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Employment and Business Law: "In 2019 I resolve... "

You’ve started your post-holiday diet. Joined a gym. Sworn off the use of credit cards – except for the automatic charges to Weight Watchers. You’ve finally agreed to go to marriage counseling. You’ve told anyone who will listen that 2019 is the year you are finally going to “get it together.” This time it’s for real. No more messing around. No more excuses.

While many will use the start of the new year as a moment to finally face their demons and try to seriously deal with their personal challenges and weaknesses, far too many business owners will continue to keep their heads in the proverbial sand when it comes to the legal risks they face, either personally or in the businesses they manage. You know that “ignorance is bliss” only until reality bites.

With apologies to those who feel that they can’t handle one more thing that needs fixing, let me suggest a few legal risks that are worthy of your attention in 2019.

Employment Law

Have a competent employment attorney or human resources specialist perform an audit of all your business employment practices, policies and procedures. That should include, at a minimum:

  • a review of and any necessary update to your Employee Handbook to address all the recent changes in the law;
  • a review of the job descriptions and actual job performed by anyone who is categorized as an exempt employee;
  • a review of the status of any “independent contractors” who you use, to determine if they meet the new requirements to allow then to be so classified; and
  • a review with your insurance broker of your Employment Practices Liability Insurance policy to assess the adequacy of coverage terms and limitations.

If you want to do a quick self- assessment of additional areas that may need attention, please click on this link to go to our firm's California Employer Checklist.

The consequences of failing to strictly comply with the law in each of these areas can be catastrophic to a small business and the fact that your non-compliance has gone undetected thus far is no predictor of what may happen to you in 2019. Assume that they (either government agencies or more likely plaintiff attorneys) will eventually find you out.

Corporate/Limited Liability Company Operations

Have a competent attorney, who is knowledgeable in the law governing your entities operations, review, at a minimum:

  • all corporate organizational records including articles of incorporation, bylaws, minutes of required annual meetings, director’s meetings, and annual reports to ensure that they are in order and provide adequate protection from anyone who would try to “pierce the corporate veil” and get at your individual assets;
  • all LLC organizational records including Operating Agreement, capital contributions, buy-sell provisions, documents required to be created and maintained annually by the LLC, minutes of meetings of members and managers (or written consents in lieu of);
  • all required company filings including Fictitious Business Name Statements, Statement of Information for Secretary of State, appropriate IRS and FTB filings if it intends to be taxed as an S Corporation;
  • all management and asset protection practices, including a review of key contracts with third parties and a review (with the company insurance broker) of all insurance policies;
  • all notices, filings and practices required to comply with securities law;
  • all required permits, licenses and registrations;
  • all company intellectual property to determine if it is protected by, where appropriate, patents, trademarks, copyrights, non-disclosure agreements and company practices to ensure that trade secrets are properly maintained; and
  • company succession planning including agreements covering owners and key personnel and related estate planning.

For self-assessment of additional areas that may need attention, please click on this link to go to our firm’s California Corporation & Limited Liability Company Checklist.

Make 2019 the year you finally get serious about things with your business that you know need attention or that you have chosen to ignore. I know from experience that our law firm will see many new clients this year who will say something to the effect of “if I’d only taken care of this before this got out of hand and we got sued; I would have saved so much grief and money!” Now is the time. No more messing around. No more excuses.

Have a great 2019!