To protect consumers from unwanted autodialed or prerecorded telemarketing calls, referred to as telemarketing robocalls, new Federal Communications Commission (FCC) regulations took effect in October.
These regulations require a consumer’s “prior express written consent” before businesses can make telemarketing robocalls, eliminating the prior exception of an “established business relationship.”
“Businesses will need to modify their consumer contracts or create a separate consumer consent if they want to make these calls to their consumers,” says Ashleigh M. Morales, an associate at Semanoff Ormsby Greenberg & Torchia, LLC.
Smart Business spoke with Morales about what the new regulations require.
What calls are considered telemarketing robocalls under the new FCC regulations?
An autodialed call is any call placed using an automatic telephone dialing system that can produce, store and call telephone numbers using a random or sequential number generator. If your organization uses any type of call center software as part of a telemarketing campaign — calls offering or marketing products or services to consumers — the regulations most likely will deem it an autodialed call.
The new regulations apply to calls to cell phones as well as to landlines. In addition, the FCC considers a cell phone text message a call under the regulations.
Are any types of calls excluded?
The regulations do not apply to manually dialed calls or calls that do not contain a prerecorded message. The regulations also do not apply to purely informational prerecorded calls, such as calls from nonprofit organizations or for political, emergency or non-commercial purposes, such as those delivering information regarding school closings.
Is any customer base grandfathered in?
The FCC chose to not grandfather consumer consents granted under the old regulations. As a result, businesses and third-party telemarketers may need to re-solicit consents in order to satisfy the new requirements.
The old regulations allowed telemarketing robocalls to be made to consumers with whom there was an established business relationship. The new regulations eliminate this exception.
How can businesses best obtain written consent for calls?
To get prior express written consent, the consent must be signed by the consumer and include a clear and conspicuous disclosure informing the consumer that he or she is:
- Consenting to receive telemarketing messages using an automatic telephone dialing system or a prerecorded voice to the telephone number the consumer provides.
- Not required to sign the agreement regarding consent to telemarketing messages as a condition of purchasing any property, goods or services.
Electronic and digital forms of signature are acceptable provided the business complies with the federal E-Sign Act. In addition to modifying current consumer contracts, companies should obtain new consumers’ written consent to future autodialed or prerecorded calls at the time the consumer signs an agreement with the business. Then, the business must implement procedures to maintain records of the consents and ensure telemarketing robocalls only go to the telephone numbers for which the consumers have consented to receive calls.
What are the penalties for failure to comply?
Failure to comply with the new regulations can result in actual damages as well as statutory damages of at least $500 per call, which can be increased to $1,500 per call. In determining the amount of statutory damages, courts will look at whether the violation was willful. Since telemarketing campaigns generally involve hundreds, if not thousands, of calls, the potential damages could be great. If you have not already done so, contact your legal counsel to ensure you are complying with these new regulations. ●
Insights Legal Affairs is brought to you by Semanoff Ormsby Greenberg & Torchia, LLC
If your business has benefited from California enterprise zone credits, the next few months might shock your system.
AB 93, signed into law by Governor Jerry Brown on June 12, 2013, effectively eliminates the enterprise zone program. In its place, three new tax incentives will take effect beginning Jan. 1, 2014. Will these new incentives bring the same value to the California economy? Will your business lose benefits that it has come to rely upon, or will it find new benefits?
Smart Business spoke with Marcus Halluin, CPA, tax manager at Sensiba San Filippo LLP, to find out more about these incentives, what’s coming in 2014 and what businesses can expect moving forward.
What was the enterprise zone program and what did it do for businesses?
The enterprise zone program was a long-standing state incentive designed to encourage specific business activities in designated ‘economically depressed’ areas. The program provided lucrative hiring credits, sales tax credits, net interest deductions, business expense deductions and net operation loss deductions.
What new incentives does AB 93 create?
AB 93 creates a statewide sales tax exemption, which will be available for equipment purchases made by businesses engaged in manufacturing or biotechnology research and development. It will significantly modify and restrict eligibility for the hiring credit. AB 93 also creates a new investment tax credit based on a competitive application process.
How has the California sales tax exemption changed?
The new sales tax exemption created by AB 93 targets industries and activities rather than geographic areas. Specifically, the exemption will apply to manufacturers and biotechnology R&D companies. Qualifying businesses can exclude the first $200 million of eligible purchases per year from state sales and use tax. At least 50 percent of qualified purchases must be used in the process of manufacturing or R&D.
How will the hiring credit change in 2014?
Beginning in 2014, the hiring credit will be decidedly more restrictive and will apply only to the net increase in jobs. The expected effect of this change is significant. Many businesses that previously relied on hiring credits may no longer qualify or may see their benefits significantly reduced. The new law also makes changes to the definition of qualified jobs, including reducing the number of qualifying target employee groups and requiring hourly wages between $12 and $28 per hour.
What is the investment tax credit and how will it be administered?
The investment tax credit will be based on a competitive application process and will be awarded by a newly established California Competes Tax Credit Committee. Competitive criteria have been outlined and include the number of jobs created or retained, the compensation paid to employees, the total value of the investment made in the state, the level of unemployment in the area of proposed business locations and the overall economic impact in the state of the project or business. The Governor’s Office of Business and Economic Development will negotiate agreements with applying businesses, subject to approval by the committee.
What do California businesses need to know before these changes take effect?
Businesses need to understand that the game has changed. Just because your business qualified for credits in the past doesn’t mean it will in the future.
If you were relying on enterprise zone credits, you should sit down with your accountant or tax adviser and analyze the effects of the changes. Getting caught by surprise with an unexpected tax bill could have a negative long-term effect on your business.
The new incentives are certainly worth investigating. Manufacturers and R&D companies will likely qualify for new sales and use tax exemptions. And the investment tax credit could be very lucrative for businesses that qualify and participate in the application process. ●
Insights Accounting is brought to you by Sensiba San Filippo LLP
When evaluating the Affordable Care Act (ACA), there are two angles — the employer’s angle and the individual American’s angle. Setting aside what employers need to know, in the individual world, the first thing people bring up is the individual mandate.
“It is important to discuss the individual side of the legislation, so employers know what their people face if they are not offered coverage and, also, what their part timers face who may not be eligible for the employer’s plan,” says Tobias Kennedy, executive vice president, Montage Insurance Solutions. “Employers may be considering reducing hours of certain staff down to part time, and countless American small business owners may be getting rid of coverage entirely, so a dive into the ACA’s impact on individuals is very important.”
Smart Business spoke with Kennedy about the individual mandate.
How exactly does the individual mandate work?
The individual mandate is the part of the legislation that says most U.S. citizens and legal residents must carry minimal essential coverage for themselves and their dependents. Exceptions are very rare and really only extended to incarcerated people or those who belong to a specifically recognized religiously exempt group. Other than that, pretty much all citizens and legal residents have to comply.
The good news is there are many ways for an individual to satisfy this mandate. Most commonly, people will be complying with this via employer coverage, social service programs like Medicare or Medicaid, certain Veterans Affairs programs like TRICARE or through plans purchased on the individual market including the new exchange marketplaces created by the ACA.
What happens if individuals don’t have coverage?
If a person doesn’t have coverage, there is risk of a tax penalty. The penalty begins humbly enough in 2014 at 1 percent of income, or $95 — whichever’s greater. However, in 2016, by the time it’s fully phased in, the penalty is 2.5 percent of income or $695 — again, whichever’s greater.
In fact, even though it’s called the ‘individual mandate’ people should be aware it extends beyond your self. People are not only responsible for themselves, but they’re responsible for dependents as well. If someone is on your tax return, you’re responsible for the fines if he or she doesn’t have coverage. Children’s fines are half of an adult’s, and there’s an annual cap per household, which keeps the maximum allowable penalty amount to three adults. But people will want to talk to tax professionals with an understanding that, for many folks, the individual mandate extends beyond just the individual.
How can people get help with coverage costs?
Thankfully, there is some financial help available for certain people, so it’s important to explore all of the options. This assistance comes by way of the ‘subsidies’ that have been in the news.
The subsidies are a way for people who qualify to get premium assistance, so their plan is more affordable. They are only redeemable in the exchanges and are set off of the silver plans, which are the middle of the road plans that carry a 70 percent actuarial value. Actuarial value is a broad-strokes term that describes the average a plan is designed to pay for claims expenses like deductibles and co-pays — the remainder is the average that a member is designed to pay. So, qualifying people can get a subsidy to purchase a 70 percent plan through the exchange.
The subsidy basically says ‘you are only responsible for a certain premium dollar figure per month, and we’ll cut a check to the insurance company for any overage.’ This keeps the plan’s monthly premium from going over a certain amount of out-of-pocket costs.
Qualification for the subsidy is based on a lot of factors, including having an income below 400 percent of the Federal Poverty Limit but also not having affordable coverage available elsewhere. Examples of other coverage that disqualify you for a subsidy are access to things like affordable employer coverage or social service programs like Medicare/Medicaid.
Next month, we’ll discuss all of the information surrounding how to qualify, what exactly qualification gets you, and the financial assistance’s extension beyond premiums to help with co-pays and deductibles, too. •
Insights Business Insurance is brought to you by Montage Insurance Solutions
Some mistakenly believe that U.S. patents travel the world with universal protection, but countries work independent of each other when granting patents. That is why, when conducting business internationally, it is important to understand how intellectual property protections are procured in each country.
According to the Paris Convention, a treaty signed by the U.S. and 174 other countries that protects industrial property, a patent granted in one signatory country does not mean it must be granted in another.
“U.S. patents are independent from those granted by foreign countries, so protection is advisable in each market a patented product will be sold,” says John S. Zanghi, a partner at Fay Sharpe LLP.
Smart Business spoke with Zanghi about acquiring international patent protection.
How does the Paris Convention apply?
National treatment and right of priority are two important clauses of the Paris Convention with which businesses should be familiar. National treatment says member countries must grant the same patent protection rights to foreign citizens of other signatory countries as it grants to its own nationals. Nationals from a non-signatory country also are entitled to national treatment so long as they have a ‘real and effective industrial or commercial establishment in a contracting state.’
‘Rights of priority’ refers to the length of time an applicant can take to file a patent for the same invention in two countries. For patents and utility models, an applicant must file additional applications within 12 months. A patent office handles these as if they were filed on the same day as the original application, allowing time to determine the commercial viability of the patented product in additional countries.
An applicant seeking priority based upon an earlier filing is protected from any subsequent disclosures, such as publications, that occurred since the first patent was filed.
Why can’t one international patent application grant protection in all countries?
People have long discussed the idea of a single international patent application, but it’s not available.
Applicants can file using the Patent Cooperation Treaty (PCT), a multilateral agreement administered by the International Bureau of the World Intellectual Property Organization, which allows applicants to file a single application for patent protection in multiple countries. Applicants select the countries or regions where they would like to receive protection. The application is submitted to each office for review, which manages the granting of patent protection individually. Applicants must adhere to the requirements of a particular country and prosecute each patent separately from other countries.
For patent protection in Europe, filing regionally through the European Patent Office (EPO) is an option. The EPO is a collection of 38 European countries that agreed to establish a single procedure for the grant of patents. A European patent gives its proprietor the same rights as would be conferred by a national patent granted in any participating country. Ultimately, if granted, the European patent will grant in the selected European countries. Any infringement is dealt with by national law.
What needs to be done to file a patent in a foreign country?
Obtain legal counsel in each foreign country because each manages its own patent protection. Local counsel has knowledge of local requirements and can assist in filing and prosecuting an application through to the grant of the patent. They also are able to process applications in a timely manner to ensure you don’t miss a filing deadline.
Which patent and patent laws apply if a U.S. business is sued in another country?
Each issuing country manages and maintains patent protection. If someone sues you for infringement outside of the U.S., the laws of that country govern. However, if the country is a Paris Convention signatory, it must grant the same protection to all non-citizens as its own citizens. It is important to understand how the various international treaties and conventions operate, as well as the filing requirements of each country.
Filing a patent is not an insignificant cost, so it is imperative to understand your obligations and risks wherever you conduct business or in countries where significant competitors conduct business. •
Insights Legal Affairs is brought to you by Fay Sharpe LLP
The Summit of Sustainability Awards
Winner Small Business Category
Ms. Julie’s Kitchen
When it comes to the grassroots level for the wisest practices for not only being a steward of the environment but of the health of the community, Julie Costell is on the cutting edge.
The owner of Ms. Julie’s Kitchen, a vegetarian restaurant that grows its own food, Costell goes back to basics even to the degree of recently tilling her garden with two plow horses.
“We turned almost two acres of vacant city lands into organic tillable, arable land,” she says “We removed debris, amended the soil, built a fence and planted beautiful flowers along with our tons of vegetables.”
As a result of growing her own food for Ms. Julie’s Kitchen and to sell in the neighborhood, she saved more than $5,000 on groceries. Building a fence with materials considered “seconds” and employing neighborhood youth along with summer youth workers saved $3,000.
No chemicals are used at the gardens, and produce is grown organically. Ms. Julie’s Kitchen uses organic biodegradable cleaning products and compostable containers which are put into compost at the gardens.
“Area residents have reported losing hundreds of pounds, decreasing diabetes medications and reducing heart medications after eating our foods on a regular basis and learning from us how to change their eating habits to benefit their health,” Costell says.
She also volunteers to teach cooking classes in the community.
Among the awards Ms. Julie’s Kitchen has earned include the Art of Living Foundation, International Association for Human Values & The Akron Peace Project Human Values Award 2011, Akron Life Magazine — Third Place Best of City for Healthy Lunch 2012 and 2013, and Fox 8 Hot List Third Place Best Vegetarian Menu 2012.
The Summit of Sustainability Awards
Winner Public Sector Category
City of Twinsburg
What started as an environmental protection program for portions of the Tinkers Creek flood plain and nearby corridor that the city purchased several years ago has bloomed into substantial efforts to conserve financial resources and reduce energy consumption as well as the city’s carbon footprint.
Energy management projects that have been completed include installing energy-efficient lighting at city facilities; replacing windows and doors with energy-efficient products; installing solar heating arrays at the outdoor city pool to save 50 percent in natural gas consumption and heated water expenses; and converting all traffic signals in the city to LEDs.
Water management at the city’s Gleneagles Golf Course now makes use of storm water retained on the property; in addition, organic fertilizer is applied to the fairways and greens. A total of 4,800 trees have been planted in the city since 1995 to help improve water quality, reduce storm water runoff and moderate temperature.
In the winter, city streets receive treatment with beet juice and brine for more environmentally friendly ice control.
Waste paper has been reduced significantly after the city encouraged digital communication and record keeping. Recycling efforts have increased for residents as well, and the resident recycling programs have achieved the second highest rate of community participation in Summit County.
Many other efforts are underway to help the city’s green initiative. The success of the city’s program is directly related to the corporate culture of sustainability adopted by the staff members who remain vigilant in their search for efficiency, sustainability and cost reduction.
The Summit of Sustainability Awards
Winner, NonProfit Category
The Akron Marathon
The efforts of the Akron Marathon to become an environmentally responsible sporting event since it started a recycling plan in 2008 have shown impressive gains each year. The first year, a quarter ton of material was diverted from the landfill and sent to be recycled, and last year, 5.46 tons of material was diverted from the landfill.
Last year, the Akron Marathon instituted other environmental initiatives in its efforts to be certified by the Council for Responsible Sport as an environmentally responsible sporting event. These included calculating the carbon footprint to travel to and from the race by participants, improved management of water supplies, better control of waste management, expanded information about recycling stations, and creative initiatives to reuse or recycle other race day products that may have otherwise been thrown out.
According to the group’s calculations for 2012, carbon dioxide emissions for vehicular and air passenger travel combined to equal 212.8 metric tons. The group can now use this benchmark calculation to help create a plan to reduce the carbon footprint in years to come.
These efforts to reduce the carbon footprint include providing access to public transportation, promoting carpooling, using alternative fuel vehicles and providing mass transit to and from partner hotels and relay exchange zones.
Last year, the organizers also saved 3,344 gallons of water by filling cups for the runners to the half-full level. This was the first year water usage was measured which will offer a baseline for future years.
The Summit of Sustainability Awards
Winner Mid-Size Business Category
Kent Elastomer Products Inc.
In its 53-year history, Kent Elastomer Products Inc. has evolved from a latex tubing manufacturer into a diversified supplier of products ranging from thermoplastic elastomers to non-latex Free-Band Tourniquets.
The company started lean manufacturing in 2006 with an emphasis on continuous improvement. Kaizen practices were the main vehicle, and employees were the drivers for implementing and sustaining these and other improvements.
Since 2008, its Mogadore facility has realized an 84 percent decrease in water usage, a 13 percent decrease in electric usage and it sends 80 percent fewer dumpsters (from five per week to one per week) to the landfill. Total annual savings from these three improvements alone is approximately $26,000.
A wholly owned subsidiary of Meridian Industries Inc., Kent Elastomer builds its business on people — its employees, its customers and the patients who rely on quality products. Kent Elastomer serves a variety of markets including medical, dental, food/beverage, sports/recreation, laboratory and industrial.
The integrity of its people is reflected in its products, which are known for durability and strength. The company is nimble — able to create customized products quickly and to unique specifications.
An innovative approach at Kent Elastomer is employee ownership. The culture change that happened as a result of lean manufacturing is evident by the involvement of employees, their commitment to their jobs and the low turnover rates.
“We take pride in being a world class producer of quality products with employees striving for continuous improvement and reducing waste,” says Bob Oborn, president. “We take our stewardship of the environment seriously, and it shows.”
The Summit of Sustainability Awards
Many organizations are realizing that in order compete, they must follow the triple-bottom line model: people, planet and prosperity. Under this ideology, these leaders contribute to their communities by creating a sustainable business plan that helps to redevelop their cities as well as strengthen economic value in the area and increase the health and wealth of its people.
Even before this particular business ideology became known, Mayor Don Plusquellic of Akron introduced a sustainability plan on Earth Day 2009 called Greenprint for Akron. The purpose was to create an environmental partnership to foster a sustainable, eco-friendly community through education and leadership. Since that time, the city has been not only been setting and achieving its own sustainable goals but also encouraging local businesses and nonprofits to do the same.
In order to broaden the spectrum of organizational involvement, Paula Davis and Paul Feezel, members of the Greenprint for Akron Green Ribbon Panel, developed the idea for the Summit of Sustainability Awards program to not only recognize those Summit County organizations that have taken up the sustainability challenge but also to share these best sustainable business practices with all businesses in Summit County and beyond.
These practices can then be emulated by organizations that may not know where to begin on a sustainability plan. Each year the winning applications with coordinating professional videos will be displayed on the program website at www.SummitOfSustainability.org.
The City of Akron, Summit County, Greater Akron Chamber of Commerce and ReWorks were eager to join in on this program and, along with Keep Akron Beautiful, are the founding partners of The Summit of Sustainability Awards.
Now in its second year, The Summit of Sustainability Awards added two Sustainability Symposiums to provide attendees with sustainability mentoring from SOSA 2012 winners and sponsors, energy savings contacts from FirstEnergy and COSE/Dominion, and SOSA 2013 application clarification from SOSA committee members.
SOSA 2013 program applicants were judged on their implementation of business sustainability plans and the significance of their results and metrics when evaluated against the organization’s size and available resources.
Esteemed judges reviewed each applicant’s energy, building, waste and water management, chemical management, purchasing program, environmental awareness and green innovation. Over the following pages, we are proud to recognize the five Summit County 2013 winners whose efforts embody people, planet and prosperity.
1. Winner, Large Business Category -- GOJO Industries Inc.
2. Winner, Mid-Size Business Category -- Kent Elastomer Products Inc.
3. Winner, NonProfit Category -- The Akron Marathon
4. Winner, Public Sector Category -- City of Twinsburg
5. Winner, Small Business Category -- Ms. Julie’s Kitchen
Twelve years ago, EY decided to go global with its Entrepreneur Of The Year awards and establish the World Entrepreneur Of The Year program — and the results have been, shall we say, an international success. The conference, held annually in Monaco, features Entrepreneur Of The Year country winners competing for the World Entrepreneur Of The Year title.
Assembling business leaders from around the world in one place to be honored is a huge accomplishment — the wealth of experience, as well as the variety of successful leadership styles, is outstanding.
Here are some thoughts from the collection of the world’s most accomplished entrepreneurs — innovators, futurists, turnaround specialists and problem-solvers — about leadership styles. ●
“I built the company based on people, not on experience from before. They were willing to learn and try anything. We had a bunch of people who had never done this before. None of us had run companies. None of us had worked in high levels of companies. None of us were from Fortune 500s. Chobani not only became a business that grew, but Chobani was like a school to us, including myself.”
founder, president and CEO
Entrepreneur Of The Year 2012 United States
2013 Entrepreneur Of The World
“Early on, the business was centered on me, and I had to make all the decisions alone. Now I share those decisions with my 10 main directors. If there are differences in opinion, I make the last decision.
The other thing is that I have had to ensure that the people who are invited to work here are people with principles, values, integrity, responsibility and passion. If I don’t see a person with passion, they don’t hang around the company very long.”
Lorenzo Barrera Segovia
founder and CEO
Entrepreneur Of The Year 2012 Mexico
“I’m a very passionate person, which will never change. When you grow, you gain more experience and the kind of problems you face change. As you grow, you need to grow with your organization.”
Entrepreneur Of The Year 2012 Argentina
“In the startup days, you have to be very innovative, hire and retain talent, refine your business as you deploy in the marketplace, and you learn things from it. Today, with a solid track record of business success, I can focus on what’s next and think more strategic and long-term than you’re allowed to in the early days. My style has evolved as the business has matured.”
Chevron Energy Solutions
“Entrepreneurship and leadership is about always having ideas, knowing that it is possible even though everyone says it is too difficult. Maintain the positive and always have new ideas.”
Mario Hernandez, founder and president, Marroquinera
Entrepreneur Of The Year 2012 Colombia
“To keep the entrepreneurial spirit and entrepreneurship alive once you've got past the startup base, I think it is making sure people understand why they are there. There are always things you can do to improve your business. You should be rethinking and retooling it every chance you get. The key thing is to make sure everybody in the organization understands the story, where are you going — how are you going to get there? And the belief that you are doing the right thing —people want to know their purpose. Keep the energy going, keep a strong sense of purpose.”
Dr. Alan Ulsifer
CEO, president and chair
Entrepreneur Of The Year 2012 Canada
“The skill sets of an entrepreneur involve understanding how to create business. Why not work with kids who need it the most and actually teach them and help them to be entrepreneurs? That’s what is going to grow our economy and create stability where otherwise we’re going to have a lot of social unrest.”
President and CEO
Network for Teaching Entrepreneurship
“I like to be involved. I want to know everything that is going on. But I have to delegate to my team. That was the biggest adjustment for me, and it’s not an easy thing to do. It’s that delegating to others, trusting them and reinventing yourself. Now that we’ve grown, I put more responsibility on my team and rely on my team more than I once did.”
President and founder
SME Entertainment Group
“If someone makes a mistake, what do you do? You laugh with them. You don’t yell at them. You laugh. It just keeps things light and lively and people want to do their very best. You let them know they screwed up, but you also let them know it’s OK.”
National Heritage Academies