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Five Items Every Business Owner Should Discard Or Revise During Spring Cleaning

Categories: All Resources, Tips

“The spring wakes us, nurtures us and revitalizes us. How often does your spring come? If you are a prisoner of the calendar, it comes once a year. If you are creating authentic power, it comes frequently, or very frequently…”
– Gary Zukav (author of four consecutive NY Times Best Selling Books).

This quote reminds us that, even if our spring has been a bit rainy, we can choose this moment to blossom and thrive, both professionally and personally. If you are a business owner, there are steps you can take that are akin to a spring cleaning at your house: digging up older versions of documents, dusting them off, and revising / updating these items, to ensure compliance with the labor and employment laws. Such actions can promote better functioning of your business — providing the equivalent of sunlight and water for plants — to grow your company’s profits.

Five items for the business owner’s spring-cleaning are as follows:

1. Review And Update Your Independent Contractor Arrangements:

If you have independent contractors (IC’s) working for you, ask a professional to review the contracts that you have with these workers, and to review the actual working conditions (schedule of hours, types of work that your IC’s perform, designation of authority over work schedules, payment arrangements, freedom to have separate clients, and the like). Such review should have the goal of making sure that your IC workers / consultants comport with the “1099” independent contractor status, as they are listed in their contracts with your business. (Note: if you don’t have written contracts with your hired independent contractors, that can be your next spring cleaning item: have some contracts drawn up, between your company and your independent contractors). It is a simple process. The benefit? It’s better to self-correct any inconsistencies around your independent contractors’ working conditions, before the New York State Department of Labor, U.S. Department of Labor or I.R.S. correct such discrepancies for you.

2. Revise and Update Your Employee Handbook (And Discard The Older Version):

Remember that employee handbook that you had drafted for your business at its NYC location, back in 2011? It may have been a great handbook, but if it has not been reviewed and updated since, then I can tell you that it is an incomplete, inaccurate document, which fails to include key legal issues for your employees (whether in Manhattan or Syracuse). I know, I haven’t read your 2011 employee handbook, but I’m presuming that it is missing reference to New York State’s Achieve Pay Equality Legislation – specifically, the conditions in the workplace under which employers and employees are permitted to disclose and discuss their wages. Said Legislation further describes the procedures for employees and employers to follow, when concerns of gender-based wage inequity in the workplace are raised. Other recent laws with provisions that your employee handbook should reference include The New York City Paid Sick Leave Law from 2014, and your [year 2017 updated] employee handbook should include language detailing: employee benefits afforded to an employee’s same-sex partner, trans-gendered employees’ accommodation rights, and policies related to other members of a protected class. Updating your company’s Employee Handbook is a relatively simple process for an employment law attorney to perform for you. Your business may benefit, by avoiding potential problems that may arise, when employees’ expectations and understanding of workplace protocol do not match those of the current laws.

3. Have Your Business’ Shareholder Agreement Reviewed, For Possible Changes:

Many companies – whether they are corporate structures, or any type of business that may include joint founders or investors – have a shareholder’s agreement (a binding contract between the shareholders [or owners] of a corporation, defining the shareholders’ rights, privileges, protections, and obligations). The shareholder’s agreement usually includes your company’s Articles of Incorporation and Bylaws, and can help instruct a startup or company on how to proceed, when a partner wants to sell their shares of the business. However, does your company’s current shareholder agreement accurately reflect the present-day value of your business? (How will your company be valued, if you must sell it for some reason?) Have you had your business appraised? What if your newest shareholder additions to your business, or your partner who owns substantial shares, becomes ill, disabled, or dies? Does your business’ present-day shareholder agreement address these concerns? If not, you can take a simple step of giving your shareholder agreement to an attorney, for review and possible revisions. It may make a world of difference to your business, should anything happen involving a majority shareholder (or shareholders) in 2017. (Don’t have a shareholder agreement or a buy-sell agreement for your business? If not, then you have another chance for a Spring Time Activity: Draft A Shareholder Agreement for your business this year, for the benefits stated above).

4. Make Sure That Your Business Is Up To Date And Covered, With Respect To Workers’ Compensation Insurance And NYS Unemployment Insurance:

With all the balls that you juggle as a business owner (owning, operating, running, over-seeing, supervising), it is easy to lose track of a few details (i.e. – a notice from your worker’s compensation carrier, reminding you that your workers’ comp insurance needs to be renewed; a brochure from the NYS Department of Labor, outlining those requirements for registering with NYS for unemployment insurance withholding, now that you have employees, and so forth). Remember to consider any other new or existing government tax and insurance requirements that might apply to your business in 2017, particularly if you have employees, including OSHA requirements, ACA requirements (as may be amended and changed, as per current pending legislation), federal tax withholdings for employees, self-employment tax, and payroll tax. Thus, the fourth Spring Cleaning Tip would be to tidy up your documented list of workers, and bring them to a trusted professional – an accountant, an employment lawyer, or other trusted advisor – to be sure that your business has no Workers’ Compensation carrier lapses, or other overlooked items in 2017. The benefit: tremendous savings / being spared the hefty penalties from the government, when these items lapse or are not properly in place.

5. Make Sure To Investigate, Address And (If Possible) Resolve Any Employee Discrimination Concerns That Were Brought To Your Attention This Year:

For starters, I always counsel my clients (small and mid-sized businesses and startups) to immediately address any concerns raised by employees who allege discrimination, harassment, or retaliation in the workplace (this is usually a complex and extensive process of investigation, redress, remedying of wrongdoings, if any, and documenting your company’s steps taken). However, if any of your company’s employees have raised concerns about unlawful discrimination, retaliation, or both, then I would recommend promptly beginning (and heavily documenting) a full investigation, geared towards ending any discrimination that may have occurred, or confirming the lack of any discriminatory acts, if the evidence points in that direction. In satisfying the federal, state and New York City anti-discrimination laws, there are many steps that an employer faced with an internal complaint of discrimination must take: interviewing the employee who voices concerns of discrimination (and independently reviewing any evidence or documents), interviewing potential witnesses to events, identifying any possible perpetrators of harassment (and making sure that said harassment ends), rectifying discriminatory pay inequities or practices, etc. If your company has any unresolved complaints of discrimination, then your fifth Spring Cleaning Item would be to get help in investigating such matters, and finding resolution. Hiring an attorney who is experienced specifically in labor and employment law is a wise route to go.

Spring time is an ideal time for revitalization: assessing which documents, actions, and ways of interacting in our businesses lead to growth and blossoming profits, while further looking to eliminate those outdated items that are hindering our businesses’ growth, by keeping us snowed under with compliance issues, or left out in the cold without an updated road map for success. For a small or mid-sized business owner, an entrepreneur, or a startup, taking small yet steady actions – such as the Five Items Every Business Owner Should Dust Off, Discard, Or Revise During Spring Cleaning – may provide you with some valuable touchstones to professional progress.

Happy Spring Time! May we all enjoy the fruits of our labor…


Eric M. Sarver, Esq.

Eric Sarver, Esq. is an attorney practicing law for eighteen years — the past sixteen of which as the sole proprietor / principal at The Sarver Law Firm’s practice areas include: labor & employment law – including employment defense from lawsuits, and from NYS Department of Labor Audits and Investigations – and business law, for small and mid-sized businesses. He is admitted to practice law in the State of New York, and in the federal courts, in the Eastern and Southern Districts of New York. For questions in New York State involving a specific contract, an employment law-related matter, or other legal issue that your business may encounter, feel free to contact Eric M. Sarver, Esq. / Sarver Law Firm, PLLC: Tel: 917-930-8684; E-mail: ems@ericsarver.com; Web:sarver-law.com

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