KERN Journal Business
Vol. 7, No. 1
A MEMBER O F T HE
TB C M E DIA FAM ILY
Cover story
New year, new laws: 2018 employment law update
February / March 2018
World Ag Expo schedule on Page 24
Legal & HR Issue
By Jerry Pearson
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s we welcome a new year, business owners and employers should also be prepared to welcome a number of significant new laws that could affect whether or not their business is in compliance with California state law. This legislative update will address new labor laws and changes to existing laws that that could impact California businesses in 2018, including expanded protections to parental leave, new restrictions on applicant inquiries, continuing increases to the minimum wage and more. It is important to note that every employment law situation is unique and this labor law update is not a replacement Jerry Pearson for legal counsel. If you have questions on how these changes may impact your business, contact an employment law attorney. Unless otherwise specified, the following legislative changes went into effect Jan. 1.
Parental Leave Protections Expanded This new law expands parental leave protections to individuals who work for employers with at least 20 employees. Under the new law, employers with at least 20 employees must allow an employee who has more than 12 months of service with the employer to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption or foster care placement. The new law expands the protections afforded under existing law, which had previously applied only to employers with 50 or more employees. Continued on Page 16 Kickoff for Give Big Kern, a countywide celebration of giving. This year, it is on May 1. Story on Page 22.
Kern Business Journal P.O. Bin 440 Bakersfield, CA 93302
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INSIDE
Sexual harassment is no joking matter. Get some tips of what employers should do. Page 12
PR disaster lessons to be learned from 2017. Page 26
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Journal KERN Business
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Editor’s Note
Showcasing Kern County business and industry February / March 2018 Vol. 7, No. 1 Kern Business Journal is a bimonthly publication of TBC Media. Copies are available from The Bakersfield Californian, Kern Economic Development Corp. and Greater Bakersfield Chamber of Commerce.
Publisher Ginger Moorhouse President/CEO Michelle Chantry Assistant Managing Editor Mark Nessia Art Director Glenn Hammett Graphic Designer Holly Bikakis To submit a story kbj@bakersfield.com To advertise Diana Bolin dbolin@bakersfield.com 661-395-7521 To subscribe 661-392-5777
Mind your manners
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s children, good manners were hammered into our skulls day in and day out. Humans born with many innate abilities, but polite behavior and proper etiquette are not one of them. It must be cultivated and nurtured from an early age so it becomes second nature. Things like washing our hands, covering our mouths when we cough, saying please and thank you, and apologizing when we are in the wrong are things (most of us) do without a second thought but they are habits instilled in us by our parents, teachers and peers years and years ago. It just makes sense to be polite and courteous to one another — common sense, even. But common sense isn’t so common sometimes. Mark Nessia With all the harassment claims popping up over the last several months, it leaves me wondering, “What went wrong?” At what point do we go from being polite children taught to be nice to one another to working professionals who don’t apply the same logic to co-workers? One thing many of the accused making headlines have in common is they are people of authority and with power comes the potential for its abuse. Epitomized by the Stanford Prison
Experiment in 1971 in which students acting as “prison guards” began abusing their “wards,” who were also fellow students, an increase in power and influence has the potential to cause even the most law-abiding citizen to make questionable decisions. But as Uncle Ben once told Peter Parker, aka Spider-Man: “With great power comes great responsibility.” A large amount of trust is placed on people of authority, public figures, role models, etc. and that is something that should not be mistreated. When in doubt, go back to the basics: Do unto others as you would have them do unto you. Reverse
the roles and ask yourself if you’d be uncomfortable in that position or situation. Good workplace ethics is a big point of emphasis in this issue of the Kern Business Journal and should always be a focal point in all professional environments year-round. Just because we are older doesn’t mean we should forget the lessons implanted in us as children because they are applicable all throughout life. Make a good first impression. Be punctual. Think before you speak. Be respectful to others. Overall, mind your manners.
Business at-a-glance Rector elected as KEDF chair
Bill Rector was elected chair of the Kern Economic Development Foundation, bringing a broad range of experience to the position. Rector is the executive director of Western Energy Services Training and Educating Center and previously served as chief of police for the Bakersfield Police Department for over five years. Born and raised in Bakersfield, Rector majored in criminology at Fresno State before returning to his hometown in 1982 and joining BPD as an officer, assigned to patrol his childhood neighborhood. He earned a master’s degree in counseling at CSU Bakersfield. Rector helped the BPD earn the Helen Putnam Award for Excellence for its “A Life Interrupted” program that educates youths about driver and occupant responsibility. At WESTEC, Rector says his best accomplishments are the daily wins of putting people back into the workforce. “Giving these people basic training for the workforce springboards them back into getting a. job and making money again, which can ultimately change their lives,” he said.
Nagy steps down from Mission Bank board Bill Rector
George Nagy has retired from the boards of Mission Bancorp and Mission Bank effective Dec. 21, 2017. Nagy, the former CEO of Mojave Desert Bank, has been a director
for over five years. He joined the board as part of the merger between Mojave Desert and Mission Bank in 2013. “The last five years has seen tremendous growth in our legacy Mojave Desert locations and all the other Mission Bank locations,” said Nagy. “Mission Bank is uniquely suited to continue delivering the type of banking service, along with a level of advisory and execution currently missing in the local markets. “The merger has been a home run for customers, team members and shareholders. I know the bank is in strong hands with the remaining board members, CEO and management team, and as a shareholder, I will follow the bank’s growth in the years to come.” “George has been a key member of our board and the success of Mission Bank over the last five years. He built a tremendous customer base in the Antelope Valley markets, and we were fortunate to build on his legacy. The board started a process to evolve its directors a few years ago. We have added a couple strong new members and will continue to evaluate our needs. Although we do not plan to immediately select a new director, we will continue the process of board succession,” said A.J. Antongiovanni, Mission Bancorp’s president and chief executive officer. “Our board has been a source of vision and strength for our first 20 years of operations. We will evolve the board to meet the needs of the bank in our next 20 years.”
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Chamber roundup February / March 2018 events
Greater Bakersfield Chamber of Commerce Feb 16 — Government Review Council; 7:30-8:30 a.m.; Location TBD. Feb. 19 — Chamber closed — President’s Day Feb. 20 — BYP Pub Club, 5:30-7:30 p.m.; $5 at the door; Eureka!, 10520 W. Stockdale Highway Feb. 22 — Chamber After Hours Mixer; 5:30-7:30 p.m.; $5 members; $10 nonmembers; The Station — Kern County Fire Fighters, 7900 Downing Ave., Suite D. Feb. 23 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. March 2, 9, 23 and 30 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. March 6 — Philanthropy on Tap; featured nonprofit: Independent Living Center of Kern County; 5:30-7 p.m.; Imbibe Wine and Spirits Merchant, 4140 Truxtun Ave. Free to attend. March 8 — Pancakes & Partnerships Procurement Breakfast; check-in/networking, 7:30 a.m.; program, 8-10 a.m.; $25 members; $50 nonmembers; Greater Bakersfield Chamber of Commerce, 1725 Eye St. March 14 — Kern County Economic Summit; 7-11:30 a.m.; DoubleTree by Hilton,
3100 Camino Del Rio Court; Tickets available at kedc.com. March 15 — Labor Law and HR Forum; check-in/networking, 7:30 a.m.; program, 8-10 a.m.; $25 members; $50 nonmembers; Greater Bakersfield Chamber of Commerce, 1725 Eye St. Presenting sponsor: Young Wooldridge LLP; co-sponsor: LeBeau-Thelen LLP. March 16 — Government Review Council; 7:30-8:30 a.m.; Location TBD. March 22 — Chamber After Hours Mixer; 5:30-7:30 p.m.; $5 members; $10 nonmembers; Southern California Orthopedic Institute, 2400 Bahamas Drive, Suite 200. April 3 — Philanthropy on Tap; featured nonprofit: Youth 2 Leaders Education Foundation; 5:30-7 p.m.; Imbibe Wine and Spirits Merchant, 4140 Truxtun Ave. Free to attend. April 6 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. For more information, contact the Greater Bakersfield Chamber of Commerce at 661-327-4421 or visit www.bakersfieldchamber. org.
The Greater Bakersfield Chamber of Commerce holiday mixer at Metro Galleries.
Finance
Major tax reform includes new business provisions, new tax planning opportunities By Joel A. Bock
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n Dec. 22, 2017, the Tax Cuts and Jobs Act was signed into law. Hailed by many as the first major tax reform since the Tax Reform Act of 1986, the legislation sought to lower marginal tax rates while also eliminating certain deductions. While the increase in the standard deduction amount and the elimination of the personal exemption will simplify the tax Joel A. Bock return filing process for some wage-earning taxpayers, the TCJA includes a variety of new business provisions that will likely provide new tax planning opportunities. Prior to the TCJA, the United States had one of the highest statutory corporate tax rate structures in the world (including eight marginal tax rates with a top rate of 35 percent). The change away from the
prior rate structure to a flat 21 percent tax rate is a welcome change for very large corporations; however, smaller corporations may experience a slight tax increase due to the removal of the 15 percent marginal rate. Individual income tax rates were reduced as well from a highest marginal tax rate of 39.6 percent to a new highest marginal tax rate of 37 percent. In an effort to provide a tax benefit to pass-through entities and sole proprietorships, the TCJA included a new deduction (subject to certain limitations based upon income, type of business, wages and depreciable assets) equal to 20 percent of “qualified business income.” While most of the TCJA provisions are effective for tax years starting on or after Jan. 1, 2018, the enhanced accelerated depreciation provision allowing for 100 percent depreciation of new or used fixed asset acquisitions is effective for asset acquisitions occurring on or after Sept. 28, 2017. Additionally, the TCJA increases the amount that a taxpayer may expense under §179 from $510,000 to $1,000,000 effective on or after Jan. 1, 2018.
In an effort to provide a tax benefit to passthrough entities and sole proprietorships, the TCJA included a new deduction (subject to certain limitations based upon income, type of business, wages and depreciable assets) equal to 20 percent of “qualified business income.” There was early hope in the tax reform process that the alternative minimum tax would be completely repealed. While complete repeal did not occur for individual taxpayers, the AMT was repealed for corporations. Substantially fewer individual taxpayers will likely be subject to AMT due to both the increase in the AMT exemption amounts and corresponding phaseout of the exemption amount, as well as the limitation of the state and local tax deduction.
The TCJA limits the deduction for net interest expense by a business to 30 percent of adjusted taxable income. This may alter the debt/equity structure of certain business; however, this provision will not apply to businesses with average annual gross receipts of $25,000,000 or less. A significant change in the estate and gift tax area was an increase in the federal estate and gift tax unified credit basic exclusion amount effective for decedents dying and gifts made after 2017 and before 2026. The amount (adjusted for inflation from the 2010 base year) will be $11,200,000 per individual ($22,400,000 for married couples). As expected with any tax legislation of this magnitude, substantial clarification and guidance from the IRS is needed. This guidance will likely take months and possibly years to become available. Please consult your tax adviser to determine how the TCJA may impact your specific situation. Joel A. Bock, CPA, MST is a partner in Daniells Phillips Vaughan & Bock, a Bakersfield accounting firm.
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KERN BUSINESS JOURNAL
Finance
What exactly is the new 20% business income deduction? By Brittany Flemming
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espite the fact that countless articles have been released that essentially reduce the latest “simplified” tax reform to mere bullet points, the law contains some pretty complex topics. One such complexity is the new 20 percent deduction available on “qualified business income” that has caught the attention of so many business owners. This provision started out as something quite simple, but gradually morphed into something else entirely. It is filled with words that make you stop and wonder, “What exactly does that mean?” In addition to these trigger words, it seems that after every part of the code you could insert “subject to special rules and limitations.”
What does the deduction do for you? If you are a shareholder in an S-corp, a partner in a partnership, or the owner of a sole proprietorship, this new deduction applies to you. Whether or not it actually benefits you depends on several factors. If your taxable income is $157,500 or less ($315,000 for joint filers), you will receive a new deduction. If your taxable income exceeds the threshold amount, your deduction will be limited based on the amount of W-2 wages your company pays and how much property your company owns. Businesses that provide the owner with high taxable income, own no property and pay no wages are in the worst-case scenario with regard to this new provision. These types of operations will receive no benefit from the new deduction. Sole proprietors will most commonly find themselves in this predicament.
What is qualified business income? The definition of qualified business income is fairly straight forward. Qualified business income is ordinary income, less ordinary deductions, that a taxpayer earns from S-corporations, partnerships and sole proprietorships. Not all income that is passed through qualifies as qualified business income. Capital gains and losses, dividends and interest income are all excluded from the definition of QBI. It is important to understand that QBI does not include any wages or guaranteed payments received from any pass-through entities. In addition to this caveat, if an owner of an S-corporation does not take a wage but provides significant services to the company, they could, in the case of an IRS audit, be deemed to have taken a salary. The result of such an audit adjustment would be a decrease in QBI and ultimately a lower QBI deduction. Thus, taxable income would increase, resulting in a higher tax bill.
Limitations Recall from earlier, the QBI deduction is limited to the lesser of 20 percent of QBI or the greater of: • 50 percent of the W-2 wages with respect to the business, or • 25 percent of the W-2 wages with respect to the business plus 2.5 percent of the unadjusted basis of all qualified property. With reference to the calculation of any taxpayer’s QBI deduction, the wages and property basis used are the partner or shareholder’s allocable portion, as opposed to the businesses entire amount. That leaves one more big question: What does the “unadjusted basis of all qualified property” mean? Qualified property is tangible property subject to depreciation. This means no inventory and no land. The unadjusted basis is specifically defined in the code as the unadjusted basis (usually cost) immediately after acquisition.
Escaping the W-2 limitation Now that we have all the definitions hammered out, let’s talk about the exception to the W-2 limitation. If a taxpayer’s taxable income (not adjusted
gross income) is less than the threshold amount for the year, then the W-2 limitations simply does not apply. For 2018, the limitation is $315,000 for married filing joint and $157,500 for everyone else. Once the taxable income begins to exceed the threshold, the W-2 limitation phases in until the taxable income is $100,000 (for married individuals, $50,000 for everyone else) higher than the threshold.
An example John is a 30 percent shareholder of JKL Corp. from which he receives $230,000 of QBI. JKL Corp has $50,000 of unadjusted basis in qualified property and paid $250,000 in W-2 wages. Of the unadjusted qualified property basis, $15,000 ($50,000 x .3) is allocable to John and of the wages, $75,000 are allocable to John (250,000 x 30 percent). John is married to Mary, who earns $75,000 of W-2 income. John and Mary have taxable interest income of $5,000. Taxable income is $310,000. If not for the provision allowing us to ignore the W-2 wage limitation, the calculation of John and Mary’s QBI deduction would be calculated as follows: 1. The lesser of: • 20 percent of QBI (.20 x $230,000 = $46,000); or • The greater of: • 50 percent of the W-2 wages with respect to the business, (.50 x $75,000 = $37,500); or • 25 percent of the W-2 wages with respect to the business plus 2.5 percent of the unadjusted basis of all qualified property ($18,750 (.25 x $75,000) + 375 (.025 x 15,000) = $19,125). 2. Plus: • 20 percent of qualified REIT dividends; and • qualified publicly traded partnership income. This would leave John and Mary with a deduction of $37,500. However, since their taxable income is below $315,000 the W-2 limit is ignored and they are entitled to a deduction in the amount of $46,000. Had their taxable income been higher than the threshold, the W-2 limit would gradually come into play. Once their taxable income reached $415,000 the W-2 limit would be in full effect and their deduction would be $37,500.
The Take Away It is easy to see that the tax reform has not simplified things as much as Congress had hoped. To find out more about how this new deduction applies to your specific tax situation, reach out to a qualified tax adviser. Brittany Flemming is a CPA and senior tax accountant at Brown Armstrong Accountancy Corp. Contact her at bflemming@bacpas.com or 661-324-4971.
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Finance
Saving more for retirement? Thank Richard Thaler By Steven Van Metre
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ichard H. Thaler is not your average college economics professor. He co-authored the bestselling 2008 book “Nudge: Improving Decisions about Health, Wealth and Happiness;” appeared in the 2015 hit movie “The Big Short”; and last fall won the 2017 Nobel Prize in economics. The 72-year-old University of Chicago professor also has spent a career waging war on the flawed, popular theory that when it comes to all sorts of matters — especially money — human Steven Van Metre beings consistently make wise, predictable “choices.” That’s just not so. And it’s no wonder public policies and plans that often are based on that flawed theory just don’t work out. Before you start rolling your eyes and dismissing Thaler as a nerdy pinhead who has no impact on your life, think again. If you have money in your 401(k) plan and hope someday to retire, you can thank Thaler for his awardwinning work in economics for helping you make that happen. In a nutshell, Thaler has concluded that many factors enter into a person’s decisions regarding money, health care and happiness. These include emotional and persuasive factors. As a result, people often need to receive “nudges” to help them make better decisions.
Thaler and other “behavioral economists” argued that workers needed a nudge if they hoped to ever have enough money to retire. That nudge was “automatic enrollment.” Rather than wait for an employee to decide to enroll, he or she would automatically be signed up for a plan. If the employee decided not to participate, they could “opt out.” Here’s how a “nudge” would look when it comes to health care decisions, for example. When the Bush administration rolled out Medicare Part D, or the prescription drug benefit, seniors were faced with so many options that some did not participate. Thaler suggested that rather than making no decision, seniors should have been “nudged” or assigned a default plan. And as the enrollment year unfolded, they should have been shown the benefits, or financial returns, that Part D provided.
Richard H. Thaler in front of a graphic from his book cover, “Nudge: Improving Decisions about Health, Wealth and Happiness.”
As another example, Thaler in his book applied a “nudge” to food choices in a school cafeteria. By simply placing healthy foods at eye-level and less healthy foods out of convenient reach, students were nudged to make better selections. And this brings us to nudging us to save for our retirements. In his book, Thaler noted that Americans simply were not saving enough money for retirement. “In 2005, the personal savings rate for Americans was negative for the first time since 1932-1933 — the Great Depression years,” he wrote, adding that public policy and employer action were needed to nudge workers to save more money. Over the past several decades, American employers have been dropping their defined-benefit pension plans and replacing them with tax-exempt, defined-contribution plans, such as 401(k) plans. Participation in these plans is voluntary and initially, workers were left on their own to decide if they wanted to participate. Often the employer’s promise to match a certain percentage of a worker’s contribution — commonly about up to 3 percent to 5 percent — was insufficient incentive for employees to participate. Enrollment in the savings programs lagged. But Thaler and other “behavioral economists” argued that workers needed a nudge if they hoped to ever have enough money to retire. That nudge was “automatic enrollment.” Rather than wait for an employee to decide to enroll, he or she would automatically be signed up for a plan. If the employee decided not to participate, they could “opt out.” A 2016 study by the Plan Sponsor Council of America revealed that 58 percent of plans now are automatically signing up workers. That is an increase from 8.1 percent in 2000.
A companion to the automatic enrollment nudge is auto-escalation. Say the goal is to encourage workers to set aside 15 percent of their salaries for retirement savings. Auto-escalation would nudge workers to achieve that goal by increasing contributions in small increments — maybe 1 percent per year. The PSCA reports that a majority of employers now offer some form of auto-escalation with their workers’ definedcontribution savings plans. The Employee Benefit Research Institute credits the combination of auto enrollment and auto-escalation with an increase in the nation’s retirement savings rate. Thaler’s nudges have caught the attention of public policy makers in the United States, as well as many other countries. In 2015, President Barack Obama signed an executive order encouraging federal agencies to “identify policies, programs and operations where applying behavioral science insights may yield substantial improvements in public welfare, program outcomes and program cost effectiveness.” Whether it is to encourage better financial decisions, or other worthwhile goals, companies can do the same. People still have the free will to make their own choices — for better or worse. But if a “nudge” will help achieve a better outcome, give it. Ironically, when asked how he will spend the $1.1 million that comes with his Nobel Prize in economics, Thaler told a reporter, “I will try to spend it as irrationally as possible.” Steven Van Metre is a Bakersfield certified financial planner who specializes in retirement income strategies and teaches a course on retirement planning for the Levan Institute for Lifelong Learning at Bakersfield College. His website is www.stevenvanmetre.com.
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Finance
Legal, HR sexual harassment challenge is resolvable through sound risk management practices By John Pryor
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ou don’t need to be Harvey Feinstein or Al Franken to understand a paradigm shift has occurred within our national culture. Sexual harassment now is “high profile” as accusations emerge from all directions. Risks to organizations include reputation damage, negative publicity, legal costs and expanded jury awards to punish John Pryor those perceived to have failed to prevent harassment. The solution is a sound “risk management” system. It’s no wonder liability insurance sales to protect employers from these awards are spiking. Conventional liability insurance doesn’t apply, so “Employment Practices Liability Insurance” was introduced in 1992. But this is getting the “cart before the horse.” In risk management, alternatives to commercial insurance are thoroughly explored before the word “insurance” is even uttered! Let’s start at the beginning of this three-process system: Risk Identification and Measurement; followed by Risk Reduction and Control; and finally Risk Transfer and Finance, of which insurance is a part but the very last step in these processes. The challenge to business owners is to be proactive and control harassment to the point that it is virtually eliminated throughout their overall organization.
Risk Identification and Measurement Risk identification is an easy step now that the “cat is out of the bag.” Yet sexual harassment comes in a variety of forms. Here are but a few: Threats or bribes — express or implied — for an unwanted sexual relationship.
Sexual comments or suggestive hints. Touching, patting, stroking, squeezing or other seemingly accidental contact with another person. An uninvited neck or shoulder massage. And the list goes on. And on. And on. Like most liability risks, measurement of this risk is automatically construed to be “unlimited.”
Risk Reduction and Control Before the “Me Too” movement, the principal risk control measure was a nondisclosure agreement. “Whistle blowing” was discouraged and sometimes punished. Now transparency is the norm. It is perhaps the most effective “risk control” method for future risks — but too late for those already in litigation. The use of NDAs is now declared void by certain states when applied to this risk. These are legal issues a business owner will want to discuss with legal and HR counsel before taking any action.
Risks to organizations include reputation damage, negative publicity, legal costs and expanded jury awards to punish those perceived to have failed to prevent harassment. An essential risk reduction tool is for employers to adopt a formal corporate policy statement. It not only should define “harassment” but also should include specific examples, as partially listed above. The policy should unequivocally state that such behavior is strictly prohibited and retaliatory action is never condoned. Each employee — plus new employees as they are hired — should sign a statement attesting to their having received and read the policy statement.
Most states, including California, require training on this topic for both private and public entities. Many other steps can be taken, such as creating a clear line of communication to report harassment, to assure all complaints are promptly investigated. Windows placed in (unlockable) doors of private offices and other rooms is an optional step to consider.
Risk Transfer and Finance Risk transfer by contract is rarely, if ever, appropriate for this risk. Conventional indemnification (hold harmless) clauses are worded to avoid any vicarious liability being imputed to the other party to the agreement. Employment practices liability risks can be included in alternative risk transfer programs such as formal self-insurance, captive plans, highdeductible plans, etc. More common is the separate EPLI policy described above. It also can be written as an extension of Directors & Officers Liability — usually called “management liability” — and priced with a “package” discount. Such policies cover allegations of sexual harassment and retaliation, plus defense costs, of course. They
also cover other HR risks such as wrongful termination, hostile workplace, negligent evaluation, etc. Coverage is typically written on a “claims made” form rather than the more traditional “occurrence” form. Its policy limits are applicable to any settlement or jury award plus defense costs as well. Traditional policies provide unlimited defense costs outside policy limits. There are other differences any broker will be quick to explain. Managing harassment risks also encourages an organization to chart (and lower) its total cost of risk each year. This concept includes insurance costs, of course, but much more — e.g., deductibles paid plus costs incurred for training, legal fees, HR consultant fees, administrative expense, etc. Taking these steps to create a risk management system will effectively manage this significant risk, plus other risks, of course, and provide the traditional benefit of risk management: a quiet night’s sleep! John Pryor is a risk management consultant and author of “Quality Risk Management Fieldbook” published by International Risk Management Institute in Dallas.
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Legal & Human Resources
PAGA 101: Everything you wanted to know but were afraid to ask By Viviano Aguilar and Kaleb Judy
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AGA doesn’t stand for the “Pirates Attorney Generals Act” but most California employers will probably tell you it should. Actually, the rationale behind PAGA could trace back to days when the government authorized private armed ships called “privateers” to roam the high seas. The privateers earned enormous profits seizing enemy cargo and holding ships and passengers for ransom, while the government benefited without having to incur the expense of directly outfitting naval vessels. Of course, if you were the merchant ship that was attacked, you would probably wouldn’t see any difference between a privateer and a pirate. Fast-forward to today and we have a similar system under Labor Code Sections 2698-2699.5, known as the Private Attorneys General Act, or PAGA. This is the modern-day law authorizing private citizens to hunt down and penalize employers. Viviano Aguilar
1. What exactly is PAGA?
Employees have always had the authority to file a lawsuit against their employer for violations of the labor code. PAGA extends that right, giving employees governmental authority to assess penalties against businesses through monetary fines for every labor code Kaleb Judy violation and giving “aggrieved employees” the power to enforce those fines on their own behalf, as well as on behalf of their co-workers. For every $100 fine that an aggrieved employee enforces on behalf of the government, the employee keeps $25 and the ever-generous government takes the rest. In practice, this sharing of penalties hasn’t worked quite as the law makers expected. This creates significant uncertainty for California employers, much of which is due to the fact that PAGA also allows the aggrieved employee to recover legal fees from the employer.
2. Why should I care about PAGA? If you have any employees, PAGA can bite you. Even small, technical violations of the labor code easily snowball into huge lawsuits under PAGA. Consider what happens to a Kern County ag business with 30 employees who get paid every week. One day, the payroll manager decides to replace the company’s name and address on the pay stubs with the company’s logo. Oops, that violates Labor Code Section 226. A year later, the company’s potential liability under PAGA could be half a million dollars, plus attorney fees. Paying attention now? Under PAGA, a disinterested government official isn’t the one deciding whether to prosecute a claimed violation of the Labor Code. Instead, an “aggrieved employee” decides whether the employer must defend the costly lawsuit, and a cottage industry of plaintiffs’ lawyers stand
ready and willing to represent employees. The elephant in the room is the profit motive, and the Plaintiffs’ attorneys are the only real winners in almost every PAGA lawsuit.
3. What is the lifecycle of a PAGA lawsuit? Technically, before filing a PAGA lawsuit, the aggrieved employee is required to notify the Labor and Workforce Development Agency of the alleged violations. The LWDA has 60 days to investigate the PAGA claim. But the LWDA almost never investigates anything. Instead, after the 60-day waiting period, the aggrieved employee is given authority to file a civil lawsuit against the employer on behalf of the state of California. PAGA claims are often filed as part of a “class action” and in conjunction with private (i.e., nongovernment) claims for damages. A class action is a mechanism where an individual can bring a lawsuit on behalf of a larger group of similarly situated people. Often, a wage and hour class action will last years and cost the employer hundreds of thousands of dollars to defend. Once the lawsuit has been filed, the “discovery” phase of the lawsuit begins. Discovery is the process by which parties in a lawsuit obtain information. The first thing the plaintiff will ask for is the contact information of the company’s current and former employees, along with the company’s written policies, personnel files, payroll records and so on. Lawsuits are a bit like cancer in that the treatment is sometimes worse than the disease. In many cases, the demands of the discovery phase are enough to entice employers to settle and plaintiff’s attorneys are keenly aware of that reality. In a class action, the court eventually rules on whether the individual employee is permitted to represent the purported class of other employees before the lawsuit can go further. But in a PAGA case, there is no such requirement. Translation: Employers have fewer options for throwing out a frivolous PAGA case.
4. How is PAGA affecting Kern County businesses? In Kern County, there are currently dozens of PAGA lawsuits pending against employers. These lawsuits range from claims against the largest ag and oil companies to claims against companies with only a handful of employees. Lawsuits are expensive to defend. Once a PAGA case is filed, there is very little the employer can do to limit or control the scope of the lawsuit. Again, the courts will order the employer to turn over information regarding all of its employees, even those who work in different locations or divisions, and without any showing that the case has merit. Often, businesses decide it is cheaper to settle a case than take it all the way through trial and appeal, even if the case has no merit.
5. Is PAGA working? PAGA is working great if you are a plaintiff’s lawyer. For businesses, it has been a disaster and it does not seem to be producing any real benefit to workers. Recent statistics show an average of 5,900 PAGA filings in California per year, with the state collecting an average of $5.7 million in penalties per year. Each PAGA
notice resulted, on average, in the state getting about $975 in penalties and workers getting about $325. But each notice costs a California business significant amounts of time, energy, stress and legal fees, along with hefty settlements for plaintiff’s lawyers.
6. What can I do to protect my business against a PAGA lawsuit? There are two sure-fire ways of avoiding PAGA: Don’t have employees and don’t do business in California. Other options? Not many. Arbitration agreements don’t apply to PAGA lawsuits. Class-action waivers don’t apply to PAGA lawsuits. And doing things the way you always have is just begging for trouble. Common practices like productivity-based compensation or safety bonuses have recently been attacked by the courts and opened companies to PAGA lawsuits. The long-term solution to PAGA will almost certainly need to be legislative. Various trade groups and politicians are working to make this happen. Until they do, the best defense is a good offense: Review your employment policies regularly and keep abreast of the constantly changing California labor laws. If you get a PAGA notice, do not ignore it. In some cases, employers can avoid liability for PAGA claims if they immediately fix the issue. Unfortunately, however, short deadlines to complete the fix often pass before the company has even hired a lawyer.
Consider what happens to a Kern County ag business with 30 employees who get paid every week. One day, the payroll manager decides to replace the company’s name and address on the pay stubs with the company’s logo. Oops, that violates Labor Code Section 226. A year later, the company’s potential liability under PAGA could be half a million dollars, plus attorney fees. If you are interested in learning more about how you can protect your business against PAGA lawsuits, Belden Blaine Raytis lawyers Kaleb Judy and Viviano Aguilar will be presenting a “Lunch and Learn” about PAGA on March 21. For more information or to RSVP, please contact kbonesteel@beldenblaine.com. Viviano E. Aguilar and Kaleb L. Judy practice labor and employment law at Belden Blaine Raytis LLP. Kaleb and Viviano grew up in Tehachapi and are childhood friends. Kaleb earned his bachelor’s degree in political science from CSUB in 2006 and his J.D. from Pepperdine University School of Law in 2009. He became a partner in Belden Blaine Raytis, LLP in 2016. Viviano earned his bachelor’s degree in philosophy from UCLA in 2007 and his J.D. from Loyola Law School Los Angeles in 2015.
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Legal & Human Resources
Investigate before you decide to terminate By Robin Paggi
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’m writing this article on Jan. 29 and Steve Wynn, CEO of Wynn Resorts in Las Vegas, just became the latest person to be accused of sexual harassment. According to my count, at least 50 men in entertainment, business and politics faced similar accusations in the law few months and many of them lost their jobs as a result. Wynn resigned his position as finance chair of the Republican National Committee even though he insisted in a statement to NBC Robin Paggi News that the accusations against him were “preposterous.” “We find ourselves in a world where people can make allegations, regardless of the truth, and a person is left with the choice of weathering insulting publicity or engaging in multiyear lawsuits,” Wynn said. He has a point. Remember the TV show “The Wonder Years” that aired in the late ’80s and early ’90s and starred a teenage Fred Savage? Actress Alley Mills, who played Savage’s mom on the show, recently told Yahoo that the show was canceled because of a sexual harassment lawsuit against then 16-year-old Savage and co-star 20-year-old Jason Hervey. Mills said the suit, brought by a former costumer on the show, was “completely ridiculous” and that ABC settled out of court to avoid a scandal. “It’s a little bit like what’s happening now — some innocent people can get caught up in this stuff; it’s very tricky. It was so not true,” Mills said. How do you know which allegations are true and which are not? As someone who investigates sexual harassment (and other) complaints, I know that’s often difficult to determine. However, when you’re an employer, one thing is clear: In general, it’s important that you conduct an investigation before you terminate employees for sexual harassment.
Before you begin an investigation, here are some things to consider: Do you have a policy that states that sexual harassment is forbidden in your workplace? Even though sexual harassment is against the law, it’s easier for employers to determine that employees
violated a policy rather than determining that they broke a law. Terminating an employee for violating policies is also easier to defend in court. (California’s Fair Employment and Housing regulations require employers with five or more employees to have a written policy against unlawful harassment, discrimination and retaliation in the workplace).
As someone who investigates sexual harassment (and other) complaints, I know that’s often difficult to determine. However, when you’re an employer, one thing is clear: In general, it’s important that you conduct an investigation before you terminate employees for sexual harassment. Do you have a plan in place for responding to sexual harassment complaints? This would include things like determining when employees should be put on leave or transferred to another location during an investigation. Is a formal investigation necessary? Many people tend to think that anything that bothers them is “harassment” and creates a “hostile work environment.” While it’s important to take all complaints seriously, ask for specific examples of harassment from a complainant before launching into a full-scale investigation. Who will conduct the investigation? In her article subtitled “Bad Investigations: A Plaintiff’s Dream; Defendant’s Nightmare,” Maureen S. Binetti said, “A primary source of fodder for plaintiff’s counsel in attacking investigations continues, remarkably, to be the complete inadequacy of the investigator.” Investigators are often inadequate because of their lack of training and/or their relationship to the people being investigated, according to Binetti. It’s usually best to have a trained investigator outside of the organization conduct investigations. How will the investigation be conducted? Determine things like how Turn to INVESTIGATE on Page 30
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Februar y / March 2018
Legal & Human Resources
Sexual harassment is no joking matter By Karen Bonanno
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friend serves on the board of a local nonprofit organization. She is one of only three women on the ninemember board. As the nation is gripped in the throes of unfolding sexual assault and harassment accusations, the board’s chairman Karen Bonanno opened a recent meeting by jokingly admonishing the “guys” not to touch or say anything “wrong” to the women on the board. The men laughed. The women scowled in disbelief. A few days later, my friend asked me what she should say the next time it happens. She is convinced there will be a next time. I told her to tell her fellow board members to knock off the joking. Remind them of their fiduciary, moral and legal responsibilities. Whatever they think about accusers and their accusations, the law and a lot of court decisions are clear. They must take workplace sexual harassment seriously. The consequences of dismissing sexual harassment accusations or demonstrating disdain for enforcing state and federal sexual harassment laws can be costly to them personally and to the organization they direct. All it would take is for the chairman’s “little joke” to go viral. Public embarrassment and legal jeopardy would result. The joke and fallout could spread like wildfire on any number of social media platforms. Now is the time for business owners, directors, supervisors and employees to take workplace sexual harassment seriously. No joking around. No hoping accusations and accusers will just go away. While Title VII of the federal Civil Rights Act of 1964 bans discrimination on the basis of sex, it does not explicitly address sexual harassment. It took years of high-profile accounts, including those documented in Catharine MacKinnon’s 1979 book, “Sexual Harassment of Working Women,” to result in the U.S. Equal Employment Opportunity Commission developing guidelines for employers to protect
workers against harassment. But the guidelines have not ended workplace harassment. Courts often find companies are not liable for incidents as long they have policies
The consequences of dismissing sexual harassment accusations or demonstrating disdain for enforcing state and federal sexual harassment laws can be costly to them personally and to the organization they direct. in place banning such behavior and procedures for victims to complain. But the matter is long from being settled and California leads the nation in passing laws extending protection to workers. Beginning in 2005, California required all supervisors at companies with more than 50 employees to com-
plete sexual harassment training every two years. Last fall, California Gov. Jerry Brown signed into law SB 396 that, beginning in 2018, expands the training to include harassment based on gender identity, gender expression and sexual orientation. Human resources consulting companies, such as P.A.S. Associates in Bakersfield, as well as many law firms, offer this required training for companies. But the training and the protection it is supposed to provide to workers are only as good as the commitment of business owners, managers, supervisors and, yes, boards of directors. Everyone in an organization’s workforce must know that sexual harassment will not be tolerated and the consequences of engaging in the behavior. A written policy, complaint procedures and mandated training are not enough to protect employees from workplace sexual harassment and companies from legal jeopardy in this highly charged, accusatory environment.
What more should employers do? • Establish training goals. The plan cannot be to just minimize the
company’s liability. It must be to protect employees. • Evaluate the workplace culture. Involve employees in an assessment of the company’s workplace culture. Is it a “locker room,” where there is a “no holds barred” attitude about language or behavior? Or is it a professional, productive environment, where all employees are respected and treated fairly? • Create a complaint procedure that protects both the accuser and the accused. This should be a written procedure defining how employees can safely report problems and expect to receive solutions. • Walk the talk. Sexual harassment policies must apply from the top down to all employees in the workplace. • Demonstrate the company’s commitment to preventing sexual harassment. When problems are identified, step in quickly to protect employees. Karen Bonanno is president of the Bakersfield-based human resources consulting firm P.A.S. Associates and P.A.S. Investigations. The next sexual harassment training is Tuesday, April 10. Register at www.PASassociates.com.
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KERN BUSINESS JOURNAL
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Legal & Human Resources
Kern incentive plan targets job creation, new business
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By Dianne Hardisty
ern County supervisors have created a “carrot” they hope will help lure new business, economic development and jobs to the southern San Joaquin Valley. With the idea of making Kern County more competitive, supervisors last fall widened the number of industries that can get tax incentives for bringDianne Hardisty ing new businesses to the county and removed the cap on those tax credits. “Kern County’s incentive program has been designed to maintain parity with incentives offered by other jurisdictions within California,” explained Assistant County Administrator Teresa Hitchcock, who oversees economic development.
“Real estate and labor costs in Southern California have escalated to the point that Kern County can provide welcome relief to businesses that must be in California to serve their customers but find the costs in Southern California to be prohibitive,” she said. “We are sending the message to the business community that there is a place in Southern California where you can efficiently serve the 40 million people in this state and all of the western United States in a business-friendly community, where the local government is supportive, rather than destructive.” Richard Chapman, president of the Kern Economic Development Corporation, lauded the new incentive plan that his organization helped create. The plan is also supported by the Kern County Taxpayers’ Association, the Kern Citizens for Sustainable Government and the Cal State Bakersfield Small Business Development Center. “This will get our community on the
info@gregspetro.com www.gregspetro.com
short list” for new business development, Chapman said, after supervisors approved the plan in November. He noted that local companies hoping to expand or stay in Kern County also will benefit.
According to Hitchcock, the new incentive plan: • Is based on a pay-for-performance scheme, with businesses only receiving incentives that they earn. • Incentives will include potential rebates of sales and use tax and property tax. Transient occupancy tax rebates may be included in pursuit of quality lodging opportunities for tourism. • The program’s focus is on new, full-time job creation, rather than capital investment, at better than the living wage rate for Kern County (as determined by MIT, www.livingwage.mit.edu/metros/12540). The MIT basis will be used because the rate changes annually. • Targeted industry clusters have been
expanded to include e-commerce, general manufacturing and destination retail. • Designed for flexibility, the performance-based program will require quantitative thresholds to be tested periodically for accountability. • The county will review applicants on a case-by-case basis. Overall net benefits and incentives will be tailored accordingly. • Program details and application will be available on the Kern County’s Economic Development website (www. kerncounty.com/econdev/) and through the Kern Economic Development Corporation (www.KEDC.com) • Applications will be evaluated on a cost-benefit basis and incentives, with incentives offered on a per project basis. Complicated projects may require evaluation by an outside consultant at the applicant’s expense. • Any incentives offered of more than $100,000 will require a public hearing.
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Community Business
Eagle Oaks Specialty Center
Valley Children’s new specialty care center preparing to open in Bakersfield Courtesy of Valley Children’s Hospital
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n the early 1950s, the five founding mothers of Valley Children’s Hospital set out to ensure that children of the Central Valley had access to expert pediatric care without having to travel the long distances to Los Angeles or San Francisco. From those early years, families from Kern County have turned to Valley Children’s to care for their children. Since then, our commitment to serve Kern County families has grown, along with the Valley Children’s network that now serves 11 counties, 45,000 square miles and nearly 1.4 million children. “We are grateful for the warm reception we have received from Kern County civic and business leaders and from our families,” says Valley Children’s Healthcare President and CEO Todd Suntrapak. “The mission of Valley Children’s is to continuously improve the health of children. Working alongside with you, we look forward to new opportunities to further advance the health of kids.” Every year, nearly 9,900 children from Kern County are seen by Valley Children’s physicians and health care providers. When we asked how we could better support families and primary care physicians in the South Valley, the overwhelming response was to bring pediatric specialists to the community for care closer to home. In the spring of 2015, Valley Children’s Medical Group opened 34th Street Specialty Care Center. In 2016, our providers saw more than 3,200
patients at the outpatient center. That number is expected to grow to more than 42,000 outpatient visits within the next decade. To meet that need, Valley Children’s is building a new outpatient specialty care center in southwest Bakersfield. You may have caught a glimpse of the construction as you travel down Stockdale Highway near Allen Road, taking notice of the unique building with George the Giraffe — Valley Children’s beloved mascot — etched into the front glass. Once completed, Eagle Oaks Specialty Care Center will be a 52,000-square-foot, state-of-the-art specialty care center designed with children in mind, providing the best pediatric outpatient specialty care in the Valley. Eagle Oaks Specialty Center will be home to experts in more than 15 pediatric specialties — a number that will grow over time — that will allow Kern County children to travel much shorter distances for their continuing specialty care. And, most importantly, Eagle Oaks will allow them to remain close to those physicians they have trusted from the beginning — their primary care physicians. Valley Children’s values our partnership with South Valley pediatricians and family practice physicians, working together to provide the best care for their patients. In addition, our partnership with Dignity Health provides additional local support for our patients with Valley Children’s pediatric hospitalists and intensivists working inside the Lauren Small Children’s Center at Bakersfield Memorial Hospital.
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Community Business
The impacts of immigration in Kern County
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By Richard Gearhart
mmigrants play a vital role in the economic wellbeing of Kern County. They provide innovation and work hours, altering the labor and products market in numerous ways. This article attempts to unmask the economic impacts of immigrants in Kern County, using a variety of research conducted over several decades, as well as the copious amounts of data available to us. As of the most recent data, Kern County is comprised of 882,176 persons, with roughly 344,626 individuals employed in the labor force. Nearly 40,000 individuals are employed in farming and agriculture, almost 25,000 in resource extraction and construction, nearly 14,000 in cleaning and maintenance, nearly 14,000 in materials moving, and almost 20,000 involved in the food service sector. 0geographical location, this seems to correspond to the demographics of the foreign-born population in Kern County. The Migration Policy Institute estimates that there are 75,000 unauthorized immigrants living in Kern County, which means that nearly 1 in 12 individuals in Kern County count as unauthorized to be in this country. Nearly half of these individuals are between the ages of 25 to 44, and over 70 percent have been in the United States for at least 10 years. This highlights an important
fact about the population; they play an incredibly active role in the labor market in Kern County. Legal immigrants comprise about 100,000 additional residents in Kern County, meaning that nearly 1 in 5 residents in Kern County are classified as foreign born.
In 2017, construction laborers earned $17.45 per hour on average, food preparation and service workers earned $12.46 per hour on average, cleaning and maintenance workers earned $14.77 per hour on average, materials moving earned $18.78 per hour on average, and farmworkers earned $10.89 per hour on average. Again, nearly all of these residents are between the ages of 25 and 54, indicating that they play a disproportionately large role in Kern County’s labor market. In fact, roughly 56 percent of all foreign-born indi-
viduals are employed in the labor market. This is contrasted to about 40 percent of all individuals employed in Kern County in total (including both native-born and foreign-born individuals). Again, this is in part due to the demographics of those who choose to come, indicating that many individuals who choose to migrate to Kern County come to work. Among those who are of working age (18 to 65), out of the 382,900 working-age native-born individuals, about 244,000 are employed, imputing a labor force participation of about 64 percent for native-born workers. The numbers are 149,200 and 100,000 for foreign-born individuals, imputing a prime-age labor force participation rate of about 67 percent, acquired from the American Community Survey. These numbers indicate that immigrants are an important driver of the Kern County economy, as about 1 in 3 workers in Kern County are considered foreignborn. We now need to investigate the impacts that these workers have on the economy in Kern County. In 2017, construction laborers earned $17.45 per hour on average, food preparation and service workers earned $12.46 per hour on average, cleaning and maintenance workers earned $14.77 per hour on average, materials moving Turn to IMMIGRATION on Page 19
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Community Business – Business Profile
Karen Bonanno P.A.S. Associates
About the company: P.A.S. Associates is a full-service human resources consulting firm founded in 1987 by Holly Culhane. We specialize in providing HR assistance to small- and medium-sized businesses, nonprofits and the government sector. We are headquartered at 1401 19th St., Suite 235, in Bakersfield. P.A.S. can be reached through its website www.pasassociates.com or by calling 661-631-2165. What I do: I was a longtime senior consultant with P.A.S. Associates until my family purchased the firm in March 2017 from the founder, Holly Culhane. I now serve as president of P.A.S. Associates and P.A.S. Investigations. Before joining P.A.S. Associates in 2005, I spent more than two decades working in the environmental services industry as a human resources and project manager. In 2008, I opened Snelling Staffing Services, alongside my husband and a third partner. I continue to manage both operations at this time. Where I grew up: I was born in Santa Paula, but my family moved to Bakersfield when I was 3, so I consider myself a Bakersfield native. Family: My husband of 30 years, Tony Bonanno, works for the county of Kern, but is very involved in our businesses. Our 29-year-old daughter, Alyssa, is a musical theater actress and was married last September and currently resides in Santa Fe, New Mexico, with her wonderful husband, Gabriel Smith, Esq. Our son, Michael, is a talented drummer and composer and is part owner of Dry Hippo, a local broadcasting and media production company. Hobbies: I enjoy my volunteer work with professional and civic organizations. I presently serve on the board of the NOR Chamber of Commerce, The Bakersfield Breakfast Rotary Foundation and actively support such organizations as the Alzheimer’s Disease Association of Kern County and St. Philip the Apostle Catholic Church. I am lucky to have a very close family who enjoys spending time together. Some of our favorite times are spent wine tasting in Paso Robles, especially at my sister and brother-in-law’s winery. We are also huge Boston Red Sox fans! What was your very first job and what did you learn from it? I actually had two first jobs in high school at the same time. I worked at Wienerschnitzel on North Chester and at National Car Rental at the Meadows Field Airport. They taught me the importance of hard work and responsibility. Who or what was the biggest influence on your career? Having children taught me the importance of always showing how hard work pays off and whatever you choose to do in life, you give it your all.
In addition to my family, I must give Holly Culhane credit for teaching me her business, showing me how to take care of our clients and believing in me enough to allow me the opportunity to take over a business she started 30 years ago. What was the best piece of advice you ever received? Not so much a piece of advice, but I was told three small words: “So be it.” It is the phrase responsible for my career change and where I am today. What is the most challenging part of your job? Keeping up with a fast-paced environment, the challenges of dealing with human resources issues in California. What is the most rewarding part of your job? Being able to work with two wonderful teams, getting to know our clients, meeting new people along the way and hopefully helping them by offering the support they need. What is the most memorable accomplishment of your career? Having the opportunity to operate two local businesses and to have the support around me to continue to grow them both.
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Immigration Continued from Page 15
earned $18.78 per hour on average, and farmworkers earned $10.89 per hour on average. This means that, in terms of labor income, about 75 percent of the foreign-born individuals earn about $2,014,376,000 in 2017, meaning that all foreign-born workers earn about $3,234,296,000. Contrast this to total labor income in Kern County of about $16.8 billion. This indicates that foreignborn individuals in Kern County contribute about 19 percent of all labor income in Kern County. In fact, this indicates that immigrants contribute about 10 percent of Kern County’s GDP annually. Though this is disproportionately small to their size in the labor force, this is largely attributed to the blue-collar nature of their work and the fact that average wages for blue-collar workers tend to be small in Kern County. Think about it this way: Every hour, between 8 and 5, immigrants are contributing nearly $1.5 million toward Kern County’s GDP. Nationally, George Borjas has found that foreignborn workers are complements and work with nativeborn workers, as well as technology. At their current levels, immigrants provide net economic benefits (benefits minus costs) of $7 billion to $25 billion annually. In Kern County, this would amount to annual benefits from immigration of about $28 million to $101 million. This indicates that there would be sizable benefits to the business community, in terms of increased profits and increase in consumer retention
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from lowered prices, imposed by immigration. Importantly, Borjas has found that the impact of immigrants on native wages is small. He examines the causes for these findings and determines that new immigrants tend to replace older immigrants rather than native-born workers, largely because new immigrants tend to move into occupations that are largely staffed by existing (older) immigrants. He also finds that native-born workers are much more mobile and are able to move to cities with less immigration (and less labor market competition) in response to an influx of immigrants into an area. In Kern County, per the most recent data available, there was an increase of 7,459 working-age immigrants from 2014 to 2015. Using the average wage in Kern County (roughly $23 per hour), this means that native wages will have fallen between $0.36 and $0.43 per hour, solely because of the increase in labor market competition facing Kern County workers. Extrapolating this to the native-born workforce, this means that total labor incomes in Kern County will have fallen by about $25 million for workers annually (again, contrast this to the $1.5 million per work hour contribution of immigrants), but note that this is a wage decrease, rather than unemployment. This amounts to an average income loss, per native-born employed household, of $102 annually.
only offset the small loss in purchasing power for nativeworkers being paid a lower wage, but can also improve the economic outcomes for those who have seen no wage decrease. The average worker who faces a wage decline from immigrant competition sees an annual salary decrease of about $102. With the increase in immigration from 2014 to 2015, P Cortes has found that prices that firms can charge for the products will decrease by about 1 percent for immigrant-intensive products. This corresponds to cost savings for your average Kern County worker of $2 per month in maintenance fees (totaling about $24 per year) and annual savings on the grocery bills of about $104. This means that, even with labor incomes falling by $102, for two types of goods (food and maintenance), workers are able to reap net benefits and see an increase in their relative position. This piece exposes only a fraction of the labormarket benefits and costs to immigration. It does not explore the costs of business compliance, the cost of tax evasion, the benefits of innovation that immigrants bring or the benefits of having an incredibly multicultural county. But it begins to explore the necessity of crafting smart immigration policy that benefits our county. Immigrants play an incredibly vital role here in Kern County and eliminating even a small fraction of them would depress economic activity considerably.
How can we explain that there are positive net benefits to immigration in Kern County?
Richard Gearhart is an assistant professor of economics at California State University, Bakersfield, and managing editor of the Kern Economic Journal, a publication that tracks and analyzes local economic trends and data.
Businesses benefit in Kern County by being able to lower prices of goods produced using the now relatively cheaper labor available in Kern County. This can not
www.PASassociates.com
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Community Business
Growth continues in Bakersfield hospitality sector By David Lyman
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akersfield’s hospitality sector continues to be a bright spot for local government. Revenue from the city of Bakersfield’s hotel tax, officially known as the Transient Occupancy Tax or TOT, reached its highest level ever in the fiscal year that ended June 30, 2017 — nearly $9.58 million (see chart). Within the city of Bakersfield, the TOT rate is 12 percent of the cost of a hotel room night. Looking at data from STR Inc., hotel rates, known in the industry as average daily rate or ADR, remained flat in 2017 compared with 2016. David Lyman However, the number of room nights sold increased more than 5 percent over 2016, meaning more people are staying in Bakersfield hotels. This increased demand for Bakersfield hotel rooms has not gone unnoticed by hotel owners and investors. New hotel rooms are under construction and several existing properties are undergoing renovations. Work continues on the new Hyatt Place on Coffee Road. When completed later this year, this four-story hotel will offer 118 rooms and be the first Hyatt-branded property in Bakersfield. Homewood Suites on Mill Rock Way is one of several Bakersfield hotels to undergo renovation and improvements this year. The ongoing exterior renovation will complete a new lodge look, including a new patio and kitchen lounge area. Bakersfield’s largest hotel, the 262-room DoubleTree by Hilton on Camino del Rio Court, will update all of its guest rooms, meeting spaces and public areas to a more modern and stylish decor this year. The total investment will be more than $10 million. Next door, the Hotel Rosedale will be making cosmetic upgrades by replacing carpets, installing new floor boards, and painting walls and ceilings. In addition, its meeting rooms and ballrooms will be renovated and modernized. Across Rosedale Highway, the former Clarion Hotel has been temporarily renamed The Loft as it undergoes renovations and improvements to be upgraded and rebranded as a Fairfield Inn and Suites later this year. Another rebranding and upgrade is being finalized as the former Garden Inn and Suites on Wible Road becomes a Country Inn and Suites by Radisson. This $2 million renovation includes upgrades throughout the hotel,
along with the installation of new technology to reduce the hotel’s carbon footprint. These additions include solar panels, LED lights, a temperature control system to reduce energy consumption and charging stations for hybrid cars.
David Lyman, Ph.D., is manager of Visit Bakersfield. He and other members of Team More to Explore help visitors spend their money in California’s ninth largest city. They are available toll-free at 866-425-7353 or at Info@VisitBakersfield.com.
DoubleTree by Hilton on Camino del Rio Court is one of several hotels in Bakersfield getting a facelift this year.
Februar y / March 2018
KERN BUSINESS JOURNAL
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Community Business
2018: A year for (local) professional development for Kern County attorneys By Chris Hagan
“N
o man will make a great leader who wants to do it all himself … ” — Andrew Carnegie Our strength as the Kern County Bar Association lies in our many capable members, and there is no doubt that our ranks include many established community leaders here in the 11th largest county in the state. And so it is unquestionably a privilege to Chris Hagan assume the presidency of our local association for 2018 and I am humbled to follow in the footsteps of so many consummate professionals who have held this position before me.
It has been said, “As iron sharpens iron, so one person sharpens another,” and our profession is certainly a testament to the value of a vigorous exchange of ideas resulting in much better advocates.
It was evident during our recent KCBA Installation Dinner that we have an excellent and engaged board of directors, as well as a membership that reflects the best that the legal profession has to offer. We are all fortunate to practice here in Kern County. But as we look ahead to the challenges and opportunities that the new year holds, it is apparent that we should promote more local professional development opportunities for our attorneys in Kern County. After all, the emphasis on “continuing education and improved participation” is the first priority noted in our association’s list of goals and objectives. But more importantly, we can benefit our clients by adding unique characteristics inherent in our community, to the otherwise routine trainings that sometimes occur. In the digital age, and with our extremely busy schedules, many of us increasingly resort to online tools to satisfy our continuing education requirements. This is certainly an efficient way to stay up to date but can deprive us of the benefits of live interaction and significant networking value for our members. It has been said, “As iron sharpens iron, so one person sharpens another,” and our profession is certainly a testament to the value of a vigorous exchange of ideas resulting in much better advocates. So to that end, your Kern
County Bar Association will roll out educational opportunities that have a hint of local perspective and applicability to our practices here in central California. Ideally, our members will become better acquainted with each other and make valuable professional connections while maintaining our edge in the realm of continuing education. It is a privilege to live and work here in Kern County — and to bring unique educational opportunities
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so that by year’s end, we are better informed and connected than when we started. As a former Boy Scout leader, I would say, “Be prepared,” and the Kern County Bar Association will do our part to ensure that our members are the best equipped in the profession. Chris Hagan is a partner in the law firm of Brumfield & Hagan and 2018 president of the Kern County Bar Association.
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Find every digital edition of the Kern Business Journal on issuu.com.
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KERN BUSINESS JOURNAL
Februar y / March 2018
Community Business
Give Big Kern 2017 Morning Kickoff at the Liberty Bell.
Give Big Kern:
A countywide celebration of giving By Louis Medina
S
houldn’t a community that is known for its generosity designate a day to celebrate giving? After all, Kern County’s history is rooted in charity. If we think about it, Bakersfield, our county seat, is named after a giving man: Col. Thomas Baker, an Ohio native who moved to the banks Louis Medina of the Kern River in the 1860s and allowed weary travelers to have their livestock graze in his field — “Col. Baker’s Field,” later shortened to just “Bakersfield.” It is also likely that the Dust Bowl migration of the 1930s helped to strengthen the spirit of giving in the “Okies,” “Arkies” and Texans who came here looking for a better life and discovered how welcome a helping hand could be in times of need. Anecdotally, one hears that those displaced migrants taught their descendants the importance of freely giving, just as they had freely received. Enter Give Big Kern, observed on the first Tuesday in May as “one day to cel-
ebrate the giving spirit of Kern County.” A nonprofit strengthening program launched by Kern Community Foundation in 2016, Give Big Kern provides an opportunity for our entire county to come together to help raise unrestricted dollars and volunteer hours for Kern’s nonprofits through online crowdfunding and pledges.
How does Give Big Kern work? KCF pays for an easy-to-use online donation platform designed and managed by New York-based technology partner GiveGab, which currently serves more than 8,000 nonprofits and is growing, having just acquired Kimbia, another online fundraising giant. On givebigkern.org, local 501(c)(3) nonprofits registered with KCF set up their own donation page for free, customizing it with their logo, photos, videos, graphics and compelling stories — of children and families fed and housed, animals rescued, veterans linked to life-changing services and more. Then, in the months leading up to Give Big Kern, which this year falls on May 1, KCF and GiveGab help nonprofits prepare to engage donors and volunteers through a series of workshops, webinars, online videos and other tools that are also free of charge.
The donation portal goes live on April 1 and stays open till May 2. During that period, a frenzy of activity happens, as KCF and scores of participating agencies throughout Kern appeal to donors and volunteers for support via email blasts, social media, highly publicized events and press conferences, and a friendly competition for cash prizes to the nonprofit that raises the most dollars, engages the most donors, receives the most volunteer pledges and so on. The minimum donation that can be made through givebigkern.org is $5. Donations go directly to the nonprofits. GiveGab charges a small credit card processing fee per donation, but most donors cover this fee to ensure their entire donation goes to the charity they support.
How much money can be raised through Give Big Kern? In 2017, the effort raised close to $150,000 from 1,500 donors, benefiting some 100 community-based organizations, which also received pledges of close to 15,000 volunteer hours from more than 300 volunteers. KCF President and CEO Kristen Beall is convinced that with greater community engagement, a giving day (and there are
plenty being carried out all over the country) should be able to get 1 percent of the population involved in giving — which in the case of Kern is close to 9,000 donors. Getting one-sixth of the way there last year, the goal for Give Big Kern 2018 is to surpass the 2017 number of dollars raised and donors and volunteers engaged.
By how much? “That is entirely up to the community,” Beall said. “We see similar efforts in the Inland Empire, Sacramento region and northern part of the state raising hundreds of thousands and even millions of dollars. We can do better.”
How can the business community help? Monetary and in-kind sponsorships are still being sought to offset the cost of marketing materials, which KCF provides free to participating nonprofits, and to fund the cash prizes that are an extra boon to the winning agencies. Write to Louis@ kernfoundation.org or call 661-616-2603 to find out how your business can get involved. Louis Medina is the manager of community impact for Kern Community Foundation.
Februar y / March 2018
KERN BUSINESS JOURNAL
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Community Business
Inviting business into the classroom helps create career-ready graduates By Cheryl Scott
F
rom the day we suit up our children with their first backpacks and deliver them to kindergarten or preschool, Kern County’s future workforce is entrusted largely to our local educators. For the next 13-plus years, our youth often spend more of their weekday waking hours in a school environment than they do at home. Schools and parents are collaborating more and more, but there’s another partner that should be added to the alliance: the business community. Nearly 70 percent of Kern County’s high school graduates will end their schooling with a high school diploma. Most will continue their education, seeking a two- or four-year degree. Regardless of the amount of education a job applicant has on their resume, local employers are anxious for candidates who possess the skills (hard and soft) to fill their open positions. Students whose schools connect them with the “real world” and expose them to industry opportunities and expectations are able to identify areas of interest and hone their skills at an early age. Bringing business into the classroom can give students a leg up in their future careers and sets them up for success by equipping them with the skills and information employers need.
Linking Education and Business Builds a Better Talent Pool The Kern Economic Development Foundation encourages businesses to interact with administrators, teachers and students of all ages. Truth is, educators and professionals are all so busy with their day-to-day responsibilities that they may not naturally think about merging their worlds. Creating career-ready graduates, however, requires commitment from both the education and business communities.
How Can Educators Engage Business in a Meaningful Way? Many of Kern County’s best practices in collaboration between education and business take place in higher education and at the high school level. The Executive Advisory Council of CSUB’s School of Business and Public Administration provides an excellent platform for businesses to offer valuable input on local industry needs and trends. Two years ago, BPA launched the Student Professional Development Initiative, which brings 21 professionals onto campus to provide career advising and mock interviews in one-on-one meetings with more than 100 students. Independence High School’s Energy and Utilities Academy welcomes dozens of STEM (science, technology, engineering and math) professionals to campus each month to partner with small group student mentoring and other events that build students’ skills, like public speaking and business strategy development. Partnerships like this not only encourage students to think about careers but also encourage engagement in their classes. A
PHOTO PROVIDED BY THE KERN COUNTY SUPERINTENDENT OF SCHOOLS OFFICE
Children explore the natural world at the Kern Environmental Education Program, also known as Camp KEEP.
report by Big Brothers Big Sisters of America states that students who meet regularly with mentors are 52 percent less likely than their peers to skip a day of school and 37 percent less likely to skip a class.
It’s Never Too Soon to Bring Business into the Classroom Does business really have a role in an elementary school classroom? It certainly does, according to Stuart Packard, superintendent of the Buttonwillow Union School District. “As a superintendent, you have to have business contacts,” Packard said. He is passionate about preparing his small district’s 380 students for success, and he views business partnerships as an essential tool. Whether they help with financial contributions or by providing event volunteers, business partnerships are coveted among his and other rural school districts. Clean Harbors, located just west of Buttonwillow, provides financial support by paying for the district’s sixth-grade students to attend Camp KEEP. The contribution is critical in the district, which is comprised of mostly low-income families who might not otherwise be able to afford to send their children. Packard said he constantly searches for ways to bring professionals and students face-to-face, too. “We need to expose kids to business people who know what they are going to need,” he said. It’s a challenging endeavor for all schools, but especially for rural school districts that have fewer nearby businesses, he said. California Resources Corporation volunteers work at the district’s Science Night and other events.
Packard cultivates partnerships in all areas of his life. He uses Facebook, LinkedIn, and his personal and business relationships to grow his network in hopes of benefitting his students.
Students whose schools connect them with the “real world” and expose them to industry opportunities and expectations are able to identify areas of interest and hone their skills at an early age. Bringing business into the classroom can give students a leg up in their future careers and sets them up for success by equipping them with the skills and information employers need. Some teachers are natural promoters, Packard said, but everyone has the opportunity at some level to inform and invite business partners into the classroom. Bringing education and business together will be key to building a better-prepared workforce for our community, and the future of Kern County’s economy depends on it. Cheryl Scott is the executive director of the Kern Economic Development Foundation.
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KERN BUSINESS JOURNAL
Februar y / March 2018
Agriculture
World Ag Expo puts cutting-edge ag technology, equipment on display Kern Business Journal
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he largest annual agricultural expo will hold its 51st show, putting cutting-edge agricultural technology and equipment front and center for a three-day event, Feb. 13-15, at the International Agri-Center in Tulare, 4500 S. Laspina St. Boasting more than 1,500 exhibitors and 2.6 million square feet of exhibit space, the World Ag Expo is the premier marketplace and a celebration for all things ag, drawing thousands of attendees from all over the world.
The World Ag Expo will once again feature daily equipment showcases, live demonstrations and seminars in categories such as dairy, irrigation, international trade, business and farm management, marketing and media, and more. “World Ag Expo has built a legacy of bringing agricultural buyers and sellers together,” International Agri-Center Chief Executive Officer Jerry Sinift said in a release. “Ag is always evolving in order to feed a growing world. World Ag Expo is here to facilitate the connections between the exhibitors who provide the most advanced technology and
equipment and the farmers who continue to evaluate and improve their operations to meet that demand.” The Top-10 New Products Competition also returns, showcasing innovations such as unmanned spray systems and remote monitoring, new tire traction solutions, ag film recycling and more. There will also be a free concert featuring Craig Campbell on Feb. 14. Attendees can stay up to date on the latest news by downloading the free World Ag Expo 2018 mobile app, which also has an exhibitor directory, map and other visitor resources.
World Ag Expo Schedule of Events Tuesday, Feb. 13
9:00 a.m. Show opens 9:15 a.m. World Ag Expo Arena Opening ceremonies 9:30 a.m. Seminar Trailer Three Ag Technology: What’s Hot, What’s Not and Why Speakers: Danny Royer, Bowles Farming Co.; Penelope Nagel, Ag Tech 10:00 a.m. Seminar Trailer One Managing the Sun: Solar Asset Management for Ag Operations Speaker: Jason Smith, CalCom Solar 10:00 a.m. Seminar Trailer Two The 21st Century Dairy Speakers: Paul Anema, Chris Garnier and Gary Genske, Genske Mulder & Company, CPAs 10:05 a.m. World Ag Women Pavilion A Quilt Show Presenter: Debbie Van Fossen 10:30 a.m. World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 10:45 a.m. Seminar Trailer Three CV Salts: Long Term Fix to Nitrates in Groundwater Advancing to Adoption Speaker: Parry Klassen, executive director, East San Joaquin Water Quality Coalition 11:00 a.m. Seminar Trailer One Recycling Ag Plastic Just Got Easier Speaker: Matt Andros, ANDROS 11:00 a.m. Seminar Trailer Two An Alternative to Genomic Testing Speakers: Bill VerBoort and Denise Athy, AgriTech Analytics 11:00 a.m. World Ag Women Pavilion Cook with Chef Larry Chef: Larry Zachary, Cool Hand Luke’s Steakhouse/Saloon 11:45 a.m. Seminar Trailer Three My Job Depends on Ag Speakers: Erik Wilson and Steve Malanca, My Job Depends on Ag 12:00 p.m. World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 12:00 p.m. Seminar Trailer One Do You Have a Fugitive Dust Problem? Speaker: Silvia Barber, senior scientist, Integral Consulting Inc. 12:00 p.m.
Seminar Trailer Two Profiting from Methane Capture, Credits and Grants Speaker: N. Ross Buckenham and Neil Black, California Bioenergy LLC 1:00 p.m. World Ag Women Pavilion Cook with Chef Tommy Chef: Tommy Chavez, The Cafe 1:00 p.m. Seminar Trailer One Harvest Maximum Photosynthesis with Cover Crops Speaker: Jim Boak, equipment and crop technology specialist, Salford Group 1:00 p.m. Component Production: Is Your Herd Efficiency Up to Par? Speaker: Dr. Shane Holt, Cargill Dairy focus consultant, Cargill Animal Nutrition 1:00 p.m. World Ag Women Pavilion Cook with Bobby Salazar’s Chef: Bobby Salazar’s Mexican Food 1:30 p.m. World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 1:30 p.m. Seminar Trailer Three Financial State of Agriculture Speakers: Curt Covington, Farmer Mac; Dan Clawson, Farm Credit West; Raquel Leal, Wells Fargo 2:00 p.m. Seminar Trailer One Bio-Degradable Mulch Films in Specialty Crops Speaker: Brad Karst, Organix Solutions 2:00 p.m. Seminar Trailer Two
Dairy Drinking Water Quality Speaker: Joseph Lyman, DVM, Neogen 2:00 p.m. World Ag Women Pavilion Top of the Hill Jams & Jellies Presenter: Ruth Wardwell 2:45 p.m. Seminar Trailer Three Empowering Women in Ag to Transform through Gratitude: You Feed the World, Now Feed the Soul Speaker: Arleana Waller, ShePOWER Global 3:00 p.m. World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 3:00 p.m. Seminar Trailer One Changing Financial World Speaker: Pablo Borquez, ProducePay 3:00 p.m. Seminar Trailer Two Quality Calf Programs Start with Quality Milk Replacer Speaker: Dr. Bob James, Down Home Heifer Solutions 3:00 p.m. World Ag Women Pavilion Fashion Show Presenters: Espi’s Kids and Chelsea Street Boutique 4:00 p.m. Seminar Trailer Two Clean Water and Cow Comfort — Key to Dairy Profitability Speaker: Ross Thurston, Livestock Water Recycling Inc. 4:00 p.m. Seminar Trailer Three Are You Getting the Most From Your FSA and Rural Development Program? Speakers: Kim Vann, California
Rural Development; Aubrey Betten- court, USDA Farm Service Agency 5:00 p.m. Seminar Trailer Three Wine Reception California Women for Agriculture 5:00 p.m. Show closes
Wednesday, Feb. 14:
7:00 a.m. Jesus and Generosity Speaker: David Kieser, Midwest Food Bank 7:00 a.m. Coffee Talk Hosted by: Women in Agriculture for Mentoring and Empowerment 9:00 a.m. Show opens 9:30 a.m. Seminar Trailer Three PCA and CCA Laws and Regulations Federal Legislation Review: Insight on Water, Pesticides and GMO Labeling Speaker: Richard Gupton, Agricultural Retailers Association 10:00 a.m. Agriculture Conservation Easements Speakers: Daniel O’Connell and Scott Spear and Holly King; Central Valley Partnership, Sequoia River- lands Trust and Triple Crown Holdings LP 10:00 a.m. Seminar Trailer Two Exploring the Myths and Realities of Exporting 10:05 a.m. World Ag Women Pavilion Yoga with Lily Hart Presenter: Lily Hart, Studio Vue 10:30 a.m.
World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 11:00 a.m. Seminar Trailer One Sustainable Groundwater Management Act Speakers: Paul Hendrix, Mark Larsen and Soapy Mulholland, Groundwater Sustainability Agencies 11:00 a.m. Seminar Trailer Two Show Me the Money! Securing Payment for International Sales 11:00 a.m. World Ag Women Pavilion Cook with Chef Karl Chef: Karl Merten, Cafe 225 12:00 p.m. World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 12:00 p.m. Seminar Trailer Three Conscientious Philanthropy and Community Involvement Ag Advocacy Speaker: Karen Musson, Gar Tootelian Inc. and Gar & Esther Tootelian Charitable Foundation 12:00 p.m. World Ag Women Pavilion Cook with Chef Jeff Chef: Jeff Riggs, Tulare Adult School Culinary Arts 1:00 p.m. Seminar Trailer One Don’t Kill Your Golden Goose: Succession Strategies Speaker: Larry Oxenham, American Society for Asset Protection 1:00 p.m. Seminar Trailer Two Farm Wisdom: USDA Programs 1:00 p.m. Seminar Trailer Three Selfies, Social Consciousness & Inclusion What Matters to Millennials, How to Motivate Them and How They Can Master the Workplace Speaker: Kristi Sproul, AgCareers.com 1:00 p.m. World Ag Women Pavilion Cook with Chef Christian Chef: Christian Raia, West Hills College Culinary Arts 1:30 p.m. World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 2:00 p.m. Seminar Trailer One ABC’s of Organic Certification Speakers: Callie Cooper, certification officer, Oregon Tilth and Gwynn Sawyer Ostrom, review pro- gram technical supervisor, OMRI.
Februar y / March 2018
KERN BUSINESS JOURNAL
Agriculture 2:00 p.m. Seminar Trailer Two Manufacturing the Future: The Next Era of Global Growth and Innovation 2:00 p.m. World Ag Women Pavilion Sourced from History Presenter: Trevor Lewis, Rawson Wood Co. 2:15 p.m. Career Roundtable Speakers: Doris Mold, ag economist, University of Minnesota; Brandi LoForti, InsureCal Insurance Agency; Holly Carter, Carter & Co. Communications; Stacy Whitner, Pecan Grove Farms; Shannon Douglas, CA Farm Bureau; Kirti Mutatkar, United Ag; Tara Smith Anderson, American Petroleum Institute 2:30 p.m. World Ag Expo Arena Faster and More Efficient Ways to Rear High Performance Calves Speaker: Ben Helm, AB Neo/AHI 3:00 p.m. Seminar Trailer One Italian Advanced Agricultural Technology: Innovative Solutions for High Quality Products Speaker: Marco Acerbi, director of EIMA 3:00 p.m. Seminar Trailer Two Southeast Asia Emerges as Global Growth Leader 3:00 p.m. World Ag Women Pavilion Unique Container Gardening with Spring Flowers and Succulents Presenter: Devon Brown, The Gardens 4:00 p.m. Seminar Trailer Three 2018 Farm Bill Speakers: USDA repre- sentative; House Agriculture Committee representative; Glenda Humiston, Ag & Natural Resources for the UC System; Jenny Lester Moffitt, California Department of Food & Agriculture 4:30 p.m. World Ag Expo Arena Bud-Light After-Hours Party featuring Craig Campbell 5:00 p.m. Seminar Trailer Three Evening Networking Reception Hosted by: Sigma Alpha Sorority 5:00 p.m. Show closes
Thursday, Feb. 15:
6:30 a.m. VIP Tent Agricultural Leadership Foundation Breakfast Speaker: Father Gregory Boyle, Homeboy Industries 7:00 a.m. Seminar Trailer Three Coffee Talk Hosted by: Women in Agriculture for Mentoring and Empowerment 9:00 a.m. Show opens 9:30 a.m. Seminar Trailer Three The Future of American Energy: Workforce Opportunities in the Oil and Natural Gas Industry Speaker: Tara Smith Anderson, American Petroleum Institute 10:00 a.m. Seminar Trailer One Ag Tech Disruptive Technologies Saving Costs
Speaker: Reinier van der Lee, Vinduino LLC 10:00 a.m. Seminar Trailer Two Advances in Irrigation Flow Meter Technology Speaker: Jon R. Johnston, Irrigation Accessories Co. 10:05 a.m. World Ag Women Pavilion Bonsai Demonstration Presenter: Bob Hilvers, curator of the Clark Bonsai Collection 10:30 a.m. World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 10:30 a.m. Seminar Trailer Two Transformation through Mobile Drip Irrigation Technology Speaker: Monty J. Teeter 10:30 a.m. World Ag Women Pavilion Cook with the Barking Bakery Chef: Barbara Bennet 10:45 a.m. Seminar Trailer Three FSMA: Food Safety and Water Speaker: Priscilla Rodriguez, Western Ag Processors Association 11:00 a.m. Seminar Trailer One What You Need to Know: Antimicrobial Use in CA Livestock Speaker: Dr. Rosie Busch, veterinarian specialist, Antimicrobial Use & Stewardship, California Department of Agriculture (CDFA) 11:00 a.m. Seminar Trailer Two Close Spacing LEPA Applicators Improve Irrigation Efficiency Speaker: Dan Schueler, Senniger Irrigation 10:30 a.m. World Ag Women Pavilion Cook with Chef Kellie Chef: Kellie Black, MACHE 11:30 a.m. Seminar Trailer Two Pulse Irrigation on Almonds: Drop Water Usage While Increasing Yields Speakers: Guillermo Valen- zuela and Mark Yoshimoto, WiseConn Engineering Inc. 12:00 p.m. World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 12:00 p.m. Seminar Trailer One Get to the Root Cause and Unlock Operational Efficiency Speaker: Katy Griffin, Sustainable Productivity Solutions 12:00 p.m. Seminar Trailer Two Water Management Issues and Opportunities: Lessons from Colorado Speaker: Bethany Reinholtz, GDS Associates Inc. 12:00 p.m. Seminar Trailer Three Agroterrorism: Principles of Food Security Planning and Management Speakers: David Goldenberg, Western Institute for Food Safety and
World Ag Expo
Security; Sheldon Fung, WMD coordinator, FBI 12:00 p.m. World Ag Women Pavilion Cook with David Chef: David Vartanian, The Vintage Press 12:30 p.m. Seminar Trailer Two Managing Soil Moisture and Salinity Data via a Cloud- Based Platform Speaker: Bridget Graf, Spectrum Technologies 1:00 p.m. World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 1:00 p.m. Seminar Trailer One Advantages of Real-Time Soil Tension Data for Irrigation Management Speaker: Ben Smith, Hortau 1:00 p.m. Seminar Trailer Two How are Farmers Adopting Technology Today for Future Profitability Growth Speaker: Scott Warr, Rain Bird Corporation 1:00 p.m. World Ag Women Pavilion Cook with Chef Reagan Chef: Reagan Roach, Harris Ranch 1:30 p.m. Seminar Trailer Two Interpreting Soil Moisture Data Speaker: Brian Bourbonnais, IRROMETER Company Inc. 1:30 p.m. Seminar Trailer Three AgVocacy: How to Make a Lasting First Impression Speaker: Kristine Ranger, Knowledge Navigators; and Doris Mold, Sunrise Ag Associates 2:00 p.m. World Ag Expo Arena Equipment Showcase Facilitated by: Richie Bros. 2:00 p.m. Seminar Trailer One Food Safety Management Can Be a Risky Business! Speaker: Radojka Barycki, technical training manager, SCS Global Services 2:00 p.m. Seminar Trailer Two Advances in Irrigation Flow Meter Technology Speaker: Katie Englin, Seametrics 2:30 p.m. Seminar Trailer Two Compact, Efficient and Expandable Title 22 Treatment System for Small Water Systems Speaker: Peachie Maher Hytowitz, Amiad Water Systems 3:00 p.m. Seminar Trailer Three Cannabis: From Black Market to Mainstream Speakers: April Crittenden, Envirocann; Bryce Berryessa, California Cannabis Manufacturers Assoc.; Nicole Anderson, Caliva; Ian Rice, vice president at SC Labs 4:00 p.m. Show closes
Feb. 13-15 4500 S. Laspina St., Tulare Admission is $15 at the gate; children 6 and under, free. www.worldagexpo.com
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KERN BUSINESS JOURNAL
Marketing
PR disaster lessons to be learned from 2017 By Maureen Buscher-Dang
E
very year, public relations disasters never cease to surprise, shock and supply several “teachable moments.” Last year did not disappoint.
ADIDAS — Foot in mouth Adidas was the sponsor of the 121st annual Boston Marathon in 2017. For many, it’s the holy grail of long-distance running. One day after the race, the company emailed participants a congratulatory email with the subject line, “Congrats, you survived the Boston Marathon!” The backlash was swift on social media. Clearly, Adidas’ marketMaureen Buscher-Dang ing department didn’t think through how the wording could be perceived considering it’s been four years since the bombing at the 2013 race. It also didn’t help that the body of the email was an enticement to shop with the words, “You’ve conquered Boston. Share your race day experience and shop official gear.” Fortunately, they issued a public apology shortly after the original email. “We are incredibly sorry. There was no thought given to the insensitive email subject line we sent Tuesday. We deeply apologize for our mistake.” By immediately acknowledging responsibility and quickly issuing a sincere “no excuses” apology, Adidas was able to limit the bad press to a two- to three-day story.
EQUIFAX — Breach of confidence The list of Equifax’s PR misdeeds is long and continues to grow. • A massive data breach that exposed personal credit records, including name, Social Security number and date of birth of more than 145 million people, was publicly reported by Equifax in September 2017. This was a full six weeks after Equifax learned they’d been hacked.
• The breach could have been prevented in March after researchers uncovered a server software vulnerability. It wasn’t patched and was later used as a point of entry by hackers. • The day after the initial announcement, “Happy Friday!” was tweeted from the @AskEquifax account. “You’ve got Stevie ready and willing to help with your customer service needs today!” Clearly someone forgot to check the scheduled messages. • Three Equifax executives sold nearly $2 million in stock after the data breach was discovered, but before the public announcement. • Instead of taking the initiative to notify breach victims, Equifax decided to set up a website and call center. The large volume of inquiries resulted in little to no service from both the phone lines and website. • Two weeks after the announcement, the company admitted to directing people to a bogus website with an address similar to one created to help breach victims, rather than a page on its regular website at equifax.com. • Equifax initially charged breach victims a fee for freezing their credit. After public outcry they decided to waive the fees. While most companies won’t face the tsunami of news spewing from Equifax, there are some key lessons to be learned. Transparency is crucial. Disclose problems sooner rather than later. The public and the media can usually tell if you’re hiding something. Take responsibility. Publicly disclose all of the facts — the good, the bad and the ugly. Create a plan. Describe specific steps your company plans to fix the situation and to make certain it won’t happen in the future. Implement the plan. Show sincere empathy. Apologize. Demonstrate a genuine concern for those who are affected. Clients come first. Set up a clear path for communication. Keep clients informed on a timely basis. Maureen Buscher-Dang is a Bakersfield public relations and marketing consultant. She can be contacted through her website www.buschermarketing.com.
Februar y / March 2018
Februar y / March 2018
KERN BUSINESS JOURNAL
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Marketing
Medical, service, construction jobs to see increases By Dianne Hardisty
K
ern County continued to see strong demand for workers in all health care-related fields during 2017. And this demand is expected to continue through 2024. Citing state Employment Development Department data, Kern County Assistant County Administrator Teresa Hitchcock noted Kern’s “extremely strong growth” in jobs for personal care aides, home health aides, and other personal care and service workers. “This is due to both the growth in overall population and also the aging of the boomer population,” said Hitchcock, who oversees Kern Students in the CSUB Nursing program. County’s economic development and jobs programs. Eric Geiger, Kern Medical Dianne Hardisty Center’s staff recruiter, agreed. The county hospital held a job fair in August at the America’s Jobs Center in Bakersfield. The one-day event attracted 294 applicants, with job offers made to 25 people for positions including food and building services, trauma registration and patient care technicians. An additional 27 applicants were considered for other positions. Geiger said county jobs officials reported the event “was one of the largest they have had at their center.” Looking to 2018 and beyond, Hitchcock predicted job growth will be strong in other fields, as well. “We are expecting tremendous demand for construction workers in all fields over the next 10 years,” she said, crediting numerous public infrastructure projects that are scheduled to take place in Kern County for the Wonderful Industrial Park in Shafter overview. demand. “Many of these are mega projects, including the Lake Isabella dam project, the high-speed rail projskilled labor pool is likely to tighten. ect and the Centennial Corridor project. “We are already seeing some of this in the medical “In addition, the newly enacted gas tax will add industry, but it will more than likely increase in other transportation projects through 2027. In talking with areas as more employers compete for a smaller pool the local unions, many of their members are older and of workers,” she said, noting county jobs officials are will be aging out of the system, requiring replaceaddressing a looming shortage in a number of ways: ment workers,” she said. “Other growth areas include • Creating retention and recruitment strategies for food preparation and serving, law enforcement and existing workers. corrections, and warehouse workers (material moving • Enticing workers, who may have left the workworkers, assemblers, fabricators, packing and filling force, to return. machine workers.” • Supporting on-the-job training and apprenticeAt Kern County’s two major ecommerce distribuship programs for workers who lack industrial or tion centers — the Tejon Ranch Commerce Center at construction skills. the foot of the Grapevine and the Wonderful Industrial • Supporting specialized training that leads to Park in Shafter — developers credit a good, quality industry-recognized certificates. local labor supply for their centers’ success. “The top nine occupations projected to have the “The distribution managers at the Tejon Ranch most openings between now and 2024 require a high Commerce Center are united in their praise of their school diploma/GED or less,” said Hitchcock. “Howemployees,” said Tejon’s Barry Zoeler. “They have a ever, for some of these positions you won’t be able to strong work ethic, which translates into greater procompete without some type of vocational training. ductivity, and they’re extraordinarily stable, which has “There is a trend toward vocational training as resulted in a very low turnover rate.” an opportunity to land a better-paying job without “Right now, we still have higher unemployment necessarily completing a two- or four-year degree,” and therefore, a larger labor pool than many other she said, noting a goal will be to identify career paths markets,” said Hitchcock, adding that as the state’s and to help job seekers pursue careers, which require some Kern’s unemployment rate continues to decline, the vocational training and a certificate. “With additional
PHOTO BY MITCH STEWART
Materials testing to start in June for Corps Isabella Lake Dam project
training and education, workers can progress to higher paying jobs.” Balancing the needs of workers to find jobs with the needs of employers to find skilled workers is a focus of the county’s myriad federal- and state-funded jobs programs and the national network of America’s Jobs Centers — a collaborative effort between agencies that provide “one-stop” services for job seekers. “Our local system partnership is with 21 different agencies that provide a range of services for various targeted populations, including dislocated workers, folks with disabilities, veterans, ex-offenders, farmworkers, youth ages 16 to 24, seniors and more,” said Hitchcock. “The concept behind a one-stop center is to provide all of the services at one site so that job seekers aren’t shuffled around and forced to visit multiple places to get the help they need to find employment.” The primary local partners include Employers’ Training Resource, the Employment Development Department, the Department of Rehabilitation, Adult Education, and the Department of Human Services. Most of the funding comes from the federal Workforce Innovation and Opportunity Act (WIOA). Employers’ Training Resource is wholly grant funded and receives no county general fund money.
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Marketing
Mentor-Protege helps small, big companies and Supply, and Preferred Power Solutions to participate in large construction projects. In a nutshell, the Mentor-Protege program is an initiative that allows small businesses to pursue large, complex public projects by teaming up with larger companies that have more expertise and resources. Robison explained that through the program, She Marine has “the benefit of executive mentorship and bonding. There is also the potential of new client base and network opportunities for my company.”
In a nutshell, the Mentor-Protege program is an initiative that allows small businesses to pursue large, complex public projects by teaming up with larger companies that have more expertise and resources.
Rebecca Robison of She Marine Construction Supply.
By Kelly Bearden
T
he U.S. Small Business Administration’s Mentor-Protege program is helping a Bakersfield woman realize her dream of owning a successful small business. It is a dream that flows from growing up in Bakersfield, serving her country in the U.S. Marine Corps and later pursuing a career as a Department of Defense contractor. It is a dream that Rebecca Robison says was guided by her prayers to God that led her to return to her Bakersfield home and open She Marine Construction Supply. The oldest of Dan and Rachel Robison’s three children, Rebecca Kelly Bearden was born and raised in Bakersfield. Her family shared the collective experience of many local residents, who migrated from Oklahoma and settled in California during the Dust Bowl. Robison attended Curran Junior High School and West High School before joining the Marine Corps. “My family often spoke of my opinionated disposition and would say: ‘You argue a lot. Maybe you should be a lawyer,’” Robison recalled. “Eventually, I put soldier and lawyer together. That realization led me to signing up for six years in the Marine Corps as a legal clerk.” The original enrollment became a career, during which she saw duty at bases in the U.S. and overseas.
She eventually transitioned to training war fighters to complete a variety of communications tasks involving radio and computer technology. Along the way, she completed her college education, studying political science, with an emphasis on Middle Eastern politics, at Stephen F. Austin State University in Nacogdoches, Texas, and earning a master’s degree in business administration from National University. “There is so much silver lining to my education story,” Robison said. “My mom was the first person to graduate from high school in our family. I was the first to graduate from college and graduate school. Education is really a path from poverty to your personal potential.” Following her retirement from the Marine Corps in 2011, Robison worked for Defense contractor Booz Hamilton, teaching information operations and war fighting to civilian Department of Defense employees. “I was praying for direction in my life and God moved on my heart to return home. It was the best decision He ever made,” she said, noting that she decided if she was going to work that hard, she might as well work for herself. “She Marine Construction Supply has my heart and the full expression of my talent now.” With the assistance of consultants at the Small Business Development Center at California State University, Bakersfield, Robison has developed business plans, identified resources and been included in the U.S. Small Business Administration’s Mentor-Protege program. As a disabled veteran who heads a woman-owned company, Robison is being teamed with larger companies, including Bakersfield Pipe, Johasee/LMS Rebar
She explained the larger companies are then able to subcontract to smaller companies, such as She Marine, to have access to “set aside work” in federal government jobs across the country. The Mentor-Protege program is intended to help businesses in historically underutilized business zones, women-owned small businesses, service-disabledveteran-owned small businesses and small businesses generally. Robison’s company, She Marine Construction Supply, is a service-disabled veteran/woman-owned, broad spectrum supply company headquartered in Lake Isabella, with offices, a warehouse and pipe yard in Bakersfield and Shafter. Major projects Robison’s company has been involved with include California High Speed Rail, Lake Isabella dam/spillway repair, the Los Angeles Stadium at Hollywood Park and LAX modernization. Robison also is pursuing a general contractor’s license that will allow her to expand her company’s opportunities. Robison says she is grateful for and appreciative of the help she has received from SBDC consultants to “start and grow a viable business that benefits me, my family, my church and my larger community.” The Small Business Development Center at CSUB is one of five service centers within the University of California, Central California 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, Inyo and Mono counties by providing free 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 California State University Bakersfield.
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Technology
BTK serial killer: Power of computer forensics By Alphonso Rivera
H
e called himself the BTK serial killer. It stood for “bind, torture, kill.” And he taunted Wichita, Kansas, law enforcement for more than two decades until his ego and computer forensics brought him Alphonso Rivera down. The BTK arrest in 2005 and the killer’s eventual sentencing to 10 consecutive life sentences is considered the most famous criminal case ever solved by computer forensics. As time passes and technology becomes more sophisticated, law enforcement’s and the legal community’s reliance on computer forensics continues to expand. Not only are computer audits and investigations used to crack criminal cases, they are being used by companies to investigate disputes involving violations of company policies, financial and intellectual property thefts, security breaches and more. The famous BTK case demonstrates the power and effectiveness of adding computer experts to investigative teams. The BTK killings began in 1974, with the brutal murders of Joseph, 38, and Julie, 33, Otero and two of their children by suffocation, strangulation and hanging. A few months later, Kathryn Bright, 21, was fatally stabbed 11
times. After a gap of three years, Shirley Vian, 24, and Nancy Fox, 25, were found strangled in separate murders. After another four years, Marine Hedge, 53, was strangled in 1985 and Vicki Wegerle, 28, died a similar death in 1986. BTK then went quiet, not killing again until Dolores Davis, 62, was found strangled in 1991. Throughout the years of killing, BTK taunted law enforcement, seeking recognition and notoriety through notes hidden in boxes, library books and even newspaper classified ads. After a vicious yearslong murderous spree, from 1974 to 1991, BTK went quiet again. It wasn’t until 2004, when a newspaper story speculated that BTK was dead, that the killer contacted law enforcement officers. That communications and the computer technology the killer used brought BTK down. In March 2004, The Wichita Eagle received a letter from a man claiming to have murdered Wegerle. Enclosed were crime scene photographs and items. Before the letter arrived, BTK only had been suspected of killing Wegerle because investigators were unable to match DNA found under the woman’s nails to a suspect. Another letter was sent to a Wichita television station with more clues and a box was found on a street corner containing a graphic description of the Otero murders. And in July, a package containing more evidence was dropped into the return slot of the downtown public library. By Oc-
tober, an envelope was dropped into a UPS box containing a poem threatening the case’s lead investigator. And in December, police received another package from BTK containing a copy of victim Fox’s driver’s license. In January 2005, BTK attempted to leave a cereal box containing more crime details in a pickup truck parked at the Home Depot in Wichita. But thinking it was a joke, the vehicle’s owner tossed the box into a dumpster. Hearing nothing about his January clue-drop, BTK contacted investigators, who scrambled to Home Depot, where they found the box, as well as surveillance tapes showing a man driving a black Jeep Cherokee tossing an item into a truck. Within the month, BTK sent more letters and
a message written on a computer floppy disk. Although BTK had scrubbed old documents from the floppy disk, forensic computer investigators found buried “metadata” identifying Christ Lutheran Church and “Dennis” being the last user. An internet search revealed Dennis Rader was president of the church council. Further investigation revealed Rader drove a black Jeep Cherokee. And through medical treatment Rader’s daughter had received at a university, a DNA familial match was established with Wegerle’s DNA sample. Rader, the married father of two, an Air Force veteran, a college graduate, who majored in criminal justice, and a code enforcement officer for nearby Park
City, was arrested. He admitted committing the murders and told investigators he would have killed more people, but his intended victims “got lucky.” At the time of his arrest, he was planning another murder. The lesson learned from the infamous BTK case is that a criminal’s effort to hide a “digital trail” is no match against the skills of a trained forensic computer sleuth. Alphonso Rivera is the founder and CEO of Advanced Micro Resource Digital Forensics, a Bakersfield-based digital forensic company that specializes in digital audits involving cell phone and computer evidence for attorneys, private investigators, human resources consultants and companies.
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evidence will be collected and witnesses will be questioned before taking action. “Mishandled employment investigations can be used by employees as offensive weapons,” said Binetti. Have supervisors been trained on what to say and do during investigations? Confidentiality is critical during the process and retaliating against employees for participating in investigations is against the law. It’s a good idea to share that information with people in positions of authority.
What will you do after the investigation? If you decide to discipline the accused, how will you determine the appropriate level of discipline? What should you tell the complainant? What kind of documentation should you keep and where should you keep it? When people complain about sexual harassment, it’s easy to believe the complainant and want to take swift action against the accused. However, the California Fair Employment and Housing Commission states that employers must fully and effectively investigate
harassment complaints in order to be in compliance with the Fair Employment and Housing Act (which requires employers to take all reasonable steps necessary to prevent discrimination and harassment from occurring). Additionally, you don’t want to fire someone who’s done nothing wrong. Therefore, be sure to investigate before you decide to terminate. Robin Paggi is a training and development specialist with Worklogic HR.
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www.kedf.org
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