Complete performance reviews for all employees and independent contractors.
Review your staffing needs and plan to add, subtract, or reorganize accordingly.
Review job descriptions for independent contractors to ensure they are truly contractors and not mischaracterized employees.
Review personnel files and update I-9s and W-4s as necessary.
Review employee benefits.
Review your employment policies and procedures to ensure they are up to date and comply with recent changes in the law.
Review your administrative and business policies and procedures to see whether they accurately reflect your current practices.
Compare your actual sales to your yearly goal.
Identify successes and areas for improvement in the areas of lead generation and conversion of leads to customers.
Adjust marketing plan to match your goals.
Check customer satisfaction.
Review customer service policies and procedures.
Identify ways to improve the customer experience.
Collect W-9s from contractors and vendors that need 1099s.
Review yearly journal or transaction entries for accuracy. Especially make sure that income and expenses are properly categorized.
Verify year-end accounts payable and accounts receivable.
Reconcile payroll including comparing taxes paid to payroll returns.
Prepare documents and files for your CPA or tax professional.
Run year-end reports such as a profit and loss statement, budget report, and balance sheet. Compare to last year’s reports.
Prepare next year’s budget.
Review IT policies and procedures.
If you collect personal information from customers, review your PCI compliance.
Train employees as necessary.
Install security patches, software, and operating system updates.
Consider getting a cybersecurity audit.
Review last year’s goals.
Review your long-term goals.
Set next year’s goals.
Adjust your business plan accordingly.
Each step includes sub-tasks such as consulting experts to identify vulnerabilities in your business systems.
Begin with a review of policies and procedures for employees who handle sensitive customer information and make sure employees are well-trained to follow your procedures for data protection.
Next, review your polices for safe internet and email use, and make sure all of your employees are trained to follow basic internet and email safety practices.
What information is collected on your website? How it is protected?
Chapter 521 of the Texas Business and Commerce Code requires businesses to protect personal information collected from consumers. If your customer data is breached, in most cases you must notify customers whose data may have been compromised.
The holiday season, really from Halloween through the twelfth day of Christmas, is this Austin Business Attorney’s favorite time of year. I love just about everything about the holidays. But, with the good comes the thieves.
Here’s a short checklist to help you stay safe.
If you think someone is standing too close, they probably are. Just move away. Go look at something else and get back in line later.
If it’s dark, don’t hesitate to ask a security guard to walk you to your car.
And, if you see an email from someone you don’t know, or if an email seems suspicious, just delete it.
On November 22, Judge Amos Mazzant, of the Eastern District of Texas sitting in Sherman, issued a nationwide injunction blocking implementation of the highly-anticipated changes to the Overtime Rule. A group of 21 state attorneys general, including Ken Paxton of Texas, sued to block implementation of the rule which was slated to take effect on December 1.
The rule change would have raised the overtime exemption for salaried executive, administrative, and professional employees from $455 a week to $921 per week.
In other words, administrative employees making less than $47,892 per year would have been entitled to overtime if they worked more than 40 hours in a week.
The court found that the Department of Labor (DOL) exceeded its statutory authority in issuing the rule change. The court’s decision is available on the Texas Attorney General’s website: http://tinyurl.com/zzdo4mw.
The DOL stated it is considering its legal options. It has not yet announced whether it will appeal the injunction to the 5th Circuit Court of Appeals. The DOL press release can be viewed here: https://www.dol.gov/WHD/overtime/final2016/.
As a practical matter, the ruling comes too late for most businesses.
The DOL announced the proposed rule change on July 6, 2015. The Department received over 290,000 comments to the proposed rule change. On May 18, 2016 the DOL released the final rule and warned the new rule would take effect on December 1.
Larger businesses adopted strategies for complying with the new rule months ago. Businesses that planned to comply and announced those plans to employees will hesitate to change course because of the cost of making changes at this late date, uncertainty whether the ruling will stand, and harm to employee morale.
Starting in December, administrative employees making less than the magic number, $47,476 per year, will no longer be exempt from the overtime provisions of the Fair Labor Standards Act. These administrative employees will earn overtime pay if they work more than 40 hours in a week.
Salary alone is not the only factor for determining whether a salaried employee is entitled to overtime or is exempt. There is actually a three part test:
Otherwise, the employee is entitled to overtime pay at time and a half the employee’s hourly equivalent rate for each hour worked beyond a 40 hour work week.
The Department of Labor has identified four options for employers to comply with the new rule:
Raising salaries and paying overtime is simply not financially feasible for many businesses. Employees may negatively view adjustments in workloads and schedules or converting them from salary to hourly pay.
There is another way to comply with the new rule without undertaking additional financial burdens: adopt a workplace policy mandating that non-exempt employees cannot work overtime without prior written approval from a supervisor.
Enforce the policy consistently. This will help the business be able to predict and control labor costs while encouraging healthy work-life balance for employees.
Adopting a policy regarding overtime, educating employees about the policy, and enforcing the policy will provide some predictability and enable the business to manage workloads in a way that minimizes financial strain and possible cash flow problems. We can help craft company policies that comply with the new rule while providing the ability to manage overtime.
It’s also a good time to think about your tax strategy.
Conventional wisdom is to maximize deductions and business losses and to minimize income. While this strategy results in lower tax bills, it may not be the best strategy for your business. Choosing the best tax strategy involves some advance planning and goal setting.
If your personal goals include buying a home or if your business goals include courting investors or seeking funding to meet your goals, then think carefully before minimizing your business income to avoid tax liability.
Mortgage companies tend to view the self-employed as high risk. Self-employed mortgage seekers must jump through more hoops than their counterparts who are employed by large companies. Mortgage lenders want to see a history of income stability. If your small business has taken a loss in each of the preceding several years, it will be hard to get a mortgage.
The same goes for financing to grow your business. Lenders are looking for credit worthiness and stable income – not a brilliant tax strategy. Don’t let your brilliant tax strategy compromise your ability to meet your goals.
Have a frank discussion with your tax preparer in advance if your business or personal plans include getting financing in the next 2-5 years.
We’ve all seen the competing signs urging Travis County voters to vote yes or no to Proposition 1 – $720,000,000 in transportation bonds. So, what’s Prop. 1 about? My goal is not to tell anyone how to vote but simply to assist us in making an informed choice.
If passed, the bond money would be used for three kinds of projects:
Improvements would be made to Loop 360, Spicewood Springs Rd., Old Bee Caves Road Bridge, Anderson Mill Rd., RM 620 at RM 2222, Parmer Lane, North Lamar, Burnet Rd., Airport Blvd., East MLK Blvd., South Lamar, East Riverside, Guadalupe St., Slaughter, William Cannon, Rundberg, East Colony Loop, South Congress, Manchaca Rd., and South Pleasant Valley Rd., Fallwell Ln., FM 1626, Cooper Ln., Ross Rd., Circle S Rd., Rutledge Spur, Davis Ln., Brush Country, Johnny Morris Rd., and Brodie Ln.
The bonds would increase the debt service part of Austin’s tax rate by 2.25 cents meaning most homeowners’ taxes would go up by $40 to $100 per year.
Supporters say that the improvements will help traffic flow and increase safety for bicyclists and pedestrians and that improvements are necessary to help the City cope with population growth. Supporters concede that the bonds will pay for only a fraction of the City’s comprehensive transportation plan but believe this would be a good start.
Opponents believe voters should be able to vote on various components of the plan rather than the comprehensive bond package represented by Prop. 1 especially since the bonds are not adequate to pay for the cost of the listed improvements. Opponents fear the City will keep coming to taxpayers for more and more bond issues.
The League of Women Voters’ election guide is here: http://lwvaustin.org/, and the City’s voter education brochure about the transportation bonds can be found here: http://austintexas.gov/sites/default/files/files/Capital_Planning/2016_Bond/2016_Bond_Voter_Information_Brochure__English.pdf.
Each year the Texas Workforce Commission and the Wage and Hour Division of the U.S. Department of Labor investigate scores of Texas businesses for violating minimum wage and overtime laws. With the new federal overtime exemptions imminently taking effect, employers should review their payroll policies to ensure compliance. Beginning December 1, salaried employees who make less than $47,476 per year or $913 per week will be entitled to overtime pay for working more than 40 hours in a work week. Texas recognizes the federal minimum wage which is currently $7.25 an hour.
Plan now to be in compliance with the overtime rule on December 1. Salary alone is not the only factor for determining whether a salaried employee is entitled to overtime or is exempt:
Nonexempt employees are entitled to overtime pay at time and a half for each hour worked beyond a 40 hour work week. The Department of Labor enumerated four options for employers to comply with the new rule:
Raising salaries and paying overtime is not financially feasible for many small businesses. Converting salaried workers to hourly pay could tank employee morale. Another way to comply with the new rule without undertaking additional financial burdens is to adopt a workplace policy forbidding non-exempt employees from working overtime without prior written approval from a supervisor. Enforce the policy consistently. This allows the business to predict and control labor costs while encouraging healthy work-life balance for employees.
The last minute has arrived. If you haven’t already adopted procedures to comply, consult a lawyer to help your business transition to the new rule. The Department of Labor has published this fact sheet for employers: https://www.dol.gov/whd/overtime/final2016/general-guidance.pdf
Anyone with a social media account can post online reviews of businesses, and there’s virtually no way to vet a review, that is, whether the reviewer is being truthful or whether the reviewer has an ulterior motive.
Schemes have been found where reviewers were compensated for good reviews, where reviewers blackmailed businesses into giving benefits in return for not writing bad reviews, where businesses threatened to sue reviewers for bad reviews, and where reviews were blatantly faked.
While a sudden plethora of five star reviews might be a red flag to Yelp, Google, or Tripadvisor, business owners are more concerned about the impact of fake negative reviews on their business.
When faced with a negative review that appears malicious or fake, people often respond by contacting the review site. Unfortunately, the review site has no legal responsibility for user posts.
Sites are protected by Section 230 of the Communications Decency Act (CDA), a little known federal law that was originally enacted to keep internet pornography out of the hands of children.
Congress passed the CDA in 1996. Most of the law focused on limiting indecent or obscene material on the internet; however, those provisions were struck down in a series of lawsuits filed by free speech advocates. Section 230 remains. In a nutshell, Section 230 says that internet providers are not the publisher or speaker of information they post when the information was created by someone else. 47 U.S.C. § 230. This means that a website generally is not responsible for content posted on it that was created by a website user. There are a couple of exceptions, e.g., criminal content and intellectual property infringement are not protected. So, online review sites are not responsible for the content of reviews posted by site users.
Even though they may not be legally liable, social media sites are concerned about the reliability of reviews posted on their sites. Most sites have adopted procedures for taking down fraudulent reviews. These procedures are site specific. So victims of fraudulent reviews must contact each site owner for instructions.
While the site may not be liable for fraudulent content, the individual doing the posting does not have legal protection for fraud, criminal acts, or defamation. If a reviewer did not use the business it reviewed, the review is likely fraudulent. If the review contains facts that are not true, the review may be defamatory. The basic test for defamation is that the statement is false and caused harm, is published, and is made negligently or maliciously. However, an opinion is not defamation.
So, what’s a victim to do? Look at the site’s acceptable use policy and see if the site has a procedure for taking down fraudulent content. Contact a lawyer to see whether the review contains content that is not legally protected and what recourse you may have against the individual that posted the review.