Small Business Answers About the Americans With Disabilities Act

Inc. Magazine recently posted a good article, How to Comply With the Americans With Disabilities Act, addressed specifically to small businesses.  Given the very recent publication of revised ADA regulations (which you can find here), the article is timely.  It also contains links to other resources, including the Department of Justice’s “ADA Business Connection” (where, among many other resources, you will find a 13 minute video entitled “Ten Small Business Mistakes”) and the “ADA Guide for Small Businesses“. 

I won’t repeat the information given in the article, just leave you with the following “teasers” to encourage you to read the article yourself and download the resources it links to:

Teaser #1:  No matter how small your business may be, the ADA may still apply to you in some way.

Teaser #2:  The ADA applies both to employment relationships and to customer relationships (including, but not limited to, the physical space your business occupies).

If you are starting a new business it would be well worth your while to familiarize yourself with the requirements of the ADA; even seasoned business owners will likely find something in the article or the resource links that they didn’t know or have forgotten, however.  Forewarned is forearmed!

Share

New Statutes California Business Owners Should Know About

Earlier this week, I wrote about new statutes California community association managers and board members should know about.  So, I thought I should also talk about new statutes California business owners should know about.  Surely our legislators put great effort into passing lots of legislation to materially improve the business climate in our economically hard hit state. 

Well, no, not really.  I suppose there is a silver lining, though.  At least the folks in Sacramento didn’t go out of their way to make the business climate even worse.

Better luck next year, I suppose.

In the meantime, what to blog about?  I’ve got it! 

Considering the impending Super Bowl game, you may be happy to hear that Assembly Bill 58 amended Penal Code Section 337a, and added Penal Code Section 336.9, to eliminate misdemeanor and/or felony criminal penalties for friendly sports betting pools.  That Super Bowl pool at work?  Now it is only punishable by a fine.  If the stakes are small enough.  Or it doesn’t fall under some other exception.  So okay, these new statutes aren’t perfect (not even for California).  And I should warn you to read the full text of the law yourself, if you are considering doing anything which it may pertain to, because it’s full of all sorts of complexities (and I know less about criminal law than most criminals do).  (You can find it at:  http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_0051-0100/ab_58_bill_20090806_chaptered.pdf.)   

But it is nice to know that our state lawmakers spent their time on issues which are of such importance to our economy this past year.  I mean, in addition to these new Penal Code provisions, they also passed a law allowing a motor vehicle passenger to turn on a DVD screen in the front seat, as long as the driver can’t see it (Assembly Bill 62).  Oh, and California dentists are now prohibited from making credit arrangements with patients who are under anesthesia (Assembly Bill 171), which makes me wonder how widespread this practice was before (a scary thought). 

Tongue-in-cheek comments aside, there are a few new statutes which, depending upon the business you are in, could be important for you to familiarize yourself with.  If your business is a restaurant, remember that the ban on trans fats kicks in this year (okay, that’s still a bit sarcastic).  If you sell a product or service using recurring periodic fees or charges (an “evergreen clause”, for example), you must be careful to disclose the details and obtain your customer’s specific written consent (Assembly Bill 340).  If you do home remodeling or other contracting work, be very sure that you have the necessary license(s), as a first offense will now cost you up to a $5,000 fine and up to six months in jail (Assembly Bill 370).  And if yours is a small, home-based child care business (for six or less children), you must be licensed in pediatric first aid and CPR (Assembly Bill 1368), just like larger child care facilities.

Furthermore, a rose by any other name . . .

. . . may also bring a visit from the tax man (or woman).  Or the labor board.  Or a process server.

My previous “Rose By Any Other Name” posts have been about (a) misnamed/unnamed insureds and (b) contracts (verbal vs. written).  This post is about independent contractors who are really employees (at least, as far as the federal and state tax authorities are concerned), and other “thorny” employee classification issues.

At this time of rising State and Federal deficits, there seems to be an increased scrutiny of how small and medium sized businesses are classifying their workers.  In addition, attorneys who represent workers before the Labor Board seem to be experiencing an uptick in business, commensurate with rising unemployment.  This is strictly based upon anecdotal evidence (I’m receiving more calls from business owners on the receiving end of employee pay and benefit claims), but my suspicion is that such claims, as well as tax enforcement proceedings, are on the rise and will continue along that trend for some time to come. 

Proper classification of workers as independent contractors or employees (and if employees, as temporary, part-time or full-time and as exempt or non-exempt) can mean the difference between financial survival or failure, particularly for a small business, and small business owners, who do not have their own HR staff, are often the least equipped to make these determinations.  Failure to properly classify employees can leave a small business vulnerable to claims for legally mandated employee benefits such as workers’ compensation and unemployment benefits, for discretionary benefits such as health insurance and paid time off, and for back overtime pay.  Properly classifying employees is particularly difficult for small businesses with fluctuating staffing needs, since it is easy for a busy small business owner to forget to reclassify a temporary employee who becomes permanent, or a part-time employee who becomes full-time.   

The solution?  Well, my instinct as a lawyer is this – put it in writing, and keep it in writing.  Even temporary workers could be given something in writing that makes it clear that their status is temporary, with an approximate time limit.  Then calendar the end of that time limit, as a reminder to revisit the issue of how that worker should continue to be classified.  And even small businesses should have a written personnel policy to point to when your employee classifications (or other employment practices) are questioned.       

More dangerous than a misclassification of an employee is the improper classification of a worker as an independent contractor.  Such a misclassification leaves the employer vulnerable to back payroll taxes and penalties as well, which can be substantial enough to put you out of business.  And, whether a worker should be classified as an independent contractor or as an employee can be a particularly tricky determination for a small business owner to make, since the criteria for independent contractor status used by the IRS, the federal Department of Labor and state labor departments don’t all impose exactly the same standards. and are not “exact” but, rather, are open to some interpretation.  Even large companies, such as Microsoft and Federal Express, have been the subject of expensive enforcement actions alleging misclassification of workers.  The new targets for such actions appear to be small businesses, and I’m sure that has alot to do with the fact that they are the most likely to be mistakenly misclassifying their staff.    

The solution?  Again, my instinct is to put it in writing.  As far as I am concerned, a written contract is absolutely essential.  Even with a written contract, however, treating the independent contractor as an employee may indeed make the contractor an employee, whether that’s what you intended or not.  For an explanation of how the IRS analyzes these issues, see IRS Publication 15A.   

Finally, years ago one of my community association clients learned the hard way that even with no employees it still needed workers compensation insurance.  That is because California’s Labor Code provides that one who hires a worker to perform work requiring a license is that worker’s employer if it turns out that the worker doesn’t have the required license.  (It may shock you to hear that sometimes unlicensed contractors lie about their unlicensed status and either provide a fraudulent contractor’s license number or “borrow” another contractor’s license number.)  The association hired an unlicensed contractor, one of the contractor’s employees was injured, and the association was on the hook, with no workers compensation insurance and with a workers compensation exclusion in its commercial general liability insurance policy.  To get a better feel for how California’s Workers’ Compensation Appeals Board analyzes the issue of employment status, take a look here

The solution to this problem?  Legal liability risk management, plain and simple.  A good insurance broker and an attorney to prepare the association’s own contracts, requiring contractors to maintain appropriate licenses and insurance coverage, would have been a big help.

Share

Follow

Get every new post delivered to your Inbox.