Archive for the ‘1) Business Law’ category

ARE RED LIGHT TICKETS OR SCHOOL ZONE SPEEDING TICKETS EATING AWAY AT YOUR PROFITS?

October 16, 2014

I am sure by now either you or your employees have received those annoying red light tickets or the school zone speeding tickets. Nassau County has collected over 1.4 million dollars since school started, and projects to receive as much as $25 million a year from those annoying and costly speed camera tickets. In 2013, Suffolk County generated more than $19 million from red light camera tickets, and has estimated bringing in $30 million this year with the installation of more cameras.red light cam
We all know by now how they work. Once a vehicle passes through an intersection when the traffic light is red, or speed through a school zone, an $80 ticket is then sent by mail to the registered owner of the vehicle. It doesn’t matter who was driving the vehicle, the ticket is assessed against the owner. If it’s one of your kids who gets the ticket, like most parents you will probably make your child pay the fine. Unfortunately, the same logic cannot be applied to your employees who get those tickets.

HERE’S THE PROBLEM:

New York State Labor Law says that an employer cannot make unauthorized deductions from an employee’s wages, nor demand separate payments to cover a company expense. It also makes it unlawful for an employer to demand that an employee reimburse an employer for company expenses caused by an employee’s mistake. Since a ticket issued on a company owned vehicle is considered a company expense, employees cannot be required to pay the fine associated with the ticket. If the employee offers to voluntarily pay the fine, employers must properly document this voluntary action, otherwise there could be repercussions from the Labor Department.

BUT THERE IS A SOLUTION:

Just because there is no monetary liability on the part of the employee for the ticket does not mean that employees can disobey traffic laws while driving a company owned vehicle with no repercussions. While an employee cannot be forced to pay for one of these tickets, an employer can take disciplinary action against an employee, including firing the employee or suspending them. An employee’s future raises or bonuses can also be impacted by getting these tickets. These disciplinary actions would most likely be worse for the employee than having to pay the fine associated with the ticket, and cause them to be more careful when they are driving a company vehicle.

Employers should also consider including in their employee handbooks express policies so that their employees are aware of the consequences of receiving red light traffic tickets and school zone tickets while driving company vehicles. With knowledge of the potential consequences, your employees might be more compliant with traffic laws when driving a company owned vehicle.

If you do not have an employee manual to include such policy, it is time to get one. If you do have one, it may be a good time to update it. We would be happy to assist you in drafting a policy on this issue for your employee manual. Contact us if we can be of assistance.

Advertisements

WHY BUSINESS OWNERS SHOULD OBTAIN A RELEASE FROM TERMINATED EMPLOYEES

September 2, 2014

If you are a business owner or manager and are terminating an employee and anticipate the possibility of claims being made by such employee, you should consider obtaining from them a release of claims.

Simply stated, a release of claims is an agreement between an employer and employee whose employment has been terminated, releasing the employer from employment related claims.  Generally, a release of claims is offered by the employer in exchange for the acceptance by the employee of a severance package.  A release is a useful tool when the employer wishes to terminate the employee but feels that there is some risk that the employee will sue.  The purpose of the release is to avoid potential litigation and resolve possible disputes, such as a claim for discrimination, before the employee files a complaint.  A more formal agreement may be necessary if the former employee has already filed a claim.

If you decide that you would like to obtain a release from an employee who is going to be terminated, there are a few factors to keep in mind.  For employees age 40 and over, the release should include an age discrimination clause, which specifically refers to release of any claims under  the Age Discrimination in Employment Act, protecting against age discrimination.  The release should be in writing, and written in a manner that the employee would understand.  The employer must inform the employee that he/she has 21 days to consider the release and to accept the severance package.  (The 21 days starts to run from the date of the employer’s final offer to the employee.)  The employee can sign the release prior to the expiration of the 21-day time period.  After signing the release, the employee has 7 additional days to withdraw or revoke the release.  Such time periods and rights must be specifically stated in the release agreement; otherwise, the release is unenforceable.  Also, the agreement should specifically advise the employee to consult with an attorney before signing the release.

The release of claims is typically offered at the employment termination meeting along with the severance package. The severance package is what you would give in exchange for the employee giving up any potential claims, since, to be enforceable, the employee must receive some consideration (i.e., severance package), above and beyond the value of what he or she was already entitled to.  It is common practice for the employer to give at lease two weeks severance pay and to pay an employee for unused vacation or sick days.

Be prepared for the employee to push for a better severance package.  This is where your negotiation skills will come into play.  In determining how much to offer, you should keep in mind that if a claim is brought by the terminated employee, regardless of the validity (or more often, the lack thereof) of the claims, defense costs alone will likely run tens of thousands of dollars, plus there is always the uncertainty of the outcome.

Any time you terminate an employee, you should consult with an attorney to help evaluate the potential for a lawsuit.  If we can be of assistance to you regarding a termination and/or the drafting of a release of claims, please do not hesitate to contact us.

CAN IDA INCENTIVES HELP YOUR COMPANY

August 12, 2014

The purpose of the various Industrial Development Agencies  (IDAs) in the state of New York is to promote economic development within each of their respective counties.  Since 1969 the IDAs have been offering various types of financial incentives for business projects which are focused on the creation and retention of jobs and economic development, such as opening a new business, expanding or renovating your current business, or leasing or purchasing a new facility.  Project sizes range from one hundred thousand dollars to tens of millions of dollars.  In order to qualify for IDA assistance, your company would need to satisfy eligibility requirements and demonstrate a need for assistance.

Below is a list of some of the Financial Incentives the IDAs have to offer which your business may be eligible for.  

1.  Real Estate Tax Abatements

 The IDAs can transfer a portion of the value of its exemption from real property taxes to your company. To do so, the IDA takes temporary ownership interest in the property your company will use for the project, for the period of time during which the incentives are being provided. A “PILOT” (Payment In Lieu of Taxes) program is utilized to make reduced payments instead of real property tax payments. The PILOT program provides your company with valuable certainty as The PILOT payment, unlike actual real estate tax payments, will not rise above a set amount for the term in which the IDAs haslegal ownership of the property.

2.  Sales and Use Tax Exemptions

For projects in which construction or equipment purchases occur, the IDAs may issue a sales tax exemption letter for eligible construction materials, furniture and equipment your company purchases in connection with its project. This provides your company with a savings of at least 8 1/2 percent.

3.  Mortgage Recording Tax Exemptions

Your company may be entitled to a full exemption from mortgage recording tax for any mortgage recorded in connection with a project. The savings realized can be substantial.  For example, for a mortgage with a principal amount of three million dollars, the savings would be $31,500 (1.05% current mortgage tax rate in Nassau and Suffolk Counties x $3,000,000)

4. Tax Exempt Financing

The IDAs are authorized to issue tax-exempt bonds, and can act as a financial conduit by making the bond proceeds available to your company to finance an expansion. If your project meets the requirements for tax-exempt financing, your company may be able to obtain below market interest rates. Certain bonds are exempt from New York State and local income tax, while others are exempt from federal, New York State and local income taxes. An analysis will be undertaken by the IDAs to determine whether your project meets the requirements for tax-exempt financing established under the Internal Revenue Code.

 
The IDAs will undertake a wide variety of projects involving commercial or research facilities, as well as manufacturing, industrial or warehousing facilities, and is open to proposals from all economic sectors. If you are working on or considering a project which you think may be eligible for the financial incentives offered by the IDAs, or are just interested in hearing more about the financial incentives the IDAs have to offer, we will be happy to discuss them with you in further detail and guide you through the application process.

10 ITEMS TO INCLUDE IN YOUR EMPLOYEE HIRING PACKAGE

June 16, 2014
Whether you are a large or small business, it is important to have a well-organized hiring package for new employees.  A hiring package is essentially a packet of employment-related forms and documents for the new employee, which is provided at the start of employment to help streamline the on-boarding process.  The hiring package provides an introduction about your company culture, while ensuring your company’s compliance with labor and employment laws.  In addition, a well-designed hiring package may help to mitigate against employment-related disputes.
THE FOLLOWING ARE TEN ITEMS TO CONSIDER INCLUDING IN YOUR COMPANY’S HIRING PACKAGE
empoyee benefits
1.  Welcome Letter.  A brief welcome letter from the company is a positive first impression to a new relationship.  The letter introduces your company, its mission statement, and expresses delight in having the new employee join the “team”.
2.  Application Form(s).  A copy of any job application form(s) filled-out and signed by the new employee should be included in the hiring package.  An application should at least include contact information (i.e., address, phone number), date of birth, and an emergency contact person for the new employee.
3.  Tax and Government Forms.  Some forms are required by the Government, including a Form W-4 and Form I-9.  New York State requires that every new employee be given a Notice and Acknowledgment of Wage Rate and Designated Payday, Hourly Rate Plus Overtime, which they are required to sign and return to their employer.
4.  Consent and Disclosure for Background Checks/Drug Testing.  If your company conducts background checks and/or drug testing, prior notice and consent of the employee is required.  Such consent is typically obtained at the interview process but, if not, include proper consents/disclosures in the hiring package.
5.  Employee Handbook.  Becoming familiar and acquainted with company policies and procedures is essential at the start of new employment.  Provide an Acknowledgment of Receipt of the Employee Handbook for the new hire to sign and return.  (If your company does not have an employee handbook, please contact us to discuss the importance of having one.)
6.  Benefits and Insurance.  If the new employee is eligible for health insurance on other benefits, such as a 401(k) plan, you should include a summary plan description in the hiring package.
7.  Payroll Documents.  If your company uses direct deposit, include the enrollment form in the hiring package.
8.  Company Directory.  The hiring package should include a company directory, which includes a list of personnel names, title, email addresses and telephone extensions.
9.  Confidentiality and Non-Compete Agreements.  Depending on the nature of your business, you may want your new employee to sign a confidentiality agreement if he/she will have access to any trade secrets.  If applicable, you may also want the new hire to sign a non-compete agreement.
10.  Resume/Work Schedule/Job Description.  It may be worthwhile to have the new employee initial his/her resume submitted to the company for the job opening, and attach it to a work schedule and job description.  Including such paperwork in the hiring package may prove fruitful in the event of any discrepancy(ies) following the hiring.
This list is not exhaustive, as each company may have additional information and documentation relevant to its particular business that it may include in its hiring package.  We are happy to assist you in developing a new hiring package suitable for your company.

NYC LAW EXPANDED TO REQUIRE REASONABLE ACCOMMODATIONS FOR PREGNANT EMPLOYEES

January 16, 2014

On October 2, 2013, Mayor Michael Bloomberg signed a bill amending the New York City Human Rights Law (“NYCHRL”) to require most New York City employers to provide reasonable accommodations for pregnant employees.  The new law, which takes effect on January 30, 2014, prohibits employers from discriminating against employees on the basis of pregnancy, childbirth, or a related condition, unless the employer can prove that the accommodation would cause an undue hardship.  Image

While the federal American with Disabilities Act and the New York State Human Rights Law mandate that employers accommodate employees with pregnancy-related disabilities, the new NYCHRL expands such coverage to include all pregnant employees regardless of whether the pregnant employee’s condition qualifies as a disability.

A.    Covered Employees
The new NYCHRL applies to New York City employers (including employment agencies) with ONLY four or more employees (including independent contractors who are not themselves employers).

B.    Accommodations
A few examples of reasonable accommodations include:

     *   bathroom breaks
     *   breaks to facilitate increased water intake
     *   periodic rest if the employee stands for long periods of time
     *   assistance with manual labor
     *  changes to the employee’s work environment
     *   unpaid medical leave
C.    Exceptions
An employer need not provide such accommodations to a pregnant employee if it proves that the accommodation would cause an “undue hardship.”  Factors to be considered in determining an “undue hardship” include:
        (i) the nature and costs of the accommodation;
        (ii) financial resources of the facility;
        (iii) number of employees; and
        (iv) financial resources of the employer.

D.    Notice Requirement 
The new NYCHRL mandates that employers provide written notices to new employees upon hire (starting on January 30, 2014) and to existing employees by May 30, 2014 of their rights under the new pregnancy accommodation amendment.  The notice, which can be accessed and downloaded HERE, must be conspicuously posted in the workplace.E.    Enforcement
An employee alleging a violation of the new NYCHRL may either file a complaint with the NYC Commission on Human Rights or bring a civil action in court (or other tribunal).

New York City employers falling within the new NYCHRL should review their employee handbook and revise it accordingly to ensure compliance with this new law.  If you do not have an employee handbook, we strongly suggest that you do.

    If you need any assistance with respect such matters, we would be glad to assist you.  

Is it Time to Re-assess the Status of Your Business’ Independent Contractors?

November 11, 2013

Independent contractors (“I/C”) have become a growing resource for many companies.  There are certain benefits to hiring an I/C instead of a new employee.  As you may have experienced an I/C often provides a company with the opportunity to obtain services from a highly qualified individual at a much lower cost than an employee.  With an I/C, your company is not responsible to withhold taxes, may avoid paying minimum wage, overtime, and its portion of social security and medicare taxes, as well as unemployment and worker’s compensation insurance.  Also, unless otherwise agreed to between the company and the I/C, your company will typically not have to pay health benefits, vacation time, sick leave, and other benefits, that otherwise would be applicable to an employee.

Sounds great, right?  Not so fast. Unfortunately the growing use of I/Cs has come under heightened scrutiny from governmental agencies.  State and federal governments have raised their level of scrutiny of I/C classifications, classifying many workers as employees rather than as I/Cs.

LIABILITY FOR MISCLASSIFICATION

If your company misclassifies an employee as an I/C (or consultant), the liability can be significant.  Misclassification, whether intention or not intentional, may lead to heavy fines and penalties, and litigation expenses against your company.  In addition, liability may arise under various federal and

state labor, employment and tax laws, such as New York State Labor Law (relating to payment of wages, overtime and unemployment compensation), and the New York State Worker’s Compensation and Disability Benefits Law (provides for payment of benefits when employees are injured on the job).

Unfortunately, even if your company classifies a worker as an I/C, they may still file an application for unemployment benefits, which is the biggest source of classification audit activity.  If the worker is determined to be an employee, not only can your company be responsible for unemployment benefits, the state will likely look into the classification of any other I/Cs your company may use.

WHO QUALIFIES AS AN INDEPENDENT CONTRACTOR?     

Just because you hired an individual as an I/C, or you consider a worker an I/C, does not mean that the various governmental agencies will agree.  There is no single factor that determines whether a worker is a I/C or employee.

Proper classification of a worker is complicated by the lack of a precise definition of an I/C.  As a preliminary matter, the law will consider how much control, direction and supervision your company exercises over the worker.  Generally speaking, the more control your company has over how work is accomplished, the more likely the worker will be considered an employee.  On the other hand, if your company simply specifies the end product and the I/C controls how the work is performed, then it is more likely that the worker will qualify as an I/C.

12 TIPS TO REDUCE LIABILITY  

Below is a list of 12 tips to help reduce the risk of misclassification, and to ensure the status of a worker as an I/C.

1.    Have a written I/C agreement with the I/C, identifying the worker as an I/C.  Although such an agreement is not conclusive, it can be good evidence of an I/C relationship.

2.    The Independent Contractor agreement should describe the specific service(s) to be performed by the worker, and the amount of compensation and method of payment.   Payment should be based upon completion of tasks or assignments rather than on a periodic basis (which is more evident of an employee/employer relationship).  The agreements should provide  for the I/C to submit invoices to the company for the services provided.

3.    Do not pay the I/C’s expenses directly; let the I/C pay its own expenses, and reimburse them as appropriate.

4.    Do not pay the I/C from a payroll account used to pay employees.

5.    Do not give the I/C the same or similar benefits the company would give to an employee.

6.    Do not classify a worker as both an I/C and employee during the same tax year – this is an audit “red flag”.

7.    Allow the I/C to work their own hours and to work outside of the office.  A significant sign of I/C status is where the I/C keeps a place of business separate from the company and uses his/her own equipment and supplies.

8.    Company may set a deadline for completion of  projects, but should allow the I/C to set his/her own work schedule and to determine and control his/her method, order and sequence of completing the work.

9.    Company may hire an I/C with respect to various projects, and use the I/C regularly, but should not provide for an indefinite term of work; company should use specific start and end dates for projects worked on by the I/C.

10.    Have the I/C establish his/her own business entity and carry its own insurances.

11.    Have the I/C use his/her/their own business cards, stationary and invoices with their company name.

12.    Allow, and do not prevent, I/C from performing services for other companies.
If you need any assistance with your company’s use of  I/Cs, we would be glad to assist you.

What are the Benefits of Registering a Trademark or Service Mark?

October 15, 2013

Firstly, it should be understood that a trademark or service mark is a designation of ownership of a “brand,” using a symbol, words, device, or all three. The difference between a trademark and service mark depends on what it is used for –  trademarks are for physical goods, and service marks are for services.  A trademark is used to help potential customers distinguish between you and your competition. You have a valuable trademark. A trademark is a word, logo, shape, sound or other method to uniquely identify a product or service. Potential customers and customers easily remember your name and this creates new sales and repeat sales.

You do not have to register a trademark or service mark in order to use the “TM” or “SM” symbol and keep others from using your mark, but there are definite benefits from going through the Federal registration process and obtaining a registered trademark or service mark.inovia trademark filing

Why is it advisable to seek a U.S. federal trademark registration?

Many people assume they can protect their trademark simply by using the mark in commerce. It is true that you are not required to register a trademark to achieve some level of protection, and that you can create common law rights simply by using a mark in commerce.  However, having a federally registered trademark on the USPTO’s principal register provides several advantages.

Nine Advantages to Federal Registration of your Marks are as follows:

1. It protects your mark throughout the entire United States, no matter where you are selling and/or delivering your goods and services.
2.    You can use the ® with your mark which serves as constructive notice of your claim to its ownership. This makes it easier to pursue your claim in a lawsuit against potential copiers of your mark.
3.    A registered trademark provides clear evidence that the mark is not in the public domain and establishes a legal presumption of your ownership of the mark and exclusive right to use the mark nationwide on or in connection with the goods and/or services listed in the registration.
4.    The registration significantly strengthens your ability to stop imitators by giving you greater rights, enhanced damages and limiting the legal defenses of companies copying your mark. These rights scare off many copycats before they copy you.
5.    You are entitled to money damages from infringers.  If they copy you with knowledge of your trademark, you can get increased damages.
6.    After 5 years of being registered the trademark becomes “incontestable” under law. This is very strong protection and a great advantage.
7.    You may more easily get a case against a violator into the federal court if your trademark or service mark is registered.
8.    Customs and Border Patrol will prevent importation of infringing goods.
9.    Registration in the United States may provide a basis for obtaining registration in other countries.
10.   The registration is listed in the searchable U.S. Patent and Trademark Office online databases.

You will be much more likely to stop a trademark infringer if you have a U.S. trademark registration.  Time and again, after a trademark infringer is told of a federal registration they give up quickly.

Do you Need an Attorney to Register a Trademark or Service Mark?

While you can certainly register a trademark or service mark yourself, as a business owner you have more important things to do, so why not let the expert take on this task.  A good attorney who specializes in intellectual property can help you in several ways:

1.  By assisting in researching the U.S. Patent and Trademark data base (TESS) to make sure no one else has a trademark or service mark similar to yours.
2.  By providing you with counsel regarding the possibility of your mark infringing on another trademark or service mark.
3.  By filing the paperwork necessary for registration, to make sure everything is filled out properly so the registration application will not be rejected.
4.   By helping with revisions if necessary or in interpreting a rejection of a registration.

Feel free to contact us if you have any questions regarding the registration of trademarks and service marks, or need any other assistance with either.