The Coporate Transparency Act Implications for Small Businesses

The Coporate Transparency Act Implications for Small Businesses

by | Jun 7, 2023 | Article, Business

Do you own a small business? Are you a member of an LLC or a shareholder in a closely held company? (A closely held company has a limited number of shareholders and is often a private company that does not trade publicly). If so, you should be aware of the Corporate Transparency Act (CTA). This law was passed by Congress on January 1, 2021, because, according to the legislative history, “malign actors seek to conceal their ownership of corporations, limited liability companies, or other similar entities in the United States to facilitate illicit activity, including money laundering, the financing of terrorism, proliferation financing, serious tax fraud, human and drug trafficking, counterfeiting, piracy, securities fraud, financial fraud, and acts of foreign corruption, harming the national security interests of the United States and allies of the United States.”

The CTA requires the Financial Crimes Enforcement Network (FinCEN), an agency of the U.S. Department of the Treasury, to establish and maintain a database of beneficial owners of entities in the United States. Final regulations were issued on September 30, 2022, and the law will take effect on January 1, 2024. The law provides 23 exemptions from the new reporting requirements, mostly for already heavily regulated companies such as banks, insurance companies, publicly traded companies and credit unions. Typical charitable organizations that qualify under 501(c) of the Internal Revenue Code are also exempt. Most other entities, whether foreign or domestic, will need to report certain information about the beneficial owners and applicants of the entity unless they have at least 20 full-time employees, filed a United States income tax return in the previous year demonstrating $5 million in gross receipts or sales, and has an operating presence with a physical office within the United States.

For those entities that are not exempt, they will need to file applicable reports that include information about the person who formed the entity (known as the “applicant”) and each “beneficial owner” of the entity. A beneficial owner is someone who exercises substantial control over the entity or owns or controls not less than 25 percent of the ownership interest of the entity. By statute, minors, nominees (e.g. custodians), employees acting on behalf of a company, future owners through inheritance, and creditors are exempt from being listed as beneficial owners. The reporting company must report the full legal name, date of birth, current residential or business street address, and a unique identifying number with a copy of the underlying document (e.g. driver’s license number and copy of the driver’s license) for each beneficial owner and applicant. Alternatively, individuals may submit the required information directly to FinCEN and be issued a unique FinCEN identifier that can be used by the reporting company to identify the person.

Reporting requirements start January 1, 2024. Please make an appointment with one of our experienced business attorneys for any questions you have about whether your closely held business entity must report under the CTA.

For more information on this please follow this link. https://www.americanbar.org/groups/taxation/publications/abataxtimes_home/23win/23win-prp-graff-cta/

More Protections for Pregnant Workers

More Protections for Pregnant Workers

by | May 24, 2023 | Article, Employment

If you are an employer with pregnant employees, employees returning from parental leave, or employees who have had a child in the last two years, then please read on.

Effective on December 29, 2022, the Providing Urgent Maternal Protections for Nursing Mothers Act (also known as the “PUMP Act”) expanded protections for breastfeeding mothers. Effective in June 2023, the Pregnant Workers Fairness Act (“PWFA”) will provide new protections for pregnant employees.

The PWFA is a new law that requires covered employers to provide reasonable accommodations to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an undue hardship. The PWFA only applies to accommodations. Existing laws enforced by the Equal Employment Opportunity Commission (“EEOC”) and the Wisconsin Department of Workforce Development (“DWD”) already make it Illegal to fire or otherwise discriminate against workers on the basis of pregnancy, childbirth or related medical conditions.

The PWFA goes in to effect on June 27, 2023. Before then, the EEOC is required to issue regulations to carry out the law. This act requires employers to provide a temporary reasonable accommodation to workers with medical conditions related to pregnancy or childbirth, barring an undue hardship to the employer. Many lawmakers believe that the new law will close a gap, because present laws do not necessarily recognize pregnancy alone as a disability entitled to accommodations under the Americans with Disabilities Act (“ADA”). The act applies to employers with 15 or more employees.

The legislation is an attempt to provide “common-sense protections for pregnant workers, like extra bathroom breaks or a stool for workers who stand, so they can continue working while not putting extra strain ”on their bodies, said Sen. Bob Casey, D-Pa.

Under the PWFA Employers Cannot:

  • Require an employee to accept an accommodation without a discussion about the accommodation between the employee and the employer.
  • Deny a job or other employment opportunities to a qualified employee or applicant based on the person’s need for reasonable accommodations.
  • Require an employee to take leave if another reasonable accommodation can be provided that would let the employee keep working.
  • Retaliate against an individual for reporting or opposing unlawful discrimination under the PWFA or participating in a PWFA proceeding such as an investigation.
  • Interfere with any individual’s rights under the PWFA.

The PUMP Act expands workplace lactation accommodations to exempt (salaried) workers. It is effective immediately for companies with more than 50 Employees nationwide. The Affordable Care Act of 2010 requires that employers provide a reasonable time to express breastmilk, but it applies only to hourly employees.
Here are the primary features of the PUMP Act:

  • Applies to all employees—exempt and non-exempt—with the exception of certain airline employees.
  • Reasonable pumping breaks must be provided to breastfeeding employees for two years after a child’s birth.
  • An employer is not required to compensate non-exempt employees for pumping breaks as long as such employees are relieved of all work during that break. If the employee is not completely relieved of work duties during the entirety of the pump break, then the time must be compensated.
  • The location for pumping breaks must be somewhere other than a bathroom and must be private and free from intrusion.
  • If an employee believes her employer is violating the PUMP Act, the employee must provide notice and allow the employer ten days to Remedy the matter.

What does all of this mean for employers?
Now is the time for employers to take the following actions:

  • Updating existing personnel policies.
  • Train managers on the changes under the new laws.
  • Create a process, similar to the ADA, to create interactive dialogues for pregnancy-related limitations.

The PWFA and the PUMP Act expand the rights available to pregnant workers but use the guidance of present laws as a way to promote compliance by employers. Employers should review the new laws to ensure that they are integrating the new laws into their handbooks. If you have any questions about these new acts please call our office to speak with our experienced employment law attorney.

 

Stepping Down as a Presonal Representative

Stepping Down as a Presonal Representative

by | May 1, 2023 | Article, Estate Planning

There are a number of factors to consider before agreeing to take on the responsibility of serving as Personal Representative of someone’s estate. If a friend or family member has asked you to serve in any of these roles, it is important for you to think carefully about your ability to take on the responsibilities of the role and whether you are prepared for the legal obligations expected of you. As an attorney who practices in the estate settlement area, I have helped numerous Personal Representatives successfully handle estate administrations. The job of Personal Representative, however, can be somewhat daunting to someone who has never had the experience of serving, and should not be taken lightly.

A Personal Representative (also called “Executor”) is the person appointed to administer the estate of someone who has passed away. The Personal Representative is responsible for gathering and safeguarding the assets of the deceased, ensuring that all debts and expenses of administration are paid, and distributing the deceased person’s assets to the beneficiaries named in the deceased person’s Will. In addition, the Personal Representative is responsible to report to the Court during the various stages of administration of the estate.

Importantly, being named in a person’s Will is only a nomination, not an actual appointment. Before serving, a person nominated as Personal Representative must first be appointed by the Court before they can officially serve in that capacity.

What factors should you consider when deciding whether or not to accept the nomination?

  • Do you have the skills necessary to serve? A Personal Representative must be well-organized, detail-oriented, and have the ability to take on the responsibility of handling the financial assets that belong to the estate.
  • Do you have the time necessary to serve? Consider how close you live to the decedent. The estate will be handled in the county where the deceased passes away, and there will likely be financial institutions, agents, accountants and legal professionals that you will need to meet with in the decedent’s county of residence. There may be multiple beneficiaries that require your time and patience to explain the process and timelines.
  • Are you comfortable with the responsibility of acting as a fiduciary? A fiduciary’s duty is the obligation to act in someone else’s interest rather than your own. While that may seem like a common-sense approach to handling the estate of someone who has died, the most common disputes in probate administrations involve accusations that a personal representative has breached their duty to administer the estate in the best interest of the beneficiaries.

What if you decide not to serve? If you consider all of the factors and decide you do not want to take on the role as Personal Representative, the next steps depend on timing.

  • Before Death Occurs
    If someone asks you to serve as Personal Representative or notifies you that they have already named you in their Last Will and Testament, you can still decline the role. Simply advise them that while you are honored to be considered, you are unable to accept. If the Will has already been prepared, they will need to notify their attorney that an amendment, or Codicil, will need to be prepared to change the provisions regarding the nominated Personal Representative.
  • After Death but Before Appointment
    If you are nominated in the Will, but have not yet been formally appointed, you can notify the beneficiaries and heirs that you do not intend to serve. You should then file a Declination to Serve with the probate court. Most Wills provide for an alternate Personal Representative to serve in the event the first nominated Personal Representative is unwilling or unable to serve.
  • Resignation After Acceptance
    If you have already been formally appointed as the executor by the probate court, but wish to resign, you must file a formal resignation with the probate court. The Court may require a hearing to accept the resignation and notice will need to be given to the heirs and beneficiaries before a new Personal Representative can be appointed. You may continue to have ongoing responsibility to protect the estate until the new Personal Representative is issued letters of authority to act on behalf of the estate.

Relinquishing the responsibility to act as Personal Representative should not be taken lightly. If you have already been appointed by the Court, it is important to seek legal advice about best practices for discontinuing your responsibilities while protecting the estate and the rights of the heirs and beneficiaries. Please reach out to one of our experienced estate planning attorneys to help with this process.

 

Is That Damage to Your Vehicle Less Than $1000?

Is That Damage to Your Vehicle Less Than $1000?

by | Apr 11, 2023 | Article, General

For those who may have been involved in an non-injury minor car accident, you may have heard from the other driver or bystander, “that damage is under $1000, no need to get the police involved.” A recent Wisconsin Court of Appeals decision, County of Monroe v. Kling, albeit unpublished, shows that it is better to be safe than sorry.

Wisconsin law states that if the operator of motor vehicle is involved in an accident resulting in total damage to property owned by any one person to an apparent extent of $1,000 or more, the operator must immediately notify law enforcement of the accident by the quickest means of communication.§ Wis. Stat. 346.70(1). Unsurprisingly, the rub is what is “apparent extent?”

In County of Monroe v. Kling, Mr. Kling was heading home from work when he veered to the side of the road, hit a mailbox, overcorrected his steering, and drove into a ditch. Kling was unharmed, and he was assisted at the scene by a several bystanders. Kling could not drive his vehicle out of the ditch, as the tires had popped off their rims and the vehicle had grounded out in the mud. One of the bystanders asked Kling if he had contacted law enforcement; Kling had not. The bystander called law enforcement as Kling received a ride home. After Kling returned home, he called law enforcement and a tow truck driver, and he contacted the owner of the mailbox and offered to replace it. Kling’s call to law enforcement was 34 minutes after the bystander’s call.

At the repair shop, Kling’s tires were reattached to the rims and inflated, the car checked for leaks, but no estimate was made for any bodywork. Kling picked it up two days later. Law enforcement issued Kling a traffic citation in violation of §Wis. Stat. 346.70(1). Kling contested the ticket at a bench trial, focusing his defense that it was not apparent to him that his vehicle has sustained at least $1,000 of damage.

The responding officer was the State’s sole witness on the extent of the damage to Kling’s vehicle, playing portions of his body camera. The video showed an intact vehicle, no leaking fluids, and the only visible damage was deflated tires, and the passenger side panel appeared to have some damage and some bumper trim had fallen off. According to the officer, “that’s way over the threshold of $1,000.”

Kling presented evidence that the cost to tow and remount the wheels was $200.45, and he replaced the bumper a few years earlier and it had cost him about $500. He presented an eBay listing for a comparable bumper for $146.91. He did not provide any estimate for repairing the side panel. The trial court credited the officer’s testimony and said it was confident that the total damage was much more than $1,000. Kling appealed.

The appellate court’s decision hinged on the undefined term of “apparent.” Per the court, the term apparent means damage that is visible and obvious, regardless of whether later inspection reveals more. Any damage that would require specialized training or expertise to identify is not apparent. Also, “apparent” means at the accident scene, and while the factfinder can consider after-the-fact estimates or receipts, they are not directed toward the disposition o f the case. Crucially, the Court held that § 346.70(1) is a strict liability statute that does not require proof of subjective intent; “apparent extent” is an objective person test.

As such, the Court held: “I conclude that an operator of a vehicle must report an accident when it would be obvious to a reasonable person in the operator’s position, at the time of the accident, that the total costs of repairing the visible damage to any one person’s property to as good of a condition as before the accident equals or exceeds $1,000.”

The Court of Appeals upheld the Trial Court’s ruling, focusing on the damage to the side panel pushing the total cost above $1,000 and crediting the responding officer’s testimony and opinion. It is important to point out that this is not a published decision and cannot be cited for authority; also considering that Mr. Kling was unrepresented at the Trial and Appellate Courts, it would not be a good case to make established law. That said, there can be little doubt that the various charging authorities have knowledge of this decision. The next time you scrape a pole in a parking lot or get into a fender bender, to avoid a citation, it is best to call the authorities.

Litigation and the Risks of Social Media

Litigation and the Risks of Social Media

by | Mar 27, 2023 | Article, General

Today social media use is an integral part of everyday life for many.  There are numerous platforms people use for communication, such as Facebook, Instagram, Twitter, Snapchat, TikTok, emails, texts, etc.  Electronic communications and interactions on social media can be easily done with the use of smartphones.  Statistics show there are currently an estimated 6.8 billion smartphone users in the world.

While technology has made life more convenient and has offered new innovative ways to communicate, those communications can pose significant risks if anyone finds themselves in a lawsuit or a potential legal claim.

Social media activities are sometimes posted in a public setting where everyone can see them, sometimes these activities are intended to be private, only for a select few.  However, information contained within social media accounts, whether public or private, can be discoverable in lawsuits, and can be used against individuals in court.  A few examples of how social media activities can impact or undermine claims in litigation include the following:

  • Personal Injury: In a personal injury claim, an insurance company or defense attorney could discover the claimant posting pictures or videos showing them on vacation doing aggressive physical activities, such as skiing, kayaking, mountain climbing, while at the same time the claimant states that they are seriously injured and unable to perform basic activities of daily living.  Even if the claimant attempts to explain that they are just trying to go on with their life and are in significant pain when doing these activities, these social medial posts can undermine their entire claim.
  • Business Litigation: Texts and emails can undermine a party’s argument that they did not communicate with the other side, or that they did not have a contract or an agreement.  Texts and emails can be severely damaging in any type of lawsuit because the parties who are writing those communications do not intend or expect them to be shown in court or used against them.
  • Family Law. Texts, emails and social media posts can be very damaging in divorce cases showing the activities of the parties for example, the negative or hostile interactions they have with each other, and/or with their children and whether they have engaged in inappropriate behavior.
  • Defamation. Posting defamatory content online about a business or another individual may expose the person who posted that content to a lawsuit for defamation.
  • Employment. Making comments about one’s employer or job online may get someone fired or prevent that person from being hired by prospective employers.  Social medial posts, texts and emails may also be used in any dispute between an employer and employee regarding any claims, including those based on wrongful termination and/or discrimination.  Social media posts by individuals showing photographs or videos of them doing activities that some may seem inappropriate, may also have a negative impact on the individual as far as their current or future employment.
  • Criminal Cases. Social media posts, videos or pictures can be used to support the prosecution of crimes.  Additionally, information from smartphones and apps can also be used to track someone’s location which could potentially impact the investigation of various crimes as well.

If someone deletes their social media posts and regularly deletes their emails and texts, will that help protect them from having this information used against them?  The answer is: “It depends.”  If someone keeps their posts, emails and texts private for the most part and routinely deletes them, that will be helpful in maintaining privacy.  However, what typically happens in a lawsuit is that when a party files a lawsuit based upon a potential claim that they have against someone else, it is only after the filing of the lawsuit that they engage in what’s known as “discovery,” and it is at that time that they are able to uncover the treasure trove of texts, emails and any social media posts that the opposing party has.  Even if the opposing party has deleted any potentially incriminating evidence prior to the lawsuit, today’s technology will allow vendors who have expertise to be able to retrieve deleted information that can be used against that party.  Additionally, it may be possible to subpoena someone’s search history on Google or other platforms even if it is deleted from their smart device.

It is noteworthy that once a lawsuit begins, if a party intentionally deletes social media posts, emails or texts, that party can potentially be accused of destroying evidence which will negatively impact their position in the lawsuit.  Therefore, deleting social media posts, emails or texts comes with a risk, and may be contrary to that jurisdiction’s laws if there is a potential claim or lawsuit pending.

In conclusion, one needs to be extremely careful of what they post, how they post it, and what they text and email and to whom, as there may be a risk of creating a permanent electronic trail of one’s activities which can have significant ramifications in the context of a lawsuit or other aspects of that person’s life. If you are ever in a situation where your social media posts or electronic communications may be used against you in court please contact one of our experienced attorneys.

 

Landlord Lag Time in Wisconsin

Landlord Lag Time in Wisconsin

by | Mar 13, 2023 | Article, Business, Real Estate

The benefit to renting over owning is avoiding unexpected repair costs, in contrast, it can mean having to wait for the landlord to make repairs. Who is responsible for making repairs and how long a landlord can take to make a repair depends on the issue. While a landlord is required to “promptly” make repairs for issues that affect the habitability of a living space, Wisconsin law does not provide a set amount of time in which a landlord must make repairs.

Of course, it is best if you never have to deal with a leaky faucet or a glitchy thermostat. If you tour a space and find things in need of maintenance or repair, you should make note of any problems and request that the landlord fix them. Any promises made by the landlord to a prospective tenant regarding cleaning, repairing, or improving the unit should be made in writing and specify a date or time-period in which the fixes are to be completed. Apart from being legally binding, having a set date for the fixes can create a sense of urgency for the landlord and peace of mind for the tenant.

A Landlord’s Responsibilities

It can be difficult to spot defects in a unit before living in it. Fortunately, landlords do have a responsibility to disclose to tenants any documented or uncorrected building code violations that pose a threat to a tenant’s health or safety if the landlord is aware of them. This requirement of disclosure only covers the following habitability conditions:

  • If the unit lacks hot or cold running water;
  • If the heating system is not in safe operating condition or is incapable of maintaining at least 67 degrees in living areas;
  • If the unit is not served by electricity or components of the electrical system are not in safe operating condition;
  • If there are structural or other conditions on the premises that could pose a substantial health or safety hazard; and
  • If the plumbing or sewage disposal facilities are not in good operating condition.

All of the above listed systems (heating, plumbing, electrical, and structure) are within the landlord’s sphere of responsibility. Additionally, the landlord must maintain common areas like hallways and laundry rooms in good condition. While a tenant is usually responsible for unreasonable damages the tenant themselves caused, a landlord still has a duty to innocent tenants in these situations to maintain the common areas. A landlord must also provide and maintain carbon monoxide and smoke detectors.

A Tenant’s Responsibilities

As mentioned above, a tenant is responsible for repairing or paying for the repair of damages caused by the themselves or their guests. To prevent damages to the unit, the tenant must keep the thermostat set at a reasonable temperature that will prevent freezing of pipes and keep the unit in a safe and sanitary condition. Part of keeping the unit in sanitary conditions includes maintaining a level of cleanliness that prevents infestations. If pest infestations are caused by the actions or inactions of the tenant, the tenant may have the duty to remediate the problem or pay for the remediation and repairs.

A tenant is also responsible for minor repairs to keep the unit in good working order, like changing lightbulbs or replacing batteries in smoke detectors.

A Timeline for Repairs

Repair or replacement of a non-working smoke detector, with batteries, is one of the few fixes that the law places timeline on. When a landlord is given notice of a faulty smoke detector, they have five days to fix it. Landlords are not given a set amount of time to fix other defects.

Remedies for Tenants

  • Wisconsin Statutes do provide some remedy to tenants if the landlord does not promptly make repairs to defects that affect habitability of a unit. A tenant may break their lease and move out if a unit becomes untenantable. A unit is untenantable if the conditions that exist are so poor as to affect the tenant’s health, safety, or impose an undue hardship on the tenant. If the tenant must move out, the tenant is not responsible for the rent payments after the unit became untenantable. Even if the tenant does not move out, rent abates, meaning it is decreased by an amount proportional to the amount the tenant is deprived of the full, normal use of the premises. As a tenant, the problem with these remedies is that they may not result in the desired repair of the unit. It can also be difficult to quantify when a premises became untenantable or what dollar amount of rent abatement corresponds with an unrepaired defect.
  • It is preferable for a tenant to work with a landlord to have repairs made on a reasonable schedule. Creating a paper trail is an important step. Tenants should request repairs in writing to keep track of what the issue is and how long repairs are taking. If the landlord does not make repairs in a reasonable timeframe, the tenant may consider contacting the local building inspector or the Wisconsin Department of Safety and Professional Services.

If the landlord still refuses to make repairs, please contact one of our experienced attorneys who can help you take the right steps in pursuing remedies like rent abatement. The Tenant Resource Center may also be able to provide information or support.