Tag Archives: small business

10 Myths Small Business Owners Believe About Their Insurance

Business insurance myth:  Small business owners have a lot on their plates. In addition to being CEOs, they’re often CFOs, CTOs, CMOs, and just about everything else. On top of that, their personal finances are usually mixed with the business finances, making each dollar they spend or save that much more important.

This means that small business owners are often skeptical of new products and services (decidedly a good thing). But it also means small business owners have a heightened need to mitigate the many risks they juggle. The right business insurance can provide excellent protection, but small business owners should understand the truth behind these insurance myths before deciding on their coverage.

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Employee Lawsuits, what should you do

Employee lawsuits are more common than you think.   When you run a small business, it’s easy to feel like your employees are friends or even family members. But in a court of law, they are your employees — and, as their employer, you should take steps to protect yourself and your company in the event that one of them sues you.

The FLSA: Learn It, Know It, Live It

The most common type of lawsuit brought by employees is a “wage and hour” case, or a dispute over whether or not you’ve adequately compensated them for hours they’ve worked. The Federal Fair Labor Standards Act addresses these issues, although each state, county, and city may have their own additional rules.

Most cases begin when “non-exempt” (or hourly, part-time) employees are treated like “exempt” (or salaried, full-time) employees. “Exempt” means exempt from the FLSA. In other words, salaried employees may work overtime without being paid extra, whereas hourly employees must receive overtime pay.

“There’s a booming industry in these types of cases, where employees are not getting paid time and a half,” says Keith Gutstein, partner at Kaufman Dolowich Voluck & Gonzo. He adds that that restaurants, hotels, gas stations, car washes, landscapers, and other cash businesses are at greatest risk.

No contract can waive an employee’s right to be protected by the FLSA. There is often an agreement to work overtime without being paid time and a half, Gutstein says, “but the fact is, it’s illegal, even though employer and employee are happy. After termination, they often realize they can go back and get all the overtime that is owed to them.” In fact, the FLSA compensates workers for up to three years of back overtime — and some states award twice that. Also, if you’re at fault, the FLSA doubles the award and requires you to pay the plaintiff’s legal fees, too.

To protect yourself, keep pristine records of employee hours and pay. Without records, an employee could claim any rate of pay and hours. Also, if the government gets wind that you pay workers in cash, it will investigate to insure that it’s collected all the tax revenue it’s due. Many times, in fact, an employee unwittingly triggers an investigation by filing for unemployment benefits.

Discrimination and Harassment

Many other employee lawsuits derive from behavior on the job, and, as such, can be tough to defend against. The Equal Employment Opportunity Commission protects employees from discrimination if they are a member of a “protected class” based on gender, age, race, and disability. (Sexual orientation and marital status are not protected under federal law, but they are in many states.) The EEOC will even prosecute on behalf of claimants, so your employee does not even have to retain a lawyer to launch such a suit.

In order to file a discrimination or harassment complaint with the EEOC, an employee must prove four things: that she’s a member of a protected class, that she’s qualified and performing the job in a satisfactory manner, that she’s suffered an adverse action (such as lack of promotion or termination), and that the adverse action was the result of membership in a protected class.

If a court allows the suit to proceed, it doesn’t mean the employee has won, it just shifts the burden back to the employer to prove that the adverse action was based on legitimate business reasons, Gutstein explains. “You have to rely on documentation—counselings, warnings, write-ups,” he says.

Your most important tool, however, is your employee handbook, which should outline company policies about discrimination and harassment, your disciplinary process, and should make clear that there is an open door policy for reporting any and all complaints about discrimination and harassment. There also must be appropriate training around these policies.

Assuming that you have an employee handbook and such practices in place, you can fall back on the Faragher/Ellerth defense, which allows an employer to file for a case to be dismissed because there was an open-door policy for reporting discrimination and harassment that the employee did not use before filing suit.

5 best practices to avoid employee  lawsuits

Thomas Jefferson School of Law Helping Cash-Strapped Small Businesses

Struggling small businesses and aspiring nonprofits can get a helping hand from Thomas Jefferson School of Law and its Small Business Law Center.

The clinic provides organizations that can’t afford legal counsel with transactional help – from drawing up contracts and lease arrangements to forming entities and navigating the regulatory process.

“There is a huge need,” said TJSL professor Luz Herrera, the director of the Small Business Law Center (SBLC). “We really looking at individuals barely making a living and who would not otherwise be able to set up a business or set up a nonprofit.”

The clinic is staffed by TJSL students, who are guided during representation by a licensed California attorney. The practical experience attained by law students is a sizable side benefit of the program.

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The 10 Best Digital Tools for Entrepreneurs in 2012

As the global economy writhes and rattles, entrepreneurship has ever more clearly emerged as the solution to economic recovery. Young startups not only create nearly two thirds of America’s new jobs, they also bring forth innovation that often revolutionizes humanity and provides widespread prosperity. The best part is, ease in creating businesses has increased dramatically due in large part to apps and sites that help entrepreneurs.

Here are 10 of the best digital tools to help you launch and grow your startup:

Networking Advice: 5 Tips for an Effective Elevator Pitch

Tell me … what do you do, who you do it for, why you do it and what can you do for me?

And tell me quickly.

Such is the challenge of the elevator pitch – a personal marketing spiel seldom delivered in elevators, but a staple of networking.

A skillful elevator pitch can be the foundation upon which new professional relationships are built. A not-so-skillfull pitch will make sure you are forgotten — or, even worse, leave a bad impression with a potentially valuable contact.

“The perfect elevator pitch should take no more than 30 seconds and incorporate your number of years of experience, areas of expertise, key skills and some key projects or brands that you have been associated with,” says Jessica Bedford of niche recruiting firm Artisan Creative. “If there is anything that makes you stand out, work that into your pitch as well.”

Yes, easier said than done – but doable, nonetheless.

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Business Networking Without Looking Desperate: 5 Rules

Trying to squeeze business opportunity out of this economy is an arduous task at best. And as job numbers remain shakier than the Pacific Rim, the term “it’s who you know” is more relevant than ever for career development.

“Networking is something you should continually be doing,” says Ronn Torossian, CEO of the New York City-based 5W Public Relations firm. “It’s kind of like dating. Until you’re married, you always have to be dating. And when you’re married, you’re working on your relationship.”

That means networking can’t be something you put on a to-do list and check off once a month, and it needn’t be scheduled. “I was sitting next to this woman while having a pedicure and we started talking,” recalls Ross Ellis, CEO of Love Our Children USA, a national nonprofit working to break the cycle of violence against children and a New York City real estate agent with Halstead Property. One thing led to another, and soon Ellis had a speaking engagement for her charity: “She was a teacher and I asked her if she had a lot of bullying in her school.”

Sounds simple, but rub new contacts the wrong way and your network will shrink, not expand. Here’s how to become an expert networker, without ever being annoying, or worse, looking desperate:

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The Top 10 Things Employers Get Sued For

Employers may unintentionally violate employment laws and never realize the risk they create for the company. Trying to provide some flexibility for an employee, saving money for the company, or just being nice are all ways that an act of kindness can become a business liability.

CalChamber’s “The Top 10 Things Employers Do to Get Sued” white paper details some of the mistakes that could lead to employee lawsuits. Topics include:

  • Exempt and nonexempt employee classification
  • Meal breaks
  • Independent contractor status
  • Harassment and discrimination
  • Hours of work
  • Termination
  • Leaves of Absence
  • Final paycheck
  • Deductions from wages
  • Vacation policy

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Family Businesses Should Plan Now for Rising Gift Tax

The 2010 law governing gift and estate taxes is set to expire at the end of this year. For 2013, assuming Congress does not act, the lifetime limits on gift tax will fall from $5.12 million to $1 million. That means an individual can gift, over his lifetime, no more than $1 million tax-free starting in 2013. The top gift tax rate on amounts of more than that $1 million threshold is also scheduled to rise from 35 percent to 55 percent starting next year.

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Small-Business Optimism Hits New Four-Year High

Optimism amongst small U.S. businesses rose to its highest level in more than four years in February, data released Tuesday showed, yet business owners remain concerned about future prospects.

The National Federation of Independent Business‘s small-business optimism index rose 0.4 point to 94.3 from 93.9 in January. The February figure was its sixth consecutive monthly increase and its strongest level since December 2007.

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Consumers don’t expect brands to be flawless

Consumers will embrace brands that are FLAWSOME*: brands that are still brilliant despite having flaws; even being flawed (and being open about it) can be awesome. Brands that show some empathy, generosity, humility, flexibility, maturity, humor, and (dare we say it) some character and humanity.

Two key drivers are fueling the FLAWSOME trend:

  • HUMAN BRANDS: Everything from disgust at business to the influence of online culture (with its honesty and immediacy), is driving consumers away from bland, boring brands in favor of brands with some personality.
  • TRANSPARENCY TRIUMPH: Consumers are benefiting from almost total and utter transparency (and thus are finding out about flaws anyway), as a result of the torrent of readily available reviews, leaks and ratings.

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