Is my child's pod teacher my employee?

By Jessica Suotmaa 0

As soon as Governor Newsom announced the strict requirements needed to reopen public schools in California for in-person instruction, parents have scrambled to find alternatives.   In addition to the traditional alternatives of withdrawing a child for homeschooling, or hiring a nanny or babysitter to watch their child, some parents have formed learning pods and hired teachers.  But are these teachers and home tutors considered employees under California’s new AB-5 rule?

What’s CA AB-5 again?

California Assembly Bill 5 expands on the Supreme Court decision in Dynamex Operations West Inc. v. Superior Court, where the court ruled that employers have the burden of proof in showing their workers are not employees.

AB-5 went into effect on  January 1, 2020 and is famously affecting gig workers in California. However, the bill actually utilizes a three-prong rule, called the ABC rule, to determine whether a worker is an employee or not. The bill does include exceptions. We’ve previously discussed AB-5 on our blog as well.

How to determine if your worker is an employee:

  • Can the worker control and direct their work freely without your intervention in regards to the performance of the work?
  • Is the worker performing work that is outside the usual course of the your (or your company’s) business?
  • Is the worker usually engaged in a trade, occupation, or business of the same nature as the work they perform for you?

Do tutors and teachers meet the exception?

The statute has a list of exceptions for professions, such as cosmetologists or construction workers, who are exempt from AB-5. Teachers and tutors are not exempt.

Following the above three-pronged test, we can determine that in order for a tutor or teacher to not be an employee and meet these requirements, they would have to be completely in control of…

  • what they teach, e.g., the curriculum/lesson plans
  • how they teach
  • when they teach, e.g., the hours
  • and even where they teach

By now you may have realized that it would be impossible for a tutor or teacher hired to monitor distance learning to meet those requirements. However, a homeschool or preschool teacher/tutor might be able to meet them. It depends on who you hire and for what type of teaching.

Note: AB-5 affects freelancers who were previously paid as independent contractors, not in-home “household employees”, such as nannies.

What are the consequences of violating AB-5?

Under current circumstances, it is unclear what the consequences might be for parents looking to supplement or replace distance learning.  If enforced, the violations are severe, starting at $5,000 to 25,000 for misclassifying an employee as an independent contractor.

What can I do, as a parent, to avoid violating AB-5?

Look for established tutors or teachers who have formed their own company for providing education. Do not hire an “all-in-one” person who performs childcare, tutors, and cleans, for example.

If you do decide you need someone to do more than just provide tutoring or teach a curriculum, then consider hiring them as an employee or household employee (if they qualify).  In doing so, be sure to comply with California wage and hour laws, purchase worker’s compensation insurance, and pay payroll taxes…among other things.

What can I do as a tutor or teacher looking to work?

Generally, if you do not qualify as an independent contractor, you would need to form an entity and purchase liability coverage, etc. If you have questions regarding what type of entity to form, contact us for your free consultation!

Trademarks Containing Generic Words Can Be Registered

By Lum Law Group 0

On Tuesday June 30, 2020, the Supreme Court approved the trademark registration of “Booking.com” (Opinion of the Court), a generic term which was ineligible for trademark protection in the past. Booking.com had filed to register its domain name at the US Patent and Trademark Office. The office initially denied the registration, arguing that generic names are not eligible for trademark protection. Booking.com’s victory on Tuesday means the trademarks containing generic words can be registered in the future.

Considering trademarking a generic term for your business?

Contact us at 626-795-8886. Our attorney A. Justin Lum, Esq will help you.

5 Ways to Protect Client Privacy while Working From Home

By Jessica Suotmaa 0

During the COVID-19 global pandemic, many of us have begun working from home.  We have set up makeshift desks and home offices, prepared appropriate backgrounds for video conferences, and tried our best to focus with all the distractions of working from home.  Without giving you a breakdown of the many distractions and issues we face working from home, we want to help you.  We know that it can be difficult to protect the privacy of your customers and clients when at home. In this article, we’re sharing five ways you can better protect your customers’ right to privacy. By protecting their rights, you are also protecting your business.

1. Find a Safe Space

If you have documents with customer names, addresses, credit card numbers, or other private information, you’ll want to store them in a secure place.  It should be a lockable drawer, filing cabinet, or safe. It’s important that there is limited access to this lockable safe space, in that no other person can have access to it.

2. Stick to the Same Electronics

As a small business owner, you might mix business with pleasure when it comes to your electronics. You might use your phone to check emails and text clients, or you use your laptop both for watching videos and completing your work. Now that you’re at home, you might have additional devices at your disposal, such as the home computer with access to your personal printer. It might be tempting to jump around and use each device depending on what’s convenient, but please don’t. The reason is that it can be easy to forget to log out of secure websites with important client information. You might forget to securely remove and delete a document you had scanned to a communal computer, or saved in it for easier printer access.

If you leave client information “in the open” on a shared device, not only can other members of your household have access to it, but you increase the risk of losing that client information with a security breach, such as a virus or hacking.

3. Aim Your Screen

Just as you might guard your laptop screen when working in a public place, like a coffee shop, you should do the same at home.  Aim your screen so that no one can watch over your shoulder, and secure your device when you’re away from your desk.

4. Keep Conversations Between You

If you need to speak to a client via video conference or phone call, try to find a quiet place where you will not be overheard by other members of your household.  It might be tempting the home environment altogether, but then you risk neighbors and a random person overhearing your private conversation.

We find closets and cars safe for private conversations.

5. Hold Your Tongue

When you’re at work, you can talk to other people in your organization, especially team members and other stakeholders regarding your client or customer work.  However, when you’re at home, you might need to schedule a conference call to have that same feedback.  Instead, it might be easier to just turn around and tell your partner or other household member of your issue, but this could be in violation of your customer’s privacy.

Consider using a chat service for your team members so that you can discuss things immediately without having to wait for them to accept your conference call invitation.

 

We hope you’ll find our suggestions regarding privacy useful.  We know small businesses do not always have the resources for a private home office with all the amenities of the workplace. We also recognize that working from home full-time is not the same as taking work home over the weekend, or doing research late into the night.  Working remotely from home is a new normal that requires us to become aware of how we are doing it in order to protect our customers and our businesses.

If you have questions regarding protecting your client’s privacy, feel free to leave a comment or contact us for an email response.

What if I can't afford a lawsuit?

By Jessica Suotmaa 0

Small business owners may encounter hardships that may warrant a lawsuit. Whether it is a contract issue, a supplier issue, or an employee issue, many entrepreneurs seek legal assistance to solve their problem.  Legal advice is one thing, and lawsuits, which are litigated in a court of law, are another.  Most times, we discourage clients from pursuing a lawsuit due to its high costs.  There’s the cost of filing fees, attorney fees, and even jury fees. It doesn’t take long for the costs of a lawsuit to exceed the amount the business owner wishes to retrieve.  In addition to a lawsuit costing too much, it can also take a long time to litigate.  As such, it is wise for small business owners to consider alternatives to a costly lawsuit.

In this article, we introduce alternative dispute resolution (ADR) methods which our experienced business attorneys can still assist.

Negotation

Usually the first step in the process of resolving an issue, negotiation can be initiated without an attorney.  It is the process of meeting with the other party and attempting to reach an agreement as to how to resolve the issue.  Often, when clients come to us to file a lawsuit, they have already tried and failed to negotiate with the other party. However, we have also successfully negotiated on behalf of our clients when we begin the negotiation in the early stages of the disagreement.  Sometimes all it takes is a seasoned negotiator with no emotional attachment to the outcome to reach a low-cost resolution to your business problems.

If you have a business issue that you need to negotiate with the other party, contact one of our business attorneys and find out how we can be of assistance.

Mediation

Mediation has a separate cost that is usually still cheaper than litigation, since it involves a third-party mediator. The mediator assists the parties in reaching an amicable resolution to their problems.  Parties with close ties, relationships they want to preserve, or who genuinely wish to resolve the problem often seek mediation over filing an expensive lawsuit. Some parties take attorneys with them to mediation, and others do not. It is up to you whether you feel comfortable without an attorney present.

The mediator does not make any decisions, but can propose a solution. In the end, it is still up to the parties to decide what the resolution will be.

If you want to resolve an issue without damaging your relationship with the other party, you may want to consider scheduling mediation. An experienced attorney can guide you through the process, and advocate for you at the mediation.

Settlement Conference

Settlement conferences are similar to mediation in that they involve a third-party person who “mediates” and evaluates each side to come to a settlement.  If a case is already in litigation, a judge can require a settlement conference for the parties wherein the judge evaluates each side and recommends a solution. It is still up to the parties to decide whether they can settle outside of court.  When voluntary, a settlement conference is often mediated by a “settlement officer” who reviews each side’s case and makes a recommendation. The goal of a settlement conference is always to settle the case. If the case is already in litigation and no settlement is reached, then it will go to trial.

Neutral Evaluation

A neutral evaluation might be the appropriate solution for parties who disagree on a technicality.  A neutral evaluation is conducted by a neutral third-party, often an expert in the subject matter, who reviews the cases presented by each side and gives his or her opinion on who has a stronger case. The neutral evaluator’s opinion is then used as the foundation for negotiating a resolution.

Arbitration

Many small business owners may have heard of arbitration in a different context. It is often included in employment contracts, vendor contracts, and other company policies. Since arbitration is less costly than litigation, companies often include a “arbitration clause” in contracts to force the other party to arbitrate the issue instead of filing a lawsuit.

The difference between arbitration and the other alternative dispute resolution methods above is that the third-party arbitrator decides on the issue. The arbitrator can be a single person, or an entire panel of people. The arbitration can be “binding”, meaning its resolution is legally enforceable, or “nonbinding”, meaning it’s an optional solution on which the parties can decide. Either way, arbitration takes the form of a hearing, where parties argue their cases and present evidence. Arbitration does not require an attorney, but if you are required to arbitrate your issue, you may want to consider consulting an attorney first.

 

Hopefully this overview gives an idea of what alternatives a small business owner can rely on instead of litigation. Alternative dispute resolution methods can cost money as well, but its costs are often much less than a full-blown lawsuit. If you have further questions or would like discuss which resolution method may apply to your unique situation the best, feel free to contact one of our experienced attorneys today.

How can I safeguard my small business during coronavirus?

By Jessica Suotmaa 0

As the coronavirus pandemic continues to affect small businesses post-lockdown, many small business owners might wonder what can be done to safeguard the future of their business.  With new regulations for reopening during the COVID-19 pandemic (and the recent protests), you might question whether it is enough to continue the status quo.  If you’ve come to determine that business cannot continue as usual, then this article is for you. Here, we list six ways you can safeguard your small business during difficult times.

1. Business Strategy

When the economy is not doing well, it is a good time to review your current and past business strategies.  See how your business has grown, why you made the changes you made, and whether you need to make additional changes. Try to predict what the future will look like as a result of the pandemic, and simulate your business model–does it work? Is your business profitable? Or maybe you need to make adjustments.

Economic downturn can change the outlook of supply and demand, inventory, and prices. Make sure you leave nothing out of your review.

2. Regulations and Compliance

As conditions change, be sure to remain to up-to-date on business regulations, employment regulations, and any other regulations that require compliance.  This is also a good time to review tax compliance, and how you can minimize your end-of-your business taxes.

3. Contractual Obligations

If you have obligations to vendors, suppliers, or clients, ensure that you are able to meet your contractual obligations. Try to negotiate whenever possible if the reason you’re unable to meet requirements is due to circumstances out of your control, e.g. pandemic. If you need assistance with negotiations, feel free to consult a qualified business attorney.

In addition, it’s a good time to evaluate the relationships you have with vendors, suppliers, or clients, and prioritize those of more importance.  Add value to the important relationships by communicating more with them and finding out how they are also affected by current circumstances. You might discover new ways to serve your clients through these discussions.

4. Business Insurance

If you have a current policy, review the relevant insurance policies regarding business interruption and event cancellation.  If you do not have insurance policies for your business, this is a good time to consider adding a good insurance policy to your business arsenal.

5. Commercial Real Estate

If you have a mortgage, or commercial lease, identify and review updated policies. Remember to ask about repercussions on non-payment of rent due to impact on the business.

6. Employment

If your business has employees, be sure to remain up-to-date on current employment policies and benefits. Review your employee handbooks for policies on sick and family leave to ensure compliance with local regulations.

 

While we try to suggest what we can in our articles, we realize that every small business is different.  We welcome you to contact our office to discuss your business’ unique needs during these challenging times.

how do I change my business model?

By Jessica Suotmaa 0

As California businesses have slowly been allowed to reopen, many business owners are not sure if they can continue as they have. Whether it’s due to the new COVID-19 restrictions for their industry, or fears as to whether customers consumption appetite has changed, business owners are now taking time to analyze how the pandemic will continue to affect their business. If you are a business owner concerned with whether you can continue your existing business model under the “new normal”, we can help. Not only are we able to advise you on your business and the possible implications of reopening, but we have also compiled a list of points to consider if you want to change your business model.

1. Legal Entity Type

If you’ve already determined that your current business model will not be sustainable in the long run, and have already decided to change it, then there are legal issues to consider.  The first is whether you can continue to operate the business with its current legal entity type. An experienced business attorney can be of help in making this decision, for if your current legal entity type is unsuitable for your new business model, you will need to establish a new business entity.

If you do need to establish a new business entity, you’ll have to figure out what type of business entity is more suitable than your existing one (and why!) Finally, you’ll have to decide on the relationship between your existing business entity and the new one, for example, it could be a subsidiary, or “sister”, company.

2. Employment Law Compliance

Once you’ve outlined your new business model, the type of legal entity it requires, you’ll need to see whether there are additional labor laws associated with this new model.  If, for example, you’ll be hiring remote workers instead of in-office workers, you may need to consult state and federal employment laws regarding the physical location of your employees. Don’t make drastic changes without verifying your business is in compliance with existing laws.

Be sure to update your human resources department, or employee guides to reflect changes required by your new business model.

During the COVID-19 pandemic, you also want to keep up-to-date with current and upcoming changes to pandemic-related employment laws, such as the Family First Coronavirus Response Act.

3. Contracts

Before making a pivot, see that the change in business model and activities do not break any existing contracts you have that may limit competition (e.g. non-competition clauses in certain industries). Have a contract attorney check your existing contracts before making the final leap.

Finally, before executing new contracts, consider adding provisions that may help with the COVID-19 situation, such as termination clauses.

4. Permits

When planning your business pivot, verify that you have all the permits necessary for the new business model to operate.  Also, consider if there are any regulations that may now affect your business due to the change, such as online marketing restrictions (FTC regulations).

5. Data Privacy

If your business is going online for the first time, it might be important to familiarize with data privacy laws, especially regarding the safety of your website and regulations regarding personal identifiable information (PII).

6. Intellectual Property

Generally there are two types of intellectual property issues a new business model may trigger, the first is licensing for music or other property used in media (e.g. podcasts, videos), and the second is trademarks for your new logo, etc. Read on for why you need to protect your intellectual property. 

 

As we gradually transition from quarantine to the new post-coronavirus “normal”, we all have to consider new ways of doing things for our small businesses. If we, at Lum Law Group, can be of any assistance in helping your business survive the pandemic, please contact us and we would be happy to be of assistance.

Your Immigration Status and Unemployment Benefits in California during the COVID 19 Crisis

By Lum Law Group 0

Your Immigration Status and Unemployment Benefits in California during the COVID 19 Crisis (and can your medical care during the COVID 19 crisis make you inadmissible)

As we are all aware, California is under lockdown and stay safe provisions whereby only essential workers, such as healthcare and supermarket employees, are allowed to work. As a result, our economy has entered a recession with a record number of employees being laid off or furloughed leading to a record number of unemployment claims.

The question is, if I am not a U.S. citizen, can I claim unemployment? Will it affect my ability to become a permanent resident and/or a U.S. citizen even if I can claim unemployment? Does unemployment constitute a public charge under immigration laws?

1. Can I claim unemployment?

In California, in order to claim unemployment, one central question is can you be employed if you were offered a job? If the answer is “yes,” you can receive unemployment compensation.

What this practically means is that you are either a permanent resident (who automatically has a legal right to work), or you otherwise have legal status to work, i.e., have a work permit, although you are not a citizen, or permanent resident. Examples would be asylees, refugees, individuals who have been granted withholding of removal; people awaiting adjudication in Immigration Court who have qualified for a work permit. These individuals have a right to work, but must obtain a work permit to do so.

Therefore, these individuals can receive unemployment benefits. So long as the work permit is valid, they would be able to be employed and therefore can obtain unemployment benefits.

Unfortunately, this also means that if an individual is out of status, even if the individual managed to hold a job despite not having a work permit, she will not be able to make a claim for unemployment because she does not have a legal right to work and could not work in the future.

2. Will receiving unemployment benefits prevent you from becoming a permanent resident or U.S. citizen? No.

In February 2020, this year, the present administration passed a new rule, stating that anyone who is classified as a “public charge” is inadmissible for certain immigration benefits. This includes individuals applying for permanent residence under a relative, or individuals attempting to enter the United States under an immigrant or nonimmigrant status. First of all, the public charge disqualification does not apply to permanent residents applying for citizenship.

Although this blog is not discussing all the ways someone can be classified a public charge, one often misunderstood condition is the use of public money. This can be in the form of Medicaid, food stamps, SNAP benefits, among others. However, what has been determined is that unemployment benefits are not classified as “public money” that would disqualify an individual as a “public charge”. Therefore, those individuals eligible to claim unemployment should do so. Unemployment benefits are not a public charge for immigration purposes.

3. Public Charge and COVID 19 medical care – Medical care under such circumstances is not a Public Charge

As stated above, typically use of services like Medicare would be considered in determining an individual’s inadmissibility as a “public charge”, however, USCIS has stated that any individuals who receiving testing, treatment and preventive care (including a vaccine if one becomes available) for COVID-19 will not be considered in the public charge test, even if the treatment is provided or paid for by one or more public benefits, such as Medicaid, for example. Therefore, medical care paid for by public funds is not a Public Charge where individuals can show medical care was related to COVID 19 testing, treatment, or medical care.

COVID-19 Relief for Small Business Owners and Employers

By Jessica Suotmaa 0

With the current COVID-19 pandemic, the closing of non-essential businesses, and the fears for an upcoming recession, many small business owners are either suffering, or preparing to suffer. We, at Lum Law Group, are in the same boat. We are also a family-owned small business with few employees that, for the most part, caters to our local community.  While we are still answering calls and helping existing and potential clients, we share the same concerns as our clients, our employees, and our fellow small business owners.

In this article, we have outlined relief and resources that may assist small business owners during these difficult times. We would like to remind you that you can call us if you need assistance with vendors, landlords, or any other COVID-19 related issue. We are here to help!

Payroll: Paycheck Protection Program

Part of the CARES Act was to fund the Small Business Administration (SBA) to provide assistance to small business to continue to make payroll.  The SBA’s Paycheck Protection Program (PPP) allows businesses with fewer than 500 employees to borrow money specifically for payroll.  Less than twenty five percent of the borrowed amount can be used for other things, such as mortgage interest, rent, and utilities. You can borrow enough to cover an eight week period, which must be used within eight weeks after receiving the funds.  Loan repayments are deferred for six months.

While applications opened today (April 3, 2020), SBA announced that self-employed individuals and independent contractors will not be able to apply until April 10, 2020.

Payroll: Defer Paying Social Security

If you are self-employed, or have employees, you can defer making the social security portion of employment taxes for the time being.  This would mean a reduction of 6.2 percent tax paid on wages. The deferral allows you to pay the deferred amount over a two and a half year period, where half of it would have to be paid by December 31, 2021 and the second half by December 31, 2022.

Payroll: Keep Paying Your Employees

As part of the new economic stimulus plan, if you can prove that your business has lost fifty percent or more in profits due to coronavirus, your business can qualify for a “prize” for retaining your employees. Even if your business is closed, if you keep your employees on payroll, you can qualify for up to fifty percent of your employee’s wages.  This “prize” for keeping payroll not only helps your employees who may not be able to work from home, or may not have much to do.

As an employer, you will receive the prize in the form of a tax credit on your business tax return.

Note: Businesses that receive a SBA loan will not qualify for this tax credit.

Tax Deduction: Restaurant, Retail, Hotel

If you are a restaurant, hotel, or retail store owner, you can prepare and file amended tax returns to deduct the cost of property improvements. This deduction was supposed to be part of the 2017 tax overhaul anyway.

 

As you can tell, most of the available relief is for employers.  If you have questions about California unemployment benefits for independent contractors and self-employed individuals, please visit the EDD website. If you would like to learn more about the “stimulus check”, please read our post here.  If you have issues with vendors, landlords, business partners, etc. please contact us for how we can help you. Together, we can get through the crisis!

What Can We Help You amid COVID-19 Pandemic?

By Lum Law Group 0
Are you a small business and are having problems with cash flow, meeting payroll, or just dealing with expenses due to the COVID-19 pandemic?   The Small Business Administration (SBA) may be able to help.  Go to sba.gov for more information.
In the meantime if you need help dealing with customers and vendors over payment issues, we can help you.  Please call us at 626-795-8886 and we can set up a phone conference and see how we can help you and your company.
Coronavirus: Can I be fired?

By Jessica Suotmaa 0

Due to the coronavirus pandemic, companies have lost business, sales have gone down, and profits have plummeted. As a result, many are cutting costs by reducing work hours, or even their workforce. Here in Southern California, we have encountered questions from you regarding job loss, such as:

“Can my company let me go for no reason?”
“Can I be fired because of the coronavirus / COVID-19?”
“Can I fight back if my company lays me off for no reason?”

Also, on March 17th, 2020, Governor Gavin Newsom signed an executive order regarding this issue. If you’re working in California, please continue reading as we explain the ordinary situation, and the current situation.

California is “at will”

Unless you have an employment contract specifying employment terms, such as the length of employment, or specific dates of employment, you are subject to the “at will” employment terms in California state.  What “at will” means is that you can be let go at any time, for any reason–or alternatively, no reason at all, at the employer’s will.

Given this, the short answer to all of the questions above is: “yes”. You can be let go, for no reason at all, by your employer due to the coronavirus.

If you do have an employment contract, be sure to see what the terms state regarding breach of contract or early termination.

What is Cal-WARN Act?

If you’re an employer, the executive order signed on March 17th, 2020 will help you.  The order modifies the existing Cal-WARN act to cover COVID-19 (coronavirus).  California Worker’s Adjustment and Retraining Notification (Cal-WARN) originally applies to California employers with more than 75 employees, including part-timers.  Under the act, qualified employers must provide 60-day notice to its employees prior to closing the business operations at the employee’s location, relocating operations to a location more than 100 miles away, or terminating more than 50 employees in a 30-day period.

However, the Cal-WARN act does not cover physical calamities or acts of war, which could be an exception the COVID-19 pandemic falls under.

Violation of the Cal-WARN Act could entitle employees to back pay and cash equivalent to benefits for up to a 60-days or one half of the employee’s employment period (whichever is shorter).

Relief for Employers

The executive order signed by Governor Newsom went into effect on March 4th, 2020, when California officially declared a state of emergency.  Most notably, the order suspends the 60-day notification requirement to employers who meet certain requirements, such as:

  • Prior to termination, relocation, or mass layoffs, the employer notifies affected employees, Employment Development Department (EDD), the local workforce investment board, and the chief elected official of each city and county government.
  • If the employer cannot give 60-day notice, it is required to provide notice as soon as possible, with a brief explanation as to why it cannot adhere to the 60-day requirement.
  • The employer is terminating, relocating, or laying off employees due to circumstances caused by COVID-19, that were not reasonably foreseeable.
  • If the employer is providing notice after March 17, 2020, the employer must include the following statement in the notice:

“If you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI). More information on UY and other resources available for workers is available at labor.ca.gov/coronavirus2019.“

If you have any questions regarding unlawful termination, how to handle mass layoffs, or just questions regarding the legal aspects of covid-19 and how it may affect your employment or employees, contact us today!

 

 

 

The 7 new 2020 laws in California

By Jessica Suotmaa 0

If you’re a business owner with employees, it is time to familiarize yourself with these seven new employment-related laws that went into affect on January 1, 2020. Ensure you follow best hiring practices and follow these laws for existing employees.

1. New minimum wage

California has a new minimum wage. If your business employees 25 or less people, the new minimum wage is $12/hour. Otherwise the new minimum wage is $13/hr.

2. Independent contractors

We wrote about the AB-5 law previously, but it is still worth revisiting if you’re hiring freelance workers and treating them like independent contractors. The new law dictates that if a business controls and directs the work of the worker, and the work is an integral part of the business (think, a gig economy driver working for a ride service company), then they cannot be characterized as an independent contractor. Instead, the business has to treat them as an employee.

3. Sexual Harassment Training

If your business has more than five employees, you are required to provide sexual harassment training to all employees every two years.  SB 1343 also requires employers to provide new employees sexual harassment training within six months of being hired.

4. Lactation Accommodation

California already requires businesses to provide nursing mothers time to nurse or pump, but with the passing of SB142, businesses must ensure nursing mothers have a proper place to do so. A restroom or break room is insufficient. The location must be close to the employee’s work station, must have electrical outlets, and must be private.

5. Arbitration Agreements

An arbitration agreement is a contract whereby an employee and employer agree that certain, if not all, disputes will be settled via arbitration outside the court (rather than in court with a lawsuit). Companies can no longer force employees into mandatory arbitration agreements with the passing of AB51. This law does not apply to arbitration agreements entered into prior to January 1, 2020.

6. Paid Family Leave

With SB 83, the benefits under paid family leave increase from six weeks to eight weeks. New parents will have more time to stay home with their children starting July 1, 2020.

7. Hair Discrimination

California has banned discrimination based on natural hair style or texture with the passing of SB 188, also known as the Crown Law. Employers and schools cannot discriminate against potential incumbents based on their natural hair, or require a certain hairstyle instead of their natural hair.

 

Do you have questions or concerns as a business-owner and employer? Call an experienced business and employment attorney today! 

What Parts of Your Business Should You Evaluate Before Expanding Overseas?

By Lisa 0

After becoming successful, many companies to expand their business operations globally. In the US, most entrepreneurs fail within the first five years, so if your business is still standing—congratulations!  As a result, you might think because your business is successful here in America that you can easily spread your business out to the rest of the world. However, expanding into other countries just doesn’t happen overnight, and having success in America doesn’t always translate into successful foreign operations. There’s much to be examined in yours business before you should make the big jump. Here are a few things you can evaluate before expanding your business overseas.

Your Product

Don’t assume that because your product sells in America that it will universally sell everywhere. Do your research beforehand. Just about every global company tailors their products to different markets. For example, Samsung has what’s called “Made For India” which manufactures and sells products to suit average lifestyles in India. You have to give customers what they want. Read up on the culture, laws and regulations of the country you plan to expand into. From there, tailor your product and your marketing to the specifications needed to succeed in that country.

Your Leadership Team

Believe it or not, many businesses have business teams that aren’t very productive. While this doesn’t seem to stifle their success, having a strong leadership team can be the driving force to continued success if utilized properly.

Any well-functioning leadership team should be able to set the path going forward. While each team member has different functions they oversee, they should be able to come together and overcome any problems within the company. If they have trouble with these tasks, consider team coaching to develop your leadership team’s skills. Evaluate your leadership team on how they accomplish these roles and make changes if needed. Evaluating and investing in your leadership team is important, as the leaders’ decisions affect the rest of the company.

Your Employees

Don’t forget about your employees. Your employees are likely the reason as to why you’re in the position to expand your business in the first place. Employees will need to be notified about the international expansion as well as trained on any new tasks they will need to do in the future.

These are just a few of many things you’ll need to look at before going through with your overseas expansion. Again, this doesn’t happen overnight. Expanding your business overseas can be a successful venture if planned properly. Take the time to carefully examine the current state of your business and make needed adjustments before making the big jump.

 

Here’s another article you might like: Outsourcing, Offshore And Overseas: What Do I Need To Know?

AB 5 independent contractor

By Lum Law Group 0

 

AB 5 and the Independent Contractor

In December 2019, the Governor of California, Gavin Newsom, signed into law Assembly Bill 5, which drastically changes how most businesses classify independent contractors.  A worker is more likely to be classified as an employee instead of an independent contractor. Although the impetus for this law was to give more employment benefits to ride sharing, delivery, and “gig economy” workers, its impact is much more far reaching.  The law codifies a California Supreme Court decision, Dynamex Operations West v. Superior Court of Los Angeles (Dynamex) and alters the application of a 20 year old law.

In essence, there is now a 3-part test to determine if a worker is an employee or an independent contractor (the “ABC test”):  

(A) The hiring entity does not control or direct the performance of work;

(B) The person performs work outside the usual course of the hiring entity’s business; and

(C) The person is customarily engaged in an independently established trade, occupation or business.

If all these 3 conditions are met, a worker may be classified as an independent contractor.  If not, the worker is an employee. Some exceptions have been made to the application of this new law, mostly for licensed professionals, such as doctors, lawyers, real estate professionals, broker dealers, etc.  As stated, although this was intended to target the above mentioned workers, many businesses that have hired independent contractors to do part time work, such as bookkeepers, free lance journalists, etc., would be forced to classify these individuals as employees even though they do not solely work for the business.  The law is new and vague, and there are already legal challenges being raised and amendments and other changes being proposed, but for now employers, especially small businesses, must be even more careful of their hiring practices while the law is interpreted and its parameters are (hopefully) defined in more detail.

See The Daily Recorder – https://www.law.com/therecorder/2019/09/19/ab-5-changing-the-landscape-for-independent-contractor-analysis/?slreturn=20200109121407

Outsourcing, Offshore and Overseas: What Do I Need to Know?

By Lisa 0

Many successful entrepreneurs are faced with the eventual decision of taking their business global. Outsourcing and offshoring are two popular options for businesses to take their operations overseas. If you’re not familiar with the two terms, outsourcing involves moving some or all business operations to a third party whereas offshoring involves physically doing business in a different country.

Why People Do It

Although there are both benefits and risks to taking your business overseas, the benefits alone are enough for many businesses to go abroad. Businesses outsource their operations for several reasons but the most popular reason is to save money. This reason alone is why many companies with extensive manufacturing processes go offshore to foreign countries where manufacturing costs are cheaper.

While saving money is the main driving force for most businesses to hire outside the US, there are many other reasons businesses start operations overseas. Bilingual customer service, increased production, and establishing a foreign presence are just some of the many popular reasons why companies set their sights overseas. For example, some businesses find that offshore call centers are more affordable than their onshore counterparts. As a result, many businesses outsource call centers in foreign countries.

Why Some Avoid It

Problems can arise with outsourcing and offshoring operations to other countries. Even with modern technology, foreign workers are harder to manage, and there is the possibility that language and cultural barriers or even accents will frustrate customers. As a result, the quality can decrease, miscommunication errors arise, efficiency may drop, security risks to intellectual property may increase, and an overall lack of focus among employees can occur. This can lead to financial problems and customer complaints if the problem is not fixed.

Also, many US consumers feel that American companies outsourcing work to foreign countries is morally wrong. They believe American companies should strictly operate on American soil and benefit the economy here. By moving operations out of the country you could face public backlash and lose loyal customers as a result.

Should You Expand Your Business Overseas?

Just because it’s easier than ever to do business overseas nowadays doesn’t always mean you should jump right in. Before deciding if you should take any of your business operations overseas, you should examine your business and point out its strengths and weaknesses. If you feel like your business can benefit by going overseas then consider the ups and downs of conducting business overseas. Consider your consumer base and their preferences. Determine whether it’ll make your team more efficient and grow your business.

Taking some or all of your business operations overseas can be helpful or detrimental to your business. Before making the big decision, make sure you look at the benefits and risks and determine whether outsourcing or offshoring is right for you.

Looking to outsource your business? Schedule a business consultation with us today to determine any legal road blocks.

Does your business act like a business?

By Jessica Suotmaa 0

Don’t say we didn’t warn you, but the implementation of new tax regulations may cause many business owners to lose their business deductions when their “business” is reduced to a mere hobby.  Budding entrepreneurs need to ensure their business is set up correctly. Meanwhile, existing business owners need take a magnifying glass to their business to ensure their businesses are both set up and run like a business. In this article we’ll outline the basics of what it means to own a business that’s correctly set up as a business, as well as what it means to act like a business.

1. Form a business entity

It’s more challenging to prove your small business isn’t a hobby if it’s not registered as it’s own entity.  Hire a professional to determine which business type would be most suitable before registering with your local government.

2. Create a professional website

Whatever your business may be, a professional website will help validate it for your customers.

3. Open a separate business account

Keeping your business and personal expenses separate will simplify your year-end bookkeeping—especially come tax time. Open a business bank account and credit line to ensure they’re separate.

4. Open a business email at a professional domain

Many of our clients already have separate business emails but at the same email server as their personal email.  To solidify your professional business image, and to ensure it’s security, open a new email account with a professional domain, such as your own company’s dot com.

5. Draft written contracts

Don’t allow your clients to weasel out of contracts or make last minute changes. Hold them accountable by drafting written contracts and requiring your clients to sign them prior to beginning work.

6. Provide invoices

After you’ve completed work, always invoice your clients, and ensure that the invoices match incoming payments.

7. Advertise your product or services

Even if you rely on word-of-mouth to obtain new customers, try listing your business with a business registry if advertising is out of your budget.  The purpose is to prove that your running your business with the intention making a profit, and advertising your product or services plays a large part in it.

In order to “act like a business” and deduct relates business expenses on your taxes, even the smallest side business must follow the above rules.  If you’re still a freelancer thinking about expanding to a full-fledged business, or want to be treated (taxes) as a business, then start right from the beginning and follow our tips to avoid issues years down the line.

Business Safety Requirements You Shouldn’t Ignore

By Lisa 0

As a business owner, you understand the plethora of risks that are placed on not only yourself but your company as well. The most important of areas to have a risk assessment conducted on is on your safety requirements. A common mistake made within a variety of “low risk” jobs such as you would find in an office building is that many crucial safety requirements are not followed. This isn’t because they are not considered, but because owners believe they don’t apply to their industry. Therefore, the following list includes a few general business safety requirements you shouldn’t ignore.

Insurance

Although most business leaders understand the importance of having insurance, they might not be thinking about the right ones. A company, whether or not it is required by law, should have the right insurance in place, according to NFIB. One of the most important ones to have is workers’ compensation insurance. This insurance can help you greatly as it provides your employees with enough resources to sustain them after a workplace injury. This also reflects well on yourself and the courts if they decide to sue your company.

PPE

PPE or Personal protective equipment are pieces of equipment that are used to protect employees from hazardous obstacles and or illnesses. One of the most common injuries seen within an office building is back injuries from attempting to lift heavy boxes. If your employees are constantly needing to reach for heavy boxes and carry them around, you definitely need to provide them with the right equipment, such as an industrial back belt. This also includes the use of signs warning of danger within your various rooms. According to Creative Safety Supply, as the employer, you are responsible for providing PPE, making sure that it is accessible, and sufficient, and that employees know how to use it.

Distractions

Business leaders within the construction business can attest to the serious issue of worksite distractions. Accidents on the worksite can often be traced back to a lack of communication. However, when investigated a little further, it is not a lack of communication that was the issue but an introduction of distraction. This comes in the form of listening to music while working, fatigue, and even using cell phones for other activities other than work. You, as their boss, must make sure that these distractions are not being created within your workplace.

Running a business is no easy task. You are constantly presented with issue after issue. However, safety must always be your first priority. This is to protect not only yourself but your employees and customers as well. Simply follow some of the tips laid out above to begin implementing proper safety requirements into your business.

For all your business law-related needs, contact us so we can assist you!

Event Space for Your Small Business

By Lisa 0

Hosting events for your small business is a great way to bring your team together, gain exposure in the community, and network with industry partners. Whether you’re planning a training, networking, or some other type of special event, it’s vital that you make the most of it. To help you plan the perfect event, here’s a list of the do’s and don’ts to keep in mind.

Don’t Underestimate Planning Time

The last thing you want to do is to wait too long to start the planning process. Most business events take several months to plan. Create a planning timeline right from the start to keep you on track.

Do Set Clear Objectives

Before you even start the planning process, you must have a clear set of objectives and goals in place. Put these goals into writing to ensure everyone on the planning committee is working towards the same objectives.

Don’t Assume Anything

When it comes to planning a business event, don’t assume anything. Instead, get everything in writing, including vendor contracts, RSVPs, and committee meeting notes. This step is especially important for last-minute changes and late registrations.

Do Plan Thoroughly

It’s critical that you take the time to plan every single detail of your event. Meeting room experts recommend that you have your entire event planned at least two months before the big day. This two-month period gives you enough time to deal with any potential issues and make changes if necessary.

Don’t Skip Marketing

To make the most of your event, you must invest in marketing. Create a social and email marketing campaign that explains why someone should attend your event and how it will help them.

Do Develop a Contingency Plan

Chances are that at least one thing will not go as planned on event day. It’s a good idea to always have a contingency plan in place that you can fall back on if the need arises.

Don’t Forget Follow-Up

Many business leaders forget one of the most important steps in planning an event – to follow-up. Always take the time to follow up with attendees. Ask them if they enjoyed the event, what could have been better, and what other events they would like to see in the future.

Do Set a Budget Early

Planning a business event can become extremely expensive if you are not careful. Take the time to set a clear budget for your event early in the planning process. You can make adjustments can later if necessary, but a preliminary budget should be set right away. 

Hosting an event for your small business can be a great opportunity. The important thing is to give yourself plenty of time to organize your event and use that time wisely. We stand ready to help you grow and protect your small business for maximum improvement.

Pros and Cons of Becoming a Government Contractor

By Lisa 0

Employment with the government, whether full-time and permanent or on a contractual basis, comes with a unique set of opportunities and challenges. The nature of government operations differs dramatically in many ways from the private sector. For example, there are generally tighter regulations around government work as well as more reporting requirements, whereas with the private sector there is a less consistent supply of work and availability of jobs tends to be more volatile than with the federal government. Here are a few tips on what to expect when considering a federal contracting gig.

You’ll Need to Tighten Up Your Security

Because of the sensitivity of state secrets and other confidentiality concerns, a clean record is a must for any contracting job which requires access to classified information. Likewise, if you’re dealing with anything tech, you’ll need to make sure that the equipment you’re using is up to date in terms of security.  Recent national security concerns regarding foreign interference in governmental operations mean security will likely only get tighter in the future. If you’re working with the Department of Defense, you’ll need to make sure that you comply with NIST 800-171 cybersecurity requirements.

You Can Rely on Your Employer

Unlike private companies, the federal government is unlikely to “go out of business” – at least not any time soon. The US federal government operates on a multi-trillion dollar annual budget, far surpassing the average corporation listed on the stock exchange.  A huge portion of this is devoted to contracting research and development from third parties, especially in the IT field. Of course, contract jobs aren’t guaranteed, but you’ll know that there’s fiscal stability backing up your contract.

Expect Delays and Change Orders

Another important way that government work differs from the private sector is the frequent change in procedure and execution of projects. This is due to the changing nature of government makeup, bureaucratic shifts in priorities and other issues not faced in the private sector. Flexibility can help you excel.

You’ll Get Guaranteed Payment

In the private sector, collecting on debts owed eats up a substantial portion of many companies’ bottom lines. Efforts to collect money often mean lengthy campaigns that are sometimes unsuccessful. The government, on the other hand, is usually reliable in terms of paying contractors on time. 

Working on a contractual basis with the government can be rewarding, but you should be aware of what to expect going in. Many contractors mistakenly assume that working for the government will be much like working in the private sector. It is actually quite different, but not necessarily in a bad way.

Read more: How Much Protection Does Your Business Actually Need?

How Data Analysis Can Improve Your Small Business

By Jessica Suotmaa 0

If the term “data analysis” seems frighteningly out of reach for your small business, let us clear up how it can be of help. We are also a small business and often find ourselves dealing with an overwhelming amount of data, or options, and we feel like it’s getting out of hand. So data analysis has been sitting on our desk, under a pile, waiting to be tackled.

It’s tempting to just hand over all the data to a professional or hire a service, but that doesn’t always go well. When we tried it, we were asked more questions than we could answer. We were given many demands we thought they would handle, and in the end we felt conned; if we had known the amount of time and effort we would put into it, we would’ve just done it internally. Of course then we did exactly that. Here’s how we looked at incorporating data analysis in our small business.

What can Data Analysis do for me?
The reason we need data analysis in our small businesses is so we can make better, more informed decisions. The purpose of collecting data is to have proof supporting the decisions we make. Otherwise we might make decisions based on personal preference, inaccurate facts, or other subjective reasons. Collecting data allows us to base our decisions on facts.

How do you collect Data for Data Analysis?
Depending on the type of business you have, you may already have data collected. It could be the client management software, it could be your sales reports, or it could even be your social media insights.

Step 1: What questions do you want to answer?
Identify the issues and challenges in your small business that guidance. The right questions are the key to good data analysis. Your questions should be specific.

For example, if your business has been slow and struggling to cover your overhead, you need to figure out what to do. You could have the following question:

1. Can I reduce costs by reducing the number of employees without affecting current quality/production?
2. Is there anything fixable preventing my employees from working more efficiently?
3. Is there training I can offer my employees to increase their skills and reduce the number of employees needed?

Step 2: What Data does your business already have?
Take a close look at what data your business already has and see if it can answer your questions. If not, see about what data you would need to answer the questions you have. Then, brainstorm how you could go about collecting it.

In the above example, the data necessary could be the efficiency and output of each employee, the overall client/sales projection for the near future, and how much each employee costs the company.

Step 3: What will you measure and how?
Once you’ve narrowed down your key questions for resolving your issue, you can start deciding on you’ll measure and how you can measure it. The specific what and how depends on your questions and your data. For our example, we can decide to measure the number of employees our company has, the amount they’re paid in wages, and their output or efficiency.

This is a good time to verify your questions will result in quantifiable answers.

Once you’ve determined what you’ll be measuring, you can also define how you’ll measure it. Part of the “how” is determining the following:

– Timeframe (deadlines and parameters)
– Unit of measure (Hours? Goods? Dollars?)
– Factors (wages might not reflect complete benefits)

Step 4: What additional data does your business need?
Perhaps in defining the questions, measurements, and methods of measurement you’ve realized you have insufficient data. Maybe you haven’t successfully quantified the output or value of each employee in your business. Or you don’t know how efficient each employee could be. Either way, you’ll need to develop a plan to measure applicable data.

To measure data you can go backwards and look at the past assignments, or you could go forward and record for a certain period of time. Regardless, it will take time to collect the necessary data. Know that all you can do is have the templates, instructions, and systems prepared so that once your data is collected/organized, it can be plugged in easily for analysis.

Step 5: Analyze the data

Once you have all your data in one place, you can analyze and interpret the results. The goal in data analysis is to disprove the hypothesis or not disprove the hypothesis. This means you can’t prove your hypothesis and a positive result is an ongoing process.

Here are a few questions you can ask yourself once you have the results from the data:

– Does the data answer my question?
– Does the data help prove or disprove a point?
– What are the limitations of the data analysis?

Assuming your data analysis results answered the question you had initially posed, you can count it as successful. You can go ahead and plan how to execute the plans for improving your business or solving the issue at hand. Rest easy knowing your decision is proven by measurable and quantifiable data.

Do you have any questions about starting a business? Or running a small business? Send us a msg and we’ll sit down with you to see how we may be of service.

Are Your Hiring Practices Guilty of Accidental Discrimination?

By Lisa 0

Workplace discrimination has always been a hot subject. Yet, in today’s progressive society, employers need to be more conscious than ever in how they hire. By focusing your attention on equality and integrity during your hiring process, you can eliminate accidental discrimination. This will ensure you’re hiring the best candidate for every position. 

Avoid accidentally leaving certain demographics out of the loop. Don’t deprive your company of valuable candidates that could contribute to your company’s bottom line. Read the three major red flags that your hiring practices are discriminatory below. 

You Use Discriminatory Language

Check your job listings, website, and career pages for any discriminatory or preferential language usage. For example, using “he” when referring to a general individual instead of “their.” Also, be careful of using words that usually apply to a specific gender. For example, The Hire Talent says the adjective “dominant” may make the posting seem like it favors male applicants. 

Language preferences can be seen as narrowing down candidates based on race or ethnic group. Avoid writing your entire job post in a different language or peppering in words in another dialect.

Remove every restrictive term from your job description and ensure that everyone in your office, especially human resources and hiring managers, are well-versed and only use non-discriminatory language. Gender-specific job titles, stereotypical descriptions of men or women, and any references to skin color, ethic background, religion, gender identity, or sexuality should be omitted.

Hiring Decisions Are Made on “Gut Feelings”

According to Perception Institute, relying on a gut feeling could result in implicit biases leading to discrimination. Many companies pride themselves on hiring candidates based on connection rather than credentials, but personal connection is subjective. Most of the time, this means people are only being hired based on the opinion of hiring staff or the manager. To avoid implicit bias and discrimination in the hiring process, you should employ a variety of screening measures that ensure applicants are being judged fairly based off their competency, educational background, and commitment to the position.

Your Workplace Lacks Diversity

Take a look at your current employee population; are they all from the same ethnic background, or is there a major discrepancy between gender in various positions? If you only hire women to work in support positions and men for high-level roles, you could be at risk of discriminatory hiring practices. 

Go through your current list of resumes and see what type of candidates are applying to your company. If you find there is also limited diversity among applicants, this could strongly indicate discriminatory phrasing in your job listings. 

Take a closer look at who is hiring and make sure that your staff completes cultural sensitivity and discrimination training. Sometimes, just learning about the impact of subconscious bias can make people more aware and less likely to discriminate.

Still have questions on the best way to avoid a lawsuit on discriminatory hiring practices? Speak to the experienced attorneys at Lum Law Group today!