Share

Business Advocate Law Legal Blog

Monday, January 15, 2018

Form I-9 Inspections

 

The Immigration and Nationality Act (INA) requires employers to verify the identity of their employees and their eligibility to work in the U.S.  To comply, employers must retain original I-9 Forms for current employees and, for former employees, keep them for at least three years.  These need not be submitted to the government but must be available for inspection.  From time to time, U.S. Immigration and Customs Enforcement (ICE) ask to inspect the forms. 

What Does an Inspection Entail?

An employer who receives a Notice of Inspection must produce its I-9s, usually within 3 business days, and may be asked for payroll records, employee lists, articles of incorporation, and business licenses.  ICE may ask the employer to bring the documents to an ICE field office, or officials may visit the employer.  At the inspection, in addition to printed documents, the employer must retrieve any electronically stored documents requested and provide the ICE officer with the hardware and software needed to view them.  The employer must also provide an electronic summary of information in the I-9s, if one exists.

What Happens Afterwards?

After reviewing the I-9s, ICE may send the employer one or more of the following:

  • Notice of Inspection Results, also known as a compliance letter, informing a business that it is in compliance. 
  • Notice of Discrepancies, informing the employer of problems with the employer's I-9s and documents submitted by the employee.  The employer must provide a copy of the notice to the employee, who then must prove to ICE that he or she is eligible to work.
  • Notice of Technical or Procedural Failures, listing technical violations and giving the employer ten business days to correct them.  If not corrected in time, these failures may become "substantive "violations."
  • Notice of Suspect Documents, stating that ICE has found an employee unauthorized to work.  The employer must terminate the employee or face penalties.  ICE gives the employer and employee an opportunity to show that this finding is in error.
  • Warning Notice, notifying the employer that there are substantive verification violations, but that the circumstances do not warrant a fine.
  • Notice of Intent to Fine (NIF), informing an employer that it has been found to have knowingly hired and employed ineligible workers.  The employer must cease and may face fines and criminal sanctions.  An NIF may also be sent for technical errors that an employer failed to correct.

What If ICE Decides to Fine an Employer for Violations?

In response to an NIF, employers may seek a hearing before an Administrative Hearing Officer or try to reach a settlement with ICE.  If an employer does nothing, ICE will issue a Final Order.

Civil fines can be as low as $110 and as high as $1,100 for each employee, depending on mitigating and aggravating factors.  Serious violations may also lead to prosecution for knowingly hiring unauthorized workers, document fraud, harboring, and other crimes.  With the high stakes involved in being accused of I-9 violations, it is best to contact to qualified attorney to discuss the matter as early as possible.

 


Monday, December 11, 2017

Caution: Sexual Harassment in the Workplace

 Given the many high profile cases in the media, it is crucial for any business to understand its responsibility to prevent sexual harassment in the workplace. Generally, sexual harassment is deemed to be a form of sex discrimination under Title VII of the Civil Rights of 1964 (Title VII), and most states have far stricter laws in place designed to prevent harassment.

 There are two types of sexual harassment: quid pro quo ("this for that") and hostile work environment.

  •  Quid pro quo - This occurs when an employer, most often a person in a position of authority, demands sexual favors in exchange for a job or any other benefit of employment including promotions, bonuses and raises. An employee who is fired, disciplined, or given a poor performance evaluation, for refusing a sexual advance may be the victim of this form of harassment.
  • Hostile work environment - This involves an employee being subjected to a pattern of unwelcome conduct, such as comments or visual displays, that is severe or pervasive enough to create a distressing work environment and alter the conditions of employment.

In order to have grounds for a claim, the employee must demonstrate that he or she believed the conduct was offensive or hostile. It is also necessary to show that a reasonable person in the same position would believe the conduct was hostile. Finally, the employee must prove that he or she complained to a supervisor and that the employer failed to take action to stop the harassment.

Before filing a lawsuit, the employee must file a complaint with the Equal Employment Opportunity Commission. If the matter is not resolved, a civil lawsuit can then be filed.

In short, all employees have a right to a workplace that is free from sexual harassment. It is crucial for any business to establish policies to prevent such conduct, and institute procedures to address any employee concerns. Ultimately sexual harassment is bad for business because it can create a toxic work environment that adversely impacts employee morale. Moreover, a lawsuit can not only lead to a costly settlement, but also damage a company's reputation.


Monday, September 11, 2017

How to Valuate a Small Business

Whether you are an owner considering whether or not you should sell your small business or an individual thinking about buying a business that is on the market, it is important to determine how much the business is worth.  This can be a daunting task.  Every business is different and for that reason no single method can be used in every case. Below are the most common methods used to determine the approximate value of a small business.

The assets a business holds can be used to determine its approximate value.  Generally, a business is worth at least as much as its holdings, so looking to tangible and intangible assets can provide a baseline amount.  If you choose to use this method, the business’ balance sheet should provide all of the information you need.  This method may be too simple to be used for all businesses, especially those that are doing well and generating a lot of profits.

Another way to determine a business’ worth is to look at its revenue.  Of course, revenue is not profit a business makes.  When using this method, a multiplier is applied to the revenue amount to determine the business value.  The multiplier used is dependent upon the industry in which the business is operating.  Another method is to apply a multiplier to the business’ earnings or profits, instead of total revenue.  This is usually a more accurate way of determining what the business value actually is.

When using these methods, it is important to understand that the market is constantly fluctuating.  The value of assets can go up or down depending on the day, and revenue and earnings can change drastically from year to year.  Also, when trying to determine what a business is worth, you might consider what the business may be worth if it had better management or more optimal business execution.  The current managers may not be taking advantage of various opportunities to make the business more profitable. 

Before entering into any purchase or sale agreements, it’s essential that you consult a qualified business law attorney and a business appraiser who can assist in the valuation of a small business and help you understand whether it makes sense to proceed with the transaction.


Monday, August 14, 2017

Top Five Reasons for Filing Personal Bankruptcy

 

Although the number of personal bankruptcy filings in the U.S. has declined, many individuals continue to face insurmountable debt. Let's take a look at some of the reasons that lead people to file for bankruptcy.

Medical Expenses

A number studies demonstrate that medical expenses account for more than 60 percent of personal bankruptcies.  Catastrophic illnesses and injuries often result in hundreds of thousands of dollars in medical bills that can easily deplete savings and other sources of funds.  Once these funds have been exhausted, personal bankruptcy may be the only alternative.

Job Loss

Losing a job can have devastating consequences, whether due to a layoff, firing or resignation. While some individuals may receive severance pay or have an emergency fund to draw from, the loss of income can easily deplete one's savings. In addition, many individuals start to use credit cards to pay bills and also incur additional expenses such as COBRA insurance. Those who are out of work for an extended period of time are unable to pay creditors, and ultimately face collection activities and lawsuits.

Credit Debt

Although some individuals use credit cards irresponsibly, debts can spiral out of control due to unexpected circumstances such as illness, disability, or job loss. When consumers cannot make the minimum payment and are unable to borrow money from friends or family, bankruptcy may be inevitable. While debt-consolidations may be an option for some people, most plans only delay filings in the long run.

Divorce

Divorce can lead to financial burdens for both partners for a variety of reasons, not the least of which is legal fees. Obviously, dissolving a marriage can also lead to a significant loss of income and assets for either partner, depending on the division of marital property, and child and spousal support determinations.  Moreover, both partners will be faced with the cost of maintaining two separate households after the divorce.

Unexpected Expenses

Without an emergency fund, unexpected expenses such as a costly car repair or property damage from a catastrophic storm can easily drain a family's savings. While homeowner's insurance will cover some losses, many individuals do not receive the full value of their claims. They are also faced with expenses of finding temporary shelter and may also incur additional debt to make up any shortfalls.

Regardless of the circumstances, filing for bankruptcy can enable many individuals to eliminate or reorganize their debts and make a fresh start. However, this is a serious consideration that requires the advice and counsel of an experienced bankruptcy attorney.

 


Monday, April 10, 2017

What Does "Goodwill" Mean When Buying a Business?

Goodwill is an asset that is an intangible part of a business being purchased. In spite of its intangibility, goodwill may be worth more than concrete assets, such as property, buildings, machinery or inventory. Goodwill is the essence of the company's value to its customers, clients, and employees and, as such, is invaluable to any buyer. It is easier, as many people intending to purchase a business will tell you, to maintain goodwill than to establish it, since, among other things, goodwill takes time to build. Purchasing a business that already has established goodwill in the community can give the new owner a strong competitive edge. 

What Intangible Assets Compose Goodwill? 

Prospective buyers and sellers should be aware of the various aspects of goodwill. Not all will apply to every business, but aspects of goodwill include:

  • Brand name
  • Solid customer base
  • Good customer relations
  • Good employee relations
  • Patents or proprietary technology
  • General reputation
  • Future sales projection

Goodwill is a saleable asset, presumed to generate sales revenue and customer continuity. Having been established over years of honest and efficient behavior by the previous owner, it is transferable to the buyer, assuming the buyer maintains the pre-established excellent business practices.

How Is Goodwill Established?

As mentioned, goodwill can only be established over a period of years during which it is nourished and maintained. In business, it is assumed that expenditures have been involved in creating and preserving goodwill. Steps taken to do this include: 

  • Healthy and continuous investment in promotion
  • Maintenance of necessary quantity of high quality customer supplies
  • Support of excellent relationships with both customers and suppliers
  • Maintenance of efficient and respectful management and employees relationships
  • Establishment and maintenance of corporate identity and image
  • Keeping up an appropriate location

How Is Goodwill Evaluated?

There is no set price for goodwill, though it very definitely features in sales negotiations. Generally speaking, goodwill is reflected in the amount in excess of the firm's total value of assets and liabilities. In well-established businesses, goodwill may be reflected in a price several times higher than the firm's physical assets alone would be reasonably worth.

There are several complex methods by which business goodwill can be calculated so it is essential to have a highly competent business attorney involved in the negotiation process. 


Monday, March 27, 2017

Use of Non-Disclosure Agreements

As a small business owner, it is essential to protect sensitive information that is often referred to as trade secrets. While some well known examples of trade secrets include the formula for Coca-Cola and Google's algorithms, any business information such as practices and techniques, processes and procedures, needs to remain confidential. In some cases, business data such as client and vendor lists may qualify as a trade secret.

Although trade secrets and other confidential business information are protected by state and federal laws, it is crucial to secure this information through the use of a confidentiality or non-disclosure agreement. In sum, this is a legal contract between two or more parties in which the party receiving the sensitive information agrees not to reveal it to any other party without prior permission or authorization.

In situations in which a business engages with vendors or enters into a strategic alliance with a similar business, a separate, stand-alone agreement can be used. Similarly, confidentiality provisions can be incorporated into an employment agreement for employees who are given access to sensitive business information. In either case, common provisions included in these agreements include:

  • A definition of the confidential information (but usually not the protected information itself)

  • An explanation as to why the information is being provided to the receiving party

  • Terms under which the information may be disclosed to appropriate parties (such as on a need-to-know basis)

  • The circumstances in which the information may or not be used

  • The duration of time  the information must be kept confidential

In order for a non-disclosure agreement to be enforceable, it must be deemed fair. A court typically looks to whether an agreement is overly restrictive in making a determination of fairness. If the contract is unduly burdensome to the party receiving the information, a court may find all or part of the agreement invalid. If the information has already been revealed to a third party and the agreement is deemed to be invalid, a business may be barred from recovering damages for its losses. For this reason, it is crucial to consult with an experienced business law attorney who can help to prepare a well designed non-disclosure or confidentiality agreement.

 


Monday, March 6, 2017

Employment Contracts in a Nutshell

The contemporary workplace has become increasingly complicated as many businesses are governed by a wide range of state and federal employment laws. Moreover, the relationship between employers and employees has also become more complex, particularly as the work force becomes more diverse. For this reason, business owners should consider utilizing employment contracts to clarify these associations.

While such agreements may not be necessary across the board, they are well suited for executives, sales people, or those who have either a decision making role or an ownership interest in the business. As such, the first element of a comprehensive employment contract is a description of the employee's duties and the duration of employment.

Obviously, an employment contract should specify the salary that is being paid as well as any work-related benefits: bonuses, vacation pay, health insurance, expense accounts, stock options and retirement plans. The contract should also clarify whether the employee is working at will and the grounds for termination. It is important to note that an employee who is fired for reasons not stated in the agreement may have grounds for a wrongful termination lawsuit.

Depending on the nature of the business, it is also necessary to protect sensitive information with confidentiality provisions. In particular, it is crucial to protect trade secrets, such as formulas, designs, practices, client lists or any other information that is generally not known to the public. Moreover, employees should be notified that all work product is owned by the business. Similarly, if the entity has relationships with independent contractors or freelancers, it is important to clarify that anything they produce is on a work-for-hire basis.

In addition to confidentiality provisions, it may also be necessary to include a non-compete clause clarifying that an employee will not accept a similar job with a competitor in the geographical region for a specified period of time.

In the end, there are a number of benefits to utilizing employment contracts. In addition to helping to retain key employees and minimize the costs of training new people, employment contracts give a business control over performance standards. Further, these agreements provide protection against the potential misappropriation of trade secrets and other intellectual property. Ultimately, these agreements help to clarify the rights and obligations of both the employer and the employee. By engaging the services of an experienced employment law attorney, a business can put in place a well designed employment agreement.


Monday, February 27, 2017

The Benefits of Incorporating in Safe Haven States

Many business owners believe it's best to incorporate in their home state, but there are often business and tax advantages available in other states. In particular, Delaware and Nevada are attractive to those who are looking to form a corporation. These so-called corporate haven states are considered to be business friendly.

The State of Delaware is well regarded for its supportive business and corporate laws, said to be among the most favorable in the United States. In addition, the state has a judicial body, the Court of Chancery, that is dedicated to business matters. This exclusive focus allows the court to hear cases quickly and efficiently.

Delaware also features a government agency that is focused on supporting businesses, the Division of Corporations. In particular, this agency has streamlined procedures for incorporating that allow businesses to hit the ground running. The Division boasts long hours and provides new businesses with easy access to important resources.

Lastly, the tax law in Delaware is amenable to corporations. A corporation that is formed, but does not conduct business, in the state is not liable for corporate income tax. Moreover, there is no personal income tax for those domiciled in the state or for shareholders that do not reside in Delaware.

Nevada is the second most popular state in which to incorporate. The state's business law affords favorable treatment to corporations. In particular, owners and managers of a corporation are rarely held responsible for the actions of the corporation in the state. Nevada also offers advantageous tax treatment to corporations with no personal income, franchise or corporate income tax.

Depending upon the exigencies of your business,  incorporating in Delaware or Nevada might be the best alternative. By engaging the services of an experienced business and tax law attorney, you can take advantage of these corporate safe havens.

 


Monday, February 20, 2017

Employment Discrimination Laws in a Nutshell

There are a variety of state and federal laws that make it illegal for employers to discriminate based on certain characteristics when making decisions about hiring, terminating, promoting, demoting or compensating employees, or any other terms and conditions of employment. Employers are also barred from retaliating against employees who file a discrimination-related complaint or engage in other protected activities. While the laws vary from state to state, all employers have an obligation to adhere to the following federal laws.

Title VII of the Civil Rights Act of 1964

This law prohibits discrimination in the workplace based on race, color, national origin, religion and gender. Title VII also established the Equal Employment Opportunity Commission (EEOC), the government agency that is tasked with investigating employment discrimination claims.  Before an employment discrimination lawsuit under federal law can be brought, it is necessary to file a claim with the EEOC. Title VII applies to employers with 15 or more employees.

Age Discrimination in Employment Act (ADEA)

The ADEA prohibits employers with 20 or more employees from discriminating against individuals who are 40 years or older and their age cannot be used as a factor in any employment decision.

The American with Disabilities Act (ADA)

The ADA prohibits employers with 15 or more employees from discriminating or harassing disabled employees and requires employers to make reasonable accommodations that will enable a qualified disabled worker to complete his or her job functions.  

The Pregnancy Discrimination Act (PDA)

The PDA prohibits discrimination based on pregnancy regarding any aspect of employment in businesses with 15 or more employees. Women who are temporarily unable to perform their jobs due to pregnancy must be treated similarly to other temporarily disabled workers. The ADA may also protect a woman who suffers from a pregnancy related medical condition.

The Bottom Line

In sum, employers are prohibited from discriminating against employees and potential job candidates because of race, religion, sex, age, disability, pregnancy or national origin. Not only can violations lead to financial penalties, a discrimination lawsuit can damage a business' reputation. By engaging the services of an experienced employment law attorney, you can establish policies and procedures to ensure that your business is in compliance with these laws.

 


Monday, February 13, 2017

Why Your Business Needs an Email Policy

In the contemporary workplace, email is an essential and efficient form of communication. Whether it's used internally among staff members, or for exchanges with vendors and customers, email is a necessary business tool. At the same time, misuse of this technology can expose an organization to legal and reputational risks as well as security breaches. For this reason, it is crucial to put a formal email policy in place.

First, an email policy should clarify whether you intend to monitor email usage. It is also necessary to establish what is acceptable use of the system, whether personal emails are permissible, and the type of content that is appropriate. In this regard, the policy should prohibit any communication that may be  considered harassment or discrimination such as lewd or racist jokes. In addition, the email policy should expressly state how confidential information should be shared in order to protect the business' intellectual property.

By having employees read and sign the email policy, a business can protect itself from liability if a message with inappropriate content is transmitted. Further, it personal emails are not permitted, employees are more likely to conduct themselves in a professional manner. Because personal emails tend to be more informal and unprofessional, these messages pose a risk to the company's image if they are accidentally sent to customers. Lastly, email that is used for non-business reasons is a distraction that can adversely affect productivity.

The Takeaway

In order for a policy to be effective, it is necessary to provide training to all the employees, enforce it consistently and implement a monitoring system to detect misuse of the email system. Ultimately, establishing formal email policy and providing it to all employees will ensure a business remains productive and efficient. If an employee violates the policy, a company will also have the ability to take disciplinary action. Lastly, a well designed policy will ensure the company's image and brand is protected.


Monday, January 23, 2017

What is Pre-bankruptcy Credit Counseling?


Today, individuals who are seeking relief under Chapter 7 or Chapter 13 of the Bankruptcy Code are required to complete credit counseling with an agency approved by the U.S. Trustee's office. The purpose of pre-bankruptcy credit counseling is to determine if the debtor qualifies for bankruptcy or whether an informal payment plan is a better option.

In any event, credit counseling is necessary even if a payment plan is not feasible.


Read more . . .


← Newer12 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Older →

Archived Posts

2018
2017
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
May
April
March
February
January
2013
2012


Business Advocate Law PLLC is based in Seattle, WA and servers Western Washington with services tailored to business owners. Areas we serve include Kenmore, Woodinville, Seattle, Kirkland, Redmond, Lynnwood, and the surrounding areas of Western Washington.



© 2018 Business Advocate Law PLLC | Legal Notice/Privacy Policy
1700 Seventh Avenue, Suite 2100, Seattle, WA 98101
| Phone: 206-954-9200 | 206-369-3912 (Cell)

Business Law | Civil Litigation | Securities Law | Business Litigation

Attorney Website Design by
Amicus Creative


© Business Advocate Law PLLC | Legal Notice/Privacy Policy | Law Firm Website Design by Amicus Creative
1700 7th Avenue, Suite 2100, Seattle, WA 98101 | Phone: 206-954-9200 | Cell: 206-369-3912