Executive placement

Succession planning considerations enter into discussions that I have with business owners when discussing their interest in conducting an executive search to find a CEO to run their company. For instance: As a business owner are you worn down and tired from all the extra effort and attention that you have had to spend on your business over the last few years? Have you wondered if there are viable alternatives to growing your business when sometimes you just want to kick back and relax? Knowing what you know now about the level of effort and energy to start and grow a business, do you think it is time for a change, perhaps an exit? These are questions I often encounter when talking with business owners who have founded their business or who have taken over their business from a parent – and know that there is no one in their business who is capable of taking over the business when these current owners decide to move on.  It certainly creates a quandary for them. It’s especially challenging for these owners when they think it’s time to sell their business and realize that the business value is not what they expected to yield after many years of hard work and effort. In my experience it’s helpful for owner(s) to take a step back and review the options they have when considering a business exit, because hiring a CEO to run their company is only one option. Business Succession Owners who go through a business succession discussion benefit from a review of the options as these will also consider their personal outcome goals, their company’s outcome goals, and what I call legacy goals.  Oftentimes I find owners have not considered their personal goals and it leaves them at a disadvantage when seeking to objectively evaluate their company and legacy goals. Think about it. If you are a business owner you most likely spend the majority of your time working on or in your business, with an occasional look up to reflect on what you might do once you exit the business. But when it comes time to exit the business – you have most likely have not developed your personal exit plan.  Not having a personal transition plan will impact the choices owners make when deciding to exit their business. Succession Alternatives Effective evaluation of succession alternatives does require careful planning. If, as an owner, you have not used business planning tools previously it may be challenging to follow a planning process, however, the benefits to a carefully thought-out succession planning process can substantially improve the succession choice to be made. Succession alternatives range from business sale to an outside buyer, selling to your employees, or, my favorite, retaining ownership of your company and hiring a CEO to run the company so that you and the CEO can develop a growth strategy to improve the value of the company prior to its eventual sale. There are several ways in which the succession planning discussion can occur.  It’s important however, that the discussion occur. My purposeful approach to conducting an executive search for the CEO of closely held or family-owned company’s benefits from a succession planning discussion with owners because it helps them to engage more proactively in the

There are quite a few executive search firms in the Boston area and other regions as well.  But, you wonder, which is the best?  And, how do you know it is the best? What determines that? I’ve had these questions presented to me regularly, after all, I run an executive search firm. As a matter of fact, someone asked me that yesterday. Let’s start with some assumptions. You need to hire a C-Level executive, perhaps a CEO for a family-owned or closely held business where there is no successor in the company. Sounds simple. Some firms may offer this service. It can include – developing a position announcement, development a confidential company and position profile, developing a psychometric assessment specifically for the position, and then presenting candidates with a series of psychometric assessments, conducting extensive and detailed preliminary interviews, conducting thorough reference and background investigations, aiding clients in the interview and candidate evaluation process, and negotiating terms and conditions of employment, to name more than a few. But what if you add in a succession-based planning process for the owners? Is this different from the few executive search firms in Boston that you are familiar with? This can include – Working with ownership and the executive team to determine the functional and dysfunctional parts of the business, Identifying what needs to happen to improve those dysfunctional parts, Identifying ways to improve those functional elements along with the dysfunctional elements to develop an actionable growth strategy that the executive team and that new CEO can implement over time. You need a vision for the C-Level executive to pursue. Yes, if you have developed a succession-based planning process with the owners and their executive team, chances are you have developed a vision (as well as a mission, goals, and actionable strategies). Taken together the vision will enable that CEO to implement the succession and growth strategy for the owner. The strategy and plan will look out at least five to seven years and include revenue and valuation targets. You want an executive search firm that is local, yet regional, perhaps national, and international. It’s a good strategy to look retain an executive search firm that has the ability to conduct and executive search to find the best candidate for a client company. Most candidates are employed, yet they may not be within the immediate geographic reach of the client company. You want personal service. Is that too much to ask? If you are researching executive search firms in Boston – or any region for that matter, find out what level of attention your executive search process will be provided. Is there a executive search consultant who will provide your firm continued personal and professional attention? Will the personal service want to understand your company’s culture, environment, workforce, customers, vendors, community – the legacy that you want your company to embrace? You want guarantees on the search results. This sounds simple, but oftentimes it is overlooked. Simply stated – is there a guarantee if either the selected candidate or the company decides the new CEO is not working out? Ask what that guarantee is, and how long it will last, and under what conditions? Simply put – The Executive Suite provides up to a one-year guarantee. I trust these simple, yet effective comments help in finding an

Being new at anything is difficult for a period. New team members try to get their bearings and begin to feel like a resident member of the company. This month a newcomer provided a critical reminder of the one factor which significantly influences the first week on the job. Why is this important to leaders?  Employers have to consider a new internal reset for retaining people. Navigating a new set of employee viewpoints for a preferred work relationship is not sufficient if only in conversation. Your chances of retaining people in today’s fight for talent increases when you connect them on day one of your new relationship. “Day one” provokes a blend of emotions. There is anticipation of interactions with a new team, even though you may have met some of them during the selection process.  A planned and structured agenda for key introductions and process training that includes specific outcomes will increase the engagement of new team members. There are feelings of excitement. New members will set out to make a personal contribution to organizational goals. On the first day at a new job, most newcomers expect a positive experience.  They will consider how their new peers work individually and collaboratively as they navigate their first week. They look forward to an agenda for learning the details of their new role. Margaret is a strategic communications professional. She has been looking forward to starting a new position at a top firm in her industry. She felt the usual emotions going into “day one” but her experience caused her to take pause.  At the end of day one, Margaret wondered how this well-established corporate team missed an important set up of their new relationship. Instead of a planned introduction to her team and her role, she was left to make introductions around the office and determine how to fill her time for an entire week before initial training was scheduled. What tasks was she to prioritize? Where was her team on day one? Would she be part of the business culture? What would help her to acclimate emotionally and professionally? Definition of critical onboarding steps. While many companies include some onboarding steps, the definition of this critical process varies dramatically. For small businesses, onboarding is a primary strategy for attracting and keeping top performers. This is one thing that will make a positive first impression and ensure that your initial working relationship phase will have a strong start.  Onboarding lays the groundwork for a lasting professional affiliation.  Making a new team member want to stay is difficult when an onboarding plan is missing. Three essential factors will ensure your new team member will decide to stay a while. Have an onboarding plan ready on day one. Do not skip this step; take the time to generate a plan that includes priorities for the initial 90-day period. You don’t have to iron out all the details, and the agenda can be edited in advance of each 30-day period. Your onboarding plan should include an illustration of role priorities for the initial period and for the long-term evolution of the role. Commit to giving ample thought to the experience of the early working phase as a set up for a long-term association. Expectations and priorities must include who and what. Depending on the level of your new team member, you want to give him or her the right framework for a productive first day, first week. Day one should include who they will have a regular interface with, and what they will achieve together. Your new team member will have the insight and direction to determine their priorities. A timeline is critical. Everyone wants to know what is expected of their time and energy in a new role. Priorities and expectations are in focus, now you should coordinate these within two to three identifiable periods of time. With an illustration of priorities and timelines, a new team member can easily determine how to spend time and energy during each specified period. Now the execution of the role during the initial period will occur with optimum productivity and performance can be reviewed at the completion of each specified period. A first impression is made at the time of candidate selection. A mutual agreement to work together is confirmed at hiring, and a new team member’s transition into a lasting affiliation starts on day one. Do not skip this step, your new team member will thank you!

Succession planning considerations enter into discussions that I have with business owners when discussing their interest in conducting an executive search to find a CEO to run their company. For instance: As a business owner are you worn down and tired from all the extra effort and attention that you have had to spend on your business over the last few years? Have you wondered if there are viable alternatives to growing your business when sometimes you just want to kick back and relax? Knowing what you know now about the level of effort and energy to start and grow a business, do you think it is time for a change, perhaps an exit? These are questions I often encounter when talking with business owners who have founded their business or who have taken over their business from a parent – and know that there is no one in their business who is capable of taking over the business when these current owners decide to move on. It certainly creates a quandary for them. It’s especially challenging for these owners when they think it’s time to sell their business and realize that the business value is not what they expected to yield after many years of hard work and effort. In my experience it’s helpful for owner(s) to take a step back and review the options they have when considering a business exit, because hiring a CEO to run their company is only one option. Business Succession Owners who go through a business succession discussion benefit from a review of the options as these will also consider their personal outcome goals, their company’s outcome goals, and what I call legacy goals. Oftentimes I find owners have not considered their personal goals and it leaves them at a disadvantage when seeking to objectively evaluate their company and legacy goals. Think about it. If you are a business owner you most likely spend the majority of your time working on or in your business, with an occasional look up to reflect on what you might do once you exit the business. But when it comes time to exit the business – you have most likely have not developed your personal exit plan. Not having a personal transition plan will impact the choices owners make when deciding to exit their business. Succession Alternatives Effective evaluation of succession alternatives does require careful planning. If, as an owner, you have not used business planning tools previously it may be challenging to follow a planning process, however, the benefits to a carefully thought-out

Conducting an executive search for a CEO for a closely held or family-owned company where the owner(s) don’t have a successor-candidate already working for the company can contribute to challenges for any search consultant no matter how qualified.transition One of the principal challenges involves a discussion on owner(s) transitions. It’s understandable for an owner to question the need for a CEO, especially when that owner has been running their company for more than 30 years. Yes, for the most part I’m referring to baby boomer business owners, who have been at the helm and are now pondering how to get out – sell or not to sell, merge or not to merge, liquidate or not, or perhaps, just perhaps, stick around and hire a CEO to help to grow company value and legacy. In my owner transition and executive search work it is difficult to separate the two factors – how can an owner prepare him/herself for the hiring of a CEO when they have left unanswered how they are going to transition out of the long-held executive role, and, eventually, sell the company. Transition Thoughts It may sound easy but it’s not. Consider that the owner has worked in their company (oftentimes as a founder) for many years, is still privately held, has a stable customer, employee and vendor base, and enjoys the support of the local community. But and this is a significant but – owner age, industry competition, technology changes, and, most recently, the impacts of the COVID pandemic on employee recruitment, competitive pay, and increases in vendor costs are stressing both the owner and the company’s position. Consider also that there are at least ten different ways for an owner to transition out of their company. Without even commenting on all ten (although four are referenced above), the owner must deal with emotional and behavioral considerations (some would call it baggage) that have accumulated over the years, which they now must address and resolve prior to deciding a transitional course of action. Transition Steps When you help an owner decide what to do with their business, then create and implement a successful business transition strategy you can then help the owner move toward an effective executive search strategy and process. Here are several of the steps that are involved a transitional discussion. If you think the process can be performed overnight, think again – the company is oftentimes the only business that the owner has worked in. Change takes time. Emotional confidence – perhaps underappreciated but helping the owner gain emotion confidence in deciding that, in my work, engaging in an executive search to retain a CEO is a huge step and involves considerable discussion. Explore strategies and criteria for preparing their company for successful transition – as noted above, there are at least ten options available to an owner to transition out of their company. I’d be doing a disservice to my clients if I did not help them explore the viability of each. Thinking about it – I’d rather have a successful search process where the owner is fully committed to the search because they understand their” WHY”. Explore and apply strategies for choosing the best new owner – as part of the ten options reviews, I also focus on choosing that best new owner, in part because the hiring of a CEO most likely includes providing an equity stake to the CEO and an option to purchase the company at some future date. Design both their personal and family goals, and their goals for their company – oftentimes overlooked, these should be an integral part of the discussion, as the owner and family relationships to the company are often so intertwined that it can be difficult separate them out without a step-by-step elaboration of the personal, family, and company goals. Develop step-by-step action plans – assuming the owner does want to pursue an executive search process it is important to set up an actionable plan for the search – for instance developing an overview of the company’s strengths, opportunities, aspirations, and results desired. Finally, but certainly not the least working with the owner to develop a plan to work effectively work with various types of professional advisors to help them plan for and achieve their transitional and executive search goals. While I have the latter covered, I know I can’t help an owner with financial planning, accounting, business valuation, business sale, and other advisory services. Summary I realize I’ve discussed a lot in a short post but wanted to illustrate that in a closely held or family-owned business where there are no successors in place it is important for the owner to develop a transitional strategy prior to deciding to engage in an executive search. That’s the sum and substance of my executive search services. Perhaps a bit unorthodox, but I know it is necessary – and it works.

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  COREnology is the first behavioral finance tool developed to help advisors identify, track and grow clients’ core values, beliefs and goals.   Soon after David York and Andrew Howell started their estate planning law firm they noticed a glaring disconnect between what mattered most to their clients’ and how their clients were managing their wealth. Families were preparing wealth for their children, but were not preparing their children to have wealth.  They knew how to gain wealth, but not how to be wealthy. When David and Andrew looked at the families that were successful at growing and transferring their wealth, they noticed some consistent trends. These families knew: Who they were What they valued What they believed Together David and Andrew wrote a book titled “

You have been working on the transaction for months.  The business has gotten healthy with great valuation increase.  Now is the time to get it across the finish line.  Then… The owner struggles with the emotions of relinquishing the business. The owner gets overwhelmed with the process and gets cold feet. The owner’s health starts to decline changing the parameters of the sale. The owner’s spouse or child has an emergency or health crisis distracting from the final steps of the sale. The owner backs out due to fear of how to stay relevant and influential without the business. In the past most of the emphasis has been on financial planning and finance-related goals.   When you have an expert on your team focused on the Wellness Portfolio alongside the owner’s financial and the business’s M&A portfolio, these delays are prevented and addressed.

Qualified Small Business Stock is a type of stock that includes immense tax relief for investors. Those benefits serve to stimulate investment in small businesses by mitigating the tax consequences that attach to their returns. Below is an article that discusses the definition of QSBS, the relevant IRC section at play, the tax benefits flowing from QSBS, the standards for obtaining QSBS, and the costs and importance involved in gaining a QSBS certification. What is Qualified Small Business Stock? Qualified Small Business Stock is that class of stock issued by a small C corporation that meets specific qualifications specified in the Internal Revenue Code. It enables the investor in QSBS to exclude from federal income taxation up to 100% of the capital gain realized upon the sale of such stock, provided certain requirements are met. The provision is meant to incentivize investment in startups and small businesses as a means of promoting innovation and driving economic growth. Governing Section of the Internal Revenue Code Treatment of QSBS is given under Section 1202 of the Internal Revenue Code. This section was enacted as part of the Revenue Reconciliation Act of 1993 and has undergone several amendments to expand the benefits available to investors. Section 1202 outlines those requirements that must be satisfied for stock to qualify as QSBS, along with particular tax benefits available to the investors. Examples of Qualified Small Business Stock Tax Benefits Investing in QSBS offers substantial benefits in terms of tax. Example: Exclusion of Capital Gains: Depending on when the QSBS was acquired, up to 100% of the capital gains from the sale of QSBS can be excluded from federal income tax. The exclusion percentages are as follows: 50% of the stock acquired from August 11, 1993 to February 17, 2009. 75% for stock acquired between February 18, 2009 and September 27, 2010. 100% for stock acquired after September 27, 2010. Limitation on Gain: The amount of gain to be excluded is limited to the greater of $10 million or ten times the adjusted basis in the stock. The generous cap allows for significant tax savings by investors. The Alternative Minimum Tax (AMT) stipulates that gains exempted under Section 1202 do not qualify as preference items for the purposes of AMT, potentially offering supplementary tax relief. State Tax Benefits: Some states follow federal QSBS exclusion rules, giving additional state tax benefits. Investors should check the particular rules of the state pertaining to QSBS. How to Meet the QSBS Requirements To qualify for QSBS treatment, certain requirements must be met: Qualified Small Business: The issuing corporation must be a domestic C-corporation and it must meet the definition of a “qualified small business.” A qualified small business is one in which the corporation’s aggregate gross assets do not exceed $50 million at any time before and immediately after the issuance of the stock. Active Business Requirement: During at least 80% of the period the investment is held, assets of the corporation must be used in the active conduct of one or more qualified trades or businesses. The following types of businesses specifically do not qualify:. The stock must be obtained directly from the corporation when the stock is originally issued, in exchange for money, other property but not stock, or as compensation for services. Holding Period: The investor must hold the QSBS for more than five years to qualify under the capital gains exclusion. These requirements are often complex to navigate, and guidance is usually sought from a tax specialist to ensure compliance with the law. What is a Qualified Small Business Stock Attestation? A Qualified Small Business Stock Attestation is the declaration of a corporation; a formal statement that the stock of the particular corporation meets all the qualifications necessary for the classification to be deemed a QSBS under Section 1202 of the Internal Revenue Code. This certification gives assurance of qualification both to investors and the tax authorities, confirming the eligibility for the tax advantages to the owners. Importance and Cost of a Qualified Small Business Stock Attestation Investor Confidence: It enhances investor confidence because the attestation is basically a documented proof that the stock is qualified for favorable tax treatment; thus, making it more attractive to prospective investors. Tax Compliance: An attestation plays a crucial role in confirming adherence to tax regulations and can promote more efficient engagement with tax authorities. It functions as proof that the corporation satisfies the QSBS requirements, which may streamline the tax reporting procedure. Risk Mitigation: The attestation works by giving a risk mitigation of disputes or challenges in the future that may develop in the mind of the IRS about the stock’s QSBS status. Cost The costs for obtaining a QSBS certification will depend on many factors, such as the extent of complexity of the company’s organizational structure and how much any given professional services company charges for providing the certification. In most cases, the costs range between several thousand to tens of thousands of dollars. Regardless of the monetary investment, the tax advantages likely to be gained for the backers, coupled with increased certainty of conformity, could make the expense a wise investment. Conclusion Qualified Small Business Stock provides substantial tax advantages to investors in the interest of enabling small businesses to energize the economy. Controlled by Section 1202 of the Internal Revenue Code, QSBS enables considerable exclusions from federal income taxation of capital gains. However, fulfilling these requirements can be tricky, and the ability to get a QSBS attestation may provide much value through assurance with compliance and qualification for huge tax benefits. Although obtaining such certification does involve some costs, the potential tax incentives and reduced liabilities make it an important consideration for companies and investors alike.

Depending on who you are talking to, Private Equity is either the Great Satan or the savior of small and mid-market companies in the United States. The stories depend a lot on the personal experience of the speakers. Once a vehicle for high-risk investment plays in corporate takeovers (see Bryan Burrough’s Barbarians at the Gate,) Private Equity has morphed into tranches where specialists seek opportunities in everything from a Main Street entrepreneurship to multi-billion-dollar entities. What is Private Equity? The term itself is relatively generic. According to Pitchbook, there are currently 17,000 Private Equity Groups (or PEGs) operating in the US. The accepted business model for our purposes is a limited partnership that raises money to invest in closely held companies. The purpose is plain. Well-run private businesses typically produce a better return on investment than publicly traded entities. The current Price to Earnings (or PE – just to be a little more confusing) ratio of the S&P 500 is about 27.5. This is after a long bull market has raised stock prices considerably. The ratio is up 11.5% in the last year. That means the average stock currently returns 3.6% profit on its price. Of course, the profits are not usually distributed to the shareholders in their entirety. Compare that to the 18% to 25% return many PEGs promise their investors. It’s easy to see why they are a favorite of high net worth individuals, hedge funds and family offices. As the Private Equity industry has matured and diversified, they have even drawn investment from the usually more conservative government and union pension funds. Private Equity Types Among those 17,000 PEGs the types range from those who have billions in “dry powder” (investable capital,) to some who claim to know of investors who would probably put money into a good deal if asked. Of course, which type of PEG you are dealing with is important information for an owner considering an offer. private equity moneyThe “typical” PEG as most people know it has a fund for acquisitions. It may be their first, or it may be the latest of many funds they’ve raised. This fund invests in privately held businesses. Traditionally PEGs in the middle market space would only consider companies with a free cash flow of $1,000,000 or greater. That left a plethora of smaller businesses out of the game. For a dozen years I’ve been writing about the pending flood of exiting Boomers faced with a lack of willing and able buyers. I should have known better. Business abhors a vacuum. Searchfunders Faced with an overabundance of sellers and a dearth of capable buyers, Private Equity spawned a new model to take advantage of the market, the Searchfunders. These are typically younger individuals, many of whom graduated from one of the “EBA” (Entrepreneurship By Acquisition) programs now offered by almost two dozen business schools. These programs teach would-be entrepreneurs how to seek out capital, structure deals, and conduct due diligence. Some Searchfunders are “funded”, meaning they have investors putting up a stipend for their expenses. Others are “self-funded.” They find a deal, and then negotiate with investment funds to back them financially. Both PEGs and Searchfunders seek “platform” companies, those that have experienced management or sufficiently strong operational systems to absorb “add-on” or “tuck-in” acquisitions. The costs of a transaction have bumped many seasoned PEGs into $2,000,000 and up as a cash flow requirement. Searchfunders have happily moved into the $500,000 to $2,000,000 market. In the next article we’ll discuss how PEGs can promise returns that are far beyond the profitability of the businesses they buy.

Early last month, the Occupational Safety and Health Administration (OSHA) proposed the Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings rule. The aim is to curb heat related injuries or death which OSHA identifies as “the leading cause of death among all hazardous weather conditions in the United States.” The proposal places new responsibilities on employers: establishing heat thresholds, developing Heat Injury and Illness Prevention Plans, regularly monitoring temperatures, and establishing safety measures when heat thresholds are met. This rule is yet to be finalized however, it is a sign of what’s to come. The standard applies to all employers except for the following: Work activities for which there is no reasonable expectation of exposure at or above the initial heat trigger. Short duration employee exposures at or above the initial heat trigger of 15 minutes or less in any 60-minute period. Organizations whose primary function is the performance of firefighting and other certain emergency services. Work activities performed in indoor work areas or vehicles where air conditioning consistently keeps the ambient temperature below 80°F. Telework (work from home). Sedentary work activities at indoor work areas that only involve some combination of the following: sitting, occasional standing and walking for brief periods of time, and occasional lifting of objects weighing less than 10 pounds. Heat Thresholds There are two heat thresholds which will trigger employer action: An “initial heat trigger” means a heat index of 80°F or a wet bulb globe temperature (defined below) equal to the National Institute for Occupational Safety and Health (NIOSH) Recommended Alert Limit; and A “high heat trigger” means a heat index of 90°F or a wet bulb globe temperature equal to the NIOSH Recommended Exposure Limit. The “heat index” is calculated by measuring the ambient temperature and humidity. Wet bulb globe temperature is a heat metric that considers ambient temperature, humidity, radiant heat from sunlight or artificial heat sources and air movement. Employers may choose either method of measuring the temperature.   Heat Injury and Illness Prevention Plan (HIIPP) Requirements If an employer does not fall under the exceptions, it must develop a HIIPP with the input of non-managerial employees and their representatives for occasions when the heat threshold is surpassed. This plan may vary on the worksite but must be written if the employer has more than 10 employees and use a language employees will understand. The HIIPP must contain: A comprehensive list of the type of work activities covered by the HIIPP Policies and procedures needed to remain compliant with the standard. Identification of which heat metric the employer will use heat index or wet bulb globe temperature. A plan for when the heat threshold is met. Along with creating the HIIPP, employers must designate one or more “heat safety coordinators” responsible for implementing and monitoring the HIIPP. The HIIPP must be reviewed at least annually or whenever a heat related injury or illness results in death, days off work, medical treatment exceeding first aid, or loss of consciousness. Employers must seek input from non-managerial employees and their representatives during any reviews or updates. The definition of “representative” is not defined; if this is broadly defined, this could be a major complexity employers must face. Identifying Heat Hazards Employers must monitor heat conditions at outdoor work areas by: Monitoring temperatures at a sufficient frequency; and Track heat index forecasts or Measure the heat index or wet bulb globe temperature at or as close as possible to the work areas. For indoor work areas, employers must: Identify work areas where there is an expectation that employees will be exposed to heat at or above the initial heat trigger; and Create a monitoring plan covering each identified work area and include this work area in the HIIPP. Employers must evaluate affected work areas and update their monitoring plan whenever there is a change in production processes or a substantial increase to the outdoor temperature. The heat metric employers choose will affect the thresholds. If no heat metric is specified, the heat metric will be the heat index value.  Employers are exempt from monitoring if they assume the temperature is at or above both the initial and high heat trigger, in which case they must follow the controls below. Control Measures When Heat Triggers are Met When the initial heat trigger is met, employers must: Provide cool accessible drinking water of sufficient quantity (1 quart per employee per hour). Provide break areas at outdoor worksites with natural shade, artificial shade, or air conditioning (if in an enclosed space). Provide break areas at indoor worksites with air conditioning or increased air movement, and if necessary de-humidification. For indoor work areas, provide air conditioning or have increased air movement, and if necessary de-humidification. In cases of radiant heat sources, other measures must be taken (e.g., shielding/barriers and isolating heat sources). Provide employees a minimum 15-minute paid rest break in break areas at least every two hours (a paid or unpaid meal break may count as a rest break). Allow and encourage employees to take paid rest breaks to prevent overheating. At ambient temperatures above 102° F, evaluate humidity to determine if fan use is harmful. Provide acclimatization plans for new employees or employees who have been away for more than 2 weeks. Maintain effective two-way communication between management and employees. Implement a system to observe signs and symptoms of heat related problems (e.g., a Buddy system). When the high heat trigger is met, employers are additionally required to: Provide employees with hazard notifications prior to the work shift or upon determining the high heat trigger is met which includes: the importance of drinking water, employees right to take rest breaks, how to seek help in a heat emergency, and the location of break areas and water. Place warning signs at indoor work areas with ambient temperatures exceeding 102° F. Other Requirements Training: all employees and supervisors expected to perform work above the heat thresholds must be trained before starting such work and annually.   What’s Next? The rule is yet to be published in the Federal Register. Once this happens, there will be a 120-day comment period when all members of the public may offer OSHA their opinion about the rule. Whether this rule comes to fruition may also depend on which party wins the White House. Furthermore, if finalized this rule would likely be challenged in the courts, which now have more discretion to overrule agency rules following the US Supreme court case of Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Department of Commerce (overturning the Chevron deference decision). Employers should review their heat illness prevention policies to maintain compliance with regulations. If you have questions, call competent labor and employment counsel. Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560  

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