employee
Business Planning

Business Booster or Big Brother—the Ins and Outs of Employee Monitoring Systems

Today’s high-tech digital landscape is both a boon and a bane to business owners. The proliferation of apps, mobile devices, and software has improved business productivity like nothing before. At the same time, however, this technology has also spawned countless digital distractions that can turn those productivity gains into losses, especially if they steal the attention spans of your team members.

On top of all this, there are now an equally diverse number of digital systems designed to track and monitor employee activities and communications, both online and off. Indeed, nearly every facet of employee activity and communication can be easily monitored and measured. But the question is—should you do it?

From software that tracks how much time an employee spends online and which sites they visit, to GPS devices that monitor their locations and systems that record their keystrokes, there’s an app for that and so much more. However, this technology is not just about ensuring workers aren’t watching too many cat videos, it also has valuable benefits for maximizing workplace efficiency, productivity, and security.

For example, employers can learn exactly how much time employees spend on specific tasks, and use this information to help calculate the cost and value of projects, identify which tools are working best, and improve organizational structure based on their employees’ most productive periods and which teams work together best.

Of course, such technology also has potential downsides. Overzealous monitoring can lead to unhappy and/or stressed-out staff, who feel  their privacy is being unnecessarily invaded and their workday is being micromanaged by Big Brother. If not used properly, there could be potential legal issues as well, so consult with us as your  Creative Business Lawyer® if you’re thinking about installing monitoring technology at your company.

As with any new technology that intimately affects employees, business owners should be as transparent as possible when adopting these systems. The Society for Human Resource Management (SHRM) suggests that the best way to avoid employee backlash and demoralization is to communicate early and often the reasons you’re using such systems. SHRM also suggests that you should focus on how the technology improves staff productivity first to get your team comfortable with it, not immediately punish employees for non-work-related web use.

Additionally, you should develop a clear Acceptable Use Policy, informing your team about how/why they’re being monitored, what the rules are, and also obtain their consent. Because some of these areas involve potential legal ramifications, you should work with us to help develop your new policy and advise you on situations that could lead to potential employee backlash.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

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Business Planning

3 Unparalleled Advantages of Family-Owned Businesses

Nike, Anheuser-Busch, Walmart, Porsche—what do these companies have in common? Outside of being globally recognized brands and generating billions in revenue, they’re also family-owned businesses. There are advantages of family owned businesses.

Though family businesses definitely aren’t for everyone and come with some unique challenges, for those who are able to make them work, they offer an array of benefits that simply aren’t available to other companies.

If you own a family business or are thinking about starting one, focus on leveraging the following three qualities to gain an upper hand on your competition.

1. Solidarity

A lot of businesses say, “We’re like a family here,” but when it comes to being tight-knit, supportive, and committed to one another, there’s no substitute for the real thing. Indeed, a family business already has a level of intimacy and communication built in that would take years—if ever—to match in a traditional company.

This closeness can foster a sense of shared responsibility, teamwork, and dedication you won’t find anywhere else. What’s more, since these are the people you go home to at the end of the day, it would be hard to find a team with a deeper sense of trust and shared accountability.

On the flip side, working with family can trigger our deepest wounds around trust and betrayal. We strongly recommend you work with a guide to support your family into awareness around power dynamics and handling conflict. Please let us know if we can help in that area.

2. Longevity

While turnover can be near constant in a traditional company, employees in family-owned business often start working with the company when they’re children or young adults. This ensures that there will not only be well-qualified heirs waiting in the wings to lead the company when someone retires, but the entire staff will know the business’ operations from the ground up, which is invaluable in terms of efficiency and respect.

In addition, with multiple generations on the job, you’ll have a built-in mechanism for keeping up with the latest trends, technology, and other industry developments without having to hire new people. This mix of old and new blood will keep the company on the cutting edge, while providing a solid foundation of wisdom and experience to fall back on.

Finally, with a well-crafted business succession plan as part of the family estate, the elders of the clan can keep the company’s core values and vision intact even when they’re no longer at the helm.

If you want your children to work in the family business, it’s never too early to begin talking with them about how they can get involved, and to invite them to the business table.

3. Flexibility

If you need to take a few days off when your kid gets sick or just want some extra time to relax and recharge, you’ll likely find that your family will be much more flexible and amenable to your personal needs than would a regular boss.

Working with family, you’ll not only have more leniency when it comes to your work schedule, but they’ll likely be more forgiving when it comes to making mistakes as well as more supportive when it’s time to make tough decisions.

But make sure you don’t make the same mistake many family business owners make in thinking that you don’t need legal agreements and clear boundaries in place just because your family. In fact, you may need these tools even more to protect your family relationships in the long-run.

No matter how tight-knit and successful your family business is, you’ll have access to a trusted, unbiased advisor for your legal, financial, insurance, and tax issues. Moreover, our expertise in estate planning is ideal for crafting a winning business succession plan to ensure your family company thrives for generations to come. Contact us today to learn more. 

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

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Business Planning

3 Steps to Avoid Getting Taxed or Sued for Misclassifying Your Independent Contractors

With the rapid rise of the “gig economy,” which primarily relies on independent contractors instead of W2 employees, there’s been an equally steady climb in the number of Independent Contractor (IC) misclassification cases filed against businesses.

Most misclassifications are not the result of intentional violations of federal and state law, but rather, unintentional mistakes made by business owners, maybe including you, who aren’t aware of the legal landscape.

Up until the last 10 years, most regulatory agencies did little to enforce classification laws, leaving many to believe there wasn’t much risk in failing to strictly comply with the laws. But today there’s heightened scrutiny from regulatory agencies at all levels and numerous lawsuits in the courts.

 You could owe back taxes on behalf of team members you’ve mischaracterized, and you may even be subject to criminal charges for misclassification. That said, with the proper legal guidance from us, it’s quite simple to stay safe and compliant. The following are three steps you should take to ensure your IC classifications are up to snuff.

1. Conduct an internal audit of your IC classifications

The first step to ensuring that your ICs are classified properly is to conduct an internal audit of your current classification policies and practices. And if you don’t have any formal policies or practices in place, now is the time to create them.

While the federal government, the states, and the courts don’t have a single common test to determine a worker’s classification, there are some overarching themes that they all consider. In general, if you have the right to control or direct how an IC’s work is done, not just what’s to be done, the worker is more likely to be an employee, not an IC. With ICs, you’re only permitted to direct and control the end result of their work, not the manner and methods of getting it done.

Since there are many complex legal issues related to this process, it’s important that you work with us as your Creative Business Lawyer® to review each worker’s on-the-job practices. Often an IC’s contract may state one thing, but their actual work performance and relationship with you may be something entirely different.

For instance, an IC’s contract might state that they’re to work independently, but in reality they work under close supervision. Or their contract may state that they’re free to work with other clients, but the audit shows that the way you’ve structured the relationship makes it impractical or impossible for them to work for anyone but you.

By auditing your policies and practices in this way, you can identify and change any problem areas internally, before a regulatory agency steps in to investigate.

2. Revisit and revise contracts when needed

Even if you’ve worked with someone for years without any problems using only a verbal agreement, it’s vital that every IC you hire has a properly drafted written contract in place, describing exactly what’s expected of them and laying out the parameters of their relationship with you.

You can see that we bolded, underlined, and italicized the fact that you need a contract in place for each of your ICs, and that’s because we cannot emphasize this point enough—it’s the foundation of your protection from misclassification.

Your IC contract should clearly define the scope of work, the time frame involved, their communication process with you, and the terms of payment. Additionally, the contract should clearly state that the worker is responsible for his or her own workplace, equipment, and expenses.

From there, be sure to have us carefully analyze and rework the contract language when and where needed—even if another lawyer prepared the contract for you. In recent court cases, attorneys for ICs have successfully used the company’s own contracts to show that the business had the right to direct and control the methods and means of the worker’s contracted services, so it’s better to be safe than sorry.

A fairly significant safe harbor for you would be if your IC is using their own contract and had their own business entity set up.

3. Implement and enforce classifications

Once you’ve identified and revised any gaps or areas needing improvement in your IC classification policies and practices, the final step is to make certain these criteria are implemented and enforced. Your policies and contracts are worthless if they’re not actually being followed.

Remember, the Department of Labor (DOL), state agencies, and the courts are only concerned with what an IC is doing, not what’s in their contract or job description.

If necessary, revise your company’s operating manual and procedures to ensure that the provisions of the contracts and policies are documented, implemented, and enforced. Try to foresee any likely barriers to implementing your policies, and then develop strategies to overcome those obstacles with an adoption process that can evolve to fit your company’s needs both now and in the future.

Whether you need help reviewing your IC classification practices and/or properly drafting IC contracts, trust us as your Creative Business Lawyer® to guide and assist you. Although there’s an uptick in IC misclassification cases right now, with the proper policies and contracts in place, you can rest assured your company is entirely compliant and up to date.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

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wellness
Business Planning

Wellness Programs Boost Employee Health and Happiness—and Your Bottom Line

Business owners who launch workplace health and wellness programs can enjoy a wide-range of valuable benefits, not just for their employees, but for the entire company.

Outside of a healthier and happier team, such programs can also increase productivity, save money, and even enhance your brand’s image among current and prospective employees.

If you’re looking for a relatively simple way to motivate your staff and increase loyalty, workplace wellness programs should be at the top of your list. The following are just a few of most powerful benefits participating companies can experience.

Improved employee productivity

The most valuable benefit of employee health and wellness programs for business owners is improved productivity. The healthier your employees are, the better they’ll be at their jobs.

In fact, one study published in the Journal of Occupational and Environmental Medicine found that employees who participated in health and wellness programs each gained an average of 10 hours in additional productivity annually. This boost saved their companies $335 in productivity costs per person per year compared to non-participants.

Indeed, the Centers for Disease Control and Prevention estimates that productivity losses related to personal and family health problems cost U.S. employers $1,685 per employee per year, or $225.8 billion annually.

Wellness programs that help employees develop healthier lifestyles will ultimately improve their productivity—and your bottom line.

Decreased stress and improved morale

Health and wellness programs not only improve employees’ physical health, but they also improve their mental health. This can be incredibly valuable for small business owners, as employees at small- to medium-sized companies often feel the most stressed out, as they’re typically shouldering more responsibilities than those at bigger firms.

You don’t need any studies to prove that less stressed-out employees are going to be happier and more productive. Happier and healthier employees are naturally going to have improved work performance, and that’s all the more reason to institute simple things to improve their health outcomes.

Simply providing access to healthy snacks and drinks in the workplace can encourage your team to take short breaks and eat food that will boost their energy levels. Or you might offer flexible work schedules and/or work-from-home opportunities—anything to make employees feel more content.

Fewer sick days

Again, it’s a no-brainer that healthier employees are going to take fewer sick days. To achieve this, you should provide resources to help improve employee health behaviors.

The easiest way to get employees to adopt a healthier lifestyle is no big secret—simply give them increased opportunities to eat better and exercise more frequently. Most people want to eat healthier and exercise, but many feel like they just don’t have the time.

Stocking the workplace with healthy snacks is one easy option. But you can also give employees more time for lunch, so they don’t have to rely on fast food, or offer to cater lunch for them, and order the food from a nutritious eatery.

It terms of exercise, you can start weekly workplace-sponsored yoga, aerobic, and/or dance classes. Or offer those who use the gym at lunch or right after work an extended break/ earlier time off, so they can more conveniently fit exercise into their daily routine. This might even cause your more sedentary employees to start a fitness regimen out of jealousy.

Enhanced recruitment

Want to attract and retain the best employees? Offer a better benefits than your rivals. Employees who feel like they’re treated better by one employer versus another will nearly always go with the employer who takes care of them—sometimes even if they offer less pay.

Health and wellness programs are a popular way to attract top talent. All of the standout tech and software company’s know the draw of impressive health and wellness programs, as they are fighting to hire the top employees in the world. Microsoft, for example, offers a free wellness program, free gym membership, onsite health clinics, and no health insurance premium.

These extra benefits not only help keep Microsoft’s team healthy, happier, and more productive, but they also encourage them to stay with the company, while attracting new talent. With such an array of incredible benefits, why wouldn’t you launch a health and wellness program?

We can advise you on the most effective ways to improve your employees’ health and wellness. We can also help you navigate any legal, insurance, financial, or tax issues that may come up as a result of the new wellness initiatives. Contact us today to learn more.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

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independent contractors
Business Planning

The Pros and Cons of Hiring Independent Contractors

If you’re a business owner, one of the most important choices you must make is whether to hire full-time employees or use independent contractors (IC). While the two classifications may seem quite similar, they both come with a wide array of unique advantages and disadvantages.

What’s more, if you make a mistake when classifying your workers, you can suffer serious penalties and even lawsuits. Here, we’ve broken down the pros and cons that come with hiring ICs, so you can better assess whether or not such workers are a good fit for your company.

Advantages of Independent Contractors

Financial Savings

One of the biggest benefits of hiring ICs over employees is the money you can save on taxes and worker’s compensation insurance. While ICs may be paid more per hour than employees, you end up saving money in the long run due to the numerous expenses that come with hiring regular employees.

In addition to the cost of maintaining office space and providing employees with the equipment and materials they need to do their job, you’re also required to pay your share of your employees’ Social Security and Medicare taxes, as well as pay for state unemployment compensation insurance and workers’ compensation insurance.

And that’s not even considering any extra benefits you provide your staff, such as health insurance, paid time off, and/or retirement vehicles like 401Ks. Paying for all of these expenses can be a huge hit to your finances, especially if you own a small startup.

Less legal liability

Under state and federal laws, employees have an array of legal rights, which means they can bring a wide variety of employment-related lawsuits against you if they feel those rights were violated. While ICs do have some legal rights to sue you, they enjoy far less protections than employees.

Some of the rights employees have that are not afforded to ICs include the right to a minimum wage and overtime pay, employment discrimination protections, rights to sick and family leave, and the right to form unions.

What’s more, employees may also sue employers for wrongful termination. ICs cannot bring such a lawsuit, as their rights to termination disputes are spelled out in the independent contractor agreement created by you.

Increased staffing flexibility

By hiring ICs, you have much more freedom to staff your company however you see fit. This allows you increased flexibility to adjust your staff based on fluctuations in the market and your workload. This freedom can be especially valuable when you’re just starting your business and aren’t sure what kind of demand your products and services will see.

Additionally, you face far less headache, expense, and potential legal liability when it comes to firing or laying off employees. You can hire ICs for a specific task or project and then be free to walk away from the relationship with no hassles once the work is complete.

Disadvantages of Independent Contractors

Less control

One of the great advantages to ICs is the lack of oversight, training, and physical space they require. However, the tradeoff for this freedom is that you have little, if any, control over how they actually do the work you hired them to do.

Indeed, while you’re able to dictate the overall outcome of an IC’s work, they have total “independence” when it comes to how they choose to complete the task at hand, provided it meets the quality and deadline requirements listed in their contract.

Giving workers such total freedom can be difficult for some business owners, especially those that prefer that the work be done using specific processes and/or tools. But it’s vital you don’t interfere too much with a IC’s work, since doing so can result in the IRS re-classifying them as employees, which can result in hefty penalties and expenses.

Increased risk of audits

As mentioned earlier, hiring ICs automatically increases your chances of being audited by the IRS, as the tax agency has a vested interest (in terms of taxes and insurance payments) in ensuring that you maintain an appropriate relationship with independent contractors.

And it’s not just the IRS that can audit your business. A number of federal and state agencies, like the Department of Labor and your state’s unemployment compensation agency, can audit/investigate your company if they think you’re misclassifying employees as ICs.

The bottom line is, if you hire ICs, be sure you take the appropriate steps to ensure that your contractors are truly “independent,” or it can cost you big time.

Contractual disputes

While ICs cannot sue your company for wrongful termination, that doesn’t mean they have zero rights to bring suit. The written contract you both signed controls all aspects of the employment relationship, including your ability to terminate them.

Depending on the terms of the contact, you may not be able to fire an IC as easily as you would an employee. Moreover, if the IC feels you’ve violated the terms of the contract, they can sue you for breach of contract, which leaves you on the hook for attorney’s fees and potential damages.

Another area that can be at risk for dispute with ICs is ownership rights to intellectual property such as copyrights. Unlike employees, with whom you generally own automatic copyrights to what they produce while working for you, ICs typically own full rights to their work product, unless the contract contains a clause transferring ownership rights to you. Make sure you have a “work for hire” clause in all of your independent contractor agreements to ensure you own the rights to anything created by your ICs.

We’re your trusted advisor when it comes to employment law and worker classification. If you’re trying to decide whether to hire independent contractors versus employees, or you need to ensure your independent contractor agreements offer your company the best protection from liability, we’re here to help.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

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Business Planning

Taking That Leap: How Emotional Intelligence Can Create Business Success

Working for yourself comes with many benefits. But it can also throw you into unfamiliar territory, financially and emotionally. Taking that leap into entrepreneurship doesn’t just require a business plan and funding, it takes emotional intelligence - the capability to recognize and work productively with your own emotions and those of others.

In fact, this is the hallmark of a great leader, though leadership isn’t always described in such terms. But if you consider any of the great leaders you know, you may notice that as a common denominator. You just feel better after being with them, and having them be with you.

In contrast, think of anyone you know who you identify as not a great leader. They may come across as reactive, hard to read, distant or cold, and you leave meetings with them feeling uncertain or fearful.

What you are feeling is the difference between someone who has well-integrated emotional intelligence, and someone who does not.

Investing in increasing your own emotional intelligence can help you take risks, promote your ideas and see them adopted, and be able to go with your gut even when you have doubts.

A lack of emotional intelligence can be costly, causing you to make financial and legal mistakes such as taking advice from the wrong people, not trusting your instincts, or holding back on key communications to partners, vendors and team members. 

Building emotional intelligence can help you visualize—and then reach success you want. But it won’t likely be developed overnight and you may need a trusted advisor to show you where you have the opportunity to learn in this area.

We can be the Trusted Advisor who helps you to hone your emotional intelligence, learn to trust your instincts and lead from the inside out. As part of our work together, over time, we can be the advisor you turn to for a backstop on emotional decisions, to help you identify and move through fear, and to  look out for your business’s future, so you have the emotional space to expand.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

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