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

August 2012 Archives

Chipotle has made a change to its receipts, after a calculating customer caught the quick-service chain allegedly short-changing patrons out of pennies.

It may not sound like much, but with 1,300 locations nationwide, it potentially adds up to a huge chunk of pilfered change.

Chipotle admits that in some markets, cash registers had been programmed to round a customer's bill up to the nearest nickel, New Jersey's Star-Ledger newspaper reports.

Why Social Media is a Small Biz Best Friend

Social media is a two-way street which adds to its benefits for small business.

Sure, it's great for advertising and attracting new customers. But it's also a social experience, meaning interactive. Not only can you get a message to your customers, they can send one back to you.

But we all know that talk is cheap. How can you reap the benefits of all that interaction?

Want to Avoid Legal Issues? Get a Mentor

Guest post by Jennifer K. Halford, Esq.

Every business owner should have a mentor. Mentors encourage you, provide advice and expertise. And a good mentor can also help you avoid legal issues.

The first step is to find a quality mentor. She should have relevant industry experience. She should also be able to advise in areas in which your business skills are lacking. This may mean that you will need more than one mentor.

The next step is to prepare an agenda of topics to discuss with your mentor. Recognize that your mentor's advice is not a substitute for legal advice. But she can help you avoid legal trouble and unnecessary attorneys' fees.

Here are five ways to utilize your mentor for legal help:

How to Respond to a Negative Online Review

It's important to figure out how to respond to a negative review on Yelp or another website because sooner or later it will happen to you.

A negative online review isn't the end of the world but how you respond to it could be. Customers can dismiss a negative review as uncharacteristic. A disproportionate response by the business owner is harder to brush away.

That doesn't mean you should sit on your hands and just let it happen. There are several choices of how to respond to negative reviews.

Legal to Ban a Customer's Service Animal?

Service animals are becoming more common in many states which leaves small business owners wondering about how that affects their pet policies.

Service animals aren't considered pets under the Americans with Disabilities Act (ADA) so they technically aren't supposed to be excluded as part of a no-pets policy. But they are still animals that can potentially make a mess, bother other customers, and generally cause a problem.

So what's a small business owner to do? The first step is to understand the law.

Terminate w/ Care to Avoid Workplace Violence

The recent shooting at the Empire State Building was revealed to be an act of workplace violence.

The alleged shooter, Jeffrey Johnson, was reportedly a former employee at a company near the Empire State building who was laid off six months ago. The man is said to have returned to his ex-employer to collect unpaid money and apparently exact revenge on a company vice president, reports The Associated Press.

The Empire State building shooting should serve as a reminder to employers everywhere of the real dangers of workplace violence and the importance of terminating employees with care.

Don't Get Sued for Misusing Work Visas

Infosys is getting sued again for allegedly misusing work visas.

The Indian outsourcing company that specializes in business and IT consulting allegedly misused temporary visitor visas to bring permanent workers into the U.S. In addition, the company allegedly failed to pay the workers the prevailing wages and then harassed employees who complained, reports The Associated Press.

In short, it's claimed that Infosys violated almost every immigration law in an effort to save time and money. Now they're facing several lawsuits and are subject to an investigation by the Department of Homeland Security. Here are some lessons to be learned from the Infosys immigration abuse case:

Top 5 Workplace Issues for a Young Office

Anecdotal evidence suggests that there's been a definite shift in the workplace and workplace attitudes with young workers.

Generation Y (people aged 19 to 30) have grew up in the age of the Internet attention span and reality television star. As a result, many Gen Y-ers have a different expectation of what work means and what a workplace should be like.

Employers are now forced to deal with a host of new issues that their predecessors did not face. Here are five workplace policies you may want to consider if you have young workers:

Carnival's All You Can Drink Package

Carnival Cruise Lines, the world's largest cruise ship company is adding an all you can drink package to some of its ships.

Several of Carnival's competitors have already offered a similar drink package, and Carnival will try out the package on select ships before deciding whether to adopt it on all, reports USA TODAY.

For almost $50 a day, the all you can drink package will allow vacationers access to unlimited wine, beer and spirits as well as sodas and non-alcoholic frozen cocktails. The package is aptly called the "My Awesome Bar Program."

Expect Young Immigrants to Flood Small Biz: Lawyers

Young immigrants could be a potential new source of qualified employees for small businesses in the wake of the President's deportation deferral program.

The program is expected to provide many young immigrants with temporary relief from deportation and permission to work in the U.S. It applies only to those who entered the U.S. before age 16 who are either enrolled in or have graduated from high school, earned a GED, or served honorably in the military.

The problem with this brand new work force is that the legal implications of hiring them are still unclear.

Minimum Wage Debate Divides Small Biz

Congress has proposed increasing the minimum wage and that has left small business owners divided on whether the move could help or hurt.

The bill would increase the federal minimum wage from $7.25 per hour to $9.80. That's the hourly equivalent of $20,000 per year, reports The Motley Fool. The bill also proposes upping the base hourly pay for tipped employees from $2.13 to $6.86 over the next several years by increasing it $0.85 per year.

That could add up to a lot in increased salary costs but it's not necessarily a bad change for small businesses.

How to Conduct a Legal Job Interview

If your business is growing, at some point you are going to need to recruit help. However, the job hiring process can be filled with legal pitfalls for those who are not prepared. So you will definitely need to know how to conduct a job interview.

Depending upon the job, a lot of employers take different approaches to the interview. Some employers may require the prospective employee to actually perform the job while others may ask vague questions about someone's strengths and weaknesses.

Regardless of your tact, you should keep the following tips in mind.

Allowing Dogs at Work Can Lead to Liability

Having dogs at work is fun and some businesses are now allowing them to come in all the time, not just on 'bring your dog to work' day.

Big companies like Google make headlines for their pet policies but small companies also embrace 'man's best friend' as an officemate. That's great when the pet is well behaved but not all of them are.

The dog's owner is liable for the pet's actions but if you allow employees to bring dogs to work you could be on the legal hook as well.

Does CARD Act Hurt or Help Small Biz Borrowing?

The CARD act provides protection for personal credit cards but it may be having an unexpected effect on small business.

The Credit Card Accountability, Responsibility and Disclosure Act, passed in 2010, put significant limits on banks' ability to raise interest rates and charge fees. But the Act only applied to personal credit cards. Consumer credit cards don't fall within the same protections.

That has led to some small businesses using personal credit cards to take advantage of the CARD Act. But it's unclear whether that's a smart move.

How to Hire an Independent Contractor

When considering how to hire an independent contractor, it's important to understand how the law evaluates the difference between full time employee and independent contractors.

In practice independent contractors can seem like full time employees because they do similar tasks. But legally it's not enough to hire someone using the title 'independent contractor' and call it a day.

There is a multi-factor test that's part of their consideration. No single factor controls the decision but the combination of all these factors will help courts reach a decision.

Small Biz and Private Equity Don't Always Mix

Private equity may seem like an appealing solution to many small businesses. After all with many banks tightening up their policies, a private equity investor could be the only way for a small business to get much needed capital.

However, seemingly fast and easy money from private equity investors can have its drawbacks.

Some small business owners unprepared for the world of private equity have found themselves losing control of the companies they worked so hard to create, reports The New York Times. So how do you know when private equity may be good for you?

Google's New Search Rankings Penalize Copyright Infringers

Google is rolling out a new search algorithm that will change how rankings are calculated. That means some pages will see a different in how well they rank in searches.

The purpose of the change? To punish copyright infringers.

This is good news for copyright holders since it makes infringement less profitable. But the lack of clear standards about what is infringement could also punish innocent businesses and individuals.

Is Crowdfunding Legal?

The JOBS Act may have authorized crowdfunding but it's not legal just yet even though the law was passed back in April. Small businesses will have to wait for the SEC to set out rules for the process.

Those rules are expected sometime early next year according to the parameters of the Act.

Crowdfunding is an alternative capital-raising strategy where potential investors buy shares in a venture. It can be complicated and the North American Securities Administrators Association has issued an advisory about things to be wary of when considering crowd funding.

Should You Finance Your Small Biz with a Credit Card?

It can be hard to get a line of credit for a new business so some owners are turning to credit cards instead.

Credit cards provide a relatively easy way to get credit but that doesn't make them a good idea for every purchase. There are drawbacks to swiping your plastic everywhere you go, both for individual and business purchases.

The trick is knowing the drawbacks of using a credit card so you can figure out where it can be a benefit to your business rather than a burden.

'The Oxford American' Editor Fired After Harassment Allegations

Marc Smirnoff, founder of The Oxford American magazine, has been ousted from his company after allegations of sexual harassment.

The founder of the company was not even immune from the effects of sexual harassment allegations (which were not even proven) serving as a reminder to small business owners that they should be especially careful to look out for inappropriate behavior.

Smirnoff founded the literary magazine in 1992 and it is alleged that he had engaged in a culture of sexual harassment for quite some time at the magazine, reports The New York Times.

5 Ways for Small Biz Owners to Get Paid Faster

We've written about getting customers to pay their invoice. While getting customers to pay is obviously important, sometimes small businesses may find that getting paid faster is just as important.

Most small businesses have to pay their business expenses on a monthly basis and as a result need to have a steady supply of capital on hand regularly. When customers are late making their payments, businesses can struggle just to stay afloat.

And when customers do finally get around to paying, it may be too late for the business. To avoid such problems, here are five steps that small businesses can take to get paid faster, as reported by Newsday:

Janet Napolitano Accused of Sexual Harassment

Secretary of Homeland Security Janet Napolitano has been accused of sexual harassment and discrimination against male employees.

In the complaint, Napolitano is accused of turning her female-run department into a "frat house" where male staffers were routinely humiliated, reports Forbes.

Along with the culture against men, Napolitano is also accused of providing unequal opportunities for men and women, promoting women to the highest positions while equally qualified men were bypassed. The lawsuit against Janet Napolitano serves as a stark reminder for employers that discrimination goes both ways, and that you have to be on the lookout for much more than men harassing women.

Cigars Shops Decry FDA Oversight of Regulation

The U.S. Food and Drug Administration is considering regulating premium cigars, much to the chagrin of cigar shops across the country.

The FDA was given authority to regulate all tobacco back in 2009 and until now it hasn't actually made new regulations for cigars. But the organization does say that it is developing a strategy to regulate tobacco products beyond those already regulated.

Cigarettes and smokeless tobacco have heavy regulations and mandatory federal taxes. Makers of premium cigars are worried about what similar regulations on cigars might do to their industry.

They aren't the only ones who oppose FDA regulations in this area.

Paleo Blogger Needs a License to Blog, NC Says

Paleo blogger/cave man dieter Steve Cooksey, was told by North Carolina officials that he did not have a license to give dieting advice. As a result, Cooksey had the choice of either not blogging or steering clear of giving individualized advice.

In this age of blogging and reaching out to consumers via social media, having a personal connection with a potential customer has been a key feature of marketing.

As many small businesses have taken to blogging, the notice given to Cooksey is particular troubling as businesses may be left wondering what is, and is not, allowed.

How to Get People to Buy In Store vs. Online

LightSpeed and other tablet point-of-sale software does more than provide small businesses an alternative to the cash register. It provides a new way to compete with online retailers.

Cash registers are a way to hold money and make change. To track inventory, compare sales, and know the specifics of every product in the store, business owners had to do something else.

But POS software provides a way to handle those other things so small businesses can focus on keeping customers.

Employers Brace for EEOC 'Red Zone' Lawsuits

It is August and we are now entering the "Red Zone" period for EEOC lawsuits against employers.

The federal government's fiscal calendar ends at the end of September and these final two months have been described as the Red Zone as the Equal Employment Opportunity Commission (EEOC) cranks into overdrive.

Last year, 175 of the agency's 261 discrimination lawsuits were filed during the Red Zone, with the busiest day coming the very last day of the fiscal year, reports Corporate Counsel. Analysts expect a similar trend this year.

So how do you avoid being targeted by the EEOC in the Red Zone?

Libor Scandal may Affect Interest Rates and Your Business

The London interbank offered rate - or Libor - has been the topic of conversation as bank regulators try to figure out how far the interest rate rigging scandal goes.

The problem began when it became apparent that Barclay's bank had attempted to fix the Libor on two occasions. Then it became clear that other banks had been working with Barclay's to fix interest rates.

The scandal may seem far away since it originated in London but its reach is much closer to home. Libor doesn't just affect interest rates in the UK. It's also part of regulating U.S. interest rates.

Interest rates are crucial to small business loans and Libor is tied to those too.

TX Strip Club Sued Over DWI Death of Teen

Lawsuits arising from DWI are generally against the driver of the vehicle. But in this case, the suit is against a strip club in Texas that served the driver, Erasmo Ramirez, too much alcohol.

Ramirez left the club with a blood alcohol level of at least 0.295 on the night of the accident.

The problem for the club, Rick's Cabaret, is that they allegedly served alcohol to Ramirez after he became intoxicated. The proof, plaintiffs say, is in their policy.

How to Hire a Social Media Expert for Small Biz

Social media is a part of daily life for many Americans and small businesses are taking advantage of that fact.

Rather than spending money on marketing, businesses can advertise for free by making a Facebook page or being active on Twitter. That's a huge benefit for owners that are short on cash but have some time to spare.

But social media is also a delicate balance between visibility and over-sharing. The decision of how to handle it requires some finesse.

Internet Tax Likely Coming Whether You Like it or Not

The days of tax-free shopping on the Internet may be coming to an end. Congress seems poised to pass an Internet tax law, the Marketplace Fairness Act, that allows states to force online companies to tax their customers.

While the Internet tax law is being touted as a "new" tax, legally speaking, it should have zero impact on the amount of taxes customers pay for online purchased goods. However, from a practical standpoint, small business owners just lost a huge advantage they had on traditional brick-and-mortar stores.

So what does the Internet tax law really mean for small business owners?

Self-employment Taxes Don't Have to be Intimidating

"Self-employment taxes" is a phrase to send chills down the spine of most people who own their own business. But it doesn't have to be that way.

Sure, paying taxes as a self-employed person can be more complicated than as a company employee. For self-employed people, the government expects you to help them figure out how much tax you owe, unlike getting a check with the taxes already removed.

The process sounds intimidating, but there are many resources available for self-employed people trying to sort out the tax code.

The first thing to determine is when you need to pay.

Paid Sick Leave Means Fewer Workplace Injuries

During these tough economic times, employers may be looking for any opportunity to cut their expenses. One area that has particularly suffered is employee benefits. Employers have cut vacation time, paid sick leave, and other benefits.

But while cutting these costs may save money immediately, these cost saving measures may end up costing you more in the long run.

A recent survey of workers found that employees who are not given paid sick leave are much more likely to suffer work-related injuries. These injuries can lead to costly administrative and civil liability for employers.

Legal Online Gambling = Money on the Table?

As more states legalize online gambling, game developers are considering the opportunity to reach a new market.

Brick-and-mortar casinos aren't going anywhere anytime soon, but states are starting to realize the potential of online gambling as a source of revenue. Nevada, Washington D.C., and Delaware already allow people within the state to gamble online and other states are considering loosening laws around online betting to bring in business.

Some critics initially dismissed the plans for online gambling as small potatoes in terms of revenue. Projected incomes from legalizing online poker were small compared to massive state deficits.

But poker is only the tip of iceberg for online gambling potential.

For small businesses, government contracts can be a lifesaver, especially in a struggling economy. What are the potential benefits and drawbacks, and how can business owners get a piece of the pie?

A wide range of government agencies -- local, state, and federal -- seek bids from private companies to handle a variety of tasks. These include construction projects, some administrative services, and the collection of fees like parking tickets.

On the "plus" side, government contracts can offer small business owners some advantages over "regular" customers. For example: