A Little Bit of Spring Cleaning – Is Your House in Order?

We are officially one (!) month (!) into Spring. The birds are chirping, pollen is blooming, and we’re already dreaming of summer vacations. We’re also focused on “spring cleaning” – getting our “houses” in order. Which makes us wonder: is your business’s house in order? Here are some blind spots and issues that you should consider ensuring that your business’s legal affairs are in check. Consider this your Q2 review, and Q2 to-do!

Let’s Start with the Easy Stuff – Are Your Corporate Filings and Documents Up-to-Date?

Businesses not only need to register to do business in the state in which they operate (yes, that sometimes includes wherever your remote workers reside), but also maintain a “good standing” status in those states. Not keeping up with these filings means hefty penalties, tax consequences, and even the inability to continue operating your business in that state. Fortunately, it’s relatively easy to check each state’s website to confirm your business’s standing. This will also help you update any contact information to ensure that you’re receiving proper notices, reports, and updates.

Now, let’s get difficult. Every business should have its “operational documents” – operating agreements (for LLCs) or by-laws (for corporations). These documents identify the owners of the company, provide for personal liability protection and indemnification, and address a bunch of other really important stuff (you know, like voting, partner disputes, tax treatment, etc.). If you don’t have these, speak to an attorney. If you do have them, but don’t know what they say, where they are, or if they’re even signed, speak to an attorney. Your operational documents should reflect your business model, your plans for growth, and the legal foundation upon which you run your business. So yeah, they’re important.

The Three Most Important Documents for Any Employer. Period. Plus, Modern-Day Hiring Practices.

Offer letters, handbooks, and personnel files – the 3 best friends that anyone can have! These serve as the foundation for your employer/employee relationship. When was the last time you reviewed these documents? Employees – especially new hires – can be a great way to “level up.” Or they can be your greatest liability. Employers most often make their biggest compliance mistakes within the first few months of onboarding.

First comes the interview. Questions about prior salaries, physical limitations, vaccination status, and the like. (Remember, NY and NJ have strict limitations on employee salary disclosures).

Then comes the offer letter. Are employees “at will” or guaranteed employment for a certain period of time? Exempt or non-exempt? Hourly or salary? The hottest issue right now is mandatory arbitration of employment disputes – the rules just changed, making mandatory arbitration for sexual harassment and sexual assault claims a no-no under federal law. New Jersey is even considering banning mandatory arbitration for any employment dispute. We’re monitoring this stuff and will provide updates as we know more.

Then comes the fancy handbook! Handbooks – which contain the company’s internal policies and requirements imposed by federal, state, and (sometimes) local law – change even more frequently. Right now, companies are updating their “return to work/remote work” policies on an almost quarterly basis. We’re also seeing updates to vaccination policies, electronic monitoring of employees, and PTO. If it’s been a while, it’s worth revisiting your company’s policies to make sure that they: (1) make sense for your business, and (2) comply with the newest rules and regulations. Handbooks can often be your first line of defense when faced with an employee dispute. If you don’t even have an employee handbook, or your existing handbook is woefully deficient, we won’t judge, but are happy to help!

And then all that compliance stuff . . . Wage and hour issues, benefits, paid and unpaid leave – what a mess. Both NJ and NY have consistently been increasing minimum wage (every January 1) for some time. Minimum wage is relatively straightforward, but employers get caught up on things like overtime and pay frequency. And don’t get us started with leave laws. States are frequently revisiting their leave laws, especially during the pandemic. Rules vary by state of course, but also for different sized businesses within the same state (we’re looking at you, Big Apple). Keeping track of what leave rules apply can be tricky.

Lastly, of course, as we told you last time, New York and New Jersey are in the process of requiring that certain employers provide retirement plan options to employees. Nobody said it’d be easy . . .

We’re ready for the coming weeks of Spring and for all the inevitable changes happening in the employment and business worlds. Are you?

As always, if you’ve got questions – you know we’ve got answers.

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