Free Enterprise - The FindLaw Small Business Law Blog

June 2012 Archives

Subscription Business Model May Impact Customer Privacy

Make a sale and you get paid once; set up a subscription sales model and you get paid every month. The drawback: you're going to have to save financial data for your customers and that can create privacy issues.

First the positive: Subscription business models are booming for online businesses. Rather than selling a customer something once, the subscription model guarantees that same sale once a month without any extra work.

Setting up a subscription model for items that are necessary or that customers are passionate about can mean more sales and better relationships with your clients.

But to keep collecting payment you have to find a way to save customers' financial data.

The U.S. Supreme Court has upheld the Affordable Care Act, commonly called Obamacare, clearing the way for an employer mandate that will require many small businesses to offer employee health insurance or face a penalty.

In a 5-4 decision, the Court found the ACA's individual mandate is constitutional under Congress' taxing power, Reuters reports. The mandate requires individuals to buy health insurance or face penalties beginning in 2014.

That's also when the ACA's employer mandate kicks in. Under the health-care law, businesses will have to:

When Are Your Employees FMLA Eligible?

The Family and Medical Leave Act (FMLA) gives some employees the right to up to 12 weeks time off work should certain personal or family health issues arise.

But contrary to popular opinion, not all employers have to give their employees FMLA leave regardless of the seriousness of the health issue, and not all employees are FMLA eligible regardless of who they work for.

So how do you know when you have to give your employees FMLA leave?

EEOC Cracking Down on Not Hiring Convicted Criminals

As a business owner, it probably goes without saying that you know you can't base employment decisions on characteristics like someone's race, sex, or national origin.

But did you know there are other factors that could potentially lead to an employment discrimination lawsuit as well like not hiring convicted criminals? That's right, not hiring a convicted criminal could get you sued.

In fact, earlier this year, the Equal Employment Opportunity Commission (EEOC) announced that it would begin cracking down on employers who considered applicant's criminal backgrounds in their hiring decisions. But if having a criminal conviction is not a protected characteristic, then why the fuss?

A small business hit by cybercrime fraud has won a $600,000 settlement in a case that could have set a new legal precedent for small businesses. But no longer.

The case involved Village View Escrow, a small business in Redondo Beach, Calif., that holds funds for real-estate deals. Cybercriminals stole about $466,000 via online wire transfers from the company's bank account in March 2010, PCWorld reports.

Village View sued its bank over the cybertheft. But because of the Uniform Commercial Code, the company's lawyers first had to persuade a judge to allow the lawsuit to proceed.

3 Reasons to Have an Internet, Social Media Policy

Guest post by Jennifer K. Halford, Esq.

The legal quandary about employers, employees, and Facebook continues.

Maryland's legislature recently passed a bill prohibiting employers from requesting employees' user names and passwords to Facebook and other social networks. However, federal legislation banning such requests did not pass the House of Representatives. For now it seems that states are left to decide if employers can demand passwords.

And so this quandary remains to be solved for some employers.

Yet, there are some things that employers know for certain about employees and social media.

First, employees are using it. Second, they are most likely using it at work. And third, employers must have a written policy that tells employees what they can and cannot do.

Why it Pays to Self-Publish a Professional Ebook

Publishing a professional ebook can be a great marketing step and with the variety of tools to self-publish it's never been easier for a new author. An ebook can also be a marketing tool since it shows the author's expertise and can bring in new business.

The benefits of self-publishing are numerous but there are also pitfalls that are best avoided. Knowing your topic is one thing but knowing how best to get it into the hands of interested readers is a whole other issue.

If you're considering writing an ebook, check out our five helpful tips for self-publishers.

3 Ways to Protect Yourself in Case Your Business is Sued

Guest post by Jennifer K. Halford, Esq.

A lawsuit can destroy your business. Even if you "win" the lawsuit, you still lose. Litigation is costly. Time is taken away from your business. And there are the emotional costs of a lawsuit.

That is if you "win" the lawsuit.

But what if you don't "win" in court? What if your business does not have enough capital to pay the judgment? Your personal assets can be taken to pay the judgment unless you have taken steps to protect yourself.

Take action now to protect yourself. Don't make these common mistakes:

3 Ways Healthcare Reform Can Affect Small Businesses

A sweeping healthcare bill passed the House of Representatives last week and now awaits President Obama's approval.

The law potentially has a significant effect on the way small employers purchase and provide health insurance for themselves and their employees. 

Here are three things you need to know about healthcare reform law for employers, as reported by CNN Money.

Why Every Business Owner Needs a Business Plan

Guest post by Jennifer K. Halford, Esq.

Many business owners see the value of having a good business plan when they are trying to obtain financing. Banking institutions and venture capitalists want to see when they can expect a return on their investment. And a business plan can show that information in an organized manner .

But few business owners know the preventative value of a solid business plan.

Creating and regularly updating your plan can help you protect your business from legal liabilities. Taking the time to consider your business goals and how to achieve them will force you to look at risk. It will also help you prevent unnecessary liabilities.

Here are three legal reasons every business owner needs a business plan:

Office Romance, Marriage Banned by Tenn. Sheriff

An office romance could cost you your job if you happen to work for the Putnam County Sheriff's office in Tennessee. But is this new policy legal?

Several employees at the Sheriff's office are already in relationships that are now in violation of the new policy. Those employees may challenge the policy in court, according to Herald Citizen. But in a statement, Sheriff's Chief Deputy Jacky Farley said he believes the policy is legally acceptable.

It's possible that Farley is correct, but banning office romance doesn't stop the real problem.

5 of the Creepiest Business Cliches

Have you ever tried to sit with a group of business people, only to realize that you have no clue what they're talking about?

And you know it's not because you don't have business savvy. Rather, you are out of the loop because they are throwing around oddball phrases and acronyms that make no sense whatsoever. In fact, some of the slang sounds downright weird.

We recently found ahilarious list of the forty-five most annoying business phrases. With so many phrases to choose from on Forbes' list, we narrowed down our list to the creepiest and most cringe worthy business phrases on the list. We even added one or two of our own.

"Outside salesmen" aren't entitled to overtime pay under the Fair Labor Standards Act. That category now includes drug company sales reps, a divided U.S. Supreme Court has ruled.

The High Court's 5-4 decision means GlaxoSmithKline will not have to pay overtime to sales representatives who visit doctor's offices to make pitches for their company's drugs, The Washington Post reports.

Key to the ruling was whether drug company representatives should be considered "salesmen" -- a question that divided the Justices, and that small business owners also need to ask about their employees in the field.

A new father's bundle of joy means new responsibilities for him, and a potential bundle of legal questions for you as an employer: Do you have to offer paternity leave, and does it have to be paid?

For small businesses, the answers depend on how many employees you have and where your employees live.

If you employ at least 50 people within a 75-mile radius, your business must abide by the federal Family and Medical Leave Act, which requires unpaid paternity leave.

What to Do About Employees' Drug Use at Work?

We all know that recreational drug use at work is not acceptable. But just because employers won't tolerate being high while on the clock, doesn't mean that all employees abide by the rules.

That certainly wasn't the case for Cat Marnell, the former Beauty and Health Editor at xoJane. She left the company rather than get clean.

Marnell was open about her drug use, but most employees don't publicize that information in a forum their boss can see.

If you suspect an employee may be high on the job, there are steps you can take to resolve the issue without risking legal liability.

Does Your Business Need a Telecommuting Policy?

Telecommuting is becoming a more popular option these days. As long as employees remain productive, you can save money with a smaller office, less overhead and a happier workforce.

But before you offer employees the privilege of working at home, you need to create a telecommuting policy that protects your interests. Having the following types of rules written in stone can prevent accusations of favoritism, discrimination and arbitrary conduct.

Before Changing Your Business Talk to These 5 People

Guest post by Jennifer K. Halford, Esq.

I was recently asked by a business owner if she should change from a sole proprietorship to an LLC.

She had been told that an LLC will shield her personal assets from the debts of her business. That fact is generally true. But liability protection is not the only factor to consider.

The answer to her question is much more complex. Changing your business structure has tax and liability consequences that require thoughtful consideration.

In fact, you must ask more people than your business attorney this question.

These five individuals should be consulted before you make the decision to change your business structure:

Partnerships, Joint Ventures and Alliances, Oh My!

For people starting a new business venture with others, one huge question that comes up at the early stage is the structure of the relationship and how to structure the partnership.

In a previous post, we discussed the idea of dividing your shares equally between founders. This assumes that you've all decided to be partners or shareholders in the same entity.

But there are other options if you want to join forces with other parties when launching a new idea. Here are your main options:

Why Every Business Owner Needs a Business Plan

Guest post by Jennifer K. Halford, Esq.

Many business owners see the value of having a good business plan when they are trying to obtain financing. Banking institutions and venture capitalists want to see when they can expect a return on their investment. And a business plan can show that information in an organized manner .

But few business owners know the preventative value of a solid business plan.

Creating and regularly updating your plan can help you protect your business from legal liabilities. Taking the time to consider your business goals and how to achieve them will force you to look at risk. It will also help you prevent unnecessary liabilities.

Here are three legal reasons every business owner needs a business plan:

How to Get Free Legal Help for Your Business

Guest post by Jennifer K. Halford, Esq.

Many business owners are struggling. Cash flow is tight. Profits are down. And they still have the same demands on their bottom line.

Getting legal advice has become a luxury. You need legal help to keep your business safe. Yet paying $350 for an hour of your attorney's time may not fit into this quarter's budget.

Most business owners don't realize that you can get free legal help for your business. Yes, I said free!

These sources are not a substitute for legal advice tailored to your business. However, they may be able to provide an answer to your general legal question. And did I mention that they are free?

Here are three ways business owners can get free legal help:

Don't Get Sued for Refusing to Hire a Criminal

Guest post by Jennifer K. Halford, Esq.

It is not uncommon for business owners to think that they have the right to ask if a job applicant has a criminal record and then to use that information to determine who to hire.

After all, it is your business. You are trying to protect it. So shouldn't you have the right to decide whether or not to hire someone who has a criminal record?

Not necessarily.

The Equal Employment Opportunity Commission ("EEOC") recently updated its position about employers' use of applicants' criminal history in making employment decisions. Specifically, the EEOC reinforced its concern that the use of such information can result in disparate impact discrimination under Title VII of the Civil Rights Act of 1964.

You want to hire the right people for the job and protect your business. But you don't want to defend a discrimination grievance. So here are a few things you should know before you post that job application:

Should Employees be Banned from Using Siri?

Guest post by Jennifer K. Halford, Esq.

Siri, take this dictation : "IBM allows its employees to use personal iPhones. But IBM does not allow its employees to use you. Find out why that is."

IBM recently banned its employees from using Siri while at work due to privacy concerns from Apple's collection and storage of personal information from the user.

Using Siri or Dictation results in the collection of recorded information in a text format. Users agree that Apple can collect that and other user information when they agree to Apple's license agreement. And all of that information is stored by Apple in Maiden, North Carolina.

Siri, add to my to do list : "Find out what Apple is doing with my personal information."

5 Tips to Pick the Right Business Insurance

Guest post by Jennifer K. Halford, Esq.

I recently spoke to a group of business owners about different ways to protect your personal assets from the liabilities of your business.

One of the topics discussed was the importance of business insurance. Most of the business owners understood the value of a good insurance plan. However, insurance is expensive.

Many business owners think about cutting insurance costs when business is bad. And some choose to downsize or cancel their policy.

But that is a risky thing to do. What if someone is injured at your business? What if there is a fire? Is saving a few dollars now really worth the risk of paying more out of your pocket if something goes wrong in the future?

Instead of canceling or downsizing your policy, be proactive and get an insurance plan that is a smart investment for your business. Here are five things you must do to make sure you select the correct insurance plan for your business:

Legal Steps to Take Your Business Out of State

If you're sitting in one state and doing a large part of your business in another state, you may need to ask yourself some tax questions.

There are many issues that can arise when you decide to engage in inter-state business. While it's not always necessary to register in another state, there are times when your business affairs or your business contacts could render you liable to the other state for things such as franchise tax or sales tax. Just ask

So what are some things you need to be aware of if you are thinking of registering your business in another state?

These Business Policies Must be in Writing

Guest post by Jennifer K. Halford, Esq.

In a prior post I shared three reasons why your company policies should be in writing. That post generated valuable feedback from employers seeking clarification about which company policies must actually be placed in writing.

Let me clarify that it is not practical or cost-effective to put every conceivable policy in writing. Nor is it legally advisable.

For instance, you do not want to have a written policy that you are not going to consistently and fairly enforce. This can be used against you if your employment practices are ever legally questioned. Likewise, you do not want to have so many written policies that they get lost in your office or in your employee handbook. A policy is not effective if no one knows it exists.

So what policies must you have in writing?

5 Reasons a Small Business Owner Should Take a Vacation

Guest post by Jennifer K. Halford, Esq.

It is summertime. It is time to travel and for family vacations. And time to take a break from the stress of your business.

Yet, I find that most small business owners believe that they cannot take a vacation. They think they are too busy or that the business will fall apart in their absence. Or they think that they cannot afford a vacation or to take time off.

But you need to take a vacation. You need to get out of town for a few days. Or plan to stay home and visit with family and friends if you cannot afford to travel. Doing so is essential to the success of your business.

Here are five reasons why every business owner needs to take a vacation:

Do You Have to Pay Unauthorized Overtime?

As an employer, you likely go to great lengths to budget payroll. You calculate just how much you have to spend and schedule everyone accordingly.

But everyone has that one employee who works off-the-clock even though they weren't asked to. Or that employee who overstays their daily welcome, triggering overtime wage laws.

What can you do? Do you have to pay unauthorized overtime?

How to Legally Hire Teenagers to Work for You

Guest post by Jennifer K. Halford, Esq.

School is out for the summer. That means that there is a new, youthful workforce looking for summer employment.

That can mean less expensive, energetic employees wanting to work for your business. This may sound like a great deal for a business owner trying to save money and increase temporary staffing for the summer months.

But beware. This also means new employment laws that you have to comply with.

The Fair Labor Standards Act (FLSA) has specific requirements for employers of teenagers when school is not in session. Violating these provisions can result in monetary fines and penalties for your business.

Avoid those penalties by knowing how to legally hire teenagers to work for you. Here are five things you need to know:

Bachelorette Parties Banned at LA Gay Bar

The Abbey and bachelorette parties are almost synonymous. Women flock to West Hollywood's hottest gay bar on the weekends, seeking to celebrate their pending nuptials with a bit of drink and a lot of flesh.

But owner David Cooley has had it. While he's happy for his straight customers, he says watching them was "kind of a slap in my face that I couldn't have that same experience." So instead of letting the parade of premarital bliss continue, he's decided to institute a bachelorette party ban.

Well, at least until he and his gay patrons can get married.