Kern Business Journal February/March 2016 by The Bakersfield Californian Specialty Publications

KERN Journal Business

Vol. 5, No. 1

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Cover Story

2016 Employment Law Update By Jerry Pearson

he beginning of a new year is an important time for business owners and employers. With each new year comes new laws and changes to existing employmentrelated requirements that can affect whether or not your business is in compliance with California state law. This 2016 employment law update addresses new Jerry Pearson and amended labor laws that could dramatically impact California businesses this year, including changes to piece-rate compensation, prohibitions to gender-based pay differentials and modifications to wage garnishment restrictions. It is important to note that every employment law situation is unique and this employment law update is not a replacement for legal counsel. If you have questions on how legislative changes can impact your business, contact an employment law attorney. Unless specified, the following

Legal and Human Resources

list of new legislation went into effect Jan. 1, 2016. PAID SICK LEAVE LAW IS AMENDED The amendments to the law include a clarification as to who is a covered worker; alternative accrual and payment methods; and a grandfather clause protecting employers that already provided paid sick leave prior to Jan. 1, 2015 (AB 304). MEAL PERIOD WAIVER RULES FOR HEALTH CARE EMPLOYEES CLARIFIED This law clarifies that special meal period waiver rules for employees in the health care industry remain in force, despite the uncertainty caused by a recent court of appeal opinion (SB 327). RECORDKEEPING DURATION LENGTHENED SB 358 also increases the duration of recordkeeping requirements of wages, wage rates, job classifications, and other terms and conditions of employment from two years to three years. PHOTO BY MARK NESSIA

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February / March 2016

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Februar y / March 2016

Journal KERN Business Showcasing Kern County business and industry February / March 2016 Vol. 5, No. 1 Kern Business Journal is a bimonthly publication of The Bakersfield Californian. Copies are available from The Bakersfield Californian, Kern Economic Development Corp. and Greater Bakersfield Chamber of Commerce. Publisher Ginger Moorhouse President/CEO Richard Beene Chief Marketing Officer Mike Skrocki Editor Olivia Garcia Assistant Managing Editor Mark Nessia Specialty Publications Coordinator

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Art Director Glenn Hammett Graphic Designer Holly Bikakis To submit a story kbj@bakersfield.com To advertise Mike Skrocki, Chief Marketing Officer mskrocki@bakersfield.com 661-395-7385 To subscribe 661-392-5777

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Editor’s Note

Looking forward

ach year starts off with plenty of excitement and goals. However, another big area centers around new rules or policies affecting businesses and the workplace. For this issue, the Kern Business Journal focused on legal and human resources topics. One must-read is a contribution by Jerry Pearson who is a partner at Young Wooldridge, LLP. Pearson writes about new laws and changes to existing employment-related requirements for 2016. “This 2016 employment law update addresses new and amended labor laws that could dramatically impact California businesses this year, including changes to piece-rate compensation, prohibitions to gender-based pay differentials and modifications to wage garnishment restrictions,” Pearson writes. Whether you are a business owner or a professional, it’s definitely worth reviewing Pearson’s article. Speaking of the new year, Joel A. Bock, who is a partner in Daniells Phillips Vaughan & Bock, examines 2016 tax law changes affecting business owners. Olivia Garcia And attorneys T. Scott Belden and Katy Raytis of BeldenBlaine examine trending wage and hour claims. Topics such as off-theclock work, overtime errors, and meal and rest-period claims are addressed in this dual column. Meanwhile, Kern County Farm Bureau Executive Director Beatris Sanders writes about the challenges in the agricultural industry in relation to its seasonal workforce and drought. Now for many businesses, image and its public relations are vital to their success. Local public relations consultant Maureen Buscher-Dang takes an interesting approach with her column in this

Business at-a-glance Anchorage, Alaska, topped the list with a median high school income of $37,050 and taking 6.01 months to get out of debt. Glendale, Arizona; Yonkers, New York; and Henderson, Nevada closed out the top five. – Kern Business Journal

Bakersfield named a top city to get out of debt Bakersfield was ranked No. 2 best city to get out of debt, according to SmartAsset. To find the best cities to get out of debt, SmartAsset calculated the amount of time required to fully pay off a credit card debt of $5,232 (the average credit card debt owed by Americans, according to Transunion) in every American city with a population more than 200,000. The calculations were based on the average income

earned by workers with a high school education. Taxes and typical housing costs were then subtracted to find the disposable income that could be used to pay off credit card debt at the current average APR of 13.1 percent. SmartAsset found that Bakersfield is far more affordable than many other major California cities, with a lower-quartile rent of $654. With the median income for high school graduates at $34,023, SmartAsset calculated it would take 6.31 months to get out of debt.

Bakersfield landscaper honored by California Landscape Contractors Association The California Landscape Contractors Association, a nonprofit trade organization of licensed and landscape-related contractors, presented a Trophy Award to Lesaca Landscape Company of Bakersfield for Outstanding Achievement in Xeriscape for its work on the Ayers residence project. “The CLCA is thrilled to recognize this Kern County landscaper and award-wining project,” CLCA Executive Director Sandra Giarde said in a news release. “Our association’s core goal is to support our members as they create beautiful, enduring landscapes that improve the quality of life. Winning a Trophy Award not only supports our members, but instills pride in our community and recognizes quality workmanship that only a licensed contractor can offer.”

issue by using the NFL as a case study on PR fumbles. In it, she also shares key tips to avoid such goof-ups. Now there is something about Bakersfield’s quality of life. Visit Bakersfield Manager David Lyman also highlights the Bakersfield Museum Trail, which is a 15-mile driving route that connects four of Bakersfield’s favorites: Bakersfield Museum of Art, Buena Vista Museum of Natural History and Science, California Living Museum and the Kern County Museum. By taking this route, residents or visitors can visit some historic sites and key points of interest. Last, I will end with this vital piece of advice that Holly Culhane, president of P.A.S. Associates and P.A.S. Investigations, shared with readers on planning for all scenarios: “As leaders, we spend most of our time planning for our businesses’ successes. Sometimes that means we give little consideration to planning for the inevitable problems – the unexpected disasters. Certainly we cannot anticipate every bad thing that can possibly occur. But having an operational checklist, anticipating scenarios and developing emergency plans are critical to controlling, rather than being controlled by a crisis,” writes Culhane. Turn the page and see what other guidance she has for emergency planning in the workplace. – Olivia Garcia is editor of the Kern Business Journal.

The Trophy Awards were established to encourage interest in landscaping, recognize people who produce outstanding landscapes, create pride in superior workmanship and bestow public recognition on companies, institutions, municipalities and residents for their interest in a beautiful California. A total of 52 awards were presented. – Kern Business Journal GET board elects new chair, vice chair The Golden Empire Transit District board of directors elected James Hunter as board chair and Cindy Parra as vice chair for 2016. Hunter was appointed as the member-at-large by the other four board members in February 2015. Originally from Fillmore, he served in the U.S. Federal Foreign Service Diplomatic corps from 1966 to 1980 and has degrees in public administration, engineering and information management. He is currrently the CEO of Knowledge Solutions Group, which focuses on strategic project planning and design. He is also a board member for the Kern Transportation Foundation and Bakersfield Sister Cities International organization and serves in the Garden Pathways mentor program. Parra was born and raised in Bakersfield and attended San Jose State University before returning to her hometown in the mid-80s to

work for SmithtechUSA Inc. as a project manager for 20 years. Parra was a founding member of Bike Bakersfield and currently serves on its board of directors, in addition to the California Bicycle Advisory Committee, the Board of California Bicycle Coalition, Kern Council of Government Board as a GET representative and is chair of the Kern Bicycle and Pedestrian Safety Coalition. – Kern Business Journal KFCU receives highest possible health rating Kern Federal Credit Union received an A-plus health rating from DepositAccounts.com, signifying its outstanding performance in achieving exceptional fiduciary standing through the end of third quarter in 2015. It is the highest rating possible. Every fiscal quarter, DepositAccounts.com evaluates the financial health of every federally insured credit union in the United States – more than 6,200 total. The grade is based on a number of factors, including capitalization, deposit growth and loan-to-reserve ratios. DepositAccounts.com is the largest and most comprehensive online publication in the U.S. dedicated to banking/savings information for consumers, covering all 14,000 federally insured banks and credit unions. – Kern Business Journal

KERN BUSINESS JOURNAL

Chamber Roundups

February / March Events

Kern County Black Chamber of Commerce

Feb. 5, 12, 26 – Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St.

Feb. 13 – KCBCC Night at CSUB Men’s Bakersfield; 7 p.m.; CSUB v. Utah Valley, Icardo Center, Reserved seating available

Feb. 15 – Chamber Closed – President’s Day Feb. 18 – Chamber After Hours Mixer; 5-7 p.m.; $5 for members; $10 for nonmembers; Emser Tile and Natural Stone, 4546 Stine Road March 4, 11, 25 – Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. March 7 – Philanthropy on Tap; 5-6 p.m.; Imbibe Wine and Spirits Merchant, 4140 Truxtun Ave. March 23 – Kern County Economic Summit; 7-11:30 a.m.; DoubleTree by Hilton, 3100 Camino Del Rio Court March 24 – Greater Bakersfield Chamber of Commerce Beautiful Bakersfield Awards nominations due by 5 p.m. April 1, 8 – Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St.

PHOTO BY MARK NESSIA

Greater Bakersfield Chamber of Commerce Feb. 11 – Pancakes & Partnerships Procurement Breakfast; Check-in/networking, 7:30 a.m.; Program, 8-10 a.m.; $25 for members; $50 for nonmembers; Greater Bakersfield Chamber of Commerce, 1725 Eye St.

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Feb. 17 – “A Tribute to the Music of Motown”; 6 p.m.; In honor of Black History Month, Bakersfield Marriott, 801 Truxtun Ave. $25 per person, $300 table sponsorship (A dinner featuring impersonations of your favorite Motown artists)

March 8-30 – KCBCC Small Business Academy; Classes are Tuesdays and Thursdays, 6-8 p.m.; Enrollment free to members, $75 non-members. Learn what it takes to own a successful business from seasoned business executives. Call 326-1529 to enroll. Deadline: Feb. 24 March 24 – Junior Chamber Mixer; 5:307:30 p.m.; Free to students grades nine through 12. Students network and learn what it takes to become a successful entrepreneur, community leader and how to create a better future for themselves. Visit kcbcc.net or call 326-1529 for information.

North of the River Chamber of Commerce

Hispanic Chamber of Commerce

Feb. 25 – 2016 Business Expo; 4:30 to 7:30 p.m.; Veterans Hall, 400 Norris Road. Join the NOR Chamber of Commerce for the 2016 Business Expo. Vendors from across Kern County will be in attendance, showcasing their expertise and services. Admission is free for attendees and perfect for business professionals looking to network and make connections with potential clients and possible business partners. Booth rentals are still available. Visit norchamber.org for more information and to register for the event, or call 873-4709 for more information.

Feb. 16 – Business Networking Mixer Dignity Health Mercy & Memorial, 5:30-7:30 p.m.; Children’s Healing Gardens, 420 34th St., Door fees: $5 members, nonmembers $10. Kick off to the Go Red for Heart Disease Luncheon and Fashion Show in partnership with the American Heart Association. For more info, call 633-5495.

March 10 – March Luncheon, Hodel’s Country Dining, 5917 Knudsen Drive, 11:30 a.m. Networking with program at noon, $20 members, $25 non-members, includes lunch. It’s your chance to mix and mingle at the NOR Chamber of Commerce’s monthly luncheon. Taking place at Hodel’s Country Dining the second Thursday of every month, it’s your opportunity to get to know local business owners and hear from industry leaders on the issues that affect us here at home. Bring your business cards and a small door prize for the raffle at the end of the program. It’s a great way to bring exposure to your business and the great work you do.

Feb. 23 – Business Workshop, 11:30 a.m.-1 p.m.; hosted by JPMorgan Chase Bank at the University of La Verne, 1201 24th St. Free. Lunch provided with reservation. Feb. 25 – Creating a Digital Brand Through Video, presented by Jason Gutierrez and Enigma, a multimedia marketing agency, noon; location TBA. To RSVP, call 633-5495 or email officeadmin@kchcc.org. Feb. 25 – Grand Opening Alfac, 5:30 p.m. Risto Rubio, 1616 30th St., Suite 200. Mar. 7 – KCHCC Business Academy 10-week course for entrepreneurs and smallbusiness owners. Learn skills and tools to be even more successful. Call 633-5495 for more information. March 9 – March Business Networking Mixer, 5:30-7:30 p.m. Hosted by La Costa Mariscos. Call 633-5495 for more information.

Emojis – the latest thing employers need to worry about By Robin Paggi

picture is worth a thousand words and, apparently, so is an emoji. For those unfamiliar with the term, emojis are colorful cartoon characters (faces, hearts, animals, etc.) that are used in electronic communications to clarify one’s messages. In her article, “Oxford’s 2015 Word of the Year Is This Robin Paggi Emoji,” on Time.com, Katy Steinmetz says that: “They act like punctuation, providing cues about how to understand the words that came before them, as an exclamation point might. Emojis typically add to ideas rather than replace words.” Thanks to a recent lawsuit, they also add one more thing employers need to worry about their employees doing that could get them into trouble. Why worry? Because along

with emails, texts and tweets, emojis are now admissible in court hearings. According to an article on NYTimes.com, the attorney for Ross W. Ulbricht, a Californian charged with operating a website where several thousand vendors sold drugs and other illegal goods, persuaded the judge to require prosecutors to include the use of emojis when they read Ulbricht’s electronic communications to the jury. Judge Katherine B. Forrest determined that an emoji was “part of the evidence of the document,” which sets a precedent for other courts to allow their admission. In fact, the U.S. Supreme Court is currently reviewing a case of a man whose violent electronic threats against his wife were followed by a face sticking its tongue out, which he says proves he was just joking about killing her. Why does it matter if emojis are admissible in court hearings? One problem with emojis is that they might clarify messages too much. For example, let’s say you have an employee who emails a

co-worker this message: “What do you think of the new intern?” The co-worker responds with this message: “She’s fine,” and an emoji of a winking face with puckered lips and a heart. The words “she’s fine” are ambiguous; however, with the emoji added, the message now has romantic overtones, which could present a problem when trying to fight a sexual harassment claim. Would employees really use emojis like the one described above in their business communications? Yes. Lots of people, including your employees, are using emojis. According to the Oxford Dictionaries team that chose the “face with tears of joy” emoji as the word of the year, “Although emojis have been a staple of texting teens for some time, emoji culture exploded into the global mainstream over the past year.” In his Time magazine article about emojis, tech writer Robert Hackett says that, “Emoji has begun to reshape the language of business.” Indeed.

In a recent survey commissioned by Cotap, a mobile messaging company, of 1,000 American workers with smartphones, 76 percent said they have used emoji in business communication. Another issue is that even if people know not to put a particular thought into words, they seem to thoughtlessly say the same thing with emojis. In his article, “Emoji-gosh! How emojis in workplace communications can spark a lawsuit (or make it harder to defend one)” on Lexology.com, attorney Peter T. Tschanz says that most employees wouldn’t dream of sending a message that the new intern is attractive, but saying it with emojis is somehow acceptable. Why? “Because many people view this sort of humor as creative and not really inappropriate. It’s just a joke,” wrote Tschanz. So, in light of this recent event, should employers now ban the use of emojis at work? I wouldn’t. Instead, I suggest reminding employees that all of their business correspondence, including emails, texts, tweets and now

emojis can be used as evidence in court and not to send anything they wouldn’t want a judge and jury to look at. And, if sending this message via electronic communication, leave off the smiley face.

– Robin Paggi is the training coordinator at WorkLogic HR where she creates and delivers workshops on topics such as harassment prevention, communication and supervisory skills. She can be reached at rpaggi@ worklogiclegal.com or 695-5168.

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KERN BUSINESS JOURNAL

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PHOTOS COURTESY OF ROD BLAIR

Left: Inventor and SBDC consultant Rod Blair’s 10-foot snow globe of Dr. Seuss’ “How the Grinch Stole Christmas!” was displayed in a Chicago Park. Top right: Blair’s inflatable creations are shown internationally. This 23-foot snow globe of “Santa’s Wonderland” was displayed at the Golden Triangle shopping mall in Jakarta, Indonesia. Bottom right: Blair’s first test-ride of the earliest Hydro Bronc in white water on the American River near Coloma, California.

Inventor uses creativity to help Kern startups By Kelly Bearden

nventor, mentor and smallbusiness operator. This combination makes Rod Blair a uniquely qualified consultant for Cal State Bakersfield’s Small Business Development Center. It also helps provide the center’s business clients with the skills and technical expertise to succeed. “My motivation has always been to help others start or revive a life experiKelly Bearden ence, which includes making a living with their work,” said Blair, 64, who is the president of Bakersfield-based Sportogo Inc., which manufactures and distributes Blair’s designs and inventions. Sportogo also provides services to help companies and individuals bring their innovations to market. Sportogo has a core workforce of four skilled professionals that is augmented by the services of many contractors. Born and raised in Southern California, Blair studied at

California State Polytechnic University, Pomona, Citrus and Mount San Antonio community colleges and the Colorado School of Mines. He holds a Bachelor of Science in industrial business from California State University, Los Angeles, and a teaching credential from the University of California, Los Angeles. But his interest in and talent for inventing grew out of his home. “My father was an inventor. As a young man, I watched and worked with my father to produce his patented horse-training product in our garage,” he recalled. “The experience with my father showed me that anybody could get a patent and start a business.” He brought that experience with him as he pursued a career as a designer with Honeywell Inc. and Aerojet Investments, as a space planner for the South Coast Air Quality Management District and as an instructor for the Los Angeles Unified School District, West Valley Occupational Center and College of the Canyons. It was while working as the vice president of engineering for American Aerostar in Valencia that Blair, his wife, Susan, and their four now-adult children, Titus, Luke, Anna and Mary,

moved to Bakersfield and Blair started a business. Now known as Sportogo Inc., the company has received international marketing acclaim for its “inflatables,” which include giant “snow globes” used to promote company products and services. Perhaps Sportogo is best known for its one-of-a-kind Hydro Bronc. “The concept for the Hydro Bronc came to me after our raft flipped on the American River and I thought there had to be a safer way to navigate white water,” Blair recalled. He invented a giant, inflatable watercraft that some have likened to a hamster cage. The Hydro Bronc allows its operator to navigate white water inside a geodesic tubular structure, while running on a netted track. Enshrouded in this bouncy cocoon, Blair was able to attempt rapids that were otherwise restricted. Blair built a crude prototype of the Hydro Bronc at his Bakersfield business and tested it in his backyard pool. After the concept proved viable, he moved his demonstrations to the public arena, including a trial navigation of the San Francisco Bay. The inventor and his Hydro Bronc have been featured on

television shows and in magazine and newspaper articles. The Hydro Bronc is included in adventurer-engineer Lia Dutton’s book, “Fifty Water Adventures to Do Before You Die.” With the project “still under wraps,” Blair said Sportogo now is manufacturing a geodesic planetarium that will house a 360-degree projector to facilitate presentations at a museum. Another project underway is a giant snow globe that will be erected in Pasadena to celebrate the National Geographic Channel’s 15th anniversary this year. With a company theme of “You dream it, we build it,” Sportogo “is now generating some of the world’s most sophisticated snow globes for display,” Blair said, who added that he believes “sharing my experiences in business and inventing with SBDC clients can shorten the distress cycle for the inventor.” “There are few who have gone down this road who have not been exploited in some fashion by invention hucksters, investors and even attorneys. It is my desire to spare the new guy the big holes in the road,” said Blair, who holds eight U.S. patents. “The SBDC offers so many

services without cost to existing business people and startup entrepreneurs. The educational services, including online webinars, are invaluable,” Blair said. “The SBDC assigns one-on-one consultants to aid in most areas of business, with many of the consultants bringing lifelong, common sense experience. Business is dynamic. So as a businessman, I take advantage of every type of help I can get – especially if there is no charge. And it’s so helpful to be able to talk to real person at the SBDC.” The Small Business Development Center at CSUB is one of five service centers within the University of California, Merced SBDC Regional Network, which is a partnership between the university and the U.S. Small Business Administration. The center at CSUB assists entrepreneurs and small business owners in Kern, Mono and Inyo counties by providing free oneon-one consulting, small business training and research. For more information, go to csub.edu/sbdc. – Kelly Bearden is the director of the Small Business Development Center at Cal State Bakersfield.

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KERN BUSINESS JOURNAL

Trending wage and hour claims in Kern County By T. Scott Belden, Esq. and Katy Raytis, Esq.

that this time is captured on the timesheet and paid to the employee.

alifornia employers are at greater risk of employment lawsuits than employers in any other state in the country. According to a 2014 Hiscox study, California employers with 10 or more employees face a 42 percent chance of getting hit with an employment lawsuit. If you think those statistics are scary, try this: According to a recent NERA study of wage and hour class action lawsuits from 2007-2015, the median settlement amount that employers paid was $6.9 million. And that doesn’t even include the company’s legal fees. So what can employers do? Since there isn’t any magical way to insulate your company from a lawsuit, the best bet is to take a proactive approach toward compliance issues, staying on top of new laws and avoiding those mistakes that are most likely to lead to litigation. Below (in no particular order) is a list of the most popular employment law claims currently plaguing Kern County employers.

2. WAGE STATEMENT VIOLATIONS It was never so important to dot I’s or cross T’s until California Labor Code Section 226 was enacted. This statute outlines the detailed information that must be included on an employee’s wage statement. Why does it matter? Because wage statement claims are perfect fodder for class action lawsuits. If your wage statement is incorrect for one employee, it is incorrect for all of them.

1. OFF-THE-CLOCK WORK Off-the-clock claims have gotten significant press recently with the onslaught of cases brought against retailers for time spent on security checks at the end of a shift. Lesson for employers: Make sure that all time is compensated. Watch for time when the employee is performing preshift tasks (such as vehicle inspection, equipment checkout, clothing change) or postshift duties (such as completing forms, returning equipment, downloading data). Ensure

3. OVERTIME ERRORS In California, it might seem like you need a PhD in math to calculate overtime correctly. Whether distinguishing nondiscretionary production bonuses from flat-sum bonuses or determining weekly “weighted averages,” there are countless ways to run afoul of California’s overtime obligations. Employers should review overtime practices, particularly if employees are paid at varying rates, are paid bonuses, work seven-day shifts or work under an alternative workweek schedule. Employers sometimes try to avoid overtime by simply classifying employees as “exempt.” Be careful. Employees aren’t automatically exempt from overtime just because they have a fancy title and a salary. 4. MEAL AND REST PERIOD CLAIMS Remember when we were so excited because the Brinker decision was going to do away with meal and rest period claims? Whoops. Looks like we celebrated a little too early. California employers continue to get slammed with meal

California employers with 10 or more employees face a 42 percent chance of getting hit with an employment lawsuit. and rest period claims. Employers should make sure that timesheets reflect the meal periods and should regularly remind employees of their right to take meal and rest breaks. An even safer approach is to schedule the meal periods and make sure that employees go. 5. DISCRIMINATION CLAIMS Age, disability and gender have tended to be the most popular discrimination claims in Kern County. Employers should remain mindful of these protected characteristics, periodically review employment practices to ensure that no specific group is more heavily impacted and ensure that adverse action against an employee is documented and supported by a legitimate business reason. – T. Scott Belden is a founding member of BeldenBlaine, a practice that encompasses all aspects of business and commercial litigation with an emphasis on management-side employment litigation. – Katy Raytis is an attorney at BeldenBlaine and focuses her employment law practice on employer representation and counseling for matters related to harassment, discrimination, wage and hour, wrongful termination and other compliance issues.

KERN BUSINESS JOURNAL

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Piece Rate Compensation Reform

The continued rise of guardian democracy and the death of common sense By Jay L. Rosenlieb

ore than 40 years ago, Ward E. Y. Elliott, as a young professor at Claremont McKenna College, wrote an in-depth and instructive book on the impact of the United States Supreme Court on voting rights in America. The title of the book, “Rise of Guardian Democracy: The Supreme Court’s Role in Voting Rights Disputes,” alludes to the notion that there are those in government who “know” that they know better than those whom they govern. This “Guardian Ethic” is driven by restlessness with the pace of the political Jay L. Rosenlieb process; this restlessness becomes impatience, and this impatience creates its own imperative to act without allowing the full organic process of democracy to come to fruition. The result is often the achievement of what is perceived by the Guardian Class of a beautiful abstraction, but the reality is nothing more than another ineffective government strategy or highly disruptive edict. In the case of the voting rights reform studied in Elliott’s book, the principle objective of which was to strengthen underrepresented communities, little progress has been made in the areas of addressing economic dependency, community health and gun violence.

California State Senate Chamber Desks

The California Legislature, with leadership from Gov. Brown and a prompt from California courts, has chosen to engage in its own separate brand of Guardian Ethic through its foray into piece rate compensation reform. Assembly Bill 1513 overturns decades of settled law and methods of doing business and imposes nothing less than bizarre and nearly impossible operating requirements on employers for highly questionable societal gains. For at least 60 years, California deferred to federal regulations that gave workers the right to be paid for how much they produce, so long as the amount the worker

is paid for the day is in excess of the number of hours worked times the minimum wage. The system provided the appropriate incentives to workers to produce (thus, their labor was not subject to being “stolen” as was the constant complaint and battle cry of the revolutionaries of old and now is the Occupy Movement of today) and safeguards to make sure that the appropriate minimums were protected. AB 1513 changed this and requires that workers not only be paid for the widgets they produce, but also for the rest periods and other nonproductive time during the day, as if this was not part of the entire

production process for which they were compensated by the piece. While the actions of the governor and the Legislature have been disruptive (and costly) to businesses, there is little doubt that the changes will do little to increase wages. Further, the changes are consistent with a Guardian Ethic that certain folks in our government know better than others and while they may have achieved their own ideal, nothing has been done to advance the wages of the workers and everything has been done to compromise the health of businesses of all sizes. Why have workers had ripped from their hands the ability to make more money based on higher production? We already have an explosion of employment-related litigation (with Kern County being one of the most severely impacted), why create another incubator for litigation of questionable worth? The answer is simple: Guardians, who “know” more than those they govern simply don’t care if there is collateral damage on the road to achieving their ideal. What happened to common sense? – Jay L. Rosenlieb chairs the Klein DeNatale Goldner employment law group, representing management in employment litigation and counseling, with a practice focus on wage and hour law, discrimination and harassment, wrongful termination, and workforce downsizing, as well as representation of management under the National Labor Relations Act.

Agriculture looks to challenges By Beatris Sanders

very day, the headlines scream out at us that the water shortage has become dire and is bound to get worse, regardless of a visit from El Nino. One thing California’s drought has shed light upon is the recognition of man-made physical capital in agriculture – the capability of people to be effective and productive economic agents, otherwise known as human capital. As an industry, Kern County agriculture is second only to the oil industry as the highest job provider. According to the Employment Development Department, during peak harvest seasons, agriculture is the leading job provider, providing more Beatris Sanders than 30 percent of the jobs in Kern County during these seasons. Maintaining this level of employment has been quite a challenge

in recent years and is likely to become more difficult over the next few decades as weather patterns, available water and growing seasons shift further. Agriculture depends on the labor workforce with skills and a commitment to a grueling work environment. Year after year, these crews endure the hot temperatures and repetitive, backbreaking motions to earn their paychecks. The life of a farm laborer has always been difficult, but the drought has made it even more grueling. Due to the lack of reliable water delivered and new water regulations, many growers have made decisions to replace their rotation crops (high labor intensive) with permanent crops, which are less thirsty and less labor intensive. This change alone has lessened the demand for large labor crews in Kern County, creating a shortage of seasonal employees. Unfortunately, the ongoing drought has forced many of these families to find more consistent work in the mid-West and Northwest regions of the United States where the water flow to agriculture isn’t scarce and they

can rely on steady employment. If agriculture is to have any chance of answering the drought challenges while retaining their seasonal employment, the diffusion of technology and improving farming techniques is imperative moving forward. In order to make up for the loss of available work labor forces, we need to focus on how to be more productive with less, investing in those employees who have decided to stay in California despite the drought and unpredictable future of agriculture. A select group of commodities in Kern County can employ smaller numbers, but there is a need to upgrade the quality of human resources employed in agriculture who are familiar or can be trained in technology. By upgrading the productive potential of people making a living in agriculture, hopefully we can retain work crews even through drought years. – Beatris Sanders is the executive director of the Kern County Farm Bureau.

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KERN BUSINESS JOURNAL

Misunderstandings with workers' compensation By Sylvia Lopez and Marcos Rodriguez

ypical scenario No. 1: Injured employee comes to see us and says the following: “I got hurt on the job but I’m afraid to file for workers’ comp. I’ve worked for my boss more than 10 years now. He’s a good guy, a friend even. I don’t want to file a lawsuit against him or his company, but I’m hurting real bad. What should I do?” Workers’ compensation is a maze of laws, ever changing and often misunderstood. As implied above in scenario Sylvia Lopez No. 1, most injured employees are under the impression that by filing for gardenvariety workers’ compensation benefits, they are then filing a lawsuit against their employer, who may Marcos Rodriguez be friends or family. I want to make sure employees and employers understand there is no lawsuit per se. Rather, filing for workers’ compensation benefits is no different than filing a claim with your own personal insurance. Hence, the employee is simply filing a claim for benefits with the employer’s mandated workers’ compensation insurance carrier. Now, there are situations that may call for a claim against the employer directly, but that comes into play only when the employee was injured due to the employer’s serious and willful conduct – a law that carries a high standard and the burden of proof is on the injured employee. However, in most cases, the employer’s workers’ compensation insurance carrier handles the allocation of all benefits rightfully owed to an injured employee and thereby leaving the employer out of the picture.

Thus, this idea of an employee vs. employer showdown, framed as a lawsuit, should be dispelled within your businesses, as it only benefits everyone to get the injured employees proper medical care, healthy again and returned to the workforce. Typical scenario No. 2: Injured employee comes to see us and says the following: “I have severe pain in both legs and feet. I have been a pharmacist technician for more than 20 years. I am required to be on my feet all day. I’ve been told by others that I can’t file for workers’ comp because I didn’t get hurt at a specific time. What should I do?” Another common misunderstanding is the type of injuries covered under the workers’ compensation laws. The easy example to grasp is whenever an injury is sustained during a work-related accident. This is called a “specific injury.” The more obscure injuries are when employees are injured from constant, repetitive motion. For example, a baker may develop severe arthritis in the hands due to molding and shaping dough over the past several years, or as described above in scenario No. 2, a pharmacist tech who has been on her feet eight hours a day, 40 hours a week for the past 20 years. These types of injuries are known as “cumulative trauma injuries” and may be covered by workers’ compensation insurance if a doctor connects the medical condition(s) to the job duties as they were performed. For that reason, it is critical for employees and employers to not only recognize and report “specific injuries” but also “cumulative trauma injuries” to the workers’ compensation carrier as soon as possible. Again, it only benefits everyone to get the injured employees proper medical care, healthy again and returned to the workforce. – Sylvia Lopez and Marcos Rodriguez are attorneys at the Law Office of Sylvia Lopez, a professional law corporation specializing in workers’ compensation, personal injury and social security disability.

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KERN BUSINESS JOURNAL

Februar y / March 2016

Drug-free workplace: Is it for your company? By Linda Eviston

o you have a drug-free workplace policy? The federal Drug-Free Workplace Act was passed in 1988, and the state of California passed its version in 1990. The DFWA is required for federal contractors, grantees and a variety of safety- or securitysensitive industries. Just because your organization is not in one of those industries, however, doesn’t mean it isn’t a good idea. As an employer, there are some real advantages to implementing a drug-free workplace. Kern County has a serious methamphetamine problem, and couple meth use with the use of other illegal drugs, prescription medication, over-the-counter medication or alcohol, and you have created a cauldron of potential jobsite problems. Alcohol or drug use does not even have to occur while the employee is at the job site; a hung-over employee can also present job hazards. Surprisingly, the majority of alcoholrelated work performance problems are associated with nondependent drinkers who may occasionally drink too much. Increased absenteeism, reduced productivity and lower job performance all can result from drug use. Accidents and safety hazards are more likely to occur when an employee is under the influence. Just some of the repercussions of drug and alcohol use on the job are below.

Increased Absenteeism – Absenteeism is 66 percent higher for drug users on the job.

Problem Employees – Disciplinary actions are 90 percent higher.

Health Costs – Health benefit utilization is almost double that of nondrug users.

Work-Related Injuries – Workers with alcohol problems were 2.7 times more likely than workers without drinking problems to have injury-related absences. How can you prevent drug and alcohol use on the job? Employers with successful drug-free workplace programs report improvements in morale and productivity and decreases in absenteeism, accidents downtime, turnover and theft. Before implementing a drug-free workplace, however, it is critical to be aware of the laws surrounding not only the workplace, but also the rights of employees. Such laws as the Americans with Disabilities Act of 1990, the Civil Rights Act of 1964, the Family and Medical Leave Act

of 1993 and the National Labor Relations Act of 1935 all work to protect the rights of employees. Laws on drug-free workplace programs are complex, but employers can follow basic steps to set a foundation for compliance. Because drug or alcohol use may mimic some disabilities, it is important to become well-versed on both the laws and practical ways to execute those laws. The Substance Abuse and Mental Health Services Administration recommends 10 steps for avoiding legal problems if you want to conduct drug testing. The following best practices are helpful for all organizations that strive for a drug-free workplace: 1. Consult an employment attorney: The American Bar Association or your state bar association can refer you to a qualified employment attorney. Consult with your attorney whenever you alter your drug-free workplace policy or if you’re launching a new one. The alternative to an attorney may be a certified personnel firm. (The author has used P.A.S. successfully on a variety of issues.) 2. Set clear penalties: Clearly stipulate the penalties for policy violations. If your policy includes a drug-testing program, state who will be tested, when they will be tested and what will happen to employees with a violation. 3. Put it in writing: Every employee should receive and sign a written copy of your drug-free workplace policy. Verbal agreements and unsigned agreements have little legal standing. 4. Provide training: Ensure that all supervisors are trained on how to detect and respond to workplace drug and alcohol misuse. Maintain attendance logs of all trainings. 5. Document employee performance: Maintain detailed and objective records on the performance of all employees. A documented performance issue often provides a basis for referring workers to employee assistance programs.

tions in private. Have another manager present to serve as a witness. Never accuse or confront an employee in front of his or her coworkers.

6. Don’t rush to judgment: Do not take disciplinary action against a worker or accuse a worker of a policy violation simply because the employee’s behavior seems impaired. Instead, try to clarify the reasons for the employee’s impairment. If drug testing is a part of your workplace policy, obtain a verified test result before taking any action.

8. Be consistent: No individual employee or group of employees should receive special treatment. Inconsistencies in enforcement could be considered discrimination.

7. Protect privacy: Hold discussions with employees about potential viola-

10. Involve employees: Workers at all levels of your organization should be

9. Know your employees: Getting to know your employees can make it easier to identify problems early on.

involved with developing and implementing your drug-free workplace policy. This will reduce misunderstandings about the reasons for having a drug-free workplace program and help ensure that your policies and procedures are fair to everyone. Improving the work environment benefits everyone – employer and employees alike.

– Linda Eviston is the executive director for STEPS, a nonprofit DUI education and prevention program. She can be contacted through the website at steps-inc.com or through the STEPS Facebook page.

Februar y / March 2016

KERN BUSINESS JOURNAL

Modern access control for small business By David A. Milazzo

hysical keys are so 3000 B.C. That’s the ballpark era when locksmiths came on the scene and began creating novel ways to secure access to doors, boxes, safes, etc. Before then, rooms were typically secured by a physical beam placed across the door. While this method got the job done, it carried the unfortunate necessity of leaving a person in the room to “mind the door,” otherwise, who could ever get back in the room? But once lock-and-key technology did emerge, the advancements progressed through the ages starting with the early pin locks of the ancient Egyptians, the rotation keys of the Romans, the medieval warded lock and, eventually, the American tumbler lock invented during the Industrial Revolution. As we’re now firmly in the digital age, corporate access control is best provided by electronic means. Most large organizations employ an access control system that manages entry to corporate facilities using IT-based processes. Instead of a metal key, a plastic card is issued David A. Milazzo to staff granting access to specific parts of the corporate campus. This low-frequency proximity – or “prox” – card contains an embedded antenna with the cardholder’s “key” replicating the core function of the traditional key: it opens only the doors it’s supposed to. But due to the infrastructure of a large access control system, prox cards take the concept of a key dramatically

Your phone is now your room key. It’s as simple as walking up, touching the lock and walking in by UniKey.

further. Combining a management server, networked door locks and revocable prox cards, the sky’s the limit when it comes to customizing how doors open across a facility. First off, as the card is programmed and issued by the company, we can rescind access at any time without having to physically revoke the card. A terminated employee can keep it as a souvenir; it won’t open squat once it’s deactivated. Additionally, we can set conditions on which doors open at what time of day. Setting a 7 a.m. to 7 p.m. open policy protects the facility from late-night Post-it note ransacking.

In addition to the reporting that comes with the access control server logging every door open event, if an emergency should arise the access control server can tell first responders exactly who’s left in the building. Oldschool keys are clearly bested. Check out HID (hidglobal. com) and Avigilon (avigilon.com) to see some cuttingedge tech for enterprise environments. But what if you’re a small business and don’t have quite the enterprise budget? New technologies leveraging Bluetooth-enabled smartphones can function the same way as a prox card. And using cloud-based services instead of pricey, premise-based servers, the cost can be dramatically lower. You’ll still need to replace or augment doors with a networked lock, but the fear (and cost) of rogue staff duplicating their traditional key and necessitating a full re-key of your facility can be erased by transitioning to this new access paradigm. For a peek at affordable and consumergrade digital access solutions, look to UniKey (unikey. com) and Kevo (kwikset.com/kevo) for inspiration. If you’re not ready to jump on the digital access control bandwagon just yet, don’t stress – it’s a daunting prospect to forgo the comfort of the 5,000-plus-year-old key. But whatever you do, just promise you won’t keep a “door minder” on the payroll. – David A. Milazzo is the founder and principal of Bakersfield-based Macroscopic, an Apple enterprise technology consultancy focused on bringing Mac and iOS technologies to businesses, schools, agencies and independent professionals. Send your questions to him via email at milazzo@macroscopic.net.

Great lawyers close to home. A top California legal team is right in your own backyard. Whether you are operating a business or need personal legal counseling, you can rely on local attorneys who have an unrivaled track record, depth of knowledge and experience unique to the San Joaquin Valley. From business litigation, transactions and counseling, to bankruptcy, intellectual property, estate planning and employment law issues, KDG works with you to meet your legal needs and achieve successful, cost-effective results.

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KERN BUSINESS JOURNAL

Februar y / March 2016

Public Relations

Three lessons to be learned from NFL public relations fumbles By Maureen Buscher-Dang

he NFL is one of the more successful and powerful sports brands in the world. Last season, the league and its 32 teams hauled in an estimated $12 billion. Success aside, there has been no shortage of public relations disasters over the years. The following three lessons serve as cautionary PR tales for any organization. Be Accountable Disclose all facts, especially the bad ones that may lead to negative media coverage. Take responsibility, even if it’s not your Maureen Buscher-Dang fault. Explain actions that will be taken to remedy the situation. For more than two decades, the NFL vigorously denied football could cause long-term brain damage from head injuries. They stuck with the script that athletes could safely return to play and criticized experts who warned about dangers of footballrelated head trauma. It cost them and the health of their players in the long run. A class action lawsuit was filed in 2011 against the NFL by more than 5,000 retired players. A federal judge approved settlement terms in April 2015. Each explayer will be provided up to $5 million for serious medical conditions connected with repeated head trauma. In 2012, the NFL decided to fund medical research with a grant they gave to the Foundation for the National Institutes of Health for $30 million in unrestricted funds. “We hope this grant will help accelerate the medical community's pursuit of pioneering research to enhance the health of athletes past, present and future,” said NFL Commissioner Roger Goodell in a press

release. “This research will extend beyond the NFL playing field and benefit athletes at all levels and others, including members of our military.” Act Quickly Be proactive, rather than reactive, in a crisis situation. It’s a mistake to assume the media and the public won’t find out, especially since the advent of social media. Once the media has already exposed the facts, it can make a company look as though they are only sorry because they were caught. In 2014, NFL Commissioner Goodell dealt with six players who had all been arrested for various forms of assault against women and children. Among the most egregious was Baltimore Ravens running back Ray Rice. In February, Rice and his fiancee Janay Palmer were involved in a fight in a casino elevator and were arrested. A few days later, a video was released that showed Rice dragging Palmer’s unconscious body out of a casino elevator. The NFL only suspended him for two games in July. It wasn’t until a second video surfaced in September showing Rice punching Palmer unconscious that he was cut from the team. From start to finish, Goodell and the NFL were criticized for not acting quickly or strongly enough in handling the domestic violence cases. Shortly after the second Rice video, Goodell met with officials from the National Domestic Violence Hotline, which handles more than 1,000 people every day. Afterward, the NFL made a multiyear, multimillion-dollar commitment. They also partnered with the National Sexual Violence Resource Center. Control your message Decide on the best avenues to get your message out: press release, direct media

Sluggish demand, tech innovation drive legal sector competition

NFL Commissioner Roger Goodell at a news conference.

contact, company blog post or social media. This can be done individually or in tandem. Control of your message is strongest with a press release or blog post. Social media can provide real-time audience engagement, but little control over conversations. The entire 2014-2015 NFL season was rife with a variety of PR nightmares. It could very easily serve as a case study of what shouldn’t be done during crises. With domestic abuse cases, the 18-game season battle and Deflategate, there was no shortage of ham-handedness. In May 2014, when the NFL was already facing public and media scrutiny, its public relations folks decided to host a Twitter chat with Commissioner Goodell. Fans were given the opportunity to ask questions using #AskCommish. What followed was predictable.

By Lisa Beason, Market Research Manager, TBC Media

hile the overall economy in the U.S. is improving, certain business sectors, such as legal services, continue to struggle post-recession. Sluggish demand, changing consumer behavior and technological innovation are creating a more competitive marketplace. “General practice” lawyers in small firms are being squeezed out of existence by individuals who concentrate on unique areas of law or by self-serve/on-demand legal providers, such as LegalZoom, Quicklegal or Avvo. To succeed in this new paradigm, legal professionals must first determine their distinctive competencies and then develop a market strategy that leverages technology to market their

Goodell was bombarded with scads of funny, ridiculous, honest and brutal questions. Here’s one example from tweeter Michael Curry: “Who’s more immoral? An employer that covers up his workers getting brain trauma or an employer tolerating abusers but not gays?” This PR blunder needlessly exposed the commissioner and the league to additional bad press. The ongoing NFL public relations crises offer rich examples from which all businesses can learn. Whether you are a new business or have been in business 50 years, it pays to take notice and be proactive with your own plan. – Maureen Buscher-Dang is a Bakersfield public relations consultant and can be reached at mbuscherdang@msn.com.

practice, drive efficiency and keep rates affordable. Nationally, the legal services industry is made up of approximately 410,900 law offices with a combined annual revenue of $282 billion. Solo practitioners make up 48 percent of private-practice lawyers, according to the American Bar Foundation, 2014. Thompsons Reuter Peer Monitor reports demand for law firm services grew slightly (under 0.5 percent) during 2014. While this represents improvement compared to the previous year when demand growth was negative, the market has remained essentially flat since its collapse in 2009. Kern County’s legal sector is comprised of more than 500 firms, generating more than $260 million in revenue annually (Nielsen 2015). More than 24,000 Kern County Continued on page 25

Februar y / March 2016

KERN BUSINESS JOURNAL

Museum Trail, arrival guide debut to promote Bakersfield By David Lyman

xplore a turn of a 20th century 16-acre village, the largest collection of Shark Tooth Hill Miocene fossils in the world, scores of endangered animals and plants, and a broad spectrum of visual arts experiences all along the new Bakersfield Museum Trail. This exciting promotion, unveiled at the start of 2016, is a 15-mile driving route that connects four unique and family friendly Bakersfield David Lyman attractions: Bakersfield Museum of Art, Buena Vista Museum of Natural History and Science, California Living Museum and the Kern County Museum. Along the way, discover some historic sites and points of interest, plus statues of both the first European visitor to our area and a giant Native American. A new brochure promoting the Bakersfield Museum Trail offers a detailed driving map, plus special savings at each museum. The more you visit, the more you save. The Bakersfield Museum Trail brochure is being distributed to nearly 1,200 locations in central and Southern California, including hotels, attractions and California Welcome Centers. Locally, the brochure is available at each museum on the trail, as well as in most Bakersfield hotels and at Visit Bakersfield, 515 Truxtun Ave. Major funding for the brochure was made possible by the Kern County Tourism Promotion Grant Program through the Kern County Board of Trade. The Bakersfield Museum Trail is an exciting and unique venture that reflects a collaborative approach among Bakersfield’s travel partners. Instead of competing for a bigger piece of the pie, each museum is working together to increase the size of the pie. The Bakersfield Museum Trail seeks to encourage visitors of one museum to explore the others and, in turn, increase attendance at local museums. This new approach also will raise the visibility of Bakersfield’s museums among local residents, who regularly act as ambassadors for visiting friends and family members. Promoting local museums under the Museum Trail umbrella is another unique amenity that sets Bakersfield apart in competing for visitors by encouraging them to stay longer to increase spending at local museums and local hotels. When visitors stay longer, they have the opportunity to explore other parts of Kern County and spend more money. Another publication that made its debut in early 2016 is the new “Official Bakers-

field Arrival Guide.” With more than 60 full-color pages about things to see and do in Bakersfield, the arrival guide includes a dining guide, a complete listing of hotels, plus new features suggested by visitors. For example, “Fun for Kids” provides a host of ideas for our younger guests (and a list of activities with special savings), with detailed tips for taking the train to Bakersfield to explore local kid-friendly destinations. The “25 Free or Inexpensive Things to Do,” helps visitors experience Bakersfield on a budget. These include a visit to the Golden Empire Historical and Modeling Society model train clubhouse, exploring the Panorama Vista Preserve, attending the weekly Bakersfield Jazz Workshop, eating at the Woolworth luncheonette and touring Dewar’s candy, ice cream and chocolate factory. The arrival guide also has suggestions on ways to explore the Bakersfield Sounds (plural), our dynamic arts scene, great outdoors, agricultural bounty, and sports and golf possibilities, plus details on local attractions and a listing of Bakersfield’s many annual events and festivals. The “Official Bakersfield Arrival Guide” is now available throughout Bakersfield and the surrounding area, including local hotels, the Amtrak station and Visit Bakersfield. You also can view a digital version online at VisitBakersfield.com. – David Lyman is the manager of Visit Bakersfield. He has spent the last 31 years promoting his hometown for the city of Bakersfield, including business attraction, business retention, redevelopment, enterprise zone and, now, helping visitors spend their money.

KERN BUSINESS JOURNAL

Februar y / March 2016

Kern County: economic development New Year’s resolutions By Richard Chapman

s we enter “interesting” economic times (e.g., falling worldwide oil prices and statewide drought) in 2016, it is more important than ever to actively promote the Kern County brand. At the same time, businesses across the county are focusing on enhancing their own brand and identifying new opportunities or ways to distinguish their product or service. Andrew Levine’s recent Forbes article Richard Chapman identifies the five “worst practices” that should be avoided at all costs in terms of economic development marketing. These recommendations would also apply to any business trying to separate itself from its competitors.

1. Swimming in a Sea of Sameness Currently, more than 3,000 counties and 39,000 local governments compete in the economic development race to create jobs. However, according to Conway Data, there were fewer than 6,000 significant relocation/expansion projects, more than 50 new employees and/or $1 million capital investment in all of 2014. Given this cutthroat environment, it is critical to differentiate Kern County as providing a value-added and cost-competitive West Coast option. In fact, Kern has often been referred to – in tongue-in-cheek terms – as the “Texas of California,” given the county’s status as the No. 1 oil-producing region in the U.S. and its pro-business mentality.

2. Shouting Rather than Engaging Face-to-face meetings and building relationships are the key to recruiting businesses to the county. Developing an ongoing rapport with site selectors, corporate real estate executives and consultants who advise businesses on expansion and relocation opportunities pays significant dividends in the long run. The bulk of Kern EDC’s outbound activity is concentrated on the $1 trillion Los Angeles and Inland Empire economy. Even though businesses leaving California are garnering the most media attention, the numbers actually show that the vast majority of relocating companies are moving to an adjacent county or cross county, from a more urban area to a less urban one. In 2013, less than 1 percent of all businesses that disappeared in California were due to out-of-state relocations, according to Youreconomy.org – a figure that is in line with other states. In addition, Kern County and the other

San Joaquin Valley counties (often working together as the regional collaborative California Central Valley EDC) are well known as the only California groups leading outbound recruitment missions throughout the U.S.

3. Viewing a New Logo/Tagline as a Silver Bullet It’s important to develop a multi-faceted campaign versus one that merely revolves around a clever catchphrase. Washington State’s ill-begotten “Say WA” campaign is a perfect (and costly) example. “Say WA” was a take on the two-letter postal designation for the state. Unfortunately, the “excitement” it created was not associated with the state’s tourism attractions but rather the perplexing slogan itself. Along those lines, it is also imperative to promote a region based on unbiased feedback of “outside” reliable sources (industry publications, site selection consultants and corporate executives with experience working in the community). Indeed, Levine is credited with the truism, “A calf doesn’t brand itself.” Kern EDC employs this philosophy by highlighting the region’s major (quantitative) business selling points through its awardwinning “Take a Closer Look” campaign and “Top 10 Reasons to Do Business in Kern County” fact sheet. Recent accolades include: • Fastest-growing economy in the U.S. since 2001 • The cost of doing business is 93 percent of the U.S. average • Four-hour drive to 90 percent of the state’s population and 38 million customers • Ranked No. 2 in the U.S. for millennial job and population growth • Ranked No. 5 in the U.S. for upward mobility

4. Designing Your Website as an Information-Only Resource According to corporate relocation executives, a community’s website is the most potent and effective marketing tool. Given that more than 90 percent of initial site selection screening is done online – before contact is made with local officials – it is essential to not only provide access to critical business development and site specific information, but also to ensure that two-way communication eventually occurs between both parties. The “push” strategy, where relevant information is directly delivered to the constituent, is vastly superior to the “pull” strategy, where customers must specifically choose to visit communication portals (i.e., website, LinkedIn, Twitter, Facebook).

Kern EDC’s weekly E-News is currently “pushed” out to more than 2,700 targeted decision-makers around the U.S.

5. Failure to Connect with Existing Customers Increasingly, business retention and expansion (BRE) activities are considered by many as the most critical of all economic development activities. Indeed, local businesses create approximately 80 percent of the new jobs and capital investment within a community. In addition, according to the Oklahoma Department of Commerce, it

costs 100 times more to recruit new businesses than to retain existing businesses. In 2015, Kern EDC’s team conducted more than 100 BREs and impacted about 4,000 full- and part-time employees. As a result of adopting many industry “best practices,” Kern County is in an excellent competitive position to face the economic challenges that the region will face in 2016. – Richard Chapman is the president and CEO of the Kern Economic Development Corporation.

Februar y / March 2016

KERN BUSINESS JOURNAL

‘Fake it until you make it’ is not an emergency plan By Holly Culhane

now-retired manager, who spent most of her career working at a high-stress company, occasionally talks about her experiences learning to fly small planes. Most of her stories are pretty funny, but they also contain lessons for us all as we guide our companies through occasional turbulent times. Holly Culhane Among the lessons we learned are that effective leaders must do more than build his or her job skills. They must prepare for both good and bad events, focus on details, communicate, keep a cool head and learn from their mistakes. Perhaps the story that best illustrates these lessons is the one she tells about flying an FAA-required solo cross-country route. She plotted a course with landings at small airports in Los Banos and Madera and then back to her south valley airport. Her instructor warned that the route’s first leg – from Visalia to Los Banos –

would be the toughest. The open farmland provided few landmarks – roads, towers, towns – to mark her course. She would have to closely follow her instincts and instruments. And that she did. As she performed her preflight checklist, she carefully adjusted the aircraft’s avionics. She knew exactly where she was headed and followed along on a sectional map. Without incident, she landed in Los Banos, taxied to the terminal and rewarded herself with a Diet Coke. With the swagger of a “Top Gun,” she climbed back into the rented Cessna 172 and whipped it back onto the runway. Plunging in the throttle and pulling back the yoke, she yanked the plane from the ground. As she cleared the end of the runway, about 200 feet into the air, she realized she had no clue where she was going. She was so heady with her initial success, she had failed to follow a checklist, including calibrating her instruments. She was in trouble. Unlike an automobile, airplanes are “unforgiving.” When you mess up, you can’t just pull over and wait for AAA to arrive. You have to keep your cool, ride it out and try to land in one piece. This is

what the young pilot, with only a few solo flight hours under her belt, did. She examined her gauges and determined she had plenty of fuel and could buy some time. She pointed the airplane in what she hoped was the correct direction and looked for landmarks. A highway she suspected might be 99 and some towns came into view. She also dialed her aircraft’s radio to the control tower at Fresno airport and announced her predicament – she was a student pilot on her way to Madera and may have lost her way. “Look down. What do you see?” the controller instructed. “I see an airport.” “Land on it and ask them where you are,” he instructed. Not a bad plan, she thought, and obeyed his instructions. Sure enough, she was in Madera. After a short rest, she returned to her airplane with a lot less cockiness and more attention to detail. She carefully followed her checklist, adjusted her instruments and flew the last leg precisely back to Visalia. That she still tells this story decades after obtaining her pilot’s license is testimony to the lessons she learned that

day – and maybe to how frightened she was. But she kept a clear head, didn’t panic, relied on her skills and was not too proud to ask for help. As leaders, we spend most of our time planning for our businesses’ successes. Sometimes that means we give little consideration to planning for the inevitable problems – the unexpected disasters. Certainly we cannot anticipate every bad thing that can possibly occur. But having an operational checklist, anticipating scenarios and developing emergency plans are critical to controlling, rather than being controlled by a crisis. As a company’s leader, employees, customers and the community will turn to you for solutions. “Fake it until you make it” is not an effective strategy. Although we all know a good leader devotes rational forethought to both good and bad events that can affect his or her company, this story is a great reminder. – Holly Culhane is president of the Bakersfield-based human resources consulting firm P.A.S. Associates and P.A.S. Investigations. She can be contacted through her website www.PASassociates. com and through the PAS Facebook page.

Our team proudly focuses its practice on protecting Kern County businesses 661.864.7826 | www.beldenblaine.com

KERN BUSINESS JOURNAL

Februar y / March 2016

KERN BUSINESS JOURNAL

Februar y / March 2016

Business Profile

FormForce helps companies improve productivity, quality of service, compliance

ocally developed here in Bakersfield, FormForce is designed to assist in the operational needs of companies desiring improvements in productivity, quality of service and compliance, all while monitoring and analyzing the performance of their field teams.

What is FormForce? FormForce is a software platform focused on mobile data collection, storage and reporting leading to gamechanging enterprise compliance. By entering form data into an electronic platform, information is “born digital” and may be securely captured and accessed by multiple parties in real-time. With a full database infrastructure, FormForce correlates employees, job sites, training, vendors, equipment and more – all aimed at providing rich data for action, analysis, verification and validation. Do your field employees work in rural environments? Not a problem. Data is cached and synced back to the central source when the network is next available. Some real-world usage: • A security company can verify and validate tasks performed, such as capturing the real-time locking or unlocking of a facility. • A janitorial company can take a picture of an area being cleaned – both before and after – to show the work was correct and complete. How can FormForce assist with compliance • An oil company can track employee-training schedules, management? perform equipment inspections and document any Our training management and compliance tracker required tasks performed. assists in keeping up-to-date information for all your staff and automatically sends prompts and reminders What is the significance of integrating to alleviate human error. Audit preparation time is compliance into my business? greatly reduced with efficient search and accurate data. Compliance is a simple word that can mean vastly Data can be strategically employed to address incident different things to different businesses. From adhering occurrence in relation to training and recertification. to federal and state regulations to trade practices and FormForce provides the tools to maintain compliance customer requirements, documenting the safety and without relying on manual updates or the editing of efficiency of your workforce is a key differentiator for disparate spreadsheets. And creating this transparency your business – not to mention an absolute necessity with your clients gives your organization a recognizdepending on the level of work your company performs. able competitive advantage. Organizations working in high-compliance industries – energy, agriculture, manufacturing, etc. – know all Not convinced that compliance is a real driver to too well the level to which they and their employees’ achieving business excellence? Don’t take our word actions are scrutinized. for it! Learn the benefits from insurance giant Every element of your Clifford & Bradford Insurance and how they Interested in staff’s training and recommend FormForce. learning more? the work they perform Call 888-440-3111 to schedule must be recorded, verified From an insurance point of view, how can a meeting with one of our and validated — and for FormForce benefit its client? team members or learn more good reason. Employing Risk management is a business of its own. Business at www.formforceinc.com. safe processes leads to a owners are required to comply with extensive federal more efficient and safer and state guidelines. Successful business owners use work environment. But keeping track of the paper for technological tools allowing them to comply with these processes can bring a business to its knees. government guidelines in an efficient manner, thereby, Printing forms is costly and filling them out is freeing the owner to dedicate time to the success of slow. In addition, hiring staff to perform data-entry their employees and business. FormForce is a remarkis both costly and slow. If you’re using multiple able tool that allows business owners to manage the spreadsheets and quasi-compatible software packages, world of compliance in a much more efficient way. your business may be digital, but it isn’t necessarily Eliminating the massive number of paper documents, efficient. spreadsheets and manual procedures that are time con-

suming and wasteful, Clifford & Bradford Insurance is excited to partner with a local company that offers an innovative product whose ultimate outcome is the valuable commodity of time.

As an insurance agency, why is compliance measurement valuable? At Clifford & Bradford Insurance, we find those employers who are focused on the safety and well-being of their employees, the maintenance of equipment and facilities, and document their compliance generally have fewer insurance claims and, therefore, a reduced number of losses. FormForce is a great tool that allows business owners to take greater control of their compliance responsibilities as required by their businesses. At Clifford & Bradford Insurance, this translates into more opportunity in the insurance marketplace and more competitive insurance options.

How does FormForce integrate into my current technological practices? FormForce integrates with all of your existing software and services, providing rich import and export functionality. With an elegant user interface on both our Web and mobile platforms, it simplifies a powerful and flexible set of capabilities that can scale and be tailored to address the needs of organizations of any size or complexity. Use FormForce to differentiate your business in the marketplace by increasing measures of compliance, transparency and integrity while driving efficiency and profitability. Engage your employees, captivate your clients and optimize your organization.

Februar y / March 2016

KERN BUSINESS JOURNAL

5 key business financing trends, predictions for 2016 By Jeffrey Sweeney

he financing market for smalland medium-sized businesses (SMBs) has undergone major transitions over the past decade, as banks retrenched from the space and alternative lenders stepped in to fill the void. But 2016 may see new trends emerging. Here are five key developments we think are worth tracking this year. 1. Continued Use of Unitranche In the competitive, high-multiple deal environment expected this year, closing transactions quickly will be important. Given this, unitranche loans are likely to remain popular in 2016. These structures, which combine senior and subordinated debt into one instrument, often carry blended amortization that comes out to less than that of a first-lien and second-lien combination. Many unitranche financings are based on a

floating Libor rate, but they will likely remain popular even when interest rates rise. 2. Regulatory Changes and Complexity Since the financial crisis, regulatory pressures have prompted banks to divest themselves of “risky” or capital intensive businesses or departments. As a result, banks have withdrawn from lending to certain constituents, such as SMBs. Traditional lenders are focusing ever more on regulatory capital requirements. This is expected to result in reduced leverage for commercial finance companies and other entrepreneurial lenders, leading to a pull back in some forms of alternative finance. 3. Disruption by FinTech Firms Amidst the regulatory pressure, nonbanking financial institutions, especially FinTech firms, will increasingly impact the future landscape of banking. The origination vol-

ume of online lenders has been rising dramatically, by about 175 percent each year, in comparison to a steady decline of about 3 percent among traditional banks. Many traditional banks remain behind the curve. This trend forms part of what Jeffrey Sweeney, chairman and CEO at US Capital Partners Inc., describes as the ongoing “democratization of capital.” However, increased regulation and compliance are becoming a reality as the sector matures and scales up. 4. Banks and Alternative Lenders Working in Partnership Rather than operating as competitors, traditional banks and alternative lenders will increasingly begin collaborating. For example, JPMorgan Chase, the largest U.S. bank, has recently partnered with alternative lender On Deck Capital Inc. to speed up the loan process for millions of smallbusiness clients. Likewise, Citibank has partnered with online marketplace lender

Lending Club, while ING is partnering with Kabbage. In 2016, we are likely to see a marriage between FinTech firms and banks, as banks try to close their innovation gap and overcome legacy systems. 5. Strong Interest in Refinancing Business credit and cash flow has been improving steadily for smaller businesses since the financial crisis. Many of these businesses, however, remain locked in constraining or costly financing structures, hampering their ability to grow. As the economy continues to grow and new commercial opportunities arise, we believe the improved financial footing of these SMBs will lead to an increasing number of them seeking to refinance existing debt. – To learn more about how your business can secure the funding it needs, email Jeffrey Sweeney at jsweeney@uscapitalpartners.net or call 415-889-1010.

KERN BUSINESS JOURNAL

Februar y / March 2016

Don’t let business travel endanger your health By Dr. Jan Mensink

any of my patients at The Practice in Bakersfield are business owners and managers who must travel a lot on behalf of their companies. They are concerned that their travel routines, particularly in light of the diminishing services airlines offer, are endangering their health. Concierge medicine, as provided at The Practice, focuses specialized attention on the health needs of selective patients. So when my patients are concerned about their travel health needs, so am I. I have spent a good deal of time identifying the health challenges faced by my business clients and recommending relatively easy ways to meet these challenges, which often are associated with eating choices. In a nutshell, I find most of my business patients are flying out of Bakersfield’s Meadows Field to attend one- or two-day meetings in cities hundreds, or thousands, of miles away. Unless their meetings are taking place in a regional “hub” city, their itineraries often will require changing airplanes at least once. To trim costs, airlines are reducing the number of flights they offer and shortening the durations of airport layovers. Combine the frequent need to run from gate to gate to make connections with the limitation of food service on airplanes and my patients often endure a daylong fast, or grab unhealthy fast food on the run. These business travelers are often patients struggling with such chronic health issues as diabetes, high blood pressure and heart disease. Maintaining a good healthy diet is critical for these people to control their symptoms. But good luck to them in finding healthy eating options. Actually, it takes more than “good luck” for these patients to keep pace with their demanding jobs, while maintain-

ing good health. It takes planning and discipline. Some of the advice I offer, which applies to people with or without chronic health problems, includes: • Few airlines offer passengers complimentary meals. Rather, they sell box lunches and snacks. Avoid airline food, which generally is high in sodium, carbohydrates and calories. Avoid doughnuts, crackers and pretzels. Instead, bring your own or buy healthy snacks that are high in protein and fiber. These include fresh fruits, such as apples, trail mix, nuts, dried fruit, energy bars, raw vegetables, beef jerky and individual peanut butter cups. Also avoid drinking alcohol and soft drinks, which can leave you dehydrated with a headache and fatigue. Drink water. • Out-of-town travel usually requires eating business meals in restaurants. Look for low-fat, low-sodium, low-calorie options that are protein rich. Often these can be found among the appetizers on restaurant menus. Grilled fish and chicken also are good choices. If a meal includes two side dishes, double up on vegetables. Order dressings and sauces served “on the side.” Limit your alcohol consumption. Generally, men should not exceed two standard drinks and women should not exceed one per day. • If your hotel provides a breakfast buffet, avoid greasy, heavy and salty offerings. Go for the fresh fruits, precut vegetables, salads and yogurt. Most hotel rooms have small refrigerators. Buy healthy snacks, such as hummus and roasted chicken, at a nearby grocery store to eat in your room. • Take along supplements, such as a probiotic and fiber, that can be mixed in water. These will help keep your body on a regular schedule.

Dr. Jan Mensink with a patient.

• Eat small amounts of food every two to three hours. This can help keep your body on a regular schedule and avoid the “I could eat a horse” hunger that leads to overeating and bad food choices. These small handfuls of food can be taken from the snacks you have packed or purchased at a local store when you arrive. As you carefully plan what clothes you will pack, plan the foods you will eat. Use the Internet to check out the menus at your hotel and nearby restaurants. Avoid high-fat foods, butters and deep-fat fried dishes. This planning may save your life. – Dr. Jan Mensink is the senior physician at The Practice, a concierge medical practice in Bakersfield. For additional advice, contact Mensink at 661-871-3300.

Februar y / March 2016

KERN BUSINESS JOURNAL

Brand Marketing

When it comes to brand consistency, avoid identity crisis By Hannah Thomasson

e’ve all heard the saying, “People want to do business with people they know, like and trust.” When a business has made itself relatable, it’s easier for consumers to feel like they know the business they’re interacting with. It creates familiarity and fosters loyalty, and it all starts with the brand. A brand is what your business represents and what it stands for. It tells your customers what they can expect from you. It affects how Hannah Thomasson people think of your business and the emotions they have when interacting with it. Managing your brand means managing how customers see your business. It comes down to consistency. Consistency manages perceptions by reminding them of who you are on a regular basis. Brand consistency is what separates a good brand from a growing brand. A business that has a good brand will have a recognizable name and logo, but a growing brand continues to effectively communicate its message to consumers and has instilled trust and credibility. By repeatedly putting your message in front of your audience, you position your brand in the consumer’s mind and reinforce what it stands for and what you offer. Just like getting to know a person, consumers should get to know your brand and its personality traits, creating a trusted and reliable relationship. Here are three steps to build brand consistency: 1. Strategy – Know your brand Consumers won’t know who you are if you don’t know who you are. If you’re confused about your brand identity and what it represents, then that will show up in the message you communicate. Consistency eliminates confusion. Take time to strategize and determine brand traits and personality – its identity. This is the core of your brand and what will be referenced when communicating with your target audience. Ask yourself and your team: What do you want your brand to be known for?

If you could pick three words that a customer will think when they hear your business name, what would they be? 2. Implement Creating consistency in messaging isn’t saying the same thing over and over again. It’s saying something new in the same tone with the same personality that your customers have grown to trust. The brand identity doesn’t change – what you’re communicating does. This is when perceptions are managed. When creating a message to share with customers, keep what the brand represents in mind and use it as a reference to craft the message. Tell them what the brand is about and continue to tell them in every single message across every platform used. Each communication effort should reinforce the brand identity in the consumer’s mind. This is what creates confidence and dependability in the brand over time.

Just like getting to know a person, consumers should get to know your brand and its personality traits, creating a trusted and reliable relationship. 3. Be intentional Be intentional in what is created and shared. Actively evaluate messaging to see if it falls in line with the tone and values of the brand that customers have grown a relationship with. If the message doesn’t fit with the brand, then throw it out. Altering what customers have grown to expect can cause confusion and hurt brand loyalty. Diligently communicate with team members what the brand stands for and how it should be represented – train them if necessary. These are the people who will carry out day-to-day responsibilities of creating and sharing content; it’s essential that they have direction. – Hannah Thomasson is the owner of Exousia Marketing and Consulting in Bakersfield. For more information go to www.exousiamarketing.com or contact her at hannahthomasson8@gmail.com.

Community Action Partnership of Kern

2016

Years of Community Action!

1965 - 2016

Humanitarian Awards Banquet & Fundraiser

Save the Date Secure Your Sponsorship or Tickets Today! Thursday, May 12, 2016 | 6 pm DoubleTree by Hilton 3100 Camino Del Rio Ct., Bakersfield, CA Platinum $20,000

Gold $10,000

• Public Recognition; display of corporate banner at banquet • 2 page color ad in program and exclusive logo placement on cover, and other event materials • Reserved seating for 16 • Recognition on CAPK’s website and Facebook

• Public Recognition • 1 page color ad in program; prominent logo placement on event materials • Reserved seating for 16 • Recognition on CAPK’s website and Facebook

Silver $5,000

Bronze $2,500

• 1/2 page color ad in program; placement of logo on event materials • Reserved seating for 8 • Recognition on CAPK’s website and Facebook

• 1/4 page color ad in program; placement of logo on event materials • Reserved seating for 8 • Recognition on CAPK’s website and Facebook

Table Sponsor $1,000 Per table • Reserved seating for 8 • Table sponsor signage • 1/8-page ad in program

Banquet Program Advertising Also Available.

Single Event Tickets: $85

Tickets/Sponsorship Opportunities: Louis Medina (661) 379-8203 banquet@capk.org or visit:

www.capk.org

CAPK is a 501(c)(3) Private Nonprofit.

KERN BUSINESS JOURNAL

Februar y / March 2016

Employers: Avoid potential wrongful termination lawsuits by following these tips By Matthew Clark

either I nor my firm Chain | Cohn | Stiles handle cases for employers. In fact, we do quite the opposite. We represent employees who have been wrongfully terminated. With this in mind, I offer you some suggestions on what I look for in a wrongful termination case, or, as an employer, some things you should avoid. When evaluating a claim for wrongful termination, I first look to see if the employee was subject to an employment contract. We see Matthew Clark these most often with employees who are members of a union. The union typically negotiates a collective bargaining agreement, and that agreement oftentimes controls the termination of the employment agreement. For example, an employment contract may require that the employer terminate an employee for cause. In most cases I see, the employee is “at-will,” meaning there is no

employment contract. Second, I look to see if my potential client’s employer violated California’s Fair Employment and Housing Act. FEHA strives to prevent discrimination in the workplace. If an employee is terminated for a discriminatory purpose, that employee likely has a claim under FEHA. FEHA prevents discrimination based on age, race, religion, gender, sexual orientation and disability, among other things. In Kern County, we primarily see cases involving age discrimination. Age discrimination falls under the regulatory authority of both FEHA and the Age Discrimination in Employment Act, a federal act. At first blush, age discrimination is simple. If an employer fires an employee over 40 years of age, and then replaces them with someone substantially younger, that fired employee has established a “prima facie” case for age discrimination. Once the fired employee establishes a prima facie case for age discrimination, the burden shifts to the employer to prove that the termination was not discriminatory; hence, the employer must prove that the

employee was terminated for a legitimate, nondiscriminatory, business purpose. If the employer is successful, the employee may claim that the nondiscriminatory purpose was simply a pretext, and that in actuality, the termination was discriminatory – and so the circle of allegations goes.

When evaluating a claim for wrongful termination, I first look to see if the employee was subject to an employment contract. We see these most often with employees who are members of a union. Oftentimes, the motivation for terminating an employee is mixed. For example, an employer may have acted with discrimination, by firing an employee in his or her 60s while replacing that employee with someone in his or her 20s, but the employer may also have evidence that the older em-

ployee was failing to satisfactorily perform his or her job duties. These “mixed-motive” terminations were recently addressed by the California Supreme Court in Harris v. Santa Monica. Harris requires, amongst other things, that the terminated employee show that unlawful discrimination was a substantial motivating factor in the termination. If the employer can show that the termination would have happened anyway, without discrimination, the damages the employee may be entitled to are greatly reduced. It is difficult, if not impossible, to address the complex issues surrounding wrongful termination cases in this short article. Accordingly, I advise any employers with questions to seek out qualified human resources professionals. For more information related to wrongful termination cases and employment law, visit chainlaw.com. – Matthew Clark is a senior partner at Chain | Cohn | Stiles where he focuses on wrongful death, wrongful termination and motor vehicle accident cases, among other injury cases for people in Kern County.

5th Annual

GROWING

OPPORTUNITIES career fair

thursday March 10, 2016 1:30 - 5:30 pm STUDENT UNION MPR california state university, bakersfield

www.csub.edu/bpa

Join us for an opportunity to meet with students seeking career and internship opportunities!

For more information regarding this event, please contact USDA Regional Director Juan Alvarez at juan.alvarez@osec.usda.gov and Angel Cottrell at acottrell@csub.edu or 661-654-3173

Februar y / March 2016

KERN BUSINESS JOURNAL

Februar y / March 2016

HR and legal professionals need to collaborate with risk managers By John Pryor

usiness owners and executives are learning they are not well served when departments in their organization operate only within their own “silo,” with little or no collaboration, crossfunctional communication and even shared goals with other departments. This has never been more important than in the convergence of risk management with both legal and human resources departments. Moreover, the practices of risk management and quality management (Lean Six Sigma) often are also found in John Pryor separate “silos.” Both disciplines, as well as the organization itself, greatly benefit when they “emerge and converge.” Collaboration with law firms has been the norm for decades. Legal review of contracts, including risk transfer clauses with esoteric headings such as “indemnification,” “subrogation waiver” and “force majeure,” have saved organizations lots of money and avoided the personal stress inherent in litigation. For this reason, I’d like to focus only on the opportunities for convergence of risk management with HR disciplines, tools and best practices. Enlightened HR professionals are already moving ahead on this front, yet more work is needed.

• •

workers’ compensation and other employee benefit services. • Some payroll service providers are including workers’ compensation in their “package” – or at least producing payroll reports to insurers.

In reality, all departments should collaborate with risk management professionals. HR departments can be models for others to emulate. Obviously, this would exclude natural risks, such as earthquakes and floods, plus property risks, such as buildings, business income, vehicles, mobile equipment, supply chain risks, etc. However, when you drill down to identify the root cause, such losses, most find human error. This is where quality management (LSS) plays a major role with its priority of reducing process variation. It minimizes the human element with its focus on process design – yet it’s humans who design processes! Even the severe outcomes of natural disasters can be mitigated through people-based practices, such as emergency response training, disaster planning and the all-important (too often neglected) business continuity planning. Hurricane Katrina was a tragic example of this neglect. Obvious examples are employee allegations of wrongful termination, sexual harassment, discrimination, etc. Equally obvious are driver negligence and violations of employee safety standards. Not so obvious are human errors in the design of products or decisions made by executives construed as “wrongful acts” that result in major damages awarded to plaintiffs. Here are examples: One area seldom addressed in traditional risk manageHR departments are assuming responsibility for workers’ ment is that of compliance with the multitude of regulacompensation, in collaboration with their risk manager tions imposed on organizations by all levels of government. and insurance broker, of course. It continues to amaze me how many compliance issues are Professional employer organizations are “co-employers” imposed on the nonprofit sector. Hundreds lose their nonwith organizations in a contract that includes payroll, profit status each year because of noncompliance. They are

subject even to certain provisions of federal laws, such as the Sarbanes-Oxley Act (records retention, whistleblower policy, youth protection policy, etc.). Private sector regulations are seemingly unending, with significant penalties and fines for noncompliance. In both sectors, HR, legal and risk management departments need to collaborate with one another to create systems and processes that keep their organization out of regulatory trouble and costly courtroom litigation. In summary: • Risk management needs to be a focus of all departments. • HR professionals are well positioned to “emerge from their silo” and converge with risk management counter parts through cross-functional communication, strategic planning and joint monitoring of results over time. • Such collaboration also should incorporate the principles, tools and best practices of LSS to reduce variation in systems and processes, coupled with a strong (external and internal) customer focus plus effective professional development of employees. • Both HR and risk management staffs should have ongoing relationships with their organization’s legal counsel where risks are transferred through contracts. Working through the labyrinth of governmental compliance is also critical. Then all involved can enjoy one of the principal purposes of risk management, viz., a quiet night’s sleep. – John Pryor, CPCU, ARM is a risk management consultant in Bakersfield. His book, “Quality Risk Management Fieldbook,” published in 2014 by the International Risk Management Institute in Dallas, demonstrates the value of converging risk management with quality management (Lean Six Sigma) throughout any organization.

Februar y / March 2016 Continued from page 12 adults reported using an attorney in 2015. Consumer demand is down 12 percent from 2014 and dropped 23 percent compared to 2013 (Scarborough Research, 2015). While traditional law firms compete for a larger “slice” of a smaller legal “pie,” the number of nontraditional and on-demand legal services in the United States continues to grow. According to Georgetown Law’s 2015 Report on the State of the Legal Market: “The proliferation of nontraditional service providers has been quite dramatic over the past few years. The trend responds to increased client demands for efficiency and cost effectiveness in the delivery of legal services and reflects the growing willingness of clients to disaggregate services among a variety of different firms and providers.” New competitors like Quicklegal are leveraging the power of mobile technology to provide instant access to lawyers via custom mobile applications. Clients will no longer have to ask their friends for referrals, wait 24 hours after posting their question to get an answer, or have to dial an 800 number. To compete in this new buyer’s market for legal services, traditional firms must shape their marketing strategy based on consumers’ changing media habits and the way they now search for an attorney. According to Scarborough Research, technology use among attorney users in Kern County shifted significantly over the past year. Compared to 2014, the number of attorney users who own a smartphone

KERN BUSINESS JOURNAL

jumped 28 percent in 2015, while those with tablets rose 10 percent. In addition, 66 percent of this consumer segment used the Internet for search in the past 30 days. Social media use is also growing, up 33 percent compared to 2014. Specifically, use of Facebook grew 30 percent year over year among attorney clients, use of Google+ doubled and use of LinkedIn spiked 500 percent. Compared to all Kern adults, attorney clients are 12 percent more likely to use Facebook, 31 percent more likely to use Google+ and 285 percent more likely to use LinkedIn. In light of these trends, attorneys who want to get their message in front of prospective legal clients must have a mobile friendly website and a visible presence in online search. It’s not enough to simply set up a business profile on social media channels. Attorneys must also invest the time to become active in social media, because the more engagement their posts get, particularly on Facebook and Google+, the higher the authority that Google will assign to their website. Looking toward 2016, Kevin O’Keefe, CEO of LexBlog, predicts: “The line between business development offline and business development online will begin to disappear. Understanding how to use the Internet for building relationships and a word of mouth reputation will be as important as knowing how to take someone to lunch or networking at a cocktail party.” – Lisa Beason is the market research manager for TBC Media.

WHEN IT COMES TO YOUR INVESTMENTS, THE FAILURE TO GET A SECOND OPINION COULD AFFECT YOU FOR THE REST OF YOUR LIFE. CALL JORDAN LEWIS AT BARNES WEALTH MANAGEMENT GROUP TODAY. (661) 322-9799 Investment advisory services offered through Barnes Wealth Management Group, a Registered Investment Adviser with the State of California Department of Business Oversight

Jordan D. Lewis | Financial Planner Barnes Wealth Management Group 5060 California Ave. Ste 1020 Bakersfield, CA 93309 Phone: (661) 322-9799 Fax: (661) 631-0655

YOUR WEALTH. OUR FOCUS.

KERN BUSINESS JOURNAL

The rise of organic farming By John Egan

ith organic food sales in the U.S. soaring to nearly $36 billion in 2014 and the organic category now accounting for close to 5 percent of all U.S. food sales, organic farmers are reaping considerable benefits. A survey by the U.S. Department of Agriculture’s National Agricultural Statistics Service found that the more than 14,000 organic farms in the U.S. sold $5.5 billion worth of organic products in 2014. That was a

72 percent jump compared with 2008. For those unfamiliar with it, organic farming goes beyond simply excluding genetically modified seeds, chemical pesticides and chemical fertilizers. “Organic farming can be defined by the proactive, ecological management strategies that maintain and enhance soil fertility, prevent soil erosion, promote and enhance biological diversity, and minimize risk to human and animal health and natural resources,” according to eXtension.org. In this infographic, LawnStarter offers an overview of the state of organic farming in the U.S.

Februar y / March 2016

KERN BUSINESS JOURNAL

24/7/365 PHOTO BY CASEY CHRISTIE

Beale Memorial Library

Legal websites and computer assistance By Katherine Ross

he Kern County Library provides access to resources that enrich lives, and that includes laws and computers. Our library staff can assist with your legal research, and our Personal Computer (PC) Tutor program helps with the second. At least six of our branch libraries offer free computer tutoring by appointment: Beale, Southwest, Frazier Park, Kern River Valley, Tehachapi and McFarland. McFarland’s library offers tutoring in both English and Spanish. Expert staff and volunteer tutors assist with a wide variety of computer subjects, specializing in computer and Internet basics. This is important, because many legal resources are most readily available online, and yet a mere Google search provides a wealth of misleading websites mixed in with the reliable ones. Library staff can recognize genuine, trustworthy legal websites and we are happy to share what they know. The following websites connect you to local, state and federal law: Bakersfield Municipal Code • www.qcode.us/codes/bakersfield Here you can find local ordinances on subjects such as animals, business licenses, streets, and zoning. Kern County Code • www.municode.com/Library/Library. aspx Select California, then click on Kern County. County codes include many of the same topics as municipal codes and a few others, such as roads, parks and utilities. This site also links to municipal codes of other states. California Code of Regulations • www.ccr.oal.ca.gov These regulations are compiled by state agencies and go into more detail than the codified California state laws. California Legislative Information • www.leginfo.ca.gov Click on “California Law” to find California codes. Other choices include bill information, for laws recently passed or under consideration, and your legislature. This site

includes the 29 California codes covering various subjects.

Affordable Access to Quality Healthcare

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California Judicial Branch • www.courts.ca.gov This site links to California forms, court rules and some self-help law information. California Home Page • www.ca.gov If you’re not finding what you need in the laws and regulations, search this site, which includes a link to state agencies. Several agencies include their laws and regulations at their sites. Congressional Laws and Bills • www.congress.gov This site, formerly known as Thomas (for Thomas Jefferson), is the official website for United States law and tracks bills from the past 40 years. Code of Federal Regulations • www.gpo.gov/fdsys Click “Code of Federal Regulations.” This site also has the Federal Register, official daily publication for rules, proposed rules and notices of federal agencies and organizations, as well as executive orders and other presidential documents. U.S. Code • www.uscode.house.gov This is the official online source for federal law. It is divided into subject areas, and it may be searched by keyword. USA.gov • www.usa.gov This site, unlike Google, only searches official United States websites. These legal websites are the most basic and important, but there are other good legal websites out there, and we can help you find them. For library hours and locations, visit our website at www.kerncountylibrary. org. Additionally, try the Legal Information Reference Center, available 24/7 to library cardholders in the “Legal” section of our “Research” link: www.kerncountylibrary. org/research. – Katherine Ross is a librarian at Beale Memorial Library, the main branch of the Kern County Library system.

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KERN BUSINESS JOURNAL

Februar y / March 2016

Kern County businesses are being crushed by ‘California’s legal way of extortion’ By Shannon Grove hen Bakersfield business owner Larry Jenkins decided to give his employees a bonus for working safely, he never imagined it would get him hit with a $14.5 million lawsuit. But that’s what happened. Why? Because lawyers have found a way to use a little-known state law called the Private Attorney General Act (PAGA) to extort million-dollar settlements from companies over minor state labor code violations. Jenkins’ offense was not including the hourly bonus in the regular pay rate used to calculate his employees’ overtime rate, a labor code requirement he didn’t know about. Over the past several years, dozens of companies right here in Kern County and hundreds throughout California have faced an increasing number of frivolous lawsuits. As one of Kern County’s representatives in the state Assembly, I have been fighting for a legislative solution for the past two years. Finally, this past year we were able to make some headway, but there is still so much more to do. For those unfamiliar with PAGA, the act was signed into law in 2004 to enable employees to directly sue their employers for labor code violations. I’m fine with this. Employees deserve protection from bosses who abuse them or cheat them out of their agreed upon wages. Previously, California Labor & Workforce Development Agency (LWDA) oversaw the enforcement of labor laws, but many times it didn’t have the manpower to investigate alleged violations. PAGA meant to remedy this situation in order to protect workers from abuse, but enterprising and unscrupulous lawyers perverted the law into a moneymaking machine to benefit themselves. Here is how it works: An attorney finds an employee or former employee within a particular company and files a labor complaint with LWDA, not only on behalf of that employee, but on behalf of the company’s entire workforce.

These types of class action lawsuits are easier to pursue for attorneys using PAGA’s less stringent procedural requirements. If the agency doesn’t launch an investigation within 33 days, which happens in most cases, the attorney can then file the lawsuit with the state court. Typically, attorneys accuse companies of wage statement errors or not giving proper meal breaks. Five such PAGA lawsuits were filed over the past few months against Kern County companies using similar allegations. But these accusations are only used as a pretense to get a judge to give an attorney permission to troll through a company’s books looking for labor code violations, no matter how insignificant. This is what happened in Jenkins’ case. And when the lawyers found he wasn’t including the amount of the safety bonus in the rate used to pay workers’ their overtime, they used PAGA to assess penalties between $100 and $200 for every incorrect pay stub for every employee going back a year. That’s how PAGA penalties skyrocketed to $14.5 million. Jenkins remembers meeting with the arbitrator, a former judge, and being told he violated the law and he had no case. Then in a moment of candor, the arbitrator told Jenkins, “This is California’s legal way of extortion.” This is a travesty and a great injustice. Our government is supposed to protect us from extortion and theft, not encourage or enable it. California has been notoriously labeled the country’s top judicial “hellhole” for years, but it doesn’t have to be this way. I have been sounding the alarm in Sacramento for the past two years and finally people are starting to listen. I found a friend in Christine Baker, the director of the Department of Industrial Relations. She shares my concerns and has made Gov. Brown aware of the PAGA abuses. Even some Democrats on the Assembly Labor Committee, with whom I regularly butt heads, have acknowledged the problem. Last year, with their help, I was able to push through legislation signed by Brown that enables

employers to fix wage statement errors that either lacked inclusive pay period dates or the employer’s legal name and address, before having to face a costly lawsuit. California employers throughout the state lost millions of dollars and laid off hundreds of workers as a result of lawsuits filed over these minor administrative errors. This change in the law provided needed relief, but the PAGA extortion continues. In 2016, I plan to introduce a PAGA legislative reform package that will cap PAGA penalties, give the state more oversight on which PAGA lawsuits that can be filed and limit PAGA’s ability to be used as a remedy for the entire labor code. The irony of all this is that a law passed to protect employees from employer abuse is being used to destroy the livelihoods these employers provide. Jenkins eventually settled his PAGA case for $1.5 million, but he says he is done with California. This is his second PAGA lawsuit, and there is no guarantee lawyers won’t come back for more. Jenkins has bought property in San Antonio, Texas, where he plans to move his business. Those who take an honest look at this issue see the perversion of justice this law is enabling. That’s encouraging. We just cannot give up hope. Our state should be rewarding businesses that excel at serving their customers and treating their employees fairly, not crushing them for not keeping abreast of the state’s constantly changing administrative rules. The last thing Kern County needs is for the state to give companies a reason to lay off more workers, move out of state or close down altogether. This abuse of power needs to stop. – Shannon Grove is the CEO of Continental Labor and Staffing Resources Inc., and represents the citizens of California’s 34th Assembly District, covering a majority of Kern County.

Februar y / March 2016

KERN BUSINESS JOURNAL

Congress complicates Social Security strategies

nce upon a time – not so long ago – Americans nearing their full retirement age of 66 walked with a bit of a swagger, as they anticipated using tactics that could expand their Social Security income by tens of thousands of dollars. They planned to use strategies created when Congress passed the Senior Freedom to Work Act of 2000, which was designed to encourage Steven Van Metre cash-strapped seniors to work well into old age to help stretch their retirement savings. Relatively few seniors knew about these windfall strategies. Basically, “those in the know” were aging boomers who closely monitored their retirement nest eggs and who had alert financial advisers helping them. But with little fanfare, Congress passed the Bipartisan Budget Act on Nov. 2, 2015, which eliminated these strategies and left a handful of eligible seniors only until April 30, 2016, to claim lucrative benefits. The Budget Act made several nuanced changes to Social Security. But the ones that should mostly concern seniors are those that eliminated the “file-and-suspend” and “restricted application” tactics. Here is how these tactics worked:

File-and-suspend – My client Bill is 65 years old and still working. He plans to retire next year, but he wants the amount of his monthly Social Security checks to continue to significantly grow. For this to happen, he must delay collecting Social Security until he is 70. But Joan, Bill’s wife, is just 61. She has worked too few years to qualify for her own Social Security. Joan wants to begin receiving her spousal benefit checks, which are based on Bill’s benefit calculations, at age 62. So under the old rules, Bill could file for his Social Security and immediately “suspend” his application. This would allow Joan to collect her spousal benefits, while Bill’s benefits continue to multiply. File-and-suspend applies to more than spouses. I even had a client who had married late in life use the tactic to help fund his two young children’s college educations. An attorney, my still-working client, filed for Social Security at 66 and then suspended his application in order to obtain monthly “dependent checks” of about $1,100 each. The money, which the children will receive until they are 18 years old, is being set aside in education accounts. With the stroke of a pen, the file-and-

suspend tactic has been eliminated for most retirees. Lucky for Bill, he will turn 66, the full retirement age, on March 4. He has been “grandfathered into the system.” If he acts quickly, he can still reap expanded Social Security benefits using file-andsuspend.

Restricted application – My clients Bob and Mary are both 60 years old. At the full retirement age of 66, Bob expects to receive $25,000 a year from Social Security and Mary expects to receive $20,000. Their plan was for Mary to file for her Social Security and Bob to apply for spousal benefits, which would have been about $10,000 a year. Then, when Bob reached 70 years old, he would apply for his own Social Security, which would have grown to an expected $39,600. Under the new rules, Bob can no longer collect restricted spousal benefits when he reaches 66 and let his own benefits grow. When the couple files for Social Security, each will receive the benefit that is the highest based on their individual entitlements. Social Security provides at least half the income to Americans aged 65 years and older. For about 25 percent of that age group, it accounts for 90 percent. All Americans, whether they are living on the “financial brink,” or amassing hundreds of thousands of dollars to fund their retirements, must carefully include Social Security in their future income strategies. A critical decision that must be made is when to “retire” and begin collecting Social Security benefits. When lucrative loopholes existed, such as the file-and-suspend and restricted application tactics, most common sense advice was for retirees to delay until at least 66, and better until 70, to file for Social Security. This brave new world somewhat complicates the decision. Many factors can enter into the consideration, including longevity risks. For some, filing early might make sense. Several online resources, including MaximizeMySocialSecurity.com, can help people nearing retirement evaluate their options. But it is critical to act quickly and seek advice to take advantage of grandfathered benefits and to adjust future retirement saving strategies. – Steven Van Metre is a Bakersfield certified financial planner who specializes in retirement income strategies. He also is a Bakersfield College Levan Institute for Lifelong Learning instructor and an adviser to local companies preparing their employees for retirement. For more information, visit www.stevenvanmetre.com.

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KERN BUSINESS JOURNAL

Februar y / March 2016

Electronic time and attendance: A logical step in nonprofit’s business evolution By Louis Medina

anaging staff time and attendance, payroll and benefits for an 800employee agency serving nine central California counties can be a daunting enterprise – especially if a lot of the work is done on paper. But transitioning seamlessly to a paperless Human Capital Management system can be just as challenging – unless the right resources Louis Medina and technology are in place. That is what Community Action Partnership of Kern learned in the fall of 2015, when it successfully implemented ADP’s Workforce Now – an integrated HCM platform designed specifically for midsized businesses – under the leadership of CAPK’s Payroll and Human Resources Information Systems Manager Eric Kelley. It was a project that the agency had wanted to implement since around 2010, said Kelley, who came on board with CAPK just a little over a year ago. “Several sincere efforts at paperless time and attendance implementation were attempted,” he said. “However, such a transition cannot interrupt ongoing operations

and unless a commitment is made to assign someone to lead the effort in a dedicated, focused way, implementation is difficult.” He credits CAPK senior leadership and board of directors with the vision to make administrative operations as efficient and cost-effective as possible. “The change to electronic time and attendance was a logical step in our natural business evolution,” CAPK Executive Director Jeremy Tobias said. “It is more accurate, less prone to human error, increases our efficiency and productivity, and lessens the time spent on calculating payroll.” Jeremy Zager, ADP district manager for major account services in the Kern, Antelope Valley and Santa Clarita areas, said: “Our goal is to help companies streamline their HR processes so they can spend less time worrying about their back-office needs and more time focusing on the strategic part of their business. By automating the payroll, time and attendance, and reporting processes, HR no longer has tons of paper files to manually update and you empower your employees through self-service. That’s good for employees and helps organizations build better workforces.” At CAPK, every employee, whether hourly or salaried, part or full time, is given login credentials for managing their electronic timesheet, which includes tracking lunch breaks, sick days, vacation requests and time off accruals. Supervisors are

New tax law changes in 2016 By Joel A. Bock

s 2015 came to a close, several small businessfriendly, previously expired tax provisions were retroactively extended and some provisions were made permanent. The permanent nature of certain provisions should provide for a more stable environment for small business owners to operate their businesses and make decisions regarding the best use of capital. With the passage of the “Protecting Americans from Tax Hikes Act of 2015,” the following are a few of the tax provisions that were extended: • The R&D tax credit was made permanent. Additionally, for years Joel A. Bock beginning after Dec. 31, 2015, the credit was expanded to allow eligible small businesses (i.e., $50 million or less in gross receipts)

given administrative rights in the system to manage their own timesheet, as well as approve time off requests and make corrections on their employees’ timesheets.

“The change to electronic time and attendance was a logical step in our natural business evolution. It is more accurate, less prone to human error, increases our efficiency and productivity, and lessens the time spent on calculating payroll.” – CAPK Executive Director Jeremy Tobias

Thorough training and a rollout period that involved using ADP’s automated system in tandem with paper timesheets for backup documentation were the keys to a successful transition. “We created a series of training videos and published them on YouTube for our employees to watch and learn from,” Kelley said. “You quickly realize that, with a technologically diverse workforce, you must explore a combination of training approaches, from in-person, to hands-on, to on-demand training.” CAPK’s ADP time and attendance system is certainly robust, Kelley said.

to offset the credit against the alternative minimum tax and small businesses with $5 million or less in gross receipts will be allowed to claim a credit of up to $250,000 per year against the employer FICA tax. • A variety of fixed asset expensing elections have been extended and expanded: — The $500,000 expensing limit for IRC §179 was made permanent as well as indexed for inflation beginning in 2016. Additionally, the definition of qualifying §179 property has been permanently extended to include computer software and qualified real property and expanded to include heating and air conditioning units. — The 50 percent bonus depreciation for eligible property has been extended through 2017 and then will begin to phaseout (40 percent in 2018 and 30 percent in 2019) until it expires at the end of 2019. Of particular interest to certain farmers is a provision that permits certain trees, vines, and plants bearing fruit or nuts to be eligible for bonus depreciation when planted or grafted, rather than when placed in service. • The reduced (five year) built-in gains recognition period for S-corporations was made permanent. • The Work Opportunity Tax Credit has been extended to qualified workers who begin work for an employer before Jan. 1, 2019, and expanded to apply to qualified long-term

Besides employee count, the customized, cloud-based system takes into consideration CAPK’s multiple worksites, scores of supervisors, special scheduling needs for different programs and allocation of worked hours to particular funding streams. The system also provides the flexibility to clock in and out using a variety of options, including an employee’s desktop or laptop computer, a phone dial-in function, a mobile app for smartphones and tablets and a wall-mounted fingerprint scanner available at certain CAPK facilities. Each employee record can be analyzed across integrated technology platforms that track data related to time and attendance, payroll, benefits and HR, including for purposes of complying with Affordable Care Act reporting requirements, ADP sales executive Nick Cunico said. “ADP is heavily invested in research and development in order to keep up with automation,” Zager said of the company, which has been delivering payroll-processing services for more than 60 years. “Most of our innovation is initially based on feedback from our clients. We listen to our clients and ultimately provide them with the tools to help them work the way that’s best for them.” – Louis Medina is the outreach and advocacy manager for Community Action Partnership of Kern.

unemployed individuals (unemployed for 27 weeks or more) for work beginning after Dec. 31, 2015. The “2016 Consolidated Appropriations Act” extends the energy credit for solar energy equipment to property on which construction begins before 2022. However, the credit is reduced from 30 percent to 26 percent for 2020 and 22 percent for 2021. The credit is reduced to 10 percent for property on which construction does not begin before 2022 or which is not placed in service before 2024. One additional beneficial change in tax policy came in the form of IRS Notice 2015-82. The Notice increases the de minimis safe harbor limit in Treasury regulation §1.263(a)-1(f)(1)(ii)(D) from $500 to $2,500 for taxpayers without an applicable financial statement. This change should reduce the administrative burden of taxpayers regarding capitalization of repairs. Accordingly, taxpayers should be certain to increase the limit included in their capitalization policy to be in compliance with this new limit. Please consult your tax adviser to determine how these tax laws impact your specific situation or contact Joel A. Bock, CPA, MST at 661-834-7411 or via email at joel@ dpvb.com.

– Joel A. Bock, CPA, MST is a partner in Daniells Phillips Vaughan & Bock, a Bakersfield accounting firm.

Februar y / March 2016

KERN BUSINESS JOURNAL

Februar y / March 2016