Mentorship Matters: How to Learn From Leadership

Mentoring can play a significant role in the success of any entrepreneur. Mentoring takes vision, dedication, and respect, all vital attributes for a mentor to attain in order to contribute positively to the growth of a mentee.  Let’s look at a few things you can do to mentor up and coming entrepreneurs and how these traits can help both parties climb to the top.

Envision a Positive Future

Everyone has to start somewhere. Today’s server could be tomorrow’s CEO. This familiar narrative is just as applicable to today’s CEO. To encourage the next generation of business leaders, it helps to know how to achieve your own career goals. Mentees benefit when people with experience encourage them to keep their eyes on the prize, and mentors benefit by reaffirming the principle that envisioning a positive future—and working toward that future—is the key to success.

Seek Experiential Learning

Envisioning a more successful future isn’t enough to bring that vision into reality, which is why job shadowing is so important. Experiencing that future in the present is the very best way to plan for it. And this is precisely what mentees need: to experience the future career they want now.

Some may have a change of heart after job shadowing a mentor, but it’s all part of working toward a future in real time that is right for them. Mentors can learn from this experience, too. By dedicating your time to giving mentees positive experiences, you’ll learn a great deal about the experience needed to achieve your own goals.

Successful business leaders seek out opportunities to learn and advance in their careers. Even if you are quite far down the path in your own career, consider using mentorship as a way to consciously get in touch with your own ambitions and take positive steps toward attaining them. Find those who have experienced the success you desire. Take some classes to refresh or sharpen your skills. No matter where you are in your career, gaining experience should always be a top priority.

Lead with Respect

Helping mentees envision and experience successful futures can help them decide where they want their career to go and how to get there. As a mentor, consider taking it one step further and treat your mentees like the future business leaders they are. Having someone in your chosen career field encourage you and believe in your future is indispensable in achieving your goals.

Having respect for young businessmen and women—and ourselves—is instrumental in professional advancement. When you have respect for others, you tend to give yourself more respect, and for a good cause, too. This is not just sound business advice, but this is a life lesson! A business leader who dedicates time to mentoring those early in their careers makes a positive impact on their industry. That, in turn, makes them a more valuable member of the business community, a necessary component to career advancement.

The key to achieving your career goals is always to keep growing and striving. But part of that process is knowing how to protect your interests to safeguard your future. If you are ready to take that step toward protecting the future you are working so hard for, begin by sitting down with us.

As your Business Attorney we are here to help you face the many challenges of owning and growing a business. We are experienced in helping entrepreneurs put protective measures in place to ensure their time can be spent on growth and giving back to the business community instead of putting out fires and fixing problems. If you want to safeguard your future, we can help you implement a robust legal, insurance, financial and tax system that protect your interests while you help others—and yourself—envision and work toward a more positive future.

This article is a service of Gratia P. Schoemakers, Business Attorney. 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.

Reducing Risk: 3 Business Agreements That Will Decrease Your Liability Risk

Those new to the business world often lack the first-hand experience of initiating and building healthy business relationships. But protecting these vital relationships with carefully crafted business agreements—such as those for co-owners, suppliers, and clients—is essential to growing a new business without the risk of being taken advantage of or of burning valuable bridges. To decrease the risk of liability in your business relationships, here are three of the most common agreements that every business owner should have customized and ready to go.

Owner Agreements

No matter how your business is structured, you need comprehensive owner agreements if you have co-owners, founders, shareholders or partners. Mistakes get expensive if you don’t have solid agreements between the owners when something goes wrong. Agreements should outline the terms and conditions applicable if one owner wants to go his or her separate way. Putting everything in writing will allow you to focus your energy on growing your business instead of on arguing about who said what, when and who was going to do what on which time frame.

Worker Agreements

Team member agreements protect both parties – you and them. These include agreements for independent contractors (think web developers and graphic designers) to clarify the terms and conditions of the work, and who owns the work they are creating as well as employees. Hiring with complete agreements – in writing – will ensure you are both on the same page regarding employment status, performance expectations, and job requirements. Although you should have agreements for both employees and independent contractors, make sure you clearly distinguish who is in what role. You could face tax and other penalties if you improperly classify a worker.

Customer and Vendor/Supplier Agreements

Your customers make your business possible, especially when you’re just starting out. Every sale is essentially a contract between your business and your customer, so make sure you are putting the proper legal protections in place. Terms of service and privacy policies will do some of this work for you, but make sure you consult with a lawyer to determine the specific clauses you need in your client/customer agreements to provide the most protection for the relationship long-term.

Your vendors and suppliers make your customer base possible. They help you meet demand and are instrumental to your business’s viability. Your vendor and supplier agreements should provide both parties with legal protections and make sure your needs are met by the relationship. Vendor and supplier relationships can make or break a new business’s success, so make sure you fortify them with clear, detailed agreements.

If you want to protect your business interests and limit your liabilities, start by sitting down with a Business Lawyer. We are experienced in helping entrepreneurs achieve success through careful financial and legal planning. As your Business Lawyer, we can establish a sound legal, insurance, financial and tax system for your business so you can focus on increasing revenue and enjoy the benefits entrepreneurship.

GP Schoemakers, PLLC offers 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.

10 Legal Tips for Starting Your Own Business

Whether the result of the recent recession or the desire by baby boomers to embark on a new professional path, new business startups are growing fast.  Here are 10 legal tips for entrepreneurs who are striking out on their own for the first time:

Choose the right entity.  Decide if you will be operating your business as a sole proprietorship, partnership, LLC, C Corp or S Corp.  Each has its own advantages and disadvantages when it comes to business structure and asset protection; consult with a Creative Business Lawyer™ to determine the best fit for you.

If you give advice, get insurance.  Many professional who leave the corporate world to start their own consulting business may want to look into liability insurance to protect themselves from lawsuits based on claims of faulty advice.

Create good contracts.  Getting paid is often a problem for new startups; be sure to get agreements in writing and enforcements for failure to pay.

If you have a partner, get a buy-sell agreement.  A buy-sell agreement will spell out what happens in case a partner wants to exit or dies unexpectedly.

Know employment laws.  Many startups hire contractors to get up and running quickly; however, you need to be aware of legal definition of a contractor versus an employee so you don’t run afoul of the IRS.

Get the right documentation.  Legal documentation for startups is important to have in place as the company grows, and includes customer contracts, confidentiality agreements, offer letters and more.

Be aware of trademark issues.  You don’t want to be in business for a few years and find out the name of your company or your best product is already trademarked by someone else.  If a name is important to your company or product, protect it.

Put legal disclaimers on your website.  Make sure your business website has Privacy Policy and Terms of Use pages that detail the rights and responsibilities of each party.

Employment agreements.  Not every employee you hire will necessarily be with you for the long run.  Protect your business with employment or independent contractor agreements that include non-competes and other stipulations that govern the relationship.

Hire a good Creative Business Lawyer™.  At some point in your new business life, you will need good legal advice.  Because we stay proactive in your business (not just reacting to problems when they come up, but helping you to structure your business smart right from the beginning),   a Creative Business Lawyer™ can be the most important advisor you have on your team.

Whether you’re starting or already running a business, the best time to hire a lawyer is before you need one. Having a business attorney that understands the individual needs and unique circumstances of your company is key to helping your business thrive and prosper. If you are interested in learning more about legal protection strategies for your business and how we work with you as a partner in protecting your company, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.

 

Helping Employees Access Health Care While Easing the Burden on Small Businesses

In December 2016, former President Obama signed an important health care act that will help alleviate the burden of employee health insurance on small businesses.

The 21st Century Cures Act will allow, among other things, small businesses to reimburse their employees for individual health insurance if they do not offer a group plan. For small companies with less than 50 full-time equivalent (FTE) employees, managing a company-wide group health insurance plan can be a complicated endeavor that saps valuable time and resources. To counteract this, the 21st Century Cures Act will help small businesses contribute to their employees’ health insurance premiums with relative ease.

Businesses don’t have to pay payroll taxes on the reimbursement and can escape the administrative headache of maintaining a group plan. And employees don’t have to pay taxes on their employer’s premium contribution. This can help small businesses attract employees who want health care coverage without taking on the responsibility of managing a group care plan. Businesses must offer the reimbursement on the same terms to all employees but can adjust the amount based on the employee’s age and family size.

Many small businesses that offered employee insurance coverage through group plans under the Affordable Care Act have struggled with the resources required to manage them. Under the 21st Century Cures Act, however, the costs are more manageable, and the administrative responsibilities significantly reduced. The new act also reduces employer liability when it comes to maintaining coverage.

Helping your employees access health care can make you a more competitive employer to those on the job market. But as a small business, you may also be concerned about the benefits and responsibilities that come with offering premium reimbursements. For example, there are caps on premium contributions, rules on small business health care credits and regulations in place that can make switching from a group plan to a reimbursement model complicated for any small business. With so many rules and regulations to consider, professional guidance is highly recommended.

If you need help with employee health care, start by sitting down with us. As your Creative Business Lawyer®, we can help you contribute to your employees’ health insurance premiums while minimizing your costs and administrative burden.

Developing a trusting relationship with a Creative Business Lawyer® will ensure your business can meet the needs of your employees while still protecting your best interests.

This article is a service of Gratia P. Schoemakers, Creative Business Lawyer®. 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 Foundation 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.

Hiring? Great! Here’s How to Get Started with Your First Employee

Up until now, you alone have been running your small business. Now you need help. The moment when a small business owner decides to hire his or her first employee is one of triumph. Conversely, knowing how to start the hiring process can be a moment of confusion.

If you’re ready to hire your first employee, first of all, congratulations! Second, don’t worry. Follow these steps to ensure your hiring process goes smoothly and you adhere to state and federal regulations.

  • Apply for your Employee Identification Number (EIN) if you don’t already have one. You will need this for taxes purposes and to get the hiring process started.
  • Prepare forms and establish a recordkeeping system for employee tax withholdings. You need to maintain records on your employee’s federal income tax withholdings, your federal wage and tax statements, and your state taxes for four years. Get organized now, and don’t wait until tax season!
  • Have your employee fill out an I-9 statement, and verify his or her eligibility to work in the U.S.
  • Register with your state’s New Hire Reporting Program. You must report your new hire within 20 days.
  • Sign up for workers’ compensation insurance. This is required for all companies with employees. This covers on-the-job accidents and injuries and protects your interests.
  • Post required notices at your work site, such as state and federal labor laws.
  • File your quarterly tax return (form 941). This is required if you withhold any taxes from your employee’s earnings.
  • And, perhaps most importantly, get organized! Hiring an employee means mandatory reporting, more complex tax filings, numerous legal requirements, good recordkeeping and looking out for your employee’s well being. Now is the time to consider employee benefits, maintaining a safe workplace and keeping your employee informed on your company’s practices and their rights and responsibilities. You will also need an excellent record keeping system to keep track of important information about your employee, stay abreast on labor laws and make sure you comply with state and federal regulations.

Hiring your first employee is a big step. When you are ready, start by sitting down with us as your Creative Business Lawyer®. We can give you legal guidance before, during and after the hiring process.

Developing a trusting relationship with a Creative Business Lawyer® can ensure your business complies with state and federal regulations and is positioned for success.

This article is a service of Gratia P. Schoemakers, Creative Business Lawyer®. 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.

Do Your Employees Get a Mandatory Raise This December 1?

If your business is covered by the Fair Labor Standards Act (FLSA), you may be required to give all of your salaried employees who perform executive, administrative or professional (EAP) duties a raise.

As of December 1, 2016, the new minimum wage for full-time salaried workers is $913 per week. Previously, the minimum wage was $455 per week.

December 1, 2016 is a Thursday, so this change will need to be made based on the payroll period that covers December 1, and it may be mid-pay period.

In the event that your EAP employees are paid commissions or other incentive-based pay, you can count those payments for up to 10% of the minimum salary amount, so long as these amounts are paid at least quarterly.

Any employees considered highly-compensated employees (HCE) under the FLSA must now be paid a minimum of $134,004 a year, as of December 1, up from $100,000 annually, previously.

It may be time to require existing salaried employees to begin tracking their time or shift salaried employees to hourly with the prospect of paying overtime instead of the increased salary, and this is an analysis we can help you to best understand and then roll out to your employees.

If you need help identifying whether your business is covered by these rules and which of your employees are exempt EAP employees or HCEs under the new rules, contact us. That’s why we are here. There are significant costs if you make this analysis incorrectly, so let us help.
This article is a service of Gratia P. Schoemakers, Creative Business Lawyer®. 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.

Can a Married Employee Name a 401(k) Beneficiary Other than a Spouse?

It can be very difficult for you, as an employer to manage a 401(k) retirement plan for your employees properly. Federal law is replete with mandates, including when employee funds must be remitted and statements made available to employees. One area you may not have considered is how to handle a married employee’s 401(k).

Federal law establishes protections for married couples known as “survivor’s rights.” Generally speaking, survivor’s rights do not allow one spouse to exclude the other spouse from receiving a portion of his or her company 401(k) account. Survivor’s rights specifically require written spousal consent to waive any 401(k) interest.

Thee rules vary depending upon whether the married employee is still working. When a married employee dies while still working for the employer, the general rule is that his or her spouse receives the entire account balance. The only time this does not happen is when the spouse has waived, in writing, the right to receive the account proceeds.

When a married employee retires, he or she must take retirement payouts in a way that continues to pay his or her spouse for life. The only way an alternative payout can be chosen is if the spouse executes a written waiver.

This spousal protection even overrides beneficiaries that an employee may name for the account. Additionally, by law, not even prenuptial and postnuptial agreements can change the requirements.

There is one major exception to this rule, and it does not directly impact you, as an employer. If a married employee rolls over a 401(k) balance to an individual retirement account, the retirement assets lose the survivor’s rights protection and can be distributed in any way the employee chooses.

Administering a retirement plan can be tricky, but you don’t have to go it alone. As your Family & Business Lawyer, we can guide and support you each step of the way.

This article is a service of Gratia P. Schoemakers, Family & Business Lawyer. We offer a complete spectrum of legal services for businesses and can help you structure your operations for success. We also offer a LIFT Start-Up Session,™ which includes employment structuring, financial, and tax systems you need for your business. Call us today to schedule a time to have a conversation!

Can I Force My Employees to Arbitrate Our Disagreements?

Many employers ask what they can do to avoid lawsuits. One of the best ways businesses can be more proactive in avoiding legal disputes and their attendant costs is to implement arbitration clauses as part of their employment contracts.

Arbitration has traditionally been viewed as less expensive than litigation. While that’s not necessarily true in every case, arbitration certainly has its advantages, such as:

  • expediency;
  • increased likelihood of preserving relationships;
  • confidentiality; and
  • control.

Arbitration is often resolved much more quickly than litigation. As new employment laws and ordinances are enacted, litigation increases. There is a correlation there. And employment litigation can be particularly time-consuming because of the plethora of documents and opinions involved.

In an arbitration, however, the parties can streamline the process and resolve differences more quickly than they would in litigation. Remember, time is money, so an important advantage of arbitration is facilitating quicker and cheaper dispute resolution.

Arbitration can also be advantageous when an employee involved in the dispute is still employed. Because arbitration is less formal and the parties know they need to continue to work together, arbitration can be more successful than litigation at preserving and continuing relationships.

A third advantage of arbitration is that there are no public pleadings filed at courthouses. The proceedings are private, which can help preserve a company’s reputation and the building blocks of its business.

Arbitration also gives the parties more control over the proceedings. Depending on how the arbitration agreement is laid out, the parties can choose the arbitrator or arbitrators, as well as the processes for discovery and evidence. Again, this can be very important in helping to reduce the time and costs of disputes.

States generally allow employers to include an arbitration clause in employment agreements, as well as freestanding arbitration agreements. Some states, however, will scrutinize these clauses more than others.

Generally speaking, arbitration clauses must be viewed as fair to all parties to be enforceable. This basically means that the rights given to the parties must be balanced. If an arbitration clause gives an employer greater rights than an employee, it may very well be invalidated by the courts. In such a case, the employer would lose the benefits of the arbitration provision.

As your  Creative Business Lawyer®, we will work with you to ensure that the agreements your employees sign have the best employment arbitration provision for our state laws.

As part of a comprehensive LIFT Audit, we will review not just your employment agreements, but all agreements your company makes with vendors, clients, and others in support of your business. In addition, we review your insurance, financial systems and tax strategies. Call today to get your Audit scheduled.

This article is a service of Gratia P. Schoemakers, Creative Business Lawyer®.  We offer a complete spectrum of legal services for businesses and can help you structure your operations for success. One of our primary services is a LIFT Start-Up Session,™ in which we guide you through the right choice of business entity, location of business entity, start up agreements, intellectual property protection, employment structuring, insurance, financial and tax systems you need to start your next business and succeed right out of the gate.  Call us today to schedule a time to have a conversation!

 

Departing Employees and Trade Secrets: Minimizing the Risk

You’ve worked hard to build your business. You’ve developed products or services and the processes, policies, and strategies which drive them. So what do you do when a key employee tells you he/she will be leaving? How do you protect the business systems you’ve worked so hard to develop?

Hopefully, you had your key employee execute a confidentiality clause when you hired them. A confidentiality clause (or agreement) requires the person signing it to keep certain information strictly confidential. Ideally, it sets forth the type of information you consider to be a trade secret. You may later use this agreement to protect against competition or disclosure of your trade secrets in the future.

If your key employee is planning to start a business to compete with you or to go to work for a competitor, a noncompetition clause will put you in a position of strength. You can even base a lawsuit on a non-compete clause, although usually only within a limited geographic area and for a limited time period.

To further strengthen your position, before the employee leaves, do the following:

  • Determine whether you want to keep the employee. If you do, find out why he/she wants to leave and address those issues.
  • Review any applicable agreements with the employee and clearly set forth your expectation that they will comply.
  • Determine where the employee is going. If they are accepting new employment with a competitor, put the competitor on notice of your areas of concern and your intent to hold the employee to any applicable agreements that relate to your trade secrets.

If these measures do not work, you may need to bring a lawsuit to protect your trade secrets. To be successful, you must be able to show that you took reasonable measures to protect your trade secrets. Our focus is keeping you out of court and out of conflict. Preparing ahead with well-drafted agreements is a significant part of how we do that. Contact us for a LIFT Audit of your legal, insurance, financial and tax systems today.

This article is a service of Gratia P. Schoemakers, Creative Business Lawyer®. We can help you protect the business you’ve worked so hard to build. We’ll work with you to craft the agreements you need to protect your valuable trade secrets from the outset. Contact us when you are ready for more creative support to grow your business.

How Can I Stop a Competitor from Poaching My Good Employees?

Due to the use of online marketing, business competition is fiercer than ever. This hyper-competitive environment causes many business owners to wonder how they can stop the poaching of their good employees. First and foremost, this is best accomplished by treating your employees great, paying wages on the higher end of the scale and creating a great workplace with flexibility.

Second, you want to have agreements with current employees that minimize the risk. Employers sometimes require their employees to agree to a non-solicitation clause as a condition of employment. These clauses require that the employee agrees not to solicit other employees to leave if that employee is ever terminated or quits.

Whether these clauses will be upheld depends on state law. Some states look very unfavorably on any agreement that might prohibit healthy competition while other states attempt to balance employee rights to change jobs with employer rights to develop employees without fear they will become future competitors.

As you might imagine, there is a distinction between a former employee who actively recruits your employees, and one who was approached by your employees. In most states, a former employee will not be charged with violating a non-solicitation clause when he or she did not initiate contact the current employee directly. For example, if one of your employees responds to an advertisement for an open position, that would be viewed differently than a direct solicitation of that employee.

If a non-solicitation clause is found unenforceable, states differ in their approach to adjudicating a dispute between the parties. Some states take a “blue pencil” approach, striking only that part of the agreement. In other states, if the clause is invalidated, the entire agreement may be void and unenforceable.

Dealing with non-solicitation clauses can be tricky. If you’re interested in preventing employee poaching, your best bet is to contact us and we’ll support you in ensuring that your agreements provide maximum protection with minimum risk of loss or liability.

This article is a service of Gratia P. Schoemakers, Creative Business Lawyer®. We offer a complete spectrum of legal services for businesses and can help you structure your operations for success. One of our primary services is a LIFT Start-Up Session,™ in which we guide you through the right choice of business entity, location of business entity, start up agreements, intellectual property protection, employment structuring, insurance, financial and tax systems you need to start your next business and succeed right out of the gate.  Call us today to schedule a time to have a conversation!