Henderson, Franklin, Starnes & Holt, P.A.

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We are so excited to announce that registration is now open for the 2016 HR Law & Solutions Seminar. Now in its 24th year, this full-day seminar is a fantastic opportunity for both new and experience HR professionals and other business executives to learn about important employment laws, network with their peers, and, of…

Ronald Reagan famously once said: “The nine most terrifying words in the English language are ‘I’m from the government and I’m here to help.’”

On January 13, 2015, the State of Florida entered into an agreement with the U.S. Department of Labor (“DOL”) with the goal of preventing the misclassification of employees as independent contractors. It is part of DOL’s “Misclassification Initiative.” Nationally, this initiative has meant a significant increase in the number of investigations undertaken by DOL, and Florida employers can expect greater scrutiny in light of the agreement with DOL.

How’s the initiative going so far? Two very recent cases caught our attention. Just a few days ago FedEx settled with the DOL by agreeing to pay $227 million to delivery drivers in California that were classified as independent contractors. FedEx will bounce back – aren’t drones going to be delivering packages soon anyway?Continue Reading Yikes…Uber Drivers are Employees, Not Independent Contractors?

The Affordable Care Act of 2010 (the “ACA”) is one of the most complex pieces of legislation ever enacted by Congress. Nonetheless, within the morass of that very complicated legislation, there is a relatively straightforward rule applicable to “Grandfathered” Health Insurance Plans. Basically, under the ACA, a group health insurance plan in existence as of March 23, 2010, is exempt from many (but not all) of the ACA’s requirements. If, however, the employer enters into a “new” health insurance plan after March 23, 2010, then all the ACA’s requirements apply to the employers’ health insurance plan. Seems pretty straightforward, right? Well, even the relatively simple legal principles become complicated in the right (or wrong) circumstances. This blog post evaluates a specific situation where what should be a straightforward application of the ACA’s grandfathering rules becomes….not so straightforward; and also illustrates the relationship between legal requirements, and the interplay of legal options and practical considerations imposed by group health insurance carriers.

The Employer – Dental Associates of Florida, D.M.D., P.A.

The case study that is the subject of this blog post is a Florida dental practice called “Dental Associates of Southwest Florida, D.M.D., P.A.” (This is NOT its real name, of course). Dental Associates of Southwest Florida, D.M.D., P.A. (“Dental Associates”) has just been established by a young, relatively recent doctor of dental medicine whom we shall call “Dr. Julie” (also not her real name). Dr. Julie has an undergraduate degree in chemistry, and has always been interested in dental polymers. So, in addition to practicing as a general dentist, Dr. Julie also establishes a small laboratory in which she develops and creates dental crowns for her patients that require such implements.
Continue Reading Grandfathering Rules under the Affordable Care Act: A Case Study

This blog is a sequel to our previous post summarizing the rules and regulations governing an employee’s use of intermittent FMLA leave, which you can find here.

Managing employees’ requests for intermittent FMLA leave can be complicated and frustrating. Intermittent leave is difficult to track. It is often abused (or is it merely coincidental that leave is most often requested for a Friday, Monday, or the day before a holiday?!). Intermittent leave causes workplace disruption—especially when it is unforeseeable. Employee morale is often affected when co-workers are forced to pick up the slack for an absent co-worker. Although employees on intermittent leave may be temporarily reassigned to a different position, they must still be restored to their original position at the end of the approved leave period. No wonder that FMLA leave is a chronic HR headache!

Here are a few tips for treating this chronic headache:
Continue Reading Intermittent FMLA Leave: A Chronic HR Headache (Part II)

In 2013, the Florida Revised Limited Liability Company Act (the “Act”) was signed into law. The Act was codified in an entirely new chapter in the Florida Statutes, Chapter 605. However, the then-current Limited Liability Company Act, found in Chapter 608, did not immediately vanish with the introduction of Chapter 605. Instead, to provide for time for businesses and the legal community to adjust to the new Act, special transition rules were implemented. All LLCs formed in or registered to do business in the state prior to January 1, 2014 were still subject to the provisions of Chapter 608 unless they elected otherwise; those formed after that date were subject to Chapter 605. This transition period, where both Chapters were operative, was short-lived. As of January 1, 2015 all LLCs organized under Florida law or registered to do business in the state are governed by the rules found in Chapter 605.

What Changed Besides Chapter Numbers?Continue Reading Does Your Operating Agreement Still Mean What You Think it Means?

At HR Law & Solutions last month, attendees asked tough questions about handling requests for intermittent leave under the FMLA. We promised to write a blog post summarizing current rules and regulations, so here goes:

Intermittent leave is FMLA taken in periodic short blocks of time for a single FMLA qualifying reason. Common reasons for intermittent leave include time off for an employee’s occasional medical appointments, flare-ups of a chronic condition (ex. migraines), or periodic treatment of an ongoing disease (ex. chemotherapy). Intermittent leave can also be taken for a family member’s serious health condition or for military caregiver leave. Employers must also grant intermittent leave to an employee whose spouse, parent or child is called up for active military duty.Continue Reading Intermittent FMLA Leave: A Chronic HR Headache (Part I)

We want to send a special THANK YOU to the more than 300 of you who attended HR Law & Solutions last week. It is always such a pleasure for all of us – it feels like an annual reunion! Congratulations to all of our raffle winners, and especially to our new HR Law & Solutions Hall of Fame recipients (pictured left to right): Patti Reigle (of Digestive Health Physicians), Fran Barker (of Physicians’ Primary Care), and Kim Hopkins (of McGregor Baptist Church.

As we mentioned during our What Would You Do? session, the National Labor Relations Board (“NLRB”) recently issued a report on employer handbook policies. It is…interesting, to say the least. The report gives examples of (supposedly) lawful and unlawful handbook policies on issues like confidentiality, conduct toward supervisors and fellow employees, conflicts of interest, and employees leaving work. Generally, “lawful” vs. “unlawful” turns on whether the NLRB thinks the particular policy infringes upon employees’ Section 7 right to engage in concerted activity regarding terms, conditions, or privileges of employment.Continue Reading Seminar Wrap-Up and NLRB Report on Handbook Policies

In 2014, S Corporation returns greatly outnumbered both “regular” corporate returns and partnership returns. Perhaps one of the reasons that S Corporations continue to be so popular, particularly relative to partnerships, is the ability in some circumstances to limit or avoid the imposition of self-employment tax on corporation income that passes through to the individual shareholder. For 2014 the self-employment tax rate was 15.3%, with the elimination of the (larger) Social Security component on compensation over $117,000.

The S Corporation Approach to Self-Employment Tax

An individual partner in a partnership is generally subject to this 15.3% self-employment tax on the pro rata share of the partnership’s income passed through to them, subject to the limits described above. However, the rules under Subchapter S differ significantly. If an S Corporation shareholder provides services to the corporation – let’s call them an “owner-operator” – and is paid a salary, that compensation is subject to FICA tax (the equivalent of self-employment tax) as if the owner-operator were an employee of an unrelated corporation. Alternatively, the corporation could not pay the owner-operator a salary but instead simply distribute cash to the owner-operator on a pro rata basis. As a shareholder is already subject to income tax on his or her pro rata share of the corporation’s net income, whether distributed or not, this distribution would not be separately taxed and, more importantly, would not be subject to the 15.3% self-employment tax. Few S Corporation owner-operators would ever take even $1 as compensation if this would be the actual result.
Continue Reading What is “Reasonable” Compensation for S Corporation Owner-Operators?

True, tax-exempt organizations are altruistic in nature. But even a tax-exempt organization needs to attract and retain talent.  And altruism will only go so far in landing a key executive hire. So what can charitable institutions do to give themselves a bit of an extra edge when it comes to hiring a key executive?

One option is to provide deferred compensation outside of the “typical” 403(b) or 401(k) Plan. This additional deferred compensation is often referred to as “non-qualified deferred compensation.” This post will cover the basic, non-qualified deferred compensation (“NQDC”) alternatives available to a private (i.e., non-governmental) tax-exempt organization.

Basic Rules Applicable to Tax-Exempt Organizations

Any NQDC plan sponsored by a tax-exempt entity must comply with the rules of Section 457 of the Internal Revenue Code. There are basically two (2) types of Section 457 arrangements that a tax-exempt entity can sponsor, commonly called “Section 457(b) Plans,” and “Section 457(f) Plans.”
Continue Reading Enhancing Executive Compensation for Tax-Exempt Organizations