeter’s Celestial Café feature menus with locally sourced fish, meat and vegetables – and a monthly dinner that is 100-percent Rhode Island foods. Clearly there is broad demand that RI producers can capitalize on.

RI Advantages
RI has a mix of potential partners in close proximity. Johnson & Wales of course, and regional career and technical high schools attract culinary students who are increasingly inspired by famous chefs and food shows on the Food Network and other TV channels. RI’s diverse restaurant/dining/hospitality industry hires many of those graduating chefs who, tuned into trends, can specify locally grown foods and enhance their establishment’s appeal in the process.

On the growing side, RI has more strength in its farming industry than it might seem. After greenhouse/nursery/turf operations, the larger segments include dairy products, aquaculture, corn, apples, vegetables, eggs and honey. About 1, 220 farms dot the state, producing on about 67,800 acres and with an average size of roughly 56 acres. According to the federal government’s Farmland Information Center, the market value of agricultural products sold in 2012 was over $59 million.

In addition to the eight farms of the Rhode Island Dairy Farms Cooperative and farm/restaurant operations like the Matunuck Oyster Bar, Carolyn’s Sakonnet Vineyard, orchards like Barden Family Orchard and retail farms like Shartner Farms have multiple markets, whether retailing on site, at farmers’ markets or selling wholesale to restaurants and food stores.

David Dadekian’s Eat Drink RI is a regional media outlet for area culinary happenings. Dadekian points to Rhode Island’s rich culinary landscape and the opportunity to develop tourism based on food. “Places like Portland, Maine have promoted themselves as a food destination, and Rhode Island could do this too with some marketing at the state level.”

Collaboration Potential
Whether growing, educating or serving, industry partners can work together to create a larger, more vibrant RI economic sector. There are some good examples.

Farm Fresh Rhode Island, a not-for-profit founded in 2004, promotes a stronger RI food system, and its Farm to School program is a good example of collaboration. In fact, RI public schools spent $175,000 on food from RI farmers in 2011 and 2012 in the form of produce and milk. Groups like this put partners together.

Retailers like Stop & Shop and Dave’s Market, and college dining services like those at Brown offer Rhody Fresh milk. Brown’s commitment is part of its Community Harvest program, which partners with small farms that employ sustainable practices.

Numerous farmers’ markets around the state enable farmers to sell direct to the public, and are usually enabled by local governments providing space for farmers to set up.

While not exclusive to food, Buy Local RI is an example of a web-based local buying initiative – and a collaborative effort “between businesses, non-profit organizations, local government and the Rhode Island Foundation.” The organization’s directory-style website lists a wide range of local businesses.