Free Enterprise: January 2012 Archives
Free Enterprise - The FindLaw Small Business Law Blog

January 2012 Archives

Are You Legally Required to Translate?

If you operate your business in a multi-lingual community, you've probably had difficulty communicating with customers and employees. In these situations, a multi-lingual staff can be quite useful.

But is it mandatory? Are businesses legally required to translate for employees and customers? Or is doing so merely a kind gesture?

As with most situations, it depends.

How OT Pay Issues Cost a Company $99 Million

Swiss drug company Novartis AG has settled its overtime lawsuit for $99 million. The Novartis settlement comes after 6 years of litigation.

The settlement will cover more than 7,700 of the company's former and current sales representatives.

The plaintiffs alleged the company denied them overtime pay. Novartis, meanwhile, said their sales representatives should be considered "exempt" employees.

Coffee and donuts are somewhat common workplace perks. But for small business owners, those simple daily indulgences can also add up to a significant tax deduction.

American workers spend on average about $1,000 a year on coffee, a new survey finds, according to Reuters. But if you're picking up the tab to keep your workers content, your coffee costs could be much higher.

This may just be the caffeine talking, but three overarching questions come to mind when considering small business tax deductions for coffee and donuts:

Should Small Businesses Barter Online?

There's a growing online community engaged in small business bartering. Entrepreneurs strapped for cash and lacking capital can trade goods and services, propping up their businesses without exchanging funds.

The community separates itself into barter exchanges, which are usually for-profit businesses. "Barter dollars" are earned when a trader provides a good or service. Those dollars can then be used to purchase a commodity from another trader.

This system could be great for some businesses, but is it right for you?

Small Firms Dodge $198B in Federal Taxes

There's a lot of talk about the tax gap -- how can someone who earns $42.6 million only pay a 14% tax rate? And what about those big businesses taking advantage of tax loopholes?

But the reality is small companies and the self-employed are the biggest tax dodgers in the nation -- and they're not even doing it legally.

The IRS tracks the taxes owed but not paid -- the official tax gap. In 2006, that gap was at $385 billion. The self-employed and small companies accounted for $198 billion of those unpaid funds.

Disney Ends 60-Year Ban on Beards

Disney's beard-ban is no more. Starting February 3, employees at the company's Florida and California theme parks can now have facial hair. It's a historic move for the company which has long been known for strict dress code policies.

There will still be some restrictions. Facial hair cannot exceed a quarter of an inch.

Disney still forbids visible tattoos, body piercings (except for ear piercings on women), "extreme" hairstyles or colors, and soul patches.

OSHA Offers Free Consults to Small Businesses

It's true that you have a legal duty to ensure workplace health and safety. And it's true you'll be cited and penalized by the Occupational Safety & Health Administration (OSHA) if you don't.

But for a small business, OSHA regulations can be both unwieldy and costly. Between inspections and improvements, business owners often don't know where to start.

Luckily, there are some programs to help -- including a free on-site consultation provided by the Administration itself.

A sluggish economy and an increasingly diverse workforce led to a record number of EEOC job-discrimination complaints last year.

The Equal Employment Opportunity Commission received 99,947 workplace-discrimination complaints in fiscal year 2011, the agency reported Tuesday. That's up slightly over 2010.

The uptick in overall discrimination claims may correspond with a weak job market, an EEOC spokesman told MSNBC. And the trend may continue, the agency suggests in a new draft planning document that's up for public review.

Starbucks to Sell Wine, Beer in CA, IL, GA

Starbucks will soon be selling beer alongside its usual assortment of coffee, pastries, and Frappuccinos. The company plans to start its new venture in select stores in California, Illinois, and Georgia. Some may think Starbucks and alcohol make a strange mix.

It's simply the retailer's latest move to expand its offerings. The company also plans to sell "premium" foods like small plates alongside its alcoholic beverages.

Owners of coffee shops and pastry stores across the nation might be cringing right about now. The same goes for owners of mom-and-pop liquor establishments. Starbucks may soon be competing for their customers.

Three Times Employees Must be Paid Not to Work

Wage laws are tricky. But it is an area of law all employers need to familiarize themselves with. It's necessary to compensate employees -- sometimes even when you least expect it. In fact, there are times when employees need to be paid for... not working.

Wait, wait. "Wages" are supposed to be money employees get for their "work." Right?

It depends. There are times when an employee needs to be rightly compensated for well, doing other things besides work. What are they?

Retailers Sue Banks Over Swipe Fees

Retailers have filed a credit card lawsuit against major banks. The interchange fee lawsuit pits nearly 5 million retailers against prominent financial institutions including Visa and MasterCard as well as 13 other large banks.

The primary concern is the 2% interchange fees -- also known as swipe fees -- which retailers are saddled with.

The retailers allege that the banks illegally colluded with each other. They claim the high credit card transaction fee would not exist in a competitive market.

Am I Legally Required to Give Bereavement Leave?

When your employees lose a loved one, they might ask for bereavement leave. Employers typically want to assist their employees as much as possible. Allowing them to take time off to bury and grieve their loved ones is something that they can offer.

If you're a small business owner, you might wonder if bereavement laws require you to give employees a certain number of days off.

There is no federal law on point. But, many companies still incorporate bereavement time off into their employee policies.

Forever 21 Sued by Employees Over Unpaid Labor

Popular retail chain Forever 21 is being sued by some former and current retail employees. The California class action suit claims that workers were not properly compensated for the company's employee bag checks.

The named plaintiffs also claim that the store routinely made them work off the clock.

Routine bag checks were utilized for many employees, according to the complaint.

Consulting an attorney can be costly, but you may be able to recoup some of those costs by deducting legal fees from your small-business taxes.

The Internal Revenue Service code does not specifically list legal fees as a deductible item. However, the tax code may allow you to deduct legal fees as an ordinary business expense, depending on how you used the legal services that you paid for.

Here are five common legal services for which you can generally deduct legal fees as a business expense:

Credit cards are convenient, but processing payments can be costly for small businesses. Enter mobile credit-card readers, which seem to be swiping more and more business from banks and third-party payment processors.

One mobile credit-card reader, made by Square, is now used by more than 1 million merchants nationwide -- that's one in eight U.S. merchants, Daily Deal Media reports. Square's market share could grow, as it recently announced its reader will soon be sold at OfficeMax and The UPS Store locations.

Meantime, software maker Intuit showed off its redesigned GoPayment Card Reader at the Consumer Electronics Show in Las Vegas, the website iSource reports.

Pepsi's $3M, Racially-Biased Background Check

Do you refuse to hire job applicants with an arrest or criminal record? No matter how small or irrelevant the infraction is to the job?

If you do, be careful. The Equal Employment Opportunity has announced that it reached a $3.1 million settlement with PepsiCo over such a policy. Investigators concluded that the practice disproportionately affected African-Americans and other minorities.

The Pepsi settlement is also not the first time the agency has targeted such criminal background check policies.

When is it Legal to Cut Employee Pay?

Whether it's tough economic times or underperformance, there will likely be a time when you'll want to cut employee pay. And at that time, you'll probably wonder whether it's legal to do so.

Chances are you can institute that salary cut. Most employees are at-will, which means you can change their salary so long as it stays above minimum wage.

And as long as you comply with the following laws and rules.

In a possible sign of economic recovery, small-business lending hit a four-year high in November, a new report shows. At the same time, the number of small-business loans in delinquency declined.

The results are revealed in the Thomson Reuters/PayNet Small Business Lending Index that tracks the overall volume of small-business financing, Reuters reports.

The lending index jumped by 18% between November 2010 and November 2011. It's now at its highest level since February 2008.

How to Legally Lay Off an Employee

It's one of the toughest decisions for any employer, small or large: Should you lay off your employees, and how should you do it so you don't get sued?

The decision about layoffs is entirely up to you. But as for how to implement layoffs, here a few legal considerations.

You've been WARNed. The Worker Adjustment and Retraining Notification Act, or WARN Act, is a federal law that requires 60 days' written notice before a plant closing or a "mass layoff." The federal WARN Act applies to employers with more than 100 workers, but state versions of the WARN Act may apply to smaller employers, according to HRHero.com.

It's January, and time to get your 2011 1099 forms and instructions in order. This year, though, there's a new player in town: The new Form 1099-K.

The new form may increase confusion about 1099 forms and instructions. So here are some Frequently Asked Questions to help clarify what's required:

What are 1099 forms?

The IRS provides 1099 forms for taxpayers to report different types of miscellaneous taxable income. (It's not for wages, which should be reported on employees' W-2 forms.)

HuffPo's 'Parentlode' Blog Settles with NY Times

The New York Times has settled its "Parentlode" lawsuit against the Huffington Post. The Times originally filed suit against AOL's HuffPo when ex-columnist Lisa Belkin switched teams.

Belkin penned the "Motherlode" blog when she worked at the Times. When she started at the HuffPo, she still wrote about parenting issues.

Just under a new name: "Parentlode." The Times responded with a cease and desist letter. They then followed up with a full-on lawsuit.

Legal to Fire Pregnant Waitress From Strip Club?

Can you fire a pregnant waitress? Or any other pregnant employee?

Josie Muriel says you can't, which is why she is suing Larry Flynt's New York Hustler Club for sex and gender discrimination. She says she was demoted and then fired after management learned of her pregnancy when she began to show.

She further alleges that management told her that her "condition" was a liability to the club.

What Is a Copyright?

Many small business owners create innovative new works in order to entice consumers. Some might wonder what is copyright protection? Or how can copyright law help me or my business?

Maybe you spent hours working on that new jingle for your television commercial. Or, perhaps you've just hired a new graphics artist to create your company's logo and illustrate new artwork for your print ad.

Whatever the case, copyright protection can help protect your image and your property. Here are the basics of what you need to know about copyright protection.

New small business laws and regulations take effect in 2012, and they will almost certainly affect your bottom line.

One of the most significant changes will affect how your small business calculates its federal taxes, the Los Angeles Times reports.

Your Top Resolution: Trademark Your Logo

Forget about weight loss and spending more time with your family. Those resolutions tend to fall by the wayside. But here's one that won't -- and shouldn't:

Trademarking your logo.

If you haven't already trademarked your logo, doing so should be your top New Years' resolution. It's absolutely necessary, and if you put your mind to it, you can do it yourself.

Attorneys, accountants and small business owners take note: New IRS rules for tax preparers went into effect Jan. 1.

The new IRS rules include education requirements, background checks, and competency exams for different classes of tax preparers. The changes aim to protect consumers from "the inept and the unscrupulous," a board member with the California Tax Education Council told BusinessWire.

California and Oregon are currently the only states that require tax preparers to meet education and exam requirements. The new IRS rules largely mirror California's rules, which the state adopted more than 10 years ago.

Of course IRS regulations are complicated, and its new rules are no exception. But in general, here are some takeaway points from the new IRS rules:

Starbucks Sued by Woman with Prosthetic Leg

Starbucks has been sued by California woman Janet Marx over her prosthetic leg. She claims she was discriminated against because of her disability.

Marx's prosthetic became loose, so se went into a Stockton-area Starbucks to use the restroom.

She wanted to tighten a screw on her leg. On her way to the restroom, a Starbucks employee chased her down.

Online Gambling (If Now Legal) May Be Big in 2012

Is online gambling legal?

This is the question everyone is asking in light of a recently released Department of Justice opinion. New York and Illinois had asked the Office of Legal Counsel to clarify the Wire Act of 1961, which purportedly bans all online gambling.

According to the new opinion, however, that's not true. 

In fact, the Justice Department has arguably given the go-ahead to intrastate online gambling.