As someone who used to procrastinate quite often, I know a thing or two about the dance of deferment. However, I am gradually transforming from a procrastinator to a frog-eater, based on the realization that tackling a difficult task may cause an initial increase in anxiety, followed by a wave of long-term relief and satisfaction.
What do frogs, and butterflies have to do with employment law, you might ask? I think about the many “frogs” that business owners do not want to swallow: the New York State Department of Labor’s Audit Notice – put aside for six months; that letter from an angry ex-employee who claimed further commissions were due – sitting unopened on the company manager’s desk. Perhaps the business owner receives a “cease and desist” letter – a tadpole that can grow into a scary frog – that the manager buries under a stack of paperwork, in hopes that the sender will go away. These items are at risk of being filed in the recesses of an employer’s mind, under the caption “I’ll deal with this later.”
Much to their credit, many business owners do swallow their frogs. When a client or prospective client seeks out legal counsel, it usually means they are ready to face whatever employment law or business law challenges they have. I can often hear the relief in a client’s voice after they have had their initial consultation -- the first bite of the formidable frog sitting before them. So what is the frog that is getting cold on your plate? Here are five employment law issues that you, dear business owner, can tackle to swallow your frog, cure the butterflies in your stomach, and ease the anxiety of avoidance and procrastination:
1. Look At Your Workers’ Situation:
Have you been anxiously reading the news about the potential penalties for misclassifying employees as independent contractors? Wondering if your unpaid interns are legitimate, under prevailing federal and NYS state labor laws? (The Fair Labor Standards Act; 29 U.S.C. § 206, et seq., and 12 NYCRR 142; Labor Law, Article 2, § 21 (11) and Article 19, § 652). Now is the time to sit down with legal counsel, and review your workers’ classification. Which of your workers are listed as an independent contractor? Who is an employee? Do you know what the legal criteria is for each? This is an extremely important topic – a delicate frog to swallow – for many small to mid-sized companies that hire employees and independent contractors.
2. Dust Off Your Employee Handbook:
Business owners: do you remember that old Employee Handbook that you had drafted years ago? The one with a section telling your employees that they should turn their computers off on the day before Y-2K? Perhaps your Employee Handbook references the employee-hacky-sack game at the annual company picnic? Chances are, it is time for an updated version. Many federal, state, and municipal laws have changed in the past two years alone – with countless other changes since 2010 – that need be communicated to your employees. Spousal / partner benefits, reasonable accommodations for disabilities, state-mandated paid family leave laws, PTO and paid sick leave are issues to address, to clarify what your employees can legally expect from you, and what you can legally expect from them in return. Such changes can help to protect your company from potential lawsuits. A note of caution: downloading boiler-plate template handbooks from the Internet may fail to account for certain individual circumstances of your business, and would be a disservice to the business owner, and their employees as well.
3. Learn The Legal Requirements Surrounding Diversity In The Workplace:
Unclear about what constitutes bias in the workplace? The answer is not to avoid hiring racially or culturally diverse employees (that could create problems for your company, and it’s just not right from a societal or moral standpoint). Rather, get clear about the federal and state laws, of what is required of you, and on some other resources that are available. If this issue is a frog that you, as a business owner, are having trouble swallowing, it is recommended that you hire an employment law attorney or H.R. Professional, trained to provide diversity training for your workplace.
4. Get Help Drafting Commission Agreements Where Necessary:
New York State – along with several other states and municipalities – requires that employers have written commission agreements with your commissioned sales staff and your commission-based employees (including those who make a partial salary consisting of wages, and are paid in part by commission). See N.Y. Labor Law Section 191(c) as amended. If you hire commission-based employees, it is wise to have help in drafting a sound commission agreement that meets the law's requirements.
5. Shareholder Agreements For Corporations:
If you are an s-corporation or a c-corporation, a Shareholder Agreement is the backbone of your business -- defining the rights, privileges, protections, and obligations that each shareholder (or partial owner) of the company is bound to with respect to one another, and between the individual and the corporate entity. Yet, many business owners, startup founders, and creative entrepreneurs hesitate to draft these crucial documents – putting them on the back burner for some time. An attorney can help you with these documents, by laying out some of the concerns that you and your business partners may have, and by making sure that key provisions and processes are addressed. These provisions include a framework for taking on new shareholders, the procedure for removing shareholders, steps for dissolution, and rules governing the sale of shares, among other key issues. Swallowing this frog will clear the way for your business' functional operation, as you passionately pursue your vision.
As a business owner, entrepreneur, or founder, it is never easy to face a potential employment law or business law problem, such as the examples listed above. If you ignore these legal issues or problems – if they remain your figurative uneaten frogs – then the problems usually worsen, and the loud croaking sounds will heighten your anxiety and worry. By contrast, dealing with these issues can be scary at first, but will eventually lead to a feeling of empowerment and satisfaction, and a renewed focus on running your business, practice, restaurant, store, or company. Perhaps it is comforting to know that “swallowing your frog” does not necessarily mean solving all of your legal challenges all at once. Simply deciding to address your business’ legal needs, and acting upon that decision, is a great example of eating your frog, one bite at a time.
Although I am not a doctor, I am quite confident that there is no room in your stomach for butterflies and frogs to co-exist.
Eric Sarver, Esq. is an employment law attorney (management-side, for small to mid-sized businesses), practicing law for nineteen years. The Law Offices of Eric M. Sarver provides representation in the hospitality industry (restaurants, cafes, bars), retail stores, tech companies, service providers and startups. The firm's practice areas include: defending employers from employee lawsuits, defense against Department of Labor audits and investigations, drafting employment contracts and employee handbooks, and counseling businesses on compliance with federal and state labor laws. Eric Sarver, Esq. is admitted to practice law in the State of New York, and in the federal courts, Eastern and Southern Districts of New York. For questions involving an employment law or business law matter, you can contact Eric M. Sarver, Esq. at: Tel: 917–930–8684; E-mail: firstname.lastname@example.org.
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