Free Enterprise - The FindLaw Small Business Law Blog

March 2015 Archives

The less paper the better, right? But what about when you need a customer's John Hancock or a vendor needs yours? In an e-commerce world, are e-signatures valid?

Both technology and the law are creating more instances where businesses can employ electronic signatures, so let's look at if and when your business should use them.

Is your business is located in California, Ohio, Oregon, Alaska, or one of the other earthquake prone places? Do you have earthquake insurance?

Do you really need it?

The U.S. Geological Survey (USGS) predicts that a 6.7 magnitude earthquake will occur every 6.3 years in California. The Northridge earthquake on January 17, 1994 was a 6.7 magnitude earthquake. It lasted 10 seconds. The quake killed 57 people, injured 9,000 people, and displaced over 125,000 people. At final count, 82,000 residential and commercial units were destroyed. It caused $20 billion in damages, and $49 billion in economic loss. Earthquake insurance claims were far greater than expected, over $12 billion.

Can you afford an earthquake without earthquake insurance?

Indiana's new 'religious freedom' law has been garnering a lot of attention since Gov. Mike Pence signed it into law on Thursday. The bill would purportedly give legal protections to business owners who refuse service to LGBT customers on the basis of religious freedom.

There are threats of business boycotts and boasts of discrimination, and voices from Apple's Tim Cook to the NCAA have stated their concerns over Indiana's new law. So let's take a look at how this new legislation could affect your business.

From the Sony hack to Hilary Clinton, work email has been all over the news lately. This may leave many employers wondering how closely they can or should monitor their employees' emails.

In some cases, federal law limits how much an employer can monitor electronic correspondence and protects certain kinds of speech in work emails. Employers need to have a plan in place (and make sure its legal) to keep this workplace convenience from becoming an office catastrophe.

According to the National Oceanic and Atmospheric Administration, the lower Missouri River basin, the Ohio River basin, and parts of western New York and eastern New England may face floods this spring. The National Flood Insurance Program warns that just a few inches of flood water can cause thousands of dollars in damage.

Is your business protected in case of a flood? If a flood damages not only your building but also your supplies and products, do you have the money to cover the costs?

With one in four businesses shutting down permanently after a natural disaster, do you need flood insurance?

What is the tip policy in your restaurant? Do your servers share tips with the busboys? Do you charge a set amount for parties of eight or more? Do you want to get rid of the headache of tips?

A growing number of restaurants are doing away with the concept of tipping completely. Bar Marco, an upscale Pittsburg restaurant, abolished their tip program opting to pay employees a base salary with health care benefits and stock shares instead. Brand 158, in California, adopted a no-tipping policy to discourage competition among employees. Servers at New York's Sushi Yasuda even run after customers to return tips. Are you considering implementing a no-tip policy for your restaurant?

What are some legal concerns of a no-tip policy you should worry about?

Severance packages are becoming more and more popular these days, and are no longer just golden parachutes for exiting executives. In fact, some states require severance pay in certain circumstances.

So how do you know when to offer soon-to-be-former employees severance packages, and what does a severance package need to include? Here are a few tips to help:

Whether you're an established business that doesn't want its proprietary information used by a competitor, or an upstart that doesn't want its secrets getting out, you may be looking at a non-compete agreement as a way to protect your trade secrets and maintain your customer base.

And the key to creating an enforceable non-compete agreement is all in the craft. So, here are a few considerations to keep in mind when crafting your non-compete clause or contract:

You hate filing taxes. It's okay. Most people hate filing taxes. This is why we hire accountants to do our taxes for us. They're the experts. They have the training. We trust them to do a good job.

But, what happens when you get audited and assessed a penalty by the IRS? Can you sue your accountant?

The tax man always gets his cut.

If your business sells clothes or shoes, you probably already know you have to collect sales tax. But, what if your business only provides a service? Do you need to collect sales tax on services?

The law on collecting sales tax on services varies from state to state, but here are some things to know:

Spring Cleaning: 5 Email Inbox Tips for Business Owners

Today's the first day of spring! Those of you on the East Coast may not be so delighted, though -- after the winter you had, it's understandable you'd be waiting for the other shoe to drop.

But while you enjoy precious sunshine, consider spring cleaning not only your house, but also your email inbox. Do you have thousands of messages in there? Do you use it as a dumping ground for all your email?

Here are five tips to help tame the email beast:

It is hard enough dividing up house, car, and bank accounts in a divorce. But what about a business?

Maybe you started your business in college, long before you got married. Or maybe you and your spouse started the business together.

Is your small business separate property or community property? How do you divide that up?

The Equal Employment Opportunity Commission (EEOC) has settled yet another HIV discrimination action. Gregory Packing, the manufacturer and distributor of Suncup juice products, agreed to pay $125,000 to settle charges that it illegally terminated a machine operator after learning he was HIV positive. The settlement also requires the manufacturer to institute equal opportunity training and reporting measures.

Over the past few years, the EEOC has increased its enforcement actions against HIV discrimination. Business owners should take this as a reminder that violations of the Americans with Disabilities Act, which covers a wide range of individuals and conditions, can come with steep penalties.

The large cash deposits smell like marijuana, so some of the businesses are spraying the cash with room freshener or perfume to hide the marijuana smell. ... The banks are even more suspicious when they have a person trying to deposit a large cash deposit that smells like perfume.

That's Colorado State Senator David Balmer, describing how the state was ill-prepared for a booming recreational marijuana industry. For all the talk about a tax windfall from legalized and regulated pot sales, one not-so-minor detail had been left out: How will marijuana businesses bank their money?

As one of the first states to legalize recreational marijuana sales, Colorado is a valuable test case for pot banking -- both in terms of early missteps and possible ways forward for a burgeoning but legally tenuous economy.

Corn growers across the United States were hit hard when China began rejecting all U.S. corn shipments in 2013. The ban was due to the discovery of genetically modified corn strains that had not been approved for export to China in some U.S. corn shipments to the country.

Farmers and exporters affected by the ban sued Syngenta, the company that sells the discovered GMO corn varieties. Now that China has approved imports of Syngenta’s AG biotech corn, will the company be prompted to settle the class action lawsuit?

The IRS tax audit notice. Is there anything more feared and dreaded for both individuals and small business owners alike?

You filed your return, paid any taxes you owed, and breathed a sigh of relief. But, wait! You've just received an audit notice in the mail. (Note: The IRS will never call you. If you got a call, it's probably a scam.)

What should you do next? Here are a few options to consider:

Ellen Pao has Silicon Valley riveted on her lawsuit against her former employer Kleiner Perkins Caufield & Byers, alleging sexual harassment and gender bias.

Pao took the stand to testify this week. She described alleged sexual harassment by a coworker whom she previously had an affair with, recounted incidents of sexist jokes made by former coworkers, and claimed that she was denied promotions because of her gender.

Sexual harassment issues in the workplace can cause a lot of trouble for any business. In light of Ellen Pao's lawsuit, here are three lessons for small business owners -- in the form of questions you may want to ask yourself:

According to the IRS, businesses owed over $100 billion in unpaid taxes in 2011 alone. With Tax Day just around the corner, one question many business owners may be asking is, “Am I liable for my business’ back taxes?”

The way your business is set up helps to determine whether or not a business owner is personally liable for a company’s taxes. Sole proprietorships, partnerships, limited liability companies (LLCs), and corporations are all taxed differently.

Here’s a general overview of what you need to know:

Your business is doing great, and you're planning on expanding into another state. Congratulations!

However, did you register as a "foreign corporation" yet? Do you need to? Here are four things that owners of growing businesses should know about being a "foreign corporation":

By now you should know whether your small business has to comply with the Americans with Disabilities Act (ADA). What you may not know is whether you can be a little overzealous in asking about the health of your employees.

As it turns out, the ADA prohibits employers from subjecting employees to "overly broad medical inquiries," as a trucking company found out when it required all of its drivers to notify the company of any contact with a medical professional. The U.S. Equal Employment Opportunity Commission (EEOC) ordered PAM Transport to pay $477,399 in back pay and damages for asking its employees to report even routine physicals to management.

So how much medical info can employers require from employees? Let's see where the ADA and EEOC draw the line:

A change to the rule regarding employment authorization for H-4 visa holders could also bring benefits for employers.

As part of President Obama's executive action on immigration reform, the Department of Homeland Security will soon allow H-4 visa holders to apply for employment authorization. Under the old rule, H-4 visa holders, who came to the United States with their H-1B spouses, were not allowed to work here. Beginning in May, H-4 visa holders will be able to apply for employment authorization that would allow them to work anywhere in the country.

Proponents of this change claim that the new rule will not only benefit H-4 visa holders but also startups looking to hire skilled workers.

As business owners know, we are smack dab in the middle of tax season. Yay! But with the tax code spanning over 70,000 pages, most entrepreneurs don't have the time to comb through it to figure out which tax credits are available.

Have no fear, FindLaw is here. Before you scramble to submit your tax return the day before its due, consider these three business tax credits that could really pay off for you:

Former Secretary of State Hillary Clinton is in hot water for using a personal email account for work purposes. What can business owners learn from this news?

During her time at the State Department, Hillary Clinton broke protocol and used a personal email account rather than a government email account to conduct her correspondence. This may have violated a federal requirement that all official correspondences must be retained as government records, CNN Money reports.

Do you have a rule prohibiting employees using personal email accounts for work? If not, here are four reasons why it's something you may want to consider: