Employee or Independent Contractor Classification under the Fair Labor Standards Act Effective March 11, 2024

Ruth Binger

By Ruth Binger



worker classificationThe U.S. Department of Labor (DOL) has modified the Wage and Hour Division Regulations to replace its 2021 analysis for determining whether a worker is an employee or independent contractor (Final Rule). The previous test gave greater weight to control and opportunities for profit and loss.

Effective March 11, 2024, under the Final Rule the employee or independent contractor classification determination will focus on the economic realities of the worker’s relationship and whether the worker is either economically dependent on the potential employer for work or is in business for himself. In short, is the worker dependent upon the business to which it renders services for work?

Economic dependence does not focus on the amount of income the worker earns, but rather whether the worker has other sources of income from other customers. To determine economic dependence, the DOL assesses seven factors and conducts a totality-of-the-circumstances analysis. No one factor carries more weight. The DOL looks at the working relationship, the workplace, and the particular industry.

Under the Final Rule, Section 795.105, DOL, uses the following tools and/or factors in its determination: Continue reading »

CTA Reporting Requirements Have Begun!

Jaime L. Curry

By Jaime L. Curry



beneficial ownership reportingReporting requirements for affected entities under the Corporate Transparency Act (“CTA”) went into effect January 1, 2024. In our article “Be Sure You’re Ready: The Corporate Transparency Act is Coming Soon!,”  we provided detailed information on the CTA’s applicability and reporting requirements. Now that the CTA is in effect and entities must report beneficial ownership, let’s take another look.

The Facts About the CTA

  • The CTA is a bipartisan act passed in 2021 by Congress to create a beneficial ownership information reporting requirement because many states, including Missouri, do not have requirements in place to collect beneficial ownership information of certain entities. An estimated 32.6 million entities are affected by the CTA.
  • For entities already in existence prior to January 1, 2024, that do not qualify for any of the 23 exemptions available, Beneficial Ownership Interest (“BOI”) Reports are due by December 31, 2024.
  • New entities formed in 2024 are subject to a 90-day BOI Report filing deadline (extended from the original 30-day deadline). Entities formed January 1, 2025, or later are subject to a 30-day BOI Report deadline.

How and What Does an Entity File?

  • An entity can file its own report – at no cost – on the Financial Crimes Enforcement Network (“FinCEN”) website at https://boiefiling.fincen.gov/fileboir.
  • Required information to be filed for an entity includes the legal entity name, any trade names or dbas, the principal place of business address, and all taxpayer-identification numbers issued to the entity.
  • Owners of at least 25% of interest in the entity and those with substantial control of the entity must report their legal name (including middle name), home address, date of birth, unique identifying number from an accepted identification document (generally a state-issued driver’s license or passport), name of the state or jurisdiction of the identification document, and an image of the identification document.

Who Has Access to Filed Information?

  • FinCEN’s database of entities will not be freely accessible to the public.
  • Federal, state, local, and tribal officials, as well as certain foreign officials, may submit a request for information for authorized activities related to national security, intelligence, and law enforcement. If a reporting company consents, certain financial institutions may be granted access in certain circumstances. For more information on access, please visit FinCEN’s website at https://fincen.gov/boi.

Cue the Scammers Continue reading »

What to Do If You Might Have Been Ineligible for the Employee Retention Tax Credit Claim

Jaime L. Curry

By Jaime L. Curry



covid-19 tax creditsThe COVID-19 Pandemic was cause for many new programs to be created by the U.S. government to keep businesses afloat and employees retained in unprecedented times. One of these programs was the Employee Retention Tax Credit (“ERC”) which incentivized employers to retain employees while business was down. The program was available regardless of the size of the employer and included tax-exempt organizations.

To be eligible for the ERC, employers had to (1) be either fully or partially suspended by government order due to COVID during the calendar quarter or (2) have gross receipts below 50% of the comparable quarter in 2019.

The IRS began sending out letters in December 2023 to more than 20,000 taxpayers who received disallowed ERC claims. Letter 105 C, Claim Disallowed is being sent to a first group of taxpayers because the entities either (1) did not exist during the eligibility period (March 13, 2020, through December 31, 2021), or (2) did not have paid employees during the ERC’s applicable time period (ERC is a credit against qualified wages).

Letter 105 is being sent out to taxpayers prior to payment in an effort by the IRS to help ineligible taxpayers avoid audits, repayments, and penalties. Many employers were encouraged to file ERC claims by “promoters” who received monetary commissions based on approval. Issuance of a disallowance letter prevents promoters from receiving funds to which they are not entitled. Continue reading »

Planning for the Incapacity or Death of a Business Owner

Jaime L. Curry

By Jaime L. Curry



are you readyAs a business owner, you are used to making plans. You have had to make plans since day one – plans to get your business off the ground, plans to increase inventory, plans to take on employees. . . plans, plans, plans. One plan that some business owners don’t think about until it’s too late is what happens to their business at the death of one of the owners.

Not planning is, in fact, a plan. If no documents are in place to transfer ownership at death, the deceased owner’s probate estate is the recipient of the business interests and the business is tied up in probate court. How can you avoid this happening to your business?

First, check your corporate governance documents. Depending on the type of entity you own, this could be your operating agreement, shareholder agreement, bylaws, or a buy-sell agreement. These documents could outline any restrictions on the transfer of ownership interests. Some of the more common transfer restrictions are to other members or shareholders, revocable trusts, or family members.

Typically, two of the simpler ways to transfer ownership interest in an entity is to assign the interest during the owner’s life to a revocable trust or, alternatively, assign the interest at the death of the owner to the owner’s trust. The terms of the trust can then control where the ownership goes, how it gets to the desired beneficiaries, and who is in charge. Make sure to update operating agreements or bylaws to reflect those changes any time an assignment of ownership occurs. Assignments of ownership interests at death can also be made to other individuals provided the terms of the entity’s operating agreement or bylaws allow for this transfer. Continue reading »

Be Sure You’re Ready: The Corporate Transparency Act is Coming Soon!

Jaime L. Curry

By Jaime L. Curry



corporate transparency actTo help combat money laundering, prevent financing of terrorism and drug and human trafficking, and deter securities fraud among other illicit activities, January 1, 2024, will usher in the new reporting requirements for most small and closely held businesses. Courtesy of the Corporate Transparency Act (CTA) established under the Anti-Money Laundering Act of 2020, companies will be required to disclose beneficial ownership information to the Treasury Department’s Financial Crimes and Enforcement Network (FinCEN).

What does this mean for existing entities?

All domestic corporations, limited liability companies, and other entities created under state law and formed prior to January 1, 2024, will have until December 31, 2024, to report the required information to FinCEN.

Because the CTA aims to garner information on shell companies and entities with no or little operations, it provides 23 exemptions allowing an entity not to report. One such exemption is for operating companies that meet the following requirements: (1) employ more than 20 full-time employees in the U.S., (2) had more than $5,000,000 in gross receipts or sales as reported on the prior year’s IRS Form 1120, and (3) have an operating presence at a physical office in the U.S.

What does this mean for new entities?

New entities created on or after January 1, 2024, will have 30 days from actual notice of creation or after a secretary of state provides public notice of the entity’s creation or registration, whichever is earlier, to file the required reporting information.

Whose information is reported?

Individuals who directly or indirectly exercise substantial control over the entity, senior officials who have substantial control over a company, and individuals who own or control 25% or more of ownership interests are the Beneficial Owners who must disclose required information under the CTA.

What kind of information do Beneficial Owners have to report? Continue reading »

Why Your Business Needs Trademarks: Protecting Your Intellectual Property

Ruth Binger

By Ruth Binger



registered trademarkAuthored by Ruth Binger with assistance from Sarah L. Ayers, contributor

Trademarks are a vital aspect of intellectual property, offering unique proprietary rights with several advantages. Unlike other forms of property, a brand or trademark can remain valuable indefinitely with proper care. In fact, trademarks tend to increase in value with use. They can be sold or licensed, making them reasonably liquid assets. Additionally, trademarks serve as powerful marketing shortcuts, influencing consumer purchasing decisions for a company’s goods or services.

However, there are misconceptions surrounding the protection trademarks provide. Incorporating, qualifying to do business, or reserving the business name with various Secretary of State offices provides limited brand name protection. The right to exclude others from using a similar name on goods and services is not automatically granted. Conduct a thorough trademark search of any new corporation or LLC name used to identify a product or service to determine the availability of a mark for your specific purposes and ensure the name does not infringe on another entity’s trademark.

Trademark registration is not mandatory to establish a protectable and exclusive right to a mark. Registered trademark remedies are injunctions and damages, but often the only remedy for an unregistered mark is an injunction. Under common law, trademark rights can be obtained within a specific geographic area of use. State trademark registration does not offer protection beyond these rights. Continue reading »

NLRB Decision Places Limits on Non-Disparagement Provisions in Severance Agreements

Katherine M. Flett

By Katherine M. Flett



severance agreementAuthored by Katherine M. Flett with assistance from Kristina M. Stevenson, contributor

Non-disparagement clauses have historically been a common element of severance agreements and aim to protect an employer’s name from negative commentary by a former employee to others. The severance agreement is a contract that outlines the compensation and benefits an employee will receive in exchange for the release of any and all employee claims against the employer arising out of the employment relationship.

Confidentiality clauses limiting an employee’s right to disclose the terms of a severance agreement have also been a common element of severance agreements.

A recent National Labor Relations Board (NLRB) decision has placed a warning sign on all employment severance agreements. Retroactively, the NLRB’s decision in McLaren Macomb may invalidate non-disparagement and confidentiality clauses in severance agreements both before and after February 21, 2023. Generally, employers are now prohibited from proffering severance agreements that require non-supervisory employees to broadly waive their rights under Section 7 of the National Labor Relations Act (NLRA) in exchange for severance benefits.

Under the NLRA, Section 7 and Section 8(a)(1) work together to protect an employee’s right to unionize, assist labor organizations, and engage in concerted activities. Employers may not interfere with the Section 7 rights of their employees. To assist in understanding how non-disparagement and confidentiality clauses interfere with Section 7 rights, NLRB General Counsel Jennifer Abruzzo issued a memorandum providing guidance for the applicability of the McLaren Macomb decision.

Five Major Takeaways from the McLaren Macomb Decision Continue reading »

Contracts: The Basics

Michael J. McKitrick

By Michael J. McKitrick



contractUnderstanding contracts is essential for a small business. Contracts are the basic building block of our economy and the legal principles of contract formation and enforcement go back centuries but are still in effect today.

Contracts require a “meeting of the minds” between the contracting parties and are enforceable in our courts. Contracts need to be clear and unambiguous and should be in writing and signed by the parties. In certain cases, oral contracts are enforceable but without a writing the terms are very hard to prove. For this reason, business contracts should always be in writing. The basic principle of contract interpretation by the courts is to determine what is the intention of the parties as determined by the four corners of the written document. Deals may be sealed with a handshake but fade away without a written document.

Contracts also require consideration to be enforceable. Consideration means that the parties exchange mutual promises or that one party agrees to provide a benefit to the other party or agrees to accept a detriment in consideration for the contract. A promise to make a gift is not enforceable because the receiving party has made no promise, payment or other consideration to the gifting party.

Under the Uniform Electronic Transactions Act (UETA), contracts can be signed electronically by using systems such as DocuSign as long as the parties intend to sign and do business electronically and keep a record that can be stored and reproduced as a copy. All states have adopted the UETA, including Missouri (codified at Section 432.200 RS MO 2003). Electronic contracts are just as enforceable as traditional signed contracts. Thus, it is important to note that the same basic principles of contract formation, interpretation and rules of enforcement apply to contracts in electronic or digital form. Continue reading »

Missouri’s New Marijuana Amendment: Workplace Testing and Employees “Under the Influence”

Ruth Binger

By Ruth Binger



marijuanaMissouri’s newly approved constitutional Amendment 3 regarding marijuana use will go into effect on December 8, 2022.  With a total of 49 pages, the Amendment 3 has two sections: revised Section 1 (former Amendment 2), which focuses on medicinal use, and Section 2, which focuses on marijuana recreational use.

Employers have long had Drug-Free Workplace policies that test employees for various illegal drugs.  Common tests are pre-employment, random, reasonable suspicion, and fitness for duty/return to work/follow up after rehab or last chance.

The original Amendment 2 regarding medicinal use was passed in 2018.  Employers responded to this amendment in several ways including choosing to keep their policies the same but providing reasonable accommodation under the disability statutes or to simply quit testing for THC altogether except for reasonable suspicion.

Now, employers will have to go back to the drawing board.

Section 1: Medicinal Use of Marijuana

Section 1 of Amendment 3 revises the original Amendment 2 in its entirety. One of the revisions/additions includes adding a nondiscrimination in employment section. It prohibits employers from discriminating against “medicinal cardholders” based on off-duty use unless the person was “under the influence of medical marijuana” at or during work. Further, it specifically prevents employers from relying solely on a positive THC test result to terminate a medicinal cardholder unless the person used, possessed, or was “under the influence” of medical marijuana at or during work.

There are exceptions to the “under the influence test” for medicinal cards for the following situations:

  1. If the employer would lose a monetary or licensing related benefit under federal law,
  2. If the employee has a job where “legal use of a lawful marijuana product affects in any manner a person’s ability to perform job-related employment responsibilities, or
  3. If it conflicts with a bona fide occupational qualification that is reasonably related to a person’s employment.

This exception protection does not appear to apply to “recreational” users who do not have a “medicinal card.”

There is no readily available test to scientifically confirm whether someone is “under the influence of marijuana” nor what the threshold of impairment is under BAC for alcohol. How long a person will test for marijuana depends on a multitude of factors but is not limited to: Continue reading »

Updated EEO “Know Your Rights” Poster Now Available

David R. Bohm

By David R. Bohm



eeo posterOn October 22, 2022, the Equal Employment Opportunity Commission issued an updated EEO poster, a copy of which is attached to this blog post. This is to replace a previous EEO poster and addendum issued by the EEOC in 2019.

In many cases, employers have posted what is known as a 6-way poster, which sets forth an employee’s rights under various federal laws, including Title VII and the Americans with Disabilities Act. You may wish to acquire an updated 6-way poster, or you can simply post the October 2022 poster next to the 6-way poster, or over the section on Equal Employment Opportunity on existing 6-way posters.

Who is Required to Post this Notice?

Any employer with more than 15 employees is required to post the updated notice.

When Should I Put This Up? Continue reading »

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