A Christmas gift for employers
By Chuck Roach, Roach Law
This time of year it is common for employers to reward employees for their hard work through the year. It is also a good time for employers to conduct year-end reviews. With those themes in mind, I put together the following year-end checklist as a holiday gift for Indiana employers. I realize it might not seem like a very good one right now, but a little attention to some overlooked details can result in substantial rewards in years to come.
1. Employee versus Contractor: I continue to talk to small business owners who are confused about the distinction between paying workers as employees or as contractors. I often hear the term “contract employees”, which is somewhat of a misnomer. The issue is vital to your business operations, not just because you need to know what’s best operationally, but because failure to pay workers based on their proper classification can result in stiff financial penalties from the IRS. Review the rules for when a worker is legally deemed an employee and not a contractor…and remember that what you call them does not make a difference. It is how you treat them that matters.
2. Exempt versus Non-Exempt: This is perhaps the most overlooked issue among large and small businesses alike, and carries enormous financial risk. If an employee does not fit into a specific “exemption” under the Fair Labor Standards Act (FLSA), he or she must be paid overtime for hours worked in excess of 40 in one week. It doesn’t matter if you call them salaried or hourly. The key factor is (once again) how they are treated, and specifically what duties they perform on a daily basis that might fit within an exempt classification. Damages from employees who were misclassified and claim back pay for OT hours can be devastating.
3. Leave Laws: Depending on the number of employees, an employer may be subject to state and federal leave laws which require time off for serious health conditions, birth or adoption of a child and various other reasons. Certain laws apply not only to the employee, but to the employee’s relatives, when the employee is required to be absent to care for them.
4. Severance Pay: Federal and state statutes, as well as case law, apply to issues surrounding termination of employees, and the requirement of a release in connection with payment of severance. Failure to adhere closely to these requirements can result in the release being invalid, and thus the severance pay rendered worthless (at least as to the employer).
5. Terminations: The general rules regarding terminations of employees are fairly well known, but remain frequently overlooked. Absent a contract or policy to the contrary, employment in Indiana is “at will”, meaning the employer and the employee may terminate the relationship at any time and for almost any reason. The “almost” is important, because terminations based on an improper motive can result in employee claims for wrongful discharge and potentially large damages for loss of employment. Documenting rules violations or poor performance remains the best policy for employers looking to avoid lawsuits from disgruntled former employees.
With a little caution and advance planning, employers can receive the gift that keeps on giving, in the form of HR policies that keep employees happy and the boss legally compliant.
Home Ownership – Understanding the Paths to the American Dream
By Chuck Roach, Roach Law Office
A large part of my practice deals with real estate – saving property, buying property, renting property, etc. Often there is confusion about the ways one can accomplish home ownership. Here’s a primer:
1. Traditional Purchase: For most purchasers, home ownership goes through a mortgage broker or direct lender such as a bank. Often a real estate agent is involved, which can be extremely beneficial. Agents act to shepherd purchasers through the process, including signing of an agreement to purchase, making application for the mortgage, and proceeding to closing. In a traditional scenario, the bank lends money to the purchaser to buy the property, with the purchaser signing a promissory note and a mortgage. The note is the purchaser’s personal promise to pay back the loan over time. The mortgage is the “safety net” for the lender in which the property is pledged as collateral for the loan. The buyer owns the property as of closing – evidenced by a transfer of the deed to the buyer – and the bank retains a security interest in the property. If the buyer fails to make payments, the lender can foreclose.
2. Land Contract: Sometimes due to a lack of credit or poor credit, a buyer cannot qualify for a mortgage loan. In these circumstances, a seller may agree to a land contract, allowing the buyer to purchase property with a small down payment, followed by payments over time. Although the payments may be based on a 15 or 30-year “traditional ”timeframe, often the contract requires the buyer to pay off the existing balance at the end of 3 to 5 years. This is usually done through the traditional financing described in #1 above, after the buyer has rehabilitated their credit and can qualify for a loan. In a land contract, the seller typically retains ownership on the deed until the buyer complies with the contract by paying off the purchase price in full.
3. Rent to Buy: In still other cases, buyers have neither the qualifying credit nor the minimum down payment a seller requires for a land contract. In these cases a seller may agree to allow the buyer to begin renting the property for a period of time. At a certain trigger point (based on a period of time or number of payments), the buyer is required to obtain traditional financing to purchase the property at a price established in the original agreement. A variation of this method is a “Lease with Option to Buy”, in which a buyer is allowed flexibility to make a full purchase of a property under certain conditions, at any time during the period of the lease term.
Beyond these methods, there are dozens of variations to be considered based on the motivations of the buyer and seller. Particularly, in the past several years parties have been forced to be creative in the transfers of real estate. The result has been positive for the real estate market overall, because anyone who wants to buy property has become increasingly aware of non-traditional methods. Under the right circumstances, there is virtually no situation in which a buyer cannot find their way to home ownership with some tenacity and creativity.
Kyle Adamson opens ice cream and coffee shop catering to Christian values
Samantha Okey and Kyle Adamson stand in His Place, LLC. The ice cream and coffee shop will feature live Christian music and values.
By Nicole Davis
Kyle Adamson said he noticed a hole in the community when he was helping a friend find places to perform his Christian music. He said he knew he could give the community a service they would enjoy and fill that gap at the same time. After four years of research and planning, Adamson and his wife, Cheryl, opened His Place on Nov. 16. They will celebrate their grand opening on Nov. 24.
“I think a gourmet coffee shop and full-service ice cream shop have perfect synergy. They complement each other. You come get ice cream and coffee to treat yourself.”
Though the White River Township location was the second choice for the Beech Grove resident, Adamson said it turned out to be a blessing. This building gave him a larger space, part of which he used to construct the drive-thru. It is also surrounded by many churches and schools to which he caters to.
Adamson said they modeled His Place after other successful business models, especially Chic-Fil-A’s. His Place is open Monday-Saturday, and closed on Sundays.
Adamson said he likes to show his creative side whenever possible and was able to do that with the menu. With more than 50 available sundae options, he said many were named after family members, local schools including Beech Grove, Greenwood and Southport and Indiana-based colleges.
“People asked when we would open before, while we were still building,” Adamson said. “The response has been fantastic. So now it’s about getting the word out.”
Why did you open this business?
My wife and I, Cheryl, want to give an opportunity to provide a unique ice cream, coffee shop destination with incredible customer service with a focus on local music.
What did you do to prepare for opening your business?
Lots of research. This has been in the planning for four years. I have a sales and marketing background. We researched competition, locations…
Who is your ideal customer/client?
We really want to make this a family atmosphere. We are marketing more from teenagers to young family.
How do you plan to be successful?
By keeping our quality of food/drinks, customer service and community outreach consistently at a very high level. Always be willing to change to meet a customer’s needs.
What would we be surprised to learn about you or your company?
All we have to offer – drive-thru, 50 unique sundaes, outdoor seating, live music.
His Place, LLC
Corner of Fairview Rd and HWY 37
337 Western Blvd.
Greenwood, IN 46242
The ‘Handshake Test’ still means something
By Chuck Roach
I have practiced law since 1992. I’ve started two firms, worked for two large firms, and was in-house counsel for a public company. In that time I have reviewed or drafted countless contracts. So it may be surprising when I tell you the most important aspect of contract law I have learned in my career: The best contract is the one you negotiate aggressively and fairly….execute…and never look at again.
Clients are often puzzled by this comment. Occasionally I will get the response that a contract is the bedrock of the relationship to be consulted often and used as a hammer. My view is a bit different. Make no mistake, written agreements are a necessary part of doing business and formalizing relationships. But at least in the small business world, there is no substitute for finding work relationships with business associates you would do business with “on a handshake.”
Be assured that I am not suggesting that businesses actually forego the use of contracts. What I am suggesting is that if my client anticipates the need for frequent consultation with the “remedies for breach” section, they may want to consider walking away entirely. A contract’s most noble purpose is to initiate and formalize a long-term arrangement between trusted individuals or businesses, and to specify the terms of the deal. Thereafter, often I encourage clients to consider it a safety net only, to be consulted only in times of good faith disagreement, and in worst case scenarios in which the relationship is in jeopardy. When managers are forced to cite “section 4, paragraph 3(c)”, usually it is a sign of trouble brewing in the deal.
With this as a backdrop, there are some basic principles of contract law with which all people should be familiar. Relationships should be well-documented, with clear obligations – and benefits – clearly set forth for each side. And of course, penalties for breach should be included. Several provisions are vital, and are often overlooked. A few examples: (i) Attorneys’ fees provisions allowing a party to recover costs of enforcement for breach; (ii) choice of jurisdiction (Indiana) and venue (e.g., small claims township); (iii) confidentiality, if this is deemed important; and (iv) a requirement that changes to the agreement be in writing and signed.
Choose your business partners wisely, and here’s to hoping that your contracts are well-done, signed…and locked up forever.
Business Check-Ups – Is It Time for Your Company to “See the Doctor”
By Chuck Roach, Roach Law Firm
Like most people, I put off going to the doctor. If I’m feeling good it seems unnecessary, and if I’m not feeling good they carry the potential for bad news – and expenses. The same holds true for business owners. I have clients for whom I formed businesses 10 years ago, and would wager they have not looked at their corporate or LLC minute book since. But a business check-up does not need to be painful or expensive, and often it can provide enormous benefits that will aid in the growth and sustainability of the company.
For small business owners, a legal check-up is not just a precaution against legal pitfalls. It’s a way to protect business assets, discover and formalize “unrealized” assets, and get the administrative house in order for a future sale or handoff of the business.
For my clients, I encourage a rundown of the OPTIMA checklist:
O – Organization – Is the business still properly organized as a sole proprietorship, LLC or corporation? Is there a better entity now based on growth or accounting and tax considerations? Are required annual minutes and records up to date?
P – Protection – Are ownership interests protected from “surprise” transfers to third parties, such as on the death of a shareholder, through a buy-sell agreement? Is confidential information protected for prospective business deals through non-disclosure agreements?
T – Trademarks and Intellectual Property – Has the business developed a logo or “brand recognition” that now carries significant value on its own, and therefore needs protection through trademark registration? Is there other intellectual property the company has developed that needs protection through copyrights or patents?
I – Investors and Capitalization – Does the business have enough cash or capital for continued growth? If not is there a plan to attract investors with partial ownership in the company, or through attractive loan terms?
M – Management of Vendors, Employees, Customers and Contractors – Does the company have an employee handbook or policy manual to address compliance with applicable HR laws? Are there non-compete agreements needed to reasonably restrict competition from departing key employees? Are service and sales contracts up to date with vendors and customers?
A – Asset and Stock Sales of the Company in the Future – At some point every company changes hands – either succession to the next generation in a family business, or sale to a third party. Is the company in position to maximize the value of its assets and stock to assure a smooth and mutually beneficial transition?
If you own a business – no matter how small – ask yourself these questions. If you decide it’s time for your business to finally “see the doctor”, make the call to your counsel. You will be glad you did.
Reading the Coupons
By Amber Yowler
The thought of using a single coupon to several coupons in a transaction, can be a daunting task, when it comes time to enter the check-out lane. With the looming thoughts of; is the coupon being used properly or will the coupon scan, may make the whole process a bit intimidating. All couponers should learn how to read their coupons, to help ensure a quick and easy transaction at the register.
These are a few of the most common wording consumer may see on the coupons:
Limit one coupon per purchase: All this is stating is the consumer is allowed one coupon per item.
Limit one coupons per transaction: The best way to remember this is transaction equals receipt. The consumer may only use one of a particular coupon per transaction.
Limit one coupon per day/visit: This is stating that only one like coupon may be used per store visit.
BOGO or Buy One Get One Free: This means the consumer may buy an item and get an item free.
This is just the beginning of a long list of the various wording that may appear on the coupons. Coupon wording is changing all the time and sometimes may be interpreted in many different ways, so it is important to always read the coupons before making a purchase. To find an updated list on how to decipher the coupons go to http://www.couponingmadesimple.com/2012/01/couponing-basics-part-3-deciphering.html.
Many times the wording can be confusing for the consumer and for the store employees alike. If the consumer equips themselves with the understanding and comprehension of what the manufacturer expectation for a particular coupon is, the more likely the coupon will be used properly. If a coupon reads with some uncertainties, then it is always best to check various couponing websites, ask the store manager or call the manufacturer to help make sense of the coupon.
Coupon fraud causing change in coupon policies
There are many changes going on in the couponing world. With the rise in coupon use and coupon fraud we are not really surprised. According to the CIC coupon fraud costs consumer product manufacturer’s hundreds of millions of dollars every year. (http://www.couponinformationcenter.com/faq.php)
As of Sept. 1, 2012 one of the largest retail store WalMart has decided to make major changes within their coupon policy mainly due to fraud.
WalMart has updated their cash register system to accept the new bar code now printed on the coupons. The GS1 DataBar is a bar code that contains more information such as product weight, size, and price and expiration date. This bar code system has been present on many coupons since 2009 but is now more widely used.
One of the biggest changes in the WalMart coupon policy is; if a coupon does not scan it will not be accepted. Also the cashiers will no longer be permitted to scan a coupon with the hand scanner. WalMart managers are also not allowed to override the register and enter the coupon into the system. The employees have been instructed to simply hand the coupon back to the consumer if the coupon does not scan.
We understand that this may cause many issues at the register but we recommend always being a courteous consumer. Remember the cashier is an employee of Walmart and does not make the rules.
We always recommend taking the knowing your favorite stores coupon policy and if possible make a copy of the coupon policy to take with you to the store. For Walmart, find a complete coupon policy at http://corporate.walmart.com/coupon-policy.
Walmart is not the first retail outlet that has taken this approach but with fraud on the rise we may find other stores following suite.
By Chuck Roach
-Roach Law Office
A buy-sell agreement is an important part of properly protecting your business and the interests of the owners. Sound business planning dictates that a buy-sell agreement be used in any business structures (corporation, LLC, partnership, etc.).
The buy-sell agreement is a form of “prenuptial agreement” among owners of a business venture. It is designed to protect each of the owners from having ownership interest transferred to a third party without their approval or consent. In cases in which one owner desires to sell his shares, it prevents an owner from doing so without the consent of the other owners, or without the opportunity to allow the other owners to buy the shares first. It also provides surviving owners with control over shares, in the unfortunate event that one of the owners passes away unexpectedly, or becomes disabled.
The agreement usually takes one of three forms:
• Cross-Purchase Agreement — In this form, a withdrawing owner agrees to sell his interest to the remaining owners. It is suitable for the small business with only a few owners. As the number of owners increase, this form can become unwieldy. In a larger business or if the individual members prefer, an entity-purchase agreement may be more suitable.
• Entity-Purchase Agreement — In this form of the buy-sell agreement, the withdrawing owner agrees to sell his interest to the entity, which then retires the ownership interest.
• Hybrid Agreement — This form is a combination of the first two. Typically, the withdrawing owner must first offer his ownership interest to the entity. If the entity declines or is unable to make the purchase, then the shares must be offered to the other owners.
The purchase of shares from a deceased or departing owner can be accommodated through the purchase of insurance for this purpose. For start up or young companies, such insurance may not be necessary, as long as the owners agree that payments can be made over time.
As with any planning for businesses, the time to prevent disputes or problems is before they occur. Dealing with the contingencies of a deceased or disabled owner, or the simple desire of an owner to sell his shares to a third party, can be made much simpler via use of a buy sell agreement. Legal fees as well as sleepless nights will be minimized if owners agree to the “What Ifs” well in advance.
By Amber Yowler
Many Dollar Tree stores in Indiana were pilot stores in accepting manufacturer coupons and as of Aug. 26 all Dollar Tree Stores are accepting manufacturer coupons. This is super exciting news.
Sophia and I visited one of the Dollar Tree’s pilot stores on several occasions and our shopping experiences were all wonderful. Knowing their store coupon policy was essential for hassle free shopping. It is always important to be familiar with the store’s coupon policy.
Dollar Tree will not accept buy one, get one free coupon nor will they accept coupons that are for free items with no purchase requirements. The policy also clearly states that management has the right to refuse any coupon and can limit quantities. If a coupon states only four like coupon in a transaction the store will only allow four like coupons to be used in a transaction. However the store did allow Sophia and I more than one transaction but it is solely up to the store manager’s discretion. We suggest if you need or want to do more than one transaction to ask the manager before getting into line. This will allow for a smooth and stress free check-out at the register.
Another thing to think about is to watch for size restrictions on the coupons. Sometimes the products available at Dollar Tree are smaller in size than what may normally be purchase at different retail stores. With that being said Sophia and I have scored some free items from Dollar Tree such as hand soap and mascara.
Check out Dollar Tree’s Coupon Policy at: http://www.dollartree.com/custserv/custserv.jsp?pageName=TermsConditions.
By: Chuck Roach
As you are probably aware, the making of a will is an extremely important procedure to ensure that your estate is distributed in the manner you desire, and/or that your children are provided for in the event of your death. A complete estate plan will usually include one or more additional documents in order to simplify the probate process after death, or to make wishes known when an individual is unable to speak for himself or herself. The following are answers to common questions regarding wills and other pre-planning documents.
Q: What is a will?
A: A will is the means by which one controls the disposition of his or her property at death by specifying the names of the persons who are to receive that property. Each state has laws which must be followed strictly when drafting a will. After death, the will is presented to the Probate Court. Upon proof of the will by one of the subscribing witnesses and approval of the court, the will is admitted to probate or “probated”.
Q: What is probate?
A: Probate is the process by which the property of a deceased person (i.e. the decedent) is distributed to his or her heirs when there is no will (intestate), or to the designated beneficiaries when there is a will (testate). In Indiana, if the value of the decedent’s property is greater than $50,000, the property must be offered for probate.Except for small estates, the probate process is usually administered by a specific court in the county where the decedent lived. The first functions of the probate court are to see that the decedent’s estate is administered in accord with all applicable laws and that the rights of the decedent’s heirs, beneficiaries and creditors are protected. As a general rule, the probate process terminates with the distribution of the decedent’s property (real estate and tangible and intangible personal property) to heirs or beneficiaries lawfully entitled thereto, after the payment of lawful claims, taxes and expenses.
Q: What is a personal representative?
A: A personal representative is the individual appointed by the probate court to take charge of the decedent’s property during the probate process. The personal representative must identify, locate and assume control over all of the decedent’s property. He or she then must pay lawful claims against the decedent’s estate, including the decedent’s debts, income taxes and death taxes and expenses of administering the estate.
Q: Is every estate subject to inheritance and other death taxes?
A: Although decedent’s estates are sometimes not subject to inheritance and other death taxes, the possibility of such taxes should be anticipated. Usually, the only death taxes affecting Indiana residents are Indiana inheritance tax and federal estate tax. Of these two taxes, many more estates are affected by Indiana inheritance tax than by federal estate tax.
Q: Are there any other documents I may need?
A: Most estate planners agree that every individual should have a Last Will and Testament, a general and healthcare power of attorney and a living will. These essential documents assure that one’s property is treated as desired in the event of death or incapacity. Specifically, in the event of incapacity, there is the assurance that real and personal property are managed in the manner desired while one is incapable of doing so.
Q: What about trusts?
A: A living trust (i.e., a trust created while a person is alive) allows an individual to put property into a trust account so that it passes automatically to heirs without going through the probate process. Usually it can be revoked at any time if the creator of it changes his or her mind.
Q: How expensive is it to have a will or other pre-planning documents prepared?
A: Although all attorneys have different fee schedules for preparation of these documents, in most cases the fees will be much less than clients anticipate.