Tag: Epiphany Law

Driving Value Before an M&A transaction

The Mergers and Acquisitions market continues to be hot. While it was initially unclear how the pandemic would affect it, the M&A market has proven to be highly adaptable and has recovered nicely. Historically low borrowing costs means motivated buyers, and while it continues to be a seller’s market, smart business owners are those that are still looking for opportunities to put their business in the best position to capture the highest possible price.

One avenue that many sellers go down is the private equity route.  But while there is a lot of private equity money chasing deals, private equity buyers are still some of the sharpest acquirers out there.  They will evaluate the business from all angles, and if there is a problem – or just an opportunity to drive the sales price down – they’re going to find it.

To prepare for that sort of sophisticated buyer, the smart seller needs to address potential problems before the sale. With appropriate time, there is significant ability to fix problems and to drive meaningful value.

One to five years before a sale, a business owner needs to stay focused on achieving the following.

  • Showing positive growth rates in sales, earnings and EBITDA
  • Developing strong EBITDA margins compared to competitors
  • Developing recurring revenue streams
  • Diversifying (where possible) your customer base and cleaning up your contractual relationships
  • Develop a succession plan that empowers managers and eliminates excess dependence on key people
  • Optimize your legal, operational and tax structure to maximize your post-tax sales price
  • Settle litigation and pre-litigation claims whenever possible
  • Evaluate and protect your branding and IP portfolio

Even if you are not thinking of selling today, most business owners will receive one or more unsolicited offers at some point, and it’s important to be prepared. Waiting until a deal is imminent will only erode value. Unfortunately for business owners, the best time to sell is probably not the time they actually want to sell. While personal timing is important, business owners looking to maximize their sale price need to be flexible and take advantage of the market.

Next Steps

The selling of a business can take six months – or longer – so preparing ahead of time is key. Consider your advisors early. A private equity buyer may purchase 20 businesses a year. That can be intimidating for a business owner who only has one chance to sell their company. The stakes are incredibly high and assembling a team of expert advisors and giving yourself time to address liabilities is the best way to ensure you will be satisfied with your sale.

To learn more about M&A in a post-Covid world, join me for the virtual Deal Makers conference on February 18. I’ll be part of a panel discussing how middle market companies can manage risks and maximize value during the sale process.

 

DOL Overtime Law

Consolidated Appropriations Act 2021: What Employers Need to Know

On December 27, 2020, the U.S. government enacted the Consolidated Appropriations Act, 2021, which is the second-largest federal stimulus package after the $2 trillion CARES Act passed back in March. Within the bill is the Coronavirus Response and Relief Supplemental Appropriations Act (the “Act”). The Act was enacted to help relieve the financial stresses businesses are experiencing during this economic downfall. The Act extended the Paycheck Protection Program (the “PPP”), enhanced the Coronavirus Aid, Relief, and Economic Security Act’s (the “CARES Act”) relief, and provided additional relief. Below is a summary of changes to the PPP, tax provisions, business meal deduction, and employment benefits.

Expansion of the Paycheck Protection Program

The Act added an additional $284 billion for forgivable PPP loans and extended the program to March 31, 2021. Small businesses categorized as “hard-hit” businesses that received PPP loans in 2020 will be eligible for a second round of funds. The eligibility requirements for the second round of PPP loans are:

  • Have 300 or fewer employees;
  • Have used or will use the full amount of their first PPP loan; and
  • Show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.

The additional eligibility requirements stated above do not apply to first-time borrowers. The size of a PPP loan is limited as follows:

  • A business may obtain 2.5 times its average monthly payroll; or
  • A business in Accommodation and Food Service (NAICS Code 72) may obtain 3.5 times its average monthly payroll.

The second round of PPP loans are capped at $2 million per borrower; whereas, the first-time borrowers remain capped at $10 million.

Enhancements to the PPP

Expanded forgivable expenses, including:

  • Operational Expenditures: software and cloud computing service payments used to facilitate, without limitation, business operations, service or product delivery, payroll, processing, billing, accounting, inventory, and human resource functions.
  • Supplier Costs: payments to suppliers of goods that are essential to operations at the time made pursuant to an order or contract in effect prior to the covered period.
  • Property Damage: costs related to any public disturbances that occurred in 2020, to the extent not covered by insurance or other compensation.
  • Worker Protection Costs: costs related to compliance with regulations issues by CDC, HHS, OSHA or any state or local government authority after March 1, 2020 and ending on the date when the national emergency declared by the president related to Covid-19 safety measures expires.

Additional Notable Updates

  • Expenses paid with proceeds of PPP loans are deductible for income tax purposes, a change from prior IRS rules. This may be the most significant change for many businesses.
  • Borrowers may self-elect a covered period between 8 and 24 weeks from receipt of the PPP loan.
  • Repealed the requirement that borrowers must deduct the $10,000 Economic Injury Disaster Loan advance amount from the forgivable amount of the PPP loan.
PPP Loan Proceeds

A business whose PPP loan is forgiven is not required to include the amount forgiven in gross income. Also, tax deductions are permitted for otherwise deductible expenses paid using the proceeds of a forgiven PPP loan, and there is no corresponding reduction in the basis of business assets. Therefore any forgiven PPP loan is effectively tax-exempt income.

Other Provisions
  • Employers who deferred withholding of the employee payroll taxes under the presidential memorandum dated August 8, 2020 now have until December 31, 2021 to arrange for withholding from employees and repay the deferred amounts.
  • Businesses that receive CARES Act loan forgiveness are not required to include amounts forgiven in income and are permitted tax deductions for otherwise deductible expenses paid.
  • Employer tax credit for paid family and medical leave extended through 2025.
  • Employer may continue to pay up to $5,250 per employee toward an employee’s “eligible student loan repayments” and the payments will be excluded from employee’s income through 2025.
Business Meal Deduction

The Act increased the limit on deducting business meals, including takeout and delivery meals, provided by restaurants to fully deductible. This rule applies to expenses paid or incurred in 2021 and 2022. All other existing requirements continue to apply when you dine with current or prospective customers, clients, suppliers, employees, partners, and professional advisors. Thus, to be deductible:

  • The food and beverages cannot be lavish or extravagant under the circumstances; and
  • You or one of your employees must be present when the food or beverages are served.

If food or beverages are provided at an entertainment activity, either they must be purchased separately from the entertainment or their cost must be stated on a separate bill, invoice, or receipt. This is required because the entertainment, unlike the food and beverages, is nondeductible.

Impact on Labor & Employment

Unemployment Benefits

The Act extended existing pandemic unemployment insurance programs under the CARES Act, the Pandemic Unemployment Assistance program, and the Pandemic Emergency Unemployment Compensation program. The Act provided an additional 13 weeks of benefits to those individuals who have exhausted their regular state benefits in addition to a supplemental federal unemployment benefit of $300 per week for up to 10 weeks to March 14, 2021. Additionally, the Act added program integrity provisions that require documentation of earnings and employment and compelled states to have processes for verifying an applicant’s identity to combat fraud and abuse in the unemployment programs.

Paid Sick Leave

The Act provides a tax credit to support employers that offer paid sick leave to employees. The Families First Coronavirus Response Act is no longer required as of December 31, 2020, but if covered employers voluntarily provide these benefits through March 31, 2021, those employers are eligible to take the tax credit for the leave. Also, the Act extended refundable payroll tax credits and employee eligibility for the paid sick and family leave to March 2021.

Next Steps

When it comes to the Coronavirus Response and Relief Supplemental Appropriations Act, there are a lot of changes for employers and business owners to know. It is important to understand all your options and develop a strategy to maximize your benefits. Epiphany Law attorneys will partner with you to create a plan that will help your business efficiently and effectively achieve your desired results. You can contact us here.

Epiphany Law, LLC Advises Tundraland on Acquisition of Renewal by Anderson.

Epiphany Law is pleased to announce that it represented Tundraland, a Kaukauna-based home improvement business, in the acquisition of the Milwaukee window company, Renewal by Anderson.

Tundraland Home Improvements LLC, which operates in Wisconsin and Arizona, announced the acquisition Wednesday, Dec 2, 2020. Tundraland is the parent company of Jacuzzi Bath Remodel of Wisconsin, Decks in a Day, Jacuzzi Bath Remodel of Arizona and Renewal by Anderson of Greater Milwaukee.

As a result of the acquisition, Tundraland will expand its workforce in the Milwaukee area. Tundraland said the company plans to add more than 100 new jobs in the Milwaukee area in the upcoming months.

“Renewal by Andersen of Milwaukee has a 20-year ‘Best in Class’ track record for delighting their customers,” said Brian Gottlieb, CEO and founder of Tundraland, in a news release

“They have a culture of excellence, which makes them a great fit. Like all the markets we serve, we’re excited to bring a unique and impactful level of community outreach to Milwaukee that makes us more than just a home improvement company; instead, a brand that’s woven into the fabric of the community.”

Tundraland, a privately held company, has more than 400 employees. It has its headquarters and a showroom in Kaukauna with another showroom in Wausau. Tundraland operates production facilities in McFarland and Pewaukee.

Epiphany Law Partner, Rob Macklin led the deal team, which also included Partner Katie Blom, as well as Associate Shane Anderson.

 

Media Contact:

Epiphany Law, LLC

Shannon Daniels

Marketing Director

sdaniels@epiphanylaw.com

920.996.0000

www.epiphanylaw.com

Epiphany Law Manufacturing Law

Can You Lose Your Corporate Protection?

What Every Business Owner needs to Know

Ask any business owner why they incorporated their business and one of the reasons they’ll give is “to protect myself from business liabilities.” But incorporating doesn’t mean you can never be held personally liable. Although it’s rare, courts sometimes ignore the legal protection of a corporation to hold an owner personally liable (a process called “piercing the corporate veil”).

The good news is there are steps you can take to avoid having a court pierce the corporate veil. Piercing happens when the court decides that you, as a business owner, haven’t really treated the corporation as a separate entity. In Wisconsin, the same theory applies to LLCs and their members as well. Essentially, the courts are saying that if you want the protection of incorporating, you have to follow corporation rules.

To avoid piercing:

  • Always follow corporate formalities, like holding annual meetings, keeping minutes and filing with the state on time
  • Never mix corporate assets with your personal ones (or those of another corporation or LLC)
  • When setting up your business, make sure it’s adequately funded. Courts are more willing to pierce an “undercapitalized” business
  • Always identify your business as a corporation or LLC so customers and creditors are on notice that your business has limited liability. Also identify your title so they know you’re acting on the business’ behalf
  • Never use your business to engage in illegal, fraudulent or reckless activities

Having a court pierce your business’s veil can be devastating for you as an owner. But by following the rules, you won’t give the courts a reason to pierce. And, always make sure to get the advice of a trusted business attorney if you are unsure about any of the guidelines. That way you and your business can take advantage of the protections offered by corporations and LLCs.

 

Dispute resolution: litigation v. mediation

Litigation vs. Mediation

In business, it’s common for disputes to arise. Developing cost effective strategies for dispute resolution is critical for achieving a healthy bottom line. Because employers and business owners generally seek to avoid litigation (it is time consuming, expensive and emotionally draining), mediation has become more common.  The below summary compares the differences between mediation and litigation and provides insights as to why the popularity of mediation is on the rise.

Employers and Business Owners understand

Litigation – Refers to a formal process that uses either state or federal court to resolve the dispute. To determine the court, you must examine the claim(s) asserted, the amount at issue and where the parties reside. Though you filed your claim with the court, the judge may require the parties attempt to resolve the dispute through mediation.

Mediation – Refers to an informal and confidential process that uses a neutral third-party, the mediator, to help the parties discuss their differences and consider potential solutions to those differences. If the parties cannot reach an agreement “that both parties can live with,” you still have the right to file a claim with the appropriate court to have a judge or jury determine the outcome of your case.

Where is the process held?

Litigation – Hearings are held telephonically or in the court room.

Mediation – You and the other party determine if the mediation is held at your counsel’s office, opposing counsel’s office, the courthouse, the mediator’s office, or even virtually. Depending upon the mediator’s and/or the parties’ preferences, the parties may be placed in the same room or in separate rooms. If in separate rooms, the mediator will walk between the rooms and present each party’s positions, thoughts and arguments to the other party.

Are the conversations confidential?

Litigation – Correspondence is not confidential and can be used as evidence at a hearing unless the correspondence is related to negotiations between both parties’ counsel to resolve the dispute.

Mediation – Correspondence and evidence presented during a mediation session is confidential and cannot be used by the other party as evidence at a hearing.  The mediator cannot be called to testify and will maintain the confidentiality of everything learned through the mediation.

What is the length of the process?

Litigation – The litigation process typically takes 2-3 years to reach a court judgment. The case may extend beyond 3 years if multiple motions are filed and depending on how complicated the claims are.

Mediation – The mediation process typically takes less than a year, and can sometimes be resolved within weeks. It often depends on the mediator chosen and schedules of all involved. Sometimes, you may attend multiple mediation sessions if both parties are continuing to progress towards a resolution.

Who determines the outcome?

Litigation – Judge or Jury. Besides presenting your case, the outcome is completely out of your hands and in the hands of the judge or jury.

Mediation – You. The mediator does not tell you who is right or wrong. The mediator does not render a decision. The Mediator is there to guide the conversation between you and the other party. Ultimately, you are the one presenting, crafting and responding to potential solutions. You are the one making the decision to accept or decline a solution. The outcome of the mediation is in your hands.

What is the potential outcome?

Litigation – The judge or jury determines a winner and a loser. The judge or jury determines the damages owed to the winner based on claims presented, case law and statutes.

Mediation – Both parties are winners. The parties, of their own accord, mutually decide to end the dispute and accept an outcome that both can live with at the end of the day.

What will the process cost?

Litigation – Below are conservative estimates of costs expected to reach a court judgment in Wisconsin courts. The costs will vary depending on the complexity of your claims and/or the dispute itself. For instance, if your case requires expert witnesses, you will pay more than the estimated costs. Also, the opposing party and/or counsel may cause your counsel to have to submit motions and briefs, which will increase your costs above the estimated costs. Remember, though, that you and the opposing party may settle the dispute prior to receiving a court judgment.

Court Filed in Represented by Counsel Costs
Small Claims Yes Filing Fees plus $5,000
Small Claims No Filing Fees
Large Claims Yes Filing Fees plus $25,000 – $50,000
Large Claims No Filing Fees
Federal Claims Yes Filing Fees plus $30,000 – $60,000

**Wisconsin and Federal Courts require companies be represented by counsel in Large Claims.

Mediation – Mediators usually charge between $250 – $350 per hour. If your case requires knowledge of a unique field or industry, the mediator may charge more than $350 per hour.

What about receiving my legal fees?

Litigation – Whether you receive legal fees depends on statutes, contract language and the discretion of the judge. If statutory or contract language allows the winning party to receive legal fees, the judge will determine the reasonable legal fees that the losing party will pay. The table below shows what you will receive if the judge awards legal fees.

Court Filed in Legal Fees
Small Claims $150 if judgment in favor; $300 if represented at trial and judgment in favor
Large Claims Reasonable fees – depends on contract and/or statutory language
Federal Claims Reasonable fees – depends on contract and/or statutory language

Mediation – Whether you receive legal fees depends on the other party’s willingness to agree to pay your legal fees. Most likely, the other party will not explicitly agree to pay your legal fees.

How do I locate a mediator?

The state bar association has a list of mediators who can be contacted for an appointment. However, it is advisable to work with your attorney first to determine if mediation is right for your case.  Your attorney will spend time investigating and selecting the right mediator for your case.

Would you like to learn more about mediation? Contact us here. Epiphany Law Partner Heather Macklin is an accredited mediator with over 20 years of litigation and dispute resolution experience.

Real Estate Law

COVID-19 and the Effects on Real Estate

 

On April 25, 2020, the Wisconsin Department of Agriculture, Trade, and Consumer Protection (the “DATCP”) enacted a new temporary law in response to Governor’s Emergency Order #72, the Health Emergency Order.  The new temporary law prevents residential landlords from enforcing or seeking late fees or penalties for nonpayment or late payment of rent against their residential tenants. This rule will be enforced from April 25 until the earlier of September 22, 2020, which is when the new temporary law expires, or 90 days after Governor’s Emergency Order #72 expires.

Because the DATCP did not enact the rule until April 25, residential landlords may charge their residential tenants late fees or penalties for nonpayment or late payment of rent for those days prior to April 25th.

In addition to the implementation of the new temporary rule, the courts themselves are beginning to adjust their processes to Covid-19. For example, the Outagamie County Courthouse released a statement that small claims plaintiffs, not the defendants, including landlord-tenant disputes, should not appear for the initial hearing. So, pay attention to your court’s local rules to determine how to proceed with your case.

If you have a question regarding landlord-tenant law, please contact Epiphany Law, LLC at 920-996-0000 and I am happy to answer your question.

Does Your Company Have a Return to Work Strategy?

Article co-written and researched by attorneys Tracy Melvin and Alexis Merbach.

Many businesses are still figuring out how to manage HR issues in a pandemic. They are following the changes in every order and stimulus/relief package passed, and effectively rolling with the punches. Among the confusion and uncertainty, they have found ways to persevere. However, as states and cities now start to reopen—in turn allowing businesses to do the same—there is one question that remains…is the business prepared to get back to work?

There are several policies to consider as a business reopens. Some policies may not be new to the organization and likely are already be in place. Regardless, now is a great time to dust them off. Having correct policy documentation in place is crucial to ensuring the organization is proactively approaching and appropriately responding to the impact of COVID-19.

Businesses should draft or update the following policies as they work to reopen their doors:
  • Telework – Have a clear policy that outlines expectations for remote workers.
  • Anti-harassment & discrimination – There have already been many stories of employees being treated differently because they have or suspect they may have contracted COVID-19. Ensuring anti-harassment and discrimination policies are in place can set expectations and help minimize any potential risk.
  • Reasonable accommodations – Have a policy in place detailing how you will engage in an interactive reasonable accommodation process.
  • Overtime – To combat any wage & hour issues, employers may want to consider a policy requiring overtime to be pre-approved.
  • “Off the Clock” Work – Considering some employees may still be furloughed, laid off, or on reduced-hour schedules, implementing an “off the clock” policy makes it clear that employees are prohibited from checking e-mail, making phone calls, etc. for free. Employees must be compensated for all time worked.
  • Safety – Document workplace safety measures, including policies for proper cleaning, protective equipment, and social distancing measures, that have been put in place to prevent spread of the virus.
  • Health & wellness – Draft policies related to any health questionnaire or temperature check process, including that any health information will be properly protected.
  • Leave – Consider implementing a temporary leave request policy related to the two paid leaves under Families First Coronavirus Response Act.

Drafting or updated workplace policies is a great first step; however, businesses need to ensure effective implementation of these new or updated policies.

There are a few ways to do so effectively:
  • Train supervisors and managers on current, updated, and new policies. This will ensure consistency across the management team and present a united front to employees.
  • Consider cross-training your workforce to accommodate employee absences.
  • Any new or updated policies should be communicated to employees to ensure compliance throughout the organization. Distribute current and updated policies, have employees sign an acknowledgement that they have reviewed, understand, and will adhere to the policies, and continue communication about policies regularly.

To learn more, make sure to watch the webinar below. If you have questions or would like assistance developing a strategy to reopen,  contact us here. 

Strategies for Maximizing the Value of Your Business

How will COVID-19 impact the M&A Market?

Whether you’re thinking about selling your business now or in the future, it’s critical to understand how a prospective acquirer might value your company, and how you can influence that valuation. Even if you’re not thinking of selling today, most business owners will receive one or more unsolicited offers at some point…and you should be prepared. Rob Macklin, Partner at Epiphany Law, and Corey Vanderpoel, Managing Director and Owner at Taureau Group, will discuss strategies you can use in order to maximize the value of your business from both legal and investment banking perspectives, and importantly, will discuss the impacts of COVID-19 on the M&A environment.

• Operational, financial and legal preparation for a business
• The transaction process
• Due diligence and legal imperatives
• Shareholder tax and estate preparation
• Assembling a team of advisors

You can watch the complete webinar here.

Epiphany Law, LLC represents Security Door & Hardware Co. and Security Builder’s Supply Co. on their sale to CIH

Epiphany Law LLC is pleased to announce the successful sale of its client, Security Door & Hardware Co. and Security Builders Supply Co. to Central Indiana Hardware, Inc. (CIH).

Security Door & Hardware (SDH) and Security Builders Supply (SBS) provide full Division 8 commercial door and hardware products through four IL locations. The companies will continue to operate under the Security Door & Hardware and Security Builders Supply names as divisions of CIH.

Russ Benson, a member of the founding family said, “We are proud of our accomplishments and feel that CIH will only expand on the legacy our family began.”  Tim Johnson, VP and General Manager of SBS added, “Being part of the Security family has been a fulfilling and educational part of my career and I am proud of what our team has accomplished. I now look forward to a new family team at CIH to grow and expand services to our longtime customers.”

“I have been a part of a great team of individuals and am very proud of what we have been able to accomplish together. We welcome the opportunity to provide additional offerings to our clients over time and are confident that we will improve on the excellent service they have come to expect. Becoming a part of CIH will allow us to better serve our customers in all aspects of the business,” said Greg Rolnicki, VP and General Manager of SDH.

“We are excited to welcome Security Door & Hardware and Security Builders Supply to the CIH family,” said Ron Couch, President & CEO of CIH. “As a company focused on delivering exceptional customer service through innovative programs, we are excited to support the SDH & SBS teams with resources to expand opportunities and accelerate growth in their market.”

“We were thrilled to be able to help the companies transition to new ownership while maintaining their core values,” said Rob Macklin, a Partner at Epiphany Law.  He added, “We think that Epiphany has one of the best track records – and best legal teams – in the country for helping small to mid-sized family businesses maximize their value in a sale or recapitalization, while maintaining the culture that they’ve worked so hard to achieve.”

Epiphany Law, LLC, served as legal counsel to Security Door & Hardware and Security Builders Supply. WCF Advisors, LLC, acted as exclusive financial advisor in connection with the sale.

 

Avoiding Constructions Lawsuits

3 Tips for Avoiding Lawsuits in the Construction Industry

The construction industry faces unique challenges. Disputes over quality, timing and non-payment are common between project owners and contractors. But, the good news is there are several strategies your company can use to avoid costly lawsuits. Review the list below to learn how you can protect your construction company.

1 – Clear Communication is Key 

If you want to avoid disputes with clients, employees and competitors, good communication is essential. You should always take time to clarify expectations and make a habit of doing the following.

  • Never over promise.
  • Keep the promises that you make. However, if you cannot keep your promise for some reason, let the person know. Offer a plan on how you will resolve the issue and make it right. Call first, then follow up with an email detailing the agreed-upon terms to resolve the issues.
  • Don’t avoid difficult situations or conversations. Avoidance is more likely to cause the problem to escalate.
  • Evaluate how your tone may be perceived. And remember that email or text messages can make it difficult to effectively convey your desired tone.
  • Don’t be afraid to swallow your pride. Doing so could help you resolve an issue before it becomes a legal matter.
  • Evaluate and enforce best practices regarding how your employees should communicate.

2 – Make Documentation a Priority – especially when it comes to change orders

To help protect yourself and your business, take time to document important communications and commitments. A few best practice tips for keeping appropriate documentation:

  • Don’t do handshake deals. All contracts should be committed to writing – even if it’s a simply one-page agreement setting forth the most basic terms, like price, scope and timing.  In particular, when dealing with change orders, it is especially important to get everyone’s approval in writing.
  • Be sure to have key customer contracts reviewed by counsel, in order to help you understand the relevant provisions. It is also best to hire legal counsel for, at a minimum, reviewing and/or drafting of custom deal contracts, settlement agreements, employee handbooks, document retention policies, sexual harassment policies, and non-compete agreements.
  • Be sure to have counsel review your company’s standard contracts every 2 to 3 years.
  • Save only what is important, such as contracts, loan documents, key documents underlying contracts and relevant negotiations, proof of payment, calendars, and tax information.

Important note – If you are anticipating business litigation, you must implement a litigation hold (also known as a preservation order or hold order).  Once you know of the existence of a dispute or even a potential dispute, save all information. The loss of relevant evidence because of failure to institute a litigation hold can result in negative sanctions against you by the Court in any related litigation.

3 – Protect Yourself: Review your insurance, business formation and employee classifications regularly. 

Insurance isn’t a popular topic of conversation, but it is an important aspect of risk mitigation especially in the construction industry. Review the following points to help ensure your business is accurately covered.

  • Make sure that all current policies are correct and appropriate for your organization.
  • Investigate your options with multiple brokers.
  • Determine if the insurance company you are working with focuses on your niche business needs. Are they industry-specific to you?
  • Understand your potential need for multiple types of policies, including general commercial liability, errors and omissions, auto, property, workers comp, product liability, and other riders/endorsements.
  • Understand the obligations you owe to your insurance company, such as notice requirements, providing documents and cooperating fully in any investigation. Don’t settle with the other side without first getting your insurance company involved if you expect your insurance company to contribute funds toward the settlement.

Business Formation – Occasionally, business owners are surprised to learn their business structure is not aligned with their type of work. To help minimize liability, you should engage counsel to help determine the appropriate corporate entity for your business. You will also want to keep corporate records, annual reports and minutes if your business formation requires it. Make sure to follow all the formalities of your business structure in order to ensure protection from personal liability. And don’t commingle funds or use the company bank accounts as your personal piggy bank!

Employee classifications and wage issues – The Fair Labor Standards Act and the US Department of Labor (DOL) have established strict criteria for determining how your employees must be paid. On January 1, 2020 the DOL announced an updated overtime and salary level threshold. It’s important your company stays up-to-date and adheres to all labor laws.  Unfortunately, many employers (especially in the construction industry) haven’t correctly classified their independent contractors and employees or are engaging in “banking” of hours that directly violates the overtime laws. Often employees are thought to be exempt from receiving overtime pay when they actually should have non-exempt status and be paid 1.5 times for any overtime hours earned each week. Payroll errors can lead to potential lawsuits (including class actions) from either past or present employees.

To learn more about business litigation and how you can proactively protect your construction business, you can contact us here or call us at 920-996-000.