What You Need to Know about Family and Medical Leave

Federal law has required certain businesses to offer family and medical leave for decades. An increasing number of states have also enacted or considered passing laws requiring businesses to offer family and medical leave. For small businesses, these laws have distinct pros and cons. This article discusses some of the most important factors small business owners should keep in mind about family and medical leave.

Family and Medical Leave Act

The federal Family and Medical Leave Act (FMLA) mandates that employers having 50 or more employees within a 75-mile radius of the worksite allow them to take unpaid leave for up to 12 weeks to address their own medical issues, care for a sick family member, and upon the birth or adoption of a child. Under the law, the employer cannot terminate an employee for taking leave, thus providing job security.

Note: The federal Pregnancy Discrimination Act prohibits businesses with 15 or more employees from discriminating against women based on pregnancy, childbirth, and related medical conditions, requiring them to be treated the same as other employees who have medical impairments. As a result, if a business with 15 or more employees permits sick or disabled employees to take leave, pregnant women temporarily unable to perform their jobs must also be allowed to do so.

State Law

Many small businesses have fewer than 50 employees, meaning that they are exempt from the requirements of the federal FMLA. However, some states have enacted laws applying similar requirements to businesses with fewer employees.

In addition, a few states have enacted laws requiring employers to provide paid leave to many of its employees. The statutes requiring paid leave typically allow the employee to continue to receive a certain percentage, for example, 50% or 75%, of their average weekly pay for a certain time period, usually less than the 12 weeks of unpaid leave guaranteed by the federal FMLA. The paid leave is funded by state-administered insurance programs to which employees contribute, which is aimed at lessening the burden on small business owners.

Tax Credit

The Tax Cuts and Jobs Act of 2017 provides a tax credit for employers who allow employees to take paid family and medical leave during 2018 and 2019 (unless Congress decides to extend the credit). Thus, even if a business is not required to offer paid family and medical leave to its employees, if it chooses to, it can then claim a direct reduction of its income tax liability for the year of up to 25% of the compensation paid during the leave. The amount of the tax credit depends upon the percentage of the employee’s wages paid during the leave.

The tax credit is also subject to a number of limitations:

  • It is not available for leave of two weeks or less,
  • The paid leave must be offered to all qualifying employees,
  • The employee must have worked for the business for one year or more,
  • The paid leave cannot be less than 50% of the employee’s normal wages, and
  • The credit is not permitted for highly compensated employees.

Conclusion

Regardless of whether it is required by law, offering paid or unpaid leave to employees can be costly for small businesses. Other employees may have to cover the workload of the employee who is on leave in addition to carrying out their own duties, or the business may have to hire and train a temporary employee to do the absent employee’s job. However, there are also some benefits to offering leave that small businesses should consider.

Small businesses that offer family and medical leave are more attractive to potential employees. Further, they are more likely to retain their current employees by decreasing the possibility that they will be lured away by larger companies with more attractive benefit packages. Offering family and medical leave also allows valuable employees to take a temporary leave of absence, preserving their jobs, and encouraging them to return when the underlying reason for the leave has been resolved.

As part of our legal services for businesses, we can provide guidance to ensure that your business is in compliance with applicable federal and state law regarding family and medical leave. Even if your small business is not required by law to offer family and medical leave, we can help you think through whether offering leave to employees would be beneficial to your business. In addition, we can assist you in setting up a paid leave plan for employees that would enable your business to take advantage of the current tax credits. We are here to help, so give us a call to set up a consultation.

TODAY WE HONOR THOSE WE WILL NEVER FORGET

In honor of September 11th, a day that we will never forget, Intrepid Law is continuing our effort to help current and past first responders.  During the month of September we are offering free wills and other estate planning documents to first responders and or their spouses.  If we can help, please contact us.

Dealing with Negative Online Reviews of Your Business – Intrepid Law

You’ve worked hard to build your small business. Nothing is more frustrating than negative online reviews, particularly if you feel they are unjustified or have been posted in bad faith. There are several steps that you can take to prevent your business’s reputation from being damaged by unfavorable reviews.

Respond promptly and professionally. More and more potential customers are turning to internet review sites like Yelp or Google My Business when they are making decisions about which businesses to patronize. If a dissatisfied customer has left a bad review of your business, you can act to mitigate its effects. Take care not to respond defensively, and don’t just ignore the bad review. Instead, respond to the user’s negative review by posting a reply on the review site apologizing for their bad experience while offering to take steps to resolve the issue. Invite them to call or email you so that future communications can be private. If a particular issue is the subject of repeated negative reviews, make changes to your business aimed at avoiding future dissatisfied customers.

Once the issue is resolved, ask the reviewer to remove the bad review. Once you have gone the extra mile to resolve the issue and are sure that the customer is satisfied, ask if they will remove the unfavorable review from the website, or update it to indicate the favorable response you have taken.

Encourage happy customers to leave positive reviews. If your business is working hard to provide a high-quality product or service, then it is likely most of your customers will have a positive experience. A negative review is less likely to damage your business’s reputation if it is surrounded by dozens of positive reviews. Give customers the opportunity to post reviews by including links to review sites in your business’s emails and on your Facebook page and website.

If the review is clearly fake, threatening, or profane, report it to the review website. Review websites are exempt from liability for their users’ posts under the Communications Decency Act, but many of them have procedures allowing business owners to request the removal of certain negative reviews. Although there is a high bar for removal, many review sites will delete posts that contain threats or profanity, or are clearly fake—for example, reviews written by the opposing party in a lawsuit or a business competitor.

Unfortunately, it is often difficult to identify the person who left a negative review, as some users post anonymously. If the review website refuses to remove the bad review, the best solution may be to post a reply explaining that you have not been able to locate the customer in your records and offering to resolve the situation or even to provide a full refund. If the person who posted the review was not really a customer, they will not respond, but potential customers will know that your business is committed to good customer service.

If the negative review contains false statements of fact about your business, consider pursuing an action for defamation. If your business’s reputation has been damaged by a negative review containing provably false statements of fact, an experienced business attorney may be able to convince the review site to remove it. Further, you may have a viable legal claim for defamation against the person who posted the review. If you think the review contains false statements of fact, not just expressions of opinion or hyperbole, contact a business attorney to evaluate whether you should file a lawsuit.

Conclusion

If you are concerned that your business is being damaged by negative internet reviews or need guidance about how to protect your business’s reputation, we are here to help. Give us a call today to set up a consultation.

7 Key Elements Investors Look for in a Business Plan – Intrepid Law

As the economy improves, more and more entrepreneurs are considering starting or expanding their small businesses. However, most small business owners do not have the financial resources to do this without obtaining outside funding. If you are looking for funding for your business, you will need to provide prospective funders with a well-thought-out and professional business plan, regardless of the type of financing you seek to obtain. Sources of financing will expect to see the following key elements in your plan.

  • Executive summary and company description. The executive summary should include a short description of your business spelling out a mission statement, the product or service provided, the company’s management team and employees, and the location. It should also include an explanation of why you expect the business to succeed. A more detailed description of the company can follow providing the specifics about its history, the needs your business fills, and the customers it serves. In addition, the business plan should highlight your business’s competitive advantage (e.g., employees with relevant expertise or new innovative technology).
  • A market analysis. Prospective capital providers need information about the market opportunities for your business, including market research showing the outlook of the industry, the existing competitors and their products, pricing, distribution channels, and how your business will meet those challenges. Information about your existing and target customers should also be included, as well as your sales and marketing strategies.
  • Your products or services. Detailed information about the product or service your business provides should be included, including photographs, a description of the benefits it provides to customers, the product life cycle, when it will be launched (if it is a new product), a description of research and development, and the steps taken to protect intellectual property, such as copyright, trademark, or patent filings.
  • Your business organization and management team. Indicate the legal structure of your business, i.e., whether it is a corporation, partnership, LLC, or sole proprietorship. Also, provide information such as an organizational chart showing the management of your business. Financial backers will also be interested in management qualifications, past successes, and how their expertise will contribute to the success of the business. Be sure to include resumes of the business’s owners or key employees to serve as supporting documentation.
  • Prospective financial outlook. Sources of financing need to be assured that your business is likely to be a success. Established businesses should supply financial information such as income statements, balance sheets, and cash flow for the past several years. Both established and new ventures should provide detailed financial projections for the next five years that are tailored to the funding request. The financial projections can be optimistic but must also be realistic.
  • Previous funding and proposed use of funds. If your business has obtained funds previously and has any outstanding loans, that information should be provided in the business plan. In addition, there should be details about how the funds sought will be used (equipment, salaries, research and development, etc.), how the funds will be repaid, and the impact the funds will have. It is also helpful to provide a copy of the business’s credit history.
  • Outline when your business plans to meet important milestones aimed at increasing the company’s value, such as launching new products, hiring key employees, meeting targeted sales goals, etc.

Next Steps

As experienced business attorneys, we are here to help you with all aspects of your business planning, including the preparation of a well-developed business plan that will help you to obtain the funding your business needs. If you need help creating a business plan, call us today to set up a consultation.

Business License and Permit Requirements – Intrepid Law – Business Lawyer

If you are starting a new business, it is important not to overlook federal, state, and local business license and permit requirements. Almost every business, even one that is home-based, is required to obtain some form of license or permit in order to operate legally. Failure to do so can lead to fines, and in some cases, the closure of your business.

Why Are They Necessary?

The government has two main purposes for requiring licenses and permits: keeping track of a business’s revenue for taxation purposes and safeguarding the public.

For example, in the context of taxation, a state sales tax permit allows the state to oversee the collection, reporting, and payment of sales taxes: A business that sells goods or services collects the sales tax on behalf of the state and is responsible for remitting it to the state.

Other licenses and permits are aimed at protecting the public, either physically or economically. For example, occupations that could impact a person’s health, such as doctors, dentists, hair stylists and barbers, generally require professional licenses establishing that these practitioners have a certain level of expertise in their field.

What Is Required?

The licenses or permits your business must obtain will vary based on the type of business, its location, and the applicable government rules. Although it is important to check with a business planning attorney to verify which licenses and permits are needed for your particular business, the following are among the most common.

Federal Licenses and Permits.

  • Business License. If your business is engaged in federally regulated activities, you must obtain a federal business license or permit. Business activities regulated by the federal government include: agriculture, alcoholic beverages, aviation, firearms, ammunition and explosives, fish and wildlife, commercial fisheries, maritime transportation, mining and drilling, nuclear energy, radio and television broadcasting, investment advising, drug manufacturing, and transportation and logistics.
  • Tax Registration. Although it does not issue permits, the IRS requires many businesses to obtain a federal tax identification number called an Employer Identification Number (EIN). One of the main exceptions is sole proprietors with no employees, who can use the sole owner’s Social Security numbers instead.

State Licenses and Permits.

  • State Business License. Some states require all businesses conducting a trade or business within the state to obtain a state business license. However, others require only certain types of businesses to obtain licenses, for example, those selling lottery tickets, firearms, liquor, or gasoline.
  • Professional Licenses. Most professional licenses are issued at the state level. They may be required for a wide variety of occupations. As mentioned above, those in health-related professions are usually required to have professional licenses, but they are required for other professions as well: building contractors, accountants, lawyers, real estate agents, funeral directors, and many more.
  • Tax Permits and Registration. Businesses engaging in retail sales often must obtain a sales tax permit. Further, in states with a state income tax, most businesses must register and obtain a state employer identification number.
  • Business Name Registration. Although it does not involve a permit or license, many states (and localities) require businesses to register their business names. In addition, businesses (most often, sole proprietors) may need to register to use a fictitious name (DBA or “doing business as”) if they want the business to operate under a name other than the owner’s legal name.

Local Licenses and Permits.

  • Local Business License. Even if no state or federal business license is required, many businesses must obtain a business license from the locality (city or county) where the business is located in order to legally operate there.
  • Zoning and Land Use Permit. Businesses, including home-based businesses, must often obtain zoning permits demonstrating that the location of the business is approved for the activities in which the business engages.
  • Home Occupation Permit. To ensure that home-based businesses do not trigger traffic, noise, or environmental conditions that are incompatible with the residential character of a neighborhood, many localities require businesses operated out of homes to obtain home occupation permits or special approval from the zoning or planning division.
  • Fire Department Permit. Some localities require businesses that are open to the public or serve large groups of people, such as childcare centers or retirement communities, to obtain a permit from the fire department. Businesses using flammable materials may also need to obtain this type of permit. Even if the permit is not mandated, those businesses may be subject to periodic inspections by the fire department.
  • Sign Permit. Some localities restrict the size and types of signs that can be used outside a business and require a permit to be obtained before they are installed.
  • Environmental Permits. If your business activities could impact the environment, for example, by burning materials, discharging substances into the sewers or waterways, or emitting gases, you may be required to obtain a special permit from the local departments regulating air and water pollution.
  • Business Name Registration. As mentioned above, some businesses (most often sole proprietors) doing business under a name different from their legal name may need to register their fictitious business name (DBA) with the locality where the business is located.

We Can Help

Starting a new business is an exciting yet complicated process. If you have questions about the types of permits and licenses your business must obtain, when they should be renewed, and where they must be displayed or stored, we are here to help. As experienced business attorneys, we can provide advice about any of the issues related to establishing your business. We invite you to give us a call to set up a meeting.