3 Strategies to Increase Your Business Profits
Many businesses recently reviewed their profit and loss statements and took a closer look at the business’s profitability. This analysis usually prompts the question “how to increase my business profits?” Although this question could only be answered after becoming familiar with your particular business, below are 3 areas where small changes, if done right, could increase your profitability. Decreasing Bad Debt If your business model does not require customers to pay for products or services in advance, collecting on unpaid invoices is likely something you are all too familiar with. However, collection itself comes at a cost to your business. Not being able to recoup that collection cost limits most businesses’ incentive to pursue collection, rightfully seeing it as throwing good money after bad. You can tip the collection scale in your favor. The default rule that each party bears their own attorney’s fees may be modified by statute or by contract. That means that where the law does not provide for recovery of attorney’s fees, you and your customers could mutually agree that if you and your customer find … Continue reading
Equal Pay Day
April 4, 2017, is “Equal Pay Day,” which is an apt time to remind employers of the risks that lurk beneath unexamined practices, subconscious biases, and general human fallibility. By the numbers: 20% = average wage gap between men and women in the United States. (Institute for Women’s Policy Research) 58% = companies that track salaries in comparable roles by gender. (LeanIn.Org and McKinsey & Company) I’m surprised the number is that high because I have yet to come across a company that conducted a pay audit by gender before coming to me. 1,075 = charges filed with the EEOC under the federal Equal Pay Act in 2016. (EEOC) $8.1 Million = benefits paid out as a result of charges for Equal Pay Act violations with the EEOC in 2016. (EEOC) Why are we still talking about pay gaps in 2017? Fortune.com provides a short outline of why the gender pay gap still exists, citing the “motherhood penalty;” deficits in negotiation; and employer bias. Our company doesn’t engage in pay discrimination. If you have done a pay audit and can … Continue reading
Age Discrimination in Hiring
I previously wrote about the age discrimination verdict against Staples. Last week, NPR published a story about a study by David Neumark and two other professors of economics at UC Irvine showing that the call-back rate for applicants drop as applicants’ ages increase. Older women witnessed lower call-back rates than older-men and “dropped by around a quarter when you go from the young group to the middle-aged group . . . . And they drop by another quarter when you go from the middle-age group to . . . around age 65.” Section 12940 of California’s Fair Employment and Housing Act prohibits age discrimination in hiring, selection for training programs leading to employment, and in other terms, conditions, or privileges of employment. Additionally, employers must “take all reasonable steps necessary to prevent discrimination and harassment from occurring.” Although discriminatory hiring practices are not always blatant, and many job applicants fail to get hired without knowing the true reason why, employers found in violation of the anti-discrimination laws wind up entangled in expensive lawsuits. One such lawsuit was a federal class-action lawsuit against … Continue reading
What to Do: Employee Leaves With Trade Secrets
Losing an employee, especially a key employee, is difficult for any business. You’ve invested time, know-how, and resources in your employees and they in turn are the lifeblood of your business. Unfortunately, people leave and when they leave, it is usually to work for a competitor or even to start a competing business. If that employee had access to your company’s confidential information such as customer lists, customer preferences, pricing formulas, and any other information that gives you a competitive edge, you want to make sure that the employee can’t take that valuable information to a competitor. How do you protect trade secrets from a competitor when an employee leaves? I have good news and bad news for you. The bad news: If the first time you think about protecting your company’s confidential information is after a key employee leaves, it may be too late. One of the fundamental requirements under California and Federal laws that protect trade secrets is the requirement that you made reasonable efforts to keep that information a secret. Thus, if you haven’t thought about how … Continue reading
Beware of Paying Employees a Fixed Daily Rate
The restaurant industry is often the target of wage and hour lawsuits, particularly, ethnic restaurants, which find themselves on the defense side of a wage claim or lawsuit filed by a server or cook who was recently terminated. For ease of administration, many smaller restaurant owners and their staff agree on wages in the form of a fixed daily rate that is paid regardless of the number of hours the employee works. Unfortunately, many of these restaurant owners believe that because there’s an agreement between them and the employee and because a close personal relationship that this type of arrangement is fine. However, this mistaken understanding will cost many hard-working small business owners tens of thousands of dollars if not ultimately force them to close down the business. Here is information that could keep you and your restaurant business out of trouble. Can I pay employees a flat daily rate instead of hourly? Technically, yes because neither federal nor California law requires that you pay employees on an hourly or any other basis. BUT paying employees a flat daily rate regardless … Continue reading
California Minimum Wage Increase 2017
The new year brings many things and one of those is a new minimum wage. Effective January 1, 2017, new minimum wage requirements go into effect at the local and state level. The minimum wage is the lowest rate per hour that an employer may pay a non-exempt employee. However, since the salary test for exempt employees requires that they make at least twice the minimum wage for full-time employment, changes in the minimum wage will affect the minimum salary that you pay your exempt employees as well. Determining what you need to pay workers depends on: How many employees you have; and Where they work. If there is a conflict between the state, county, and/or local minimum wage rate, follow the stricter standard (i.e. the one that is most beneficial to employees). Below is a non-exhaustive chart of the effective minimum wage rates effective as of the date of this post. Location Employers with 26 or More Employees Employers with 25 or Less Employees State of California $10.50 $10.00 City of Los Angeles $10.50 (until July 1, 2017) $10.00 … Continue reading
What Lawsuits and Disneyland Have In Common: The Emotional Costs of a Lawsuit
Whether you came to the decision to look for an attorney because you’ve been served with a lawsuit and have no choice but to defend yourself, or if you have reached an impasse in a dispute and have no choice but to say “see you in court,” what happens after this point is likely a mystery for you. If that’s the case, this is what a lawsuit looks like. But there’s also an emotional part of a lawsuit. Therefore, in addition to the obvious considerations of finding a capable attorney that you like and trust and the financial costs, you should also prepare for the emotional costs of a lawsuit. Since Disneyland’s just up the freeway, I’ll liken it to a day at Disneyland. It’s a Long Process If you’re traveling into town specifically to visit Disneyland with the kids, you expect to get there when the park opens, stay for the parade and fireworks, and even until the park closes. You may expect to do that for 3 days in a row. Why? The Lines are Long If Disneyland … Continue reading
Do I Need a Written Contract?
You may have been in the situation where you had an agreement with someone else to do something. It may have been a family member, a friend, a customer, or a service provider. You or the other person didn’t want to go through the formal process of putting it in writing because you have a close relationship, don’t want to offend the other person, or don’t want them to think you don’t trust them. Then something goes wrong. You discuss it with the other person and now there’s a dispute as to what you both actually agreed to, or you never talked about what you two would do if x, y, z happens. Do you have a breach of contract claim? Maybe. In this scenario, your first and most difficult hurdle in prevailing in a breach of contract lawsuit is the lack of a written contract. There are multiple reasons why you would want a written contract. Here are a few: It gives clarity regarding each person’s rights and duties. The process of creating a contract forces the parties to … Continue reading
Help! What Are My (Immediate) Defenses to a Federal Trade Secret Claim?
[Originally published without image as Help! What Are My (Immediate) Defenses to a Federal Trade Secret Claim?, by Lily Li and Andrea Paris, in Orange County Lawyer Magazine, September 2016, Vol. 58 No.9 on page 52.] The Defend Trade Secrets Act of 2016 (DTSA), signed into law by President Obama on May 11, 2016 creates a new federal cause of action for trade secret theft. Not only does the DTSA open the doors of the U.S. district courts to trade secret plaintiffs, it weaponizes complaints. Now, upon a showing of immediate and irreparable injury, plaintiffs in trade secret cases can request extraordinary relief: court-ordered seizure of the misappropriated trade secrets without notice to the defendant. This relief is above and beyond what is provided for by the Uniform Trade Secrets Act (UTSA), the trade secret law adopted by most states, including California, and copies many of the civil seizure remedies previously available to copyright, trademark, and patent plaintiffs for infringing and counterfeit goods. This extraordinary relief comes with several safeguards. Defendants, faced with the prospect of a U.S. Marshal knocking on (or down) … Continue reading
Pretext and Age Discrimination
A California Court of Appeal recently upheld an award of $16 million against Staples for age discrimination in a case called Nickel v. Staples. The majority of that award ($13 million to be exact) was in the form of punitive damages, which are meant to punish the defendant for its wrongful conduct. I found the court’s analysis in this case particularly interesting because many employers have a false sense of security that terminating older employees because they generally have higher salaries and cost the company more is a legitimate business decision. However, it’s evidence of that reasoning that justified the large punitive damages award. Workers Who Are Over 40 Years Old Protected from Discrimination Employers with over 5 employees are subject to the Fair Employment and Housing Act’s (“FEHA”) anti-discrimination laws. Government Code Section 12940(a) makes it a wrongful employment practice to discriminate against someone in the terms and conditions of their employment because they are over 40 years old. An easy rule of thumb for employers to remember is: whenever age the motivating factor for an employment decision, you … Continue reading