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  • Writer's pictureJennie Tannenbaum

Small Businesses Need to Lawyer Up When …

Updated: May 25, 2020

Jake’s Bookstore was well into its second year of steady business in the suburban town of Jorben which bordered a former mill city where a surprisingly high percentage of 18-29 year olds reside. The bookstore was doing well because of that demographic of 18-29 year olds. This group comprises the highest percentage of readers, 81% in the group have read at least one book in the last year.

Jake had met with a business lawyer to set up the legalities for the bookstore before it opened. Sometime after the bookstore had opened, he reached out to her to revise the bookstore’s employee handbook when medical marijuana became legal in the state. Subsequently, he had her revise it again when a majority of the voters voted to legalize recreational marijuana. He knew that there were some other matters that he should discuss with his lawyer to keep the bookstore protected from potential lawsuits and he added this to his set of must dos for the business this month.

Federal and state courts and government agencies issue new rulings that govern business and employment laws on a regular basis, as a result, these laws can change quickly. It’s important to stay on top of these latest rulings that impact your daily business, so that it may run smoothly within the confines of the law as well as being protected from potential lawsuits.

Besides staying on top of the latest new laws, it is important to contact your small business/employment law lawyer when the following situations arise:

To determine how to classify your employees as exempt or nonexempt as well as classifying employees as independent contractors it’s best to seek the guidance and advice of a lawyer. In 2020 there was a change in the law that classified what the weekly wage threshold would be for employees to be categorized as exempt for overtime. The change is that the minimum weekly wage went from $455 to $684. Therefore, employers should have increased the pay of those employees to a minimum of $684 to meet the threshold, in order for those employees to remain in the overtime exempt category. Alternatively, employers could have categorized those employees into the non-exempt category. If this alternative was chosen, then employers should be tracking hours worked as well as paying employees overtime for hours worked over 40 hours a week.

Misclassification of employees is costly in damages as well as resulting in unpaid overtime hours.

Terminating Employees

Your reason for terminating an employee may provide facts that rise to a law suit, since sometimes employees are part of a class protected by the law. Therefore, the manner and method in which they are terminated are important considerations to be made. A lawyer can advise you as to whether the termination would be legal or not and the steps to take to minimize the potential of a lawsuit.

Disciplining Employees

The manner and method in which an employee is disciplined is important and must be in line with the protocol set out in the employee handbook, disparate treatment could result in a lawsuit. A lawyer can advise you as to whether the discipline would be warranted and in line with your handbook as well as what steps to take and when which would minimize the potential of a lawsuit.

Additional, Other Areas where it is Obvious to Consult Your Lawyer are:

·        Laying off employees

·        When an employee has filed a complaint with a state agency against the business

·        When an employee has filed a lawsuit against the business

·        When local, state, or federal government entities have filed a complaint or is investigating your business for violation of any laws.

·        When a competing business interferes with your ability to do business

·        When there is a sale or dissolution of your company

·        When there is a purchase or an acquisition of a company

·        Business entity formation

·        Drafting employment agreements

·        Drafting independent contractor agreements

·        Drafting operating agreements and by-laws

·        Drafting non-disclosure, non-compete and severance agreements

·        Drafting employee handbooks and policies

·        Drafting vendor and client contracts

·        Reviewing and negotiating the lease of business property

If you find yourself questioning whether you need to lawyer up, it is best to contact your business law/employment law lawyer to ask a quick question rather than chance handling the matter on your own and facing a potential lawsuit in the future. If you want assistance in determining if you need to lawyer up, contact Simply Good Law for a consult.

This article is for information purposes only and is not meant to be construed as legal advice. For more information or discussion contact me at or at 978-681-0017.

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