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  • Writer's pictureLeslie A. Farber

4 Legal Issues that Could Affect your Business in 2016

Updated: Jul 3, 2019

The Employee/Contractor Classification is under scrutiny.

The Buffalo Bills argued that their cheerleaders had no labor rights under state law because they were “independent contractors,” not employees. But the judge disagreed, saying there was nothing “independent” about an official rulebook that governs the women’s personal and professional lives right down to their underwear.

Whether it due to the pressures of increasing health care costs or the desire not to pay minimum wages or overtime, many companies are seeking creative staffing solutions in this competitive economy. Creative staffing often means relying on independent contractors. This can lead to problems down the road because although the employer gives up some control over the employee, he does not automatically reduce the risks inherent in an employee-employer relationship.

The Labor Department recently issued new guidance on "joint employers" in the U.S. economy. Officials are making it clear that corporations that employ workers through subcontractors should be on the hook when laws get broken, regardless of who signs the workers' paychecks.

The National Labor Relations Board and Department of Labor are also looking at the nature of the control exercised by the employer and whether the employee performs a service integral to the business model itself. They have recently taken a very broad view about the elements of control and/or influence over the employment relationship needed to hold a company jointly liable as an “employer.” Companies who are using these kinds of alternative work arrangements should not assume safety in them, and instead should implement proactive strategies to minimize the increasing risk of unintended employer liability.

Protect your intellectual property

Bring Your Own Device (BYOD) is part of a growing trend that encourages employees to work on a device of their choice to access corporate emails or documents. The goal is increased productivity and reduced costs. This concept extends to what is being called Bring Your Own Cloud (BYOC) where employees use their own Dropbox, Evernote, Google Drive, account to do company work.

Whether employees are authorized to use BYOD and BYOC or not, they are doing so. While the benefits are many, so are the risks. Companies need to take steps now to protect their intellectual property, address privacy and data security risks, and to prepare for the challenges posed by BYOD and BYOC. An effective solution should enable you to secure the data, not just the device.

The first step would be to create a policy that outlines acceptable uses, required security procedures, and obligations for E-discovery. This policy change should go hand in hand with implementation of the appropriate technological safeguards.

Merchants may be financially responsible for credit card fraud

Data breaches and credit card fraud are increasingly prevalent and increasingly costly for businesses. That is nothing new. What is new, is the shift in financial responsibility for that fraud.

In October 2012, some U.S. payment networks (including Visa and MasterCard) implemented a fraud “liability shift” policy. Prior to this, liability for card-present fraudulent transactions was generally the responsibility of the card issuers. This change in policy make merchants responsible. Specifically, merchants that have not implemented point-of-sale terminals capable of accepted “chip” cards could find any revenue they receive associated with counterfeit card transactions stripped away under these revised rules. Understanding the “liability shift” is essential to ensuring that your company is protecting its profits from the ever-expanding fraud and data breach threats.

New overtime rules

In July of 2015, the U.S. Department of Labor (“DOL”) revealed its long-anticipated proposed changes to the Fair Labor Standards Act’s overtime exemptions. The new rules raise the income level at which workers can automatically qualify for overtime eligibility for the first time in decades, effectively giving around five million workers a raise while strengthening overtime protection for another ten million.

The DOL’s primary change more than doubles the salary threshold for the “white collar” overtime exemptions from $23,660 to $50,440 raising the previous limit to keep up with inflation. Although the new limit includes a large majority of all salaried workers, the change will disproportionately benefit women, minorities, and workers who are less educated, all of whom have historically had much less bargaining power to change their working conditions.

Although there is no deadline for the issuance of the final rule, it is expected to be released in 2016. Employers should be evaluating their workforces now to determine how to comply with the final rule and whether to pro-actively implement compensation changes for those positions most likely to be impacted.

If you are need clarification about any of these issues, how they will affect your business, and how to protect best protect yourself and your business, contact the Law Offices of Leslie A. Farber.

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