Today I’m writing about a related subject that can also blind side a company resulting in paying back wages and fines and penalties.

I’m referring to the issue of not paying employees for the overtime they work, which would be a violation of the fair labor standards act (FLSA).

A business should have a policy that describes what its overtime policy is. The following is an example of such a policy provided by the National Federation of Independent Businesses.

“Although we appreciate that you made yourself available to work overtime, please understand that working unapproved overtime may have significant budget implications and consequently violates company policy. Despite our prior discussions instructing you not to work overtime without your supervisor’s prior approval, you have again worked unauthorized overtime, which will be paid to you at the time-and-one-half premium rate. However, please understand that failure to obtain appropriate advance approval in the future may result in further disciplinary action up to and including dismissal.”

You should review your overtime policy with each employee ensuring they understand that working overtime without obtaining prior approval is a serious matter. While the employee may get paid for working the overtime, even if it wasn’t approved, the employee should also know that it could also get them fired.

If you would like help with creating an overtime policy call me at 804-368-7397 or email me: jc@toruslaw.com.

First if your bank is threatening to foreclose visit www.virginiaforeclosureprevention.com. There you will find resources related to foreclosures.

If you are facing a foreclosure and you want to keep your house you generally have two options:

1) Working with your lender to modify your loan.
2) Filing a chapter bankruptcy petition.

If you are facing a foreclosure and you do not want to keep your house you generally have three options:

1) Walk away from the house, which may result in deficiency judgement that could have tax consequences.
2) Sell your house through a short sale
3) Get the lender to accept a deed-in-lieu of foreclosure
4) File a chapter 13 or 7 bankruptcy.

If you’re facing a foreclosure or anticipate getting to that point in the near future, you’re likely dealing with a lot of stress and anxiety. Don’t try to sort out your options on your own. While you may be reluctant to get help because you’re embarrassed don’t let that keep from understanding what your options are. As they say knowledge is power. If you would like to learn more about your options call or email me at 804-368-7397 or jc@toruslaw.com. We’re here to serve you and to help you get back on your feet.

In some cases couples decide to sell their house meaning both spouses wind up relocating. In other cases the couple agrees to let one of them remain in the house meaning only one of them relocates. In these cases the couples separation agreement and divorce decree gives possession and ownership of the house to one spouse. What happens however, if years later the spouse who stayed in the home wants to sell the home. Is the language in the separation agreement and divorce decree giving exclusive possession and ownership of the house to the one spouse sufficient to complete a listing agreement to sell the house?

My experience says no. The spouse who is staying in the house should always get the vacating spouse to sign a quitclaim deed assigning whatever interest he or she had in the house to the spouse remaining in the house. Getting a quitclaim deed will allow the spouse remaining in the house to subsequently sell the house. On the other hand failing to get a quitclaim deed from the vacating spouse or failing to otherwise get the deed retitled in the remaining spouse’s name will likely prevent the remaining spouse from selling the house without reopening the couple’s divorce which could take months and may costs thousands in legal fees and costs.

The answer then whether to quit or not to quit is yes meaning a remaining spouse should always get the vacating spouse to sign a quit claim or other deed divesting them of their interest in the house.

An estate plan includes numerous documents including a will, a durable power of attorney (POA) and an advanced medical directive (AMD). A “will” directs the disposition of assets upon one’s death. A “POA” gives someone the authority to make financial and related decisions for you. An “AMD” gives someone the authority to make medical decisions on your behalf, including decisions to end life support.

Another aspect of an estate plan is medicaid planning for older adults. Medicaid planning is critical to reduce the amount the government will take from your parents if they have to move to a nursing home.

In some instances not having an estate plan will not have any or minimal consequences. For example, if I don’t have any assets and no family members the lack of an estate plan would be minimal. However, the effects could be profound for an individual or family with assets that is struck by a tragedy and has no estate plan. The effects may include losing control over how assets are distributed and having to pay more in taxes.

At Torus Law we are committed to helping individuals and families protect and preserve their assets. For more information about how an estate plan can help you meet your financial goals call us at 804-368-7397 or email me at jc@toruslaw.com

There are several consequences with treating individuals who are really employees as independent contractors. The first is if you get caught you’ll likely have to pay back federal and state taxes and penalties and you’ll have to pay the commission what its owed due to the mis-classification.

Mis-classifying individuals may also expose the company to significant liability if the mis-classified individual is injured and sues the company. A third consequence is that your employment tax may be increased to the maximum of over 6% of the first $8,000.00 in wages paid.

The Internal Revenue Service has published guidelines about how to determine if someone is an independent contractor or employee.

Another common mistake is the challenge of firing someone without relating the firing to the company’s policy manual. Correcting this requires having a policy manual and procedures that inform new hires about the manual, particularly the consequences of violating company polices and procedures.

At Torus Law we are passionate about helping our business clients dream, plan, build and succeed. If you have questions about how to classify staff or what should be in a policy manual call me at 804-368-7397 to send an email to jc@toruslaw.com

At Torus Law we value building win-win relationships based on principles and practices that model trust. For example, if we don’t know something we’ll tell you. And we if can’t help you we’ll find someone who can.

For more information or to schedule an appointment to learn how we help clients Dream, Build, Plan and Protect their ideas, strategies and results call 804-368-7397 or visit us at www.toruslaw.com.

One of my favorite restaurants is a little Mexican place in Utah called El Chubasco. I’ve often eaten there twice in a day, and once (it’s true) ate there three times.

It’s always crowded. Sometimes people wait outside, in the cold, even though there are plenty of alternatives within walking distance. So, what’s the secret? Why is it worth a drive and a wait?

No specific reason. The energy of owners Jill and Craig is certainly part of it, but most customers never encounter them. I think it’s the hand-fitted gestalt of thousands of little decisions made by caring management out to make a difference. Usually, when a business like this gets bigger or turns into a chain, marketers make what feel like smart compromises. The MBAs collide with the mystical, and the place gets boring. “Why do we need 14 free salsas when we can get away with six?” or “Perhaps we ought to stop handing out huge tumblers of water for free–our bottled water sales will go up.”

This turns out to be the secret of just about every really successful enterprise. Sure, you can copy one or two or even three of their competitive advantages and unique remarkable attributes, but no, it’s going to be really difficult to recreate the magic of countless little decisions. The scarcity happens because so many businesses don’t care enough or are too scared to invest the energy in so many seemingly meaningless little bits of being extraordinary.

The New York case relates to allegations against former Syracuse basketball assistant Bernie Fine. Apparently two former Syracuse ball boys alleged they were molested by Fine. In response to the allegations head coach Jim Boeheim, as reported on SI.com, quoted an ESPN interview in which Boeheim said, “It is a bunch of a thousand lies that [ ] has told.” Boeheim is also quoted as saying the allegations were about trying to get money. In response to Boeheim’s comments the former ball boys filed a defamation suit against Boeheim and Syracuse University.

What’s to learn from these suits? One of questions to ask is how you would respond in similar circumstances? Both of these cases involve highly charged emotions and issues. Under these circumstances it may be very difficult not to want to express your opinion particularly if you feel justified in doing so. However, in this day and age one thing we  have to remember is what you said five minutes ago could be on You Tube or Facebook in a matter of minutes. Individuals and businesses need to understand the times we live in; they need to exercise restraint and if they feel they have to express themselves they should do so in an environment that affords them protection as privately with an attorney, where the attorney client privilege would prevent even the most inflammatory comments from ever becoming public.

End Note: The phrase Lose Lips Might Sink Ships and Careless Talk Costs Lives were coined during WWI as part of the US war department’s efforts to limit giving useful information to the enemy.

1. Not using a screensaver;

2. Never turning off your computer; Nelson and Simek noted that turning off your computer once a day clears processes that didn’t terminate and applications that got tangled;

3. Always using eight character passwords. Nelson and Simek noted that anyone with any IT sophistication could crack an eight character password. However cracking a 12 character password would take 17 years;

4. Storing passwords on monitors, under keyboards or anywhere else that can be located. Passwords even 12 character ones should be easy to remember;

5. Installing illegal software in violation of copyright laws;

6. Not backing up your data and if you do back-up your data not doing a test restore;

7. Not having a PIN for your smart phone;

8. Depending too much on Outlook’s auto complete function.

For more information about these technology tips see www. lawyersweekly.com or contact Sensei Enterprises, Inc., in Fairfax, Virginia.

For more information about how our team of lawyers and other professionals can help protect and grow your business email me at jc@toruslaw.com or call me at 804-368-7397.

In a recent case a local judge allowed a creditor to pierce a corporation’s veil and sue the corporation’s lone shareholder. The judge allowed the suit against the shareholder noting that annual meetings were not held, separate books were not maintained and the corporation was grossly under capitalized.The creditor obtained a $137,454.00 judgment against the shareholder.

While corporations have to adhere to numerous formalities, LLC formalities are fewer and the consequence of not following them is less significant than failing to follow corporate formalities. And while having fewer formalities should not be the only reason to chose an LLC over a corporation it can be an important consideration depending on one’s personality.

If you’re considering starting a business call us to discuss which entity would better serve you. If you have a business that’s incorporated you should take some time to review if you’re meeting the formalities that apply to corporations.

Torus Law, Dream, Plan, Plan, Protect

JC Cancelleri, 804-368-7397 or jc@totuslaw.com

There are several corporate formalities that one has to perform to maintain the protection that corporations provide against individual liability. Among these requirements is the need to hold an annual meeting and the need to have separate books if you have separate corporations.

A recent Richmond case ACE Electric Co. Inc., v. Advance Technologies Inc., illustrates the consequences of ignoring the corporate requirements. My next post will briefly discuss what happened and will also discuss some additional differences between forming a corporation and an LLC.

There are five factors that must be satisfied to discharge income taxes:
1) the return date for the tax must be more than three years old. For example, the return file date for 2007 taxes was April 15, 2008. To satisfy this condition a bankruptcy petition would have to be filed after April 15, 2011.
2) The return has to be filed more than two years ago; and
3) Any assessment must have occurred more than 240 days before the filing of the bankruptcy petition; and
4) The tax return must not be fraudulent; and
5) The taxpayer must not have been guilty if a willful attempt to defeat or evade the tax.

If all five conditions are satisfied then the income tax would appear to be dischargeable. For example, if you were self-employed in 2007 but didn’t pay any income taxes for that year, if you meet all five conditions as stated above you should be able to discharge those taxes by filing a chapter 7. Of course you first have to be eligible to file a chapter 7. If you are eligible filing a chapter 7 could significantly reduce your tax burden.

To learn more about Torus Law and our commitment to help you grow your business through a process of Planning, Building and Protecting please call me at 804-368-7397 or email me at jc@toruslaw.com

By JC Cancelleri
100 Arbor Oak Drive, Suite 307
Ashland, VA 23005
Phone: 804-368-7397

For example, if I owed 20K and negotiated a 10K settlement the creditor will send me a 1099 for the 10K that it wrote off.  Because the IRS treats write offs as income I am going to have to pay taxes on the 10K the creditor wrote off.  Consequently before negotiating a settlement with any creditor ask your tax adviser what effects it will have on your taxes.  On the other hand consumer debts discharged through the bankruptcy process are not considered income and will not affect your taxes.

For more information about workouts, negotiating with creditors and the bankruptcy process please feel free to contact me. An adviser can help you make informed and often better long-term decisions.

Contact Info
JC Cancelleri
100 Arbor Oak Drive, Suite 307
Ashland, VA 23005
Phone: 804-368-7397
email JC

Part Two

Last week I posted a partial summary of an interview I did with Mindy Flanigan, PHR, a Human Resource Specialist with more than twenty years of experience.  In this article I discuss two of the strategic ways that Mindy brings value to businesses.

One way that Mindy strengthens businesses is by helping them minimize employments law risks.  As noted in my previous post there are numerous federal and state employment laws that businesses have to comply and contend with. As a human resource specialist Mindy helps businesses navigate the mind field of employment laws. For example, last week I referred a businessman to Mindy who called me wanting to know if his company could fire an employee who took an extended medical leave. The company had less than 10 employees.  Although the Family and Medical Leave Act may not apply due to the company’s size, the issue is still a thorny one because other equal employment opportunity laws may need to be considered.  Other  laws that could be implicated by other situations include the Fair Labor Standards Act, the American’s with Disabilities Act (ADA) and the Civil Rights Act of 1964.

Another way that Mindy strengthens businesses is by helping them maximize employee performance, which helps to reduce employment costs. It’s no secret that it can cost thousands of dollars to replace an employee who was transferred or fired due to a mismatch between the employee’s skills and the job’s demands. Mindy’s objective is to help employers hire the best people resulting in a productive work environment. Mindy recently placed a director of land surveying with an employer who after nine months still raves about the placement.

Helping businesses minimize employment risks and maximize employee performance are two of the strategic ways that Mindy helps businesses become more profitable. To learn more about Mindy’s services visit her web site at www.inspiringhr.com. or feel free to call me with your questions.

To learn more about Torus Law and our commitment to help you grow your business through a process of Planning, Building and Protecting please call me at 804-368-7397.

By JC Cancelleri, PC
100 Arbor Oak Drive, Suite 307
Ashland, VA 23005
Phone: 804-368-7397