Ah yes, it’s that time of year again. After differing degrees of debauchery these past few weeks (from over-indulging in cakes and sweets at holiday parties, to spending more money than we usually do, to… well, you can fill in your own blank here), we now come to the finale of the holidays: Making New Year’s Resolutions.
New Year’s Resolutions. Isn’t it funny how people’s reactions to this custom vary? Some decry and denounce the very mention of such a practice: (“It’s a marketing gimmick for gym owners!” “A set-up for failure!” “Why not strive to be better all year round?!”). Yet others will embrace this time-honored tradition (“Finally, I feel like I have a fresh start!” “No more guilt for those extra calories at Christmas!” “At last! I’m going to take charge of my life again, with some goals for self-improvement this year!”). Having been on both sides of The New Year’s Resolution Rift, I’ve come to realize that if my New Year’s Resolutions involve realistic, attainable goals, with foreseeable benefits in my life, then I can be at peace with, and even embrace, the New Year’s Resolution practice. On the contrary, when my New Year’s goals are overly ambitious, perfectionistic, or lacking in any likely benefit (beyond just being able to recite my New Years’ resolution, if asked), that’s when I’ve fallen into the “denounce and decry” camp. And so, I think it’s best to set small, concrete, attainable goals as New Years’ Resolutions.
While many articles address New Years’ Resolutions for your personal life (exercising more, de-cluttering your closets, cutting down on coffee, taking up yoga), I want to discuss some New Year’s Resolutions For Your Business. After all, shouldn’t your company, small business or non-profit organization be leaner, better protected, and legally compliant this year? Shouldn’t your s-corporation be healthy and happy, just like you hope to be? Specifically, I’ll address five legal steps and actions that you can take, to improve, strengthen and protect your business in 2016. Rest assured, these are small but concrete actions — feasible and attainable — with a predicted benefit for your business (more like the “three times per week workout” New Year’s Resolution, not the “daily morning marathon” vow; akin to the 2016 “cut back on carbs” goal, rather than the “700 calories per day diet of quinoa, celery sticks and egg whites”).
Five New Year’s Resolutions To Improve, Strengthen And Protect Your Business In 2016
1. Review 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 their actual working conditions (from schedules of hours, types of work that your IC’s perform, and designation of authority over work schedules, to payment arrangements and the like). Such review should have the goal of making sure that your IC workers 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 New Year’s Resolution: be sure to have some contracts drawn up, between your company and your independent contractors). It’s 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 and/or the I.R.S. correct such inconsistencies for you.
2. Revise and Update Your Employee Handbooks:
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 actually read your 2011 employee handbook, but I’m presuming that it is missing reference to New York State’s Achieve Pay Equality Legislation of 2015 – specifically, the conditions in the workplace, under which employers and employees are permitted to disclose and discuss their wages, while describing the requirements for employees and employers to follow, in light of any raised concerns of gender-based wage inequity. Other recent laws with provisions that your employee handbook should reference include The New York City Paid Sick Leave Law of 2014, while it is further wise to revisit the need for your employee handbook to have newer language, for employee benefits afforded to employees married to same-sex partners. Updating your company’s Employee Handbook is a relatively simple process for an employment law attorney to do for you. Your business’ benefit could be 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 partners and / 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 business, firm or company on how to proceed when a partner wants to sell their share of the business. However, does your company’s current shareholder agreement accurately reflect the value of your business? (How will your company be valued, if you have to 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 2016. (Don’t have a shareholder agreement or a buy-sell agreement for your business? If not, then you have another chance for a New Year’s Resolution: 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, New York State Unemployment Insurance, And Legal Requirements.
With all that of the balls that you juggle as a business owner (owning, operating, running, over-seeing, supervising), it’s 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 look into any other new or existing government tax and insurance requirements that might apply to your business in 2016, particularly if you have employees, including OSHA requirements, ACA requirements, federal tax withholdings for employees, self-employment tax, and payroll tax. Thus, the fourth New Year’s Resolution For Your Business would be to bring these matters up with your professional – an accountant, an employment lawyer, or other trusted advisor – to be sure that there are no Workers’ Compensation carrier lapses, or other overlooked items in 2016. The benefit: a huge amount of savings, in 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 And All Employee Discrimination Concerns That Were Brought To Your Attention in 2015:
For starters, I always counsel my clients (private businesses and non-profits) to immediately address any concerns raised by employees, alleging 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 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. As I’ve noted, 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, etc. If your company has any unresolved complaints of discrimination from 2015, then your fifth Business New Year’s Resolution for 2016 would be to get help in investigating such matters, and finding resolution. Hiring an attorney experienced in labor and employment law is the safest and wisest route to go, in my opinion.
In essence, the New Year is an ideal time for revitalization: assessing which habits, actions and ways of interacting in our lives lead us to growth, health and happiness, while further looking at which actions, patterns and ways of living are hindering us from our full potential (and how we might resolve to eliminate these negatives from our lives, to be healthier, happier and on more solid footing). For a small business owner, an entrepreneur, a startup or a non-profit founder, the New Year can be an equally ideal time for improving your company’s legal compliance, protection, smooth functioning, and abundance. Taking small, slow yet steady actions – such as the Five New Year’s Resolutions For Your Business – may provide you with some valuable touchstones to professional progress.
Happy New Year to everyone. May we all prosper in 2016!
Eric M. Sarver, Esq.
Eric Sarver, Esq. is an attorney with seventeen years of experience practicing law — the past fourteen of which as the sole proprietor / principal at The Sarver Law Firm, PLLC. Mr. Sarver’s practice areas include: labor & employment law, business law and contracts, for small businesses, social entrepreneurs and non-profits. 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 issues that your business is dealing with, feel free to contact Eric M. Sarver, Esq. at: Tel: 917-930-8684; E-mail:firstname.lastname@example.org; Web: www.sarver-law.com
Disclaimer: The information contained in this Article is provided for informational purposes only, and should not be construed as creating an attorney-client relationship, nor as legal advice on any specific matter that a person or business entity may be dealing with. Recipients of content from this article and/or website — clients or otherwise — should neither act nor refrain from acting, on the basis of any content included in the article or on this site, without first seeking the appropriate legal or other professional advice from an attorney licensed in the recipient’s state, with respect to their particular facts, claims or circumstances at issue. The Law Firm (The Sarver Law Firm, PLLC) and the author of this article (Eric M. Sarver, Esq.) each expressly disclaims all liability, in respect to actions taken or not taken, based on any or all the contents of this article and / or website.