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CAA MIRROR JANUARY 2002
PRESIDENT'S MESSAGE
By Patty Hartman
We are into another New Year!
I want to thank all those who
made our Winter Convention so successful especially the many new
members along with the familiar faces that we have not seen for
sometime. It would not have happened without our staff Jerry Lenander,
Louis DiCenzo and Kurt Meierhenry and we really do appreciate all
your hard work and dedication.
I want to welcome all our new Regional Presidents
and if any of you need anything in the coming year, please contact
the Board and we will all jump in to help you. To all the outgoing
presidents, I hope you will not be absent and you will all still
attend the CAA functions and share your experience and expertise.
You donated much of your time and your input is highly valued. I
also want to thank the Board that served us for 2001 and I am grateful
that many of them will be serving us in 2002.
Though 2001 is behind us there are unresolved
issues and I count on the board to get resolutions to many of the
issues. Along with Saratoga, the apprenticeship program, the many
fund raising projects we need to do for the WBFAA, we also have
another goal! Each local president and their members needs to visit
what we call an AHJ (authorities having jurisdiction). We need to
let them know the positive roles we play in our community and we
need to work with them and help educate them in what we do for a
living.
This year it is very important for us to continue
our grass roots efforts to work with the police, fire departments
and our local city councils. This is going to be a crazy year for
California and nothing should surprise us. We need to be prepared
and stay focused on what is going on in all our communities from
the North to the South. This is what makes an association strong.
I want to also acknowledge how generous many
of you have been in the past year. I am pleased to see the CAA PAC
Fund still going strong and supporting our legislative advocacy
programs.
And finally, to Harvey Eisenstadt; seeing
you tear up at your tribute dinner did us all in for the night.
It is truly a night I will not forget. I am already looking forward
to our next recipient.
Something tells me this will be a very
good year because I have opportunity to work with some of the greatest
in our Industry.
ACCOUNTING NOTES
COBRA Coverage - Need
To Know When It Applies
By Charles Schwager CPA
Barkin, Perren & Schwager, LLP
The year is wrapping up as this
goes to press so as the New Year begins, I would like to wish all
of our readers, as well as the leaders of our association, a happy,
healthy, prosperous New Year. May 2002 be free of the incredible
events and tragedies we have seen in the past months.
The state of the economy is a question asked
daily, with different answers just as frequently. Truly a roller
coaster ride that is likely to continue. Many companies have had
to respond to the economic events by becoming leaner and more cost
conscious. With this there have been layoffs, as well as early terminations
or retirement.
Health insurance coverage for all Americans
has been a political buzzword. But for those employed by companies
that offer health coverage, the loss of employment can have serious
ramifications for health coverage. Hence the other health coverage
buzzword, COBRA. What is it, and when does it apply? I hope this
information is pertinent to both employees who may be affected by
loss of coverage, and employers who need to be sure to notify employees
of its availability when cutting back on staff.
COBRA was created to reduce the effect on
health coverage upon loss of employment. If an employer contributes
to a group health plan, the employer can be required to temporarily
continue the health benefits for terminated employees and certain
other individuals. Note that new employers are not subject to COBRA
until at least their second year due to how the provisions are applied.
One or more qualifying event needs to occur that would otherwise
cause a loss in coverage. These events include:
Job termination (for reasons other than employee gross misconduct)
or a reduction in hours.
Death.
Divorce or legal separation.
Enrollment in Medicare.
The end of a child's status as a dependent under a parent's health
plan.
Employer bankruptcy causing a loss of coverage to a retired covered
employee.
COBRA requires employers to give employees
the opportunity to remain under the group health insurance policy,
but there is no requirement that employers pay the premiums for
such coverage. Usually the outgoing employee pays the premiums,
and cannot be charged more than 102% of the applicable premium.
Former employees may continue the health coverage for 18 months
or, if earlier, until they either become eligible for Medicare or
coverage under another health plan or fail to pay the required premiums.
Dependents can be covered under the policy if they were covered
on the day before the termination. COBRA participants are allowed
to change their coverage upon the birth or adoption of a new child.
Coverage can also be extended for an additional 11 months if the
former employee or dependent is disabled for social security purposes.
The employer must be notified during the original 18-month period
and the charge for the premiums can be up to 150% of the applicable
premium. A spouse or dependent child can extend the coverage for
an additional 18 months if:
The employee dies.
The employee and spouse divorce or legally separate.
The employee no longer can be covered under the plan due to being
eligible for Medicare.
The child is no longer classified as a dependent under the policy.
The election period consists of the employees being given at least
60 days to accept or waive continued coverage from the later of
the date they lose coverage under the plan or the date they receive
the plan administrator's notification of their COBRA rights.
COBRA is not permanent and may not be required
of an employer due to the size of the company. Some companies will
structure continued coverage for retired employees without reference
to COBRA. It is important to remember that in a society where health
coverage is critical, and economic change is constant, preparation
is the key.
Employers need to be responsible and keep
their employees informed. Employees need to know their options,
in or out of the employer's organization, and prepare for any change
in coverage for all members of their family in the event of a change
in employment, whether planned or not.
Be healthy, stay informed, and as always,
call me with any questions.
LEGAL BRIEFS
Wage Audits: What Every
California Employer Should Know
An Overview of the Audit Process
By Lessing Gold and Stacy West
A wage audit is an investigation by the federal
Department of Labor's Wage and Hour Division or California's Division
of Labor Standards Enforcement (DLSE) to determine if an employer
is in compliance with wage and hour laws.
When do wage audits occur?
Often, audits occur in response to an employee complaint about an
employer's violation of wage and hour laws. Employers who have violated
wage and hour rules in the past can also be audited again to ensure
compliance. Wage audits can also be conducted at random.
What do investigators do during a wage audit?
During an audit, the federal or state agency conducting the audit
can inspect and copy employer's records, question employees and
gather data regarding wages, hours, working conditions and employment
practices for the purpose of determining whether violations of the
law have occurred.
What must an employer do during a wage audit?
During an audit, the employer must produce certain records for the
investigation, including records of wages paid, hours worked and
tasks employees performed. The investigating agency may require
that other records be produced.
How are wage audits done?
Wage audits are conducted in a several step process. For example,
a wage audit generally involves the following three steps:
1. The employer and the investigator meet,
and the employer is told by the investigator which records are needed
from the employer in order for the investigator to conduct the audit.
2. The investigator gathers facts and data.
The employer produces the records necessary to determine the applicable
laws and exemptions. The records may include records of employer's
government contracts, records showing employer's interstate commerce
and records showing employer's annual dollar volume of business.
The investigators also may review payroll and time records. The
investigators conduct private interviews with employees to confirm
the information contained in the records and determine applicability
of any exemptions.
3. The employer and investigator meet a second
time. At this conference, the investigator informs the employer
of any violations of wage and hour laws. If violations were found,
the employer is told how to correct the violations.
What happens when the audit uncovers violations?
Penalties for minimum wage and overtime violations vary. Under the
Fair Labor Standards Act (FLSA), the federal wage and hour law,
an employer can be liable for up to $1000 per violation if it "repeatedly"
or "willfully" violates the FLSA minimum wage or overtime
pay provisions. An employer repeatedly violates the FLSA when it
engages in conduct a government agency has already cited as violative
of federal law or when a court has previously decided the employer
violated the FLSA. An employer also willfully violates the FLSA
when the employer knows its conduct was prohibited by the FLSA and
engages in it anyway or when the employer shows reckless disregard
for the requirements of the FLSA. Penalties are similar but not
identical under state law.
Generally, the penalty imposed by the state
or federal agency will reflect the seriousness of the violations
and the size of employer's business. State and federal agencies
will consider many factors in assessing the penalty, such as the
number of employees affected by the violations, the employer's history
of violations and it's commitment to future compliance.
Strategies for Dealing with Wage Audits
An employer contacted by a federal or state
agency regarding an upcoming audit should consider the following:
Most importantly, an employer should hire
a lawyer as soon as possible after the employer finds out it will
be audited.
The employer should make sure it understands
the reason and theory behind the audit. For example, an employer
can be audited for unpaid overtime or misclassification of employees.
Understanding the reason behind the audit will allow the employer
to respond appropriately with the right documents.
The employer should be friendly and helpful
to the investigators, and make efforts to ensure investigators are
comfortable. For example, the employer should provide the investigator
with adequate work space.
The employer should also cooperate with the
investigator to the extent possible. The employer should be aware
that the employer is required by law to make information available
to the state and federal agencies. This cooperation may often result
in a better outcome for the employer. For example, in state audits,
the DLSE may allow a cooperative employer to self-audit. The means
the employer can audit his or her own records instead of turning
them over to the DLSE. The agency will then spot check the self-audit.
The employer is prohibited from retaliating
against an employee cooperating with the investigator. In the interview,
the investigator will ask the employee if the employee felt intimidated
or was pressured by the employer in relation to the interview. The
employer should either not discuss an upcoming interview with the
employees at all, or tell the employees about the investigation
and suggest they tell the truth at the interview.
Lessing Gold of Mitchell, Silberberg &
Knupp is CAA Legal Counsel.
Stacey West is a senior associate specializing in labor and employment
law issues at Mitchell, Silberberg and Knupp in Los Angeles.
ASSOCIATES
NEWS
A Special Message
By Harvey Eisenstadt
I am taking the liberty of using my column this month for a personal
message.
Last month the California Alarm Association
held its Winter Convention in San Francisco. Hundreds of industry
people came to participate in this very successful three days of
serious business meetings, presentations, networking and social
activities. However, to steal the tone and meaning of a famous quote
of one of our greatest Presidents, Franklin Delano Roosevelt, December
7, 2001 will live with me forever. At least in my life it will long
be remembered and cherished as one of the most memorable events
of my career. The wonderful people of our industry, an industry
that I've so enjoyed as my profession for nearly thirty five years,
came together and chose to honor me with the George A. Weinstock
Award for Lifetime Achievement. There are many honors one can receive
in their lifetime, but to be the choice of your peers, and honored
by them, is the one that is difficult to surpass.
To further enhance this honor, the members
of the CAA and industry professionals from across the country dug
deep and their tribute contributions exceeded that of previous years.
Financial assistance so desperately needed for the many issues being
addressed by the CAA. Yes, we as an industry recognized a need and,
yes, we as an industry once again stepped up to the plate and delivered.
And the exciting correlation to me is that my name is attached to
that support. My heartfelt appreciation goes to all that gave so
generously and the hundreds who joined me in what I consider a once
in my lifetime celebration. Ideally, I would like to personally
thank each of you individually; however, realistically I know I'd
inadvertently forget someone. So, to all who gave so generously
and participated in the tribute, I thank you for your recognition
and generosity and to a few I do have some special words.
Neither I nor our industry, can truly say enough to thank you, George
Weinstock, for your contributions. Your name attached to this award
sets the level of achievement at its professional peak. I am so
thrilled to have achieved this goal and I know so many more will
strive to reach it.
To my good friend and mentor, Ron Spiller,
I thank you for quarterbacking this event to success. Your humor
and wisdom kept everyone involved and festive. We, the entire Eisenstadt
Family, thank you for your friendship and devotion.
We all owe Detection Systems/Radionics a very
warm show of appreciation. As a new member of the Bosch Group, under
the leadership of Peter Ribinski, CEO/President, they have supported
the CAA through their generous contributions and the recognition
of the value of my activities in the association.
A very special thank you goes to Executive
Director Jerry Lenander and his staff at the CAA office, Kurt Meierhenry
and Louis DiCenzo, for their tireless effort to the details of this
convention as well as all the CAA business. They also deserve a
special pat on the back for tolerating me during the planning of
this convention and keeping the details of the tribute a surprise.
Let's face it. This is the team that makes the Convention Chair
look good.
And to my family, my wonderful wife Judy,
my children, their spouses, and our grandchildren. There is lots
of love in the Eisenstadt homestead and they know how to humor and
tolerate me. I love them all and they have been my inspiration.
Again, there are so many more whose contributions,
personally and financially, have endowed the CAA to move ahead in
their efforts to face the challenges in the interest of the alarm
industry. It would take a column many times this size to mention
everyone individually. You know who you are and we, too, know you.
To all of you, I thank you for your unselfish support of the California
Alarm Association and for making 2001 my year of infamy.
My very best wishes to you, and your
families for a healthy, happy and prosperous New Year.
LEGISLATIVE REPORT
California Chooses Leadership
in 2002
By Alan L. Edelstein and Donald B. Gilbert
The Legislature is due to return
for the regularly scheduled second year of the 2001-2002 session
on January 7, 2002. Bills that did not make it all the way through
the Legislature in 2001 can be considered in 2002. However, those
that did not pass out of their "house of origin" (i.e.
Assembly bills in the Assembly and Senate bills in the Senate) must
do so by the end of January to stay alive. That is not an easy hurdle.
For both the remainder of the current fiscal
year and for the 2002-2003 budget, which the Governor must propose
in January, it is clear that the only areas that will not be impacted
will be law enforcement and other budget items associated with security.
One of the big issues will be whether the public health system,
which is acknowledged as inadequate in many ways and which will
have to deal with any bio-terrorism incidents, will be beefed up
along with traditional law enforcement.
It is widely assumed that Governor Davis,
who is facing a tough reelection campaign and probably wants to
run for President, certainly will not propose and likely will not
acquiesce to tax increases. It is also widely assumed that, since
a tax increase requires two-thirds vote of the Assembly and the
Senate, it is unlikely the Legislature would pass one without a
request from the Governor.
Nevertheless, there has been mention of an
effort to reinstate some of the vehicle license fees (known commonly
as the "car tax") that were lowered significantly when
the state's budget was overflowing just a couple of years ago. There
has also been some mention of imposing a sales tax on services such
as California has on goods. The argument for this tax is that as
the economy moves from one based on goods to more of a service economy,
the state loses out on revenues.
You may recall that a sales tax on services
was proposed in the early 1990's when the state faced a $14 billion
deficit. Every trade and professions group impacted raised a storm
and the effort was defeated. Expect a similar huge battle should
the idea receive serious consideration during the current crisis.
The current make-up of the Legislature is
overwhelmingly Democratic. The Democrats hold 50 of the 80 seats
in the Assembly, and 26 of the 40 seats in the Senate. On majority
vote bills they can afford to let party members in difficult seats
not vote with the party. On votes requiring two-thirds of the house,
such as the budget and other bills appropriating money, they are
often able to find sufficient Republican votes. In the Senate they
only need one Republican; in the Assembly they need four.
When the state was experiencing widespread
energy shortages and skyrocketing prices, some speculated that Governor
Davis could have serious opposition in the primary. While he still
has a budget crisis to deal with, the Governor seems to have weathered
he energy storm and will have no serious opposition.
Nevertheless, with Republicans consistently
criticizing his leadership and with several of the Republican primary
candidates pointing out his alleged deficiencies on a daily basis,
Governor Davis and several key advisors are focusing intensely on
his reelection. A prodigious fundraiser who has raised money almost
from the day of his first election, the Governor has a bountiful
campaign war chest.
Three Republicans are running for their
party's nomination. One candidate is William Simon, a wealthy Los
Angeles businessman whose father is a former U.S. Secretary of the
Treasury. Simon can raise significant funds and reportedly has enough
wealth of his own to support a run for governor. Mr. Simon is considered
bright and conservative enough to please the rightward leaning Republicans
who dominate Republican primaries. Secretary of State Bill Jones
is the only Republican who currently holds statewide office. He
is termed out this year and, therefore, has nothing to lose by running
for Governor. Still conservative but probably a bit more moderate
than Simon, Jones switched from supporting President Bush to Senator
McCain in the middle of last year's presidential primaries. Riordan,
who recently completed two terms as Mayor of Los Angeles, is considered
the front-runner for the Republican nomination and a tough opponent
for Governor Davis. A wealthy businessman, he was reelected mayor
in a city that is clearly Democratic. Most citizens give his tenure
as mayor favorable marks. He is a classic non-politician politician.
CAA PAC FUND
The CAA has retained Edelstein
& Gilbert as the legislative advocate for the industry in Sacramento.
This commitment will result in a higher profile for the industry
in the state capitol and ensure that the interests of the companies
are presented in a positive way to the legislators. The commitment
of funds is significant and is being support by membership dues
and special fund raising efforts. See minutes from CAA General and
Board of Directors Meetings in this issue for update.
The California Alarm Association Political
Action Committee was formed to provide support to the legislative
advocacy of companies conducting business in California in the electronic
security and systems industry.
Funds to a state PAC, which this one
is, can be corporate or personal, although they are not tax deductible.
CONTRIBUTIONS SHOULD BE MADE AS FOLLOWS:
Payable to
CAA PAC
Mail to:
CAA PAC
c/o Richard Eichman
1127 11th Street, #300
Sacramento, CA 95814
IMPORTANT: Include
YOUR name,
address,
employer
and occupation.
This is required for the contribution. Check can be personal or
business account.
INDUSTRY NEWS
Former FBI Director Louis Freeh
will headline the SIA Security Industry Forum to be held February
3-5, 2002 at the Westin Innisbrook Resort in Tampa, Florida. Freeh
will address Forum attendees during the dinner event held on February
4. The theme of the conference, which has become renowned for its
focus on trends and solutions for end-users, dealers, integrators
and manufacturers, is "The Digital Revolution and the Convergence
of Technologies."
"Compensation in the Security/Loss
Prevention Field" 13th Edition is now available. This new two-volume,
276-page report contains information on salaries in 26 benchmark
positions provided by 197 organizations. For more information call
708/672-4200 or visit their web site at http://abbott-langer.com
CAA SHAKES, RATTLES AND ROLLS
The California Alarm Association
is pleased to welcome five new members to the CAA and the NBFAA.
Accularm Security Systems of Oroville will be represented by Dan
Ledford and be active in the Sacramento Area Alarm Association.
Also joining Sacramento is Action Security of Sacramento, Inc. with
President James Sloan and Sales Consultant Ruben De Leon representing
the company. Alarm Acquisitions of Pasadena will be represented
by Paul Udell and be active in the Greater Los Angeles Security
Alarm Association. Diamond Enterprises of Madera will be represented
by Sam Tarin and be active in the Mid-Cal Burglar Alarm Association.
EnerSys Inc. will be represented by Debra Burkhardt as the newest
Associate Member in the Greater Los Angeles Security Alarm Association.
Welcome all to the California Alarm Association.
PROTECTION INDUSTRIES, INC., LLP has appointed
of Keith Company to the position of General Manager for Southern
California, which includes regional offices in San Bernardino, Palm
Springs, San Diego, and the Greater Los Angeles area. Keith was
formerly the Vice President of Sales for Protection One in Culver
City, CA where he was in charge of all sales activity for their
600 plus independent dealer program in North America.
PACIFIC SECURITY SYSTEMS has promoted David
Ingham to Vice President of Operations.
THE GREATER ALARM COMPANY has hired Larry
Farmer to head the company's Northern California access control
systems division. He is based out of Greater Alarm's Sacramento
Valley branch office in Roseville.
THE 4TH ANNUAL GREATER ALARM CHARITY GOLF
CLASSIC recently held at Marbella Country Club in San Juan Capistrano,
CA netted $25,000 for Kids Cancer Connection (KCC), a non-profit
organization dedicated to enriching the day-to-day lives of families
of children with cancer. This year's total brings Greater Alarm's
four-year total contributions to more than $152,000.
Troy Taylor, co-owner of Taylor Made Security
in Citrus Heights, CA passed away on December 3 after battling for
many months the burns and injuries suffered due to his aircraft
accident on April 28. Troy is survived by his wife Mary and their
two young boys Gage, age 6 and Cody, age 3. Anyone wishing to make
a donation to help the family may contact Gary Buth at 888-633-9921
or gbuth@sai-inc.com
NTS Instructors Needed
The CAA Education and Training Committee is looking for individuals
interested in becoming Certified NTS Instructors and for persons
who are already certified by NTS. Instructors are paid a fee and
expenses for teaching one to three day courses for NTS and the CAA.
For further information, contact Chris Rogers at 800/230-1654.
You can get information on licensing in California
on the Internet by pointing your browser to the BSIS at WWW.dca.ca.gov/bsis.
The site includes new information on 1999 legislation, links, and
e-mail contact for the BSIS office.
NBFAA members can receive discounted payroll
services from Paychex. Contact Paychex at 800/PAYCHEX and request
NBFAA Use Code 5606.
NBFAA logos designed for use in your printed
material are available free to CAA members. Call the NBFAA at 301/585-1855
for information on other products available to members.
CAA Members can send their company news,
personnel announcements and other information to THE MIRROR. E-mail
information to jlenander@netvip.com,
fax to 310/395-8186 or mail to CAA Headquarters (see page 3 for
address).
REGIONAL CHAPTER NEWS
SACRAMENTO AREA ALARM ASSOCIATION
By Stephen Pereira,
SAAA President
Sacramento continues to be a strong local
association. Our meeting on December 4 was attended by over 70 members,
spouses and associates. It was a great Christmas meeting with a
strong emphasis on the spirit of the season. A great time was had
by all. The meeting was the last of the year for our President Andy
Anderson ,CPP Alarm and Video of Sacramento. As you can see from
the list below of our new officers, alarm dealers from far outside
of Sacramento are becoming more involved in this local association.
This year we will be looking for more participation
from both the members and associates to bring more dialogue and
interesting forums to our meetings. So to those who have a better
idea, bring them or better yet e-mail me with your thoughts and
let's get you in the loop. My address is Stephen@certifiedsystems.net.
Our next general meeting will be on February 5, 2002. Bring your
sweetheart as we will be celebrating Valentines!
May all have a Happy and Prosperous New Year
.2002
the best is in front of us!
SAAA OFFICERS 2002
President: Stephen Pereira, Certified Systems
Vice President: Peter Saar, Safe Side Security
Treasurer: Kathy Harrold, Dial One New West
Secretary: Chris Rogers, Grand Central Station
Sergeant at Arms: Donna Blakeman, Brinks Home Security
Director at Large: Mark Snider, Capitol Alarm
SAAA Website Online
The SAAA web site is now up and running, the address is WWW.SACAAA.COM
please check this out, and advise Jackie De Leon if there in any
changes or suggestions you have for the site.
MEETINGS
SAAA Meetings begin at 6:30 p.m. sharp at Holiday Inn Northwest.
GREATER LOS ANGELES ALARM ASSOCIATION
By Mark Sepulveda,
President
To all GLASAA members and associate members,
I personally want to thank each and every one of you who attended
our magically successful vendor's appreciation dinner at The Ritz-Carlton
Marina del Rey, November 27, 2001. The response from of the all
of the attendees has been nothing short of "what a great evening."
To the invited guests that were unable to attend, we missed your
presence, your laughs and most of all your friendship.
I would like to thank our executive director
Jerry Lenander and his staff of Kurt Meierhenry and especially Louis
DiCenzo for his diligence in working closely with myself, The Ritz-Carlton,
and with all of our members to make the evening such a success.
I would also like to thank all of the members
for their participation in the raffle, which raised $1,000.00 for
the "PAC FUND." We met our goal with the last $100.00
being donated by Les Gold and his lovely wife Sandy. The board has
also approved our annual $1,000.00 donation for the 2002 CAA State
Scholarship Fund. I would like to remind our members that the above-mentioned
programs are absolutely vital to OUR industry.
Our first general meeting for 2002 will
be on February 19 and I look forward to seeing all of you. I also
look forward to seeing any new members or prospective new members.
Let's go into the New Year with the membership drive and momentum
we have created for GLASAA in the past few months.
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