business operations Tag

by Carol Killough

New DOL Rule Independent Contractor Classifications

New Department Of Labor Rule in Effect March 11 Affects Employee/Independent Contractor Classifications

Businesses relying on independent contractors need to know about the US Department of Labor’s new 6-factor test for determining worker classification under the Fair Labor Standards Act. This test narrows who is an “independent contractor,” and goes into effect March 11, 2024.

Key Changes in Worker Classification: New 6 Factor Test Used In Determining Worker Status. Factors considered:

1. Opportunity for profit or loss depending on managerial skill;
2. Investments by the worker and the potential employer;
3. Degree of permanence of the work relationship;
4. Nature and degree of control;
5. Extent to which the work performed is an integral part of the potential employer’s business; and
6. Skill and initiative.

DOL says these factors aren’t exhaustive. Instead, the analysis uses a totality-of-the-circumstances “economic reality” approach, allowing consideration of other relevant factors that “in some way indicate whether the worker is in business for themself.” Where the worker is dependent on the employer for work, they will not qualify as an independent contractor under this rule. Importantly, only the courts, federal and state agencies decide classification, not the employer or the worker.

Diverse Classification Standards:

Notably, this rule solely addresses DOL’s interpretation under the FLSA and does not supersede other law, such as state “ABC Tests,” IRS interpretations of common law, etc.

Serious Consequences for Misclassifying Workers:

• Owing double the worker’s damages
• Paying the other side’s attorney’s fees and costs
• Individual liability: individuals with a hand in misclassification aren’t shielded by the corporation; and
• To the extent a settlement is reached, the agreement itself—and the amounts paid—is public information.
• Not including IRS and/or DOL penalties.

What Employers Should Do Now:

1. Review existing and future independent contractor arrangements against the new framework.
2. Consider conducting a worker classification audit using the updated criteria.
3. Explore the IRS Voluntary Classification Settlement Program (VCSP) with guidance from a CPA.
4. Seek legal advice to understand the implications and ensure compliance.

If you would like for us to assist you in navigating the complexities of worker classification, please contact attorney Casey Martens at cmartens@kimandlahey.com or 864.973.6688.

by Carol Killough

B C Killough named Thomson Reuters Stand-Out Lawyer

CHARLESTON, SC – Kim Lahey & Killough law firm is pleased to announce that B.C. Killough has been named to the list of “Stand-out Lawyers” by Thomson Reuters.  Each year, thousands of senior in-house legal counsels from around the world nominate the top three attorneys they have worked with during the past year.

Bill Killough has been recognized for decades by his peers in publications such as The Best Lawyers in America, South Carolina Super Lawyers and Charleston Business Magazine’s Legal Elite. Best Lawyers named him the “Corporate Lawyer of the Year” for the Charleston area in 2015. These client-nominated attorneys are “real stand-out lawyers [and] are distinctive because, in combination with their technical competence, they offer business savvy advice, deliver exceptional service, or integrate well with the client team,” according to Thomson Reuters.

Bill Killough practices law in the areas of intellectual property and business law, including commercial transactions. He is a registered patent attorney and has obtained more than 350 patents for clients and filed more than 1500 trademark applications on behalf of clients. He has experience as an intellectual property litigator, with at least one of his cases setting precedent. As a certified mediator, Killough assists parties in intellectual property and corporate disputes in coming to a resolution outside of a courtroom.

With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients achieve their business goals and establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe.

by Carol Killough

Casey Martens admitted to NC Bar and GA Bar

Congratulations to Kim, Lahey & Killough attorney Casey Martens, who has recently been admitted to both the North Carolina and Georgia Bars. Casey heads up our Brevard, NC office and serves clients in GA, NC and SC in the areas of employment law counseling and compliance, employee investigations, wage and hour disputes, business disputes and litigation, contracts, and trademark analysis and registration.

A graduate of the University of Colorado and the Charleston School of Law, Casey has regularly been named as a Legal Elite of the Upstate by Greenville Business Magazine and a South Carolina Super Lawyers Rising Star as a Top Rated Employment and Labor Attorney.

With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe.

by Carol Killough

Emily Bohan joins Kim, Lahey & Killough

GREENVILLE, SC – Kim, Lahey & Killough Law Firm is pleased to announce the addition of attorney Emily Bohan to the firm’s Greenville, SC, office. Bohan’s law practice focuses in the areas of franchise law, business formation and organizations (including LLC’s and Partnerships), business disputes, alternative resolutions, and labor and employment matters.

Bohan’s firsthand experience in navigating the complexities of running a franchise operation equips her with insights into the myriad of challenges faced by businesses; her own franchise business, PuroClean, will celebrate its 15th year in 2024. As an attorney, Bohan counsels businesses and individuals in all aspects of business law including business formation, contracts, franchise, employment, compliance, licensing, and trademark matters.

In addition, Emily Bohan is a South Carolina certified mediator and is able to assist parties in business disputes to come to a resolution outside of a courtroom.

Bohan earned a Bachelor of Arts in Economics and Legal Studies from the University of California, Santa Cruz and her Juris Doctor from the George Mason University School of Law. She is admitted to practice before federal and state courts within both South Carolina and Virginia.

With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe.

by Kim, Lahey & Killough Law Firm

Are Your Non-competes Null & Void? 

Why You Should Re-examine Employment Contracts Post COVID-19.

If you had to lay off employees during the global shutdown, there is more than safety to consider as you begin to reopen. Your re-hired employees may need to sign new employment contracts, or you risk not being able to enforce the restrictive covenants employees agreed to when they were first hired.

Earlier this month, pharmaceutical company Novo Nordisk Inc. was prevented from enforcing a confidentiality and noncompete agreement it had with an employee who was briefly laid off and then rehired before leaving to work for another pharmaceutical company.

Novo Nordisk sought to enforce the agreement that prohibited the employee from working for a competitor for a year after the end of his employment. The employee was laid off in 2018 and rehired a few days later but was not asked to sign a new agreement upon his return.

Was there a break in employment?

The court said for the employee to continue to be bound to not compete beyond 2019, “Novo Nordisk would have needed to ensure there was no break in employment.” It relied on the unambiguous language of two documents:

• The termination letter stated his employment “ended effective August 3, 2018.”
• The rehire letter offered him a “new position” “effective August 6, 2018.”

The court determined there was a clear break in employment. As such, the employee was no longer bound by the “old” terms of his “previous” employment. Download full findings: Russomano v. Novo Nordisk Inc., 1st Cir., No. 20-1173, 6/2/20.

What to do next.

We want our clients to be aware of the potential pitfalls involved when there’s a break in employment, even when it’s only for a few days. What constitutes a break in employment will depend on the facts of each case, especially the language used in the documents at issue. You will most likely need to re-execute new agreements when employees return to work.

Need our help?

Casey Martens offers services in state and federal employment law, drafting and enforcement of contracts, business disputes involving interference with client relations, defamation, collections and enforcement of non-compete agreements. You can reach her at cmartens@kimandlahey.com.

by Kim, Lahey & Killough Law Firm

More Emergency Funding For Small Business

US Senate Expected to Close the Deal Today

The SC Chamber of Commerce has released a statement informing business owners that US Senate Democrats and Republicans are close to a deal for additional funding for the Paycheck Protection Program (PPP). The package, expected to be passed today in the Senate by unanimous consent, will likely allocate close to $400 billion total including funding for: