Articles Posted in Small Business

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Are NDAs for Sexual Harassment dead?

Employers will no longer be able to require workers to sign upfront non-disclosure agreements (NDAs) pertaining to sexual harassment incidents they have experienced or witnessed under new federal legislation that passed overwhelmingly through Congress and signed into law by President Biden on December 7.

One operative word here is “upfront.”   The Speak Out Act does not prohibit businesses from negotiating for NDAs that cover sexual harassment as part of a court settlement.  It simply means that aggrieved employees will need to speak out before filing any potential lawsuit that could lead to an NDA prohibiting them from doing so.  The new legislation also does not apply retroactively, so employers that previously had NDAs in place will not suddenly be faced with a flood of public allegations from prior to the legislation’s signing; the prohibition on upfront NDAs applies only going forward.

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Buyer of Nontraditional Legal Services, Beware

All kinds of business forms are offered online, and many of them for free.  Stand-alone paralegal services are offering various sorts of assistance to small businesses for significantly less than lawyers generally charge.  Accounting and bookkeeping services that organize businesses are increasingly positioning themselves as trusted enterprise advisers in ways that potentially can spill over into law-related issues.  And the cost of litigation continues to grow.

It’s thus understandable at some level that small business owners, who operate on modest margins in many cases, would ponder how much they need to continue to rely on their traditional partners in the legal world for the same level of services they typically have in the past and look to the web find alternatives to the services of a lawyer.

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Family Owned Business
Succession or Dissolution?

They make great stories when they’re successful, but maintaining continuity of family-owned businesses from generation to generation presents many challenges.  A family-owned business can be an excellent means of transferring and preserving generational wealth when run smoothly. Learning to work together as a family can benefit everyone and the business.

But many families just don’t get along, and those internal familial problems have a way of working themselves into the operation of the business.  When that happens, family members inevitably look to their attorneys for guidance, and at that point litigation may be the only option.

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How Do Family Businesses Survive Transition?

The Cornell University Smith Family Business Initiative says that more than three-quarters (77%) of small businesses rest on significant family involvement. Family Enterprise USA has counted 5.5 million family businesses in the U.S., finding that they contribute 57% of the U.S. GDP, employ 63% of workers and create 78% of all new jobs. And not all are small businesses: Businessweek.com has reported that 35% of Fortune 500 companies are family-controlled.

But the statistics on how often family businesses don’t sustain themselves over time—whether due to squabbling or for other reasons—paint a stark picture. According to Business Week, 40% of family-owned businesses reach the second generation, 13% get to a third and just 3% are passed down to a fourth generation or beyond.  And familybusinesscenter.com calculates the average life span as 24 years.

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Illinois Amends One Day in Seven Rest Act

The new year will bring with it activation dates for new or amended state legislation that passed earlier this year, some of which will have an impact on small business owners and their employees.

One significant change that employers should know about centers on the One Day Rest in Seven Act, or ODRISA. Heretofore, that law has mandated a minimum of 24 hours of rest per calendar week, but as of January 1, this will change to 24 hours of rest per seven-consecutive-day period. So if an employee works for six consecutive days, the law now covers with them on day seven, even if those six days don’t align with a Sunday through Saturday work week.

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What Would It Mean for Your Business?

Illinois voters will have the opportunity on Election Day, November 8, to vote “yea” or “nay” on an amendment to the state constitution that would protect workers’ rights to collectively bargain, while prohibiting state legislators from making Illinois a “right to work” state, in which workers in unionized workplaces can decide individually whether to join the union.  The Amendment should have no practical effect on small businesses since small businesses are generally not unionized.

Known popularly as the “Workers’ Rights Amendment”—although its official name is the more prosaic Illinois Amendment 1—the measure would amend the Bill of Rights Article of the Illinois Constitution to give employee the ability to bargain collectively, through representatives they select to negotiate wages, hours, working conditions, and worker safety.  The amendment, which received partisan support in both houses of the state legislature when it was approved for the ballot in May, also negates any local laws that prohibit this.

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Bellas & Wachowski – Chicago Business Lawyers

Small businesses with 16 to 24 employees that have been operational for at least two years and don’t already offer qualifying retirement plans will, as of November 1, 2023 be subject to the requirements of the Illinois Secure Choice Savings Program Act. 

Under an amendment passed last year, those with 5 to 15 employees must participate in the act—which has created a state-sponsored retirement savings program to boost access for private-sector employees—as of November 1, 2023.

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The City of Chicago’s newly amended sexual harassment ordinance, which takes effect July 1, will bring an enhanced definition of the term, new written policy and notice requirements, new training requirements for employers, additional safety measures, a longer statute of limitations—and heftier penalties for those found guilty.

Every Chicago business must comply with these new laws.   And the new laws should be words-to-the-wise to all Illinois Businesses in ensuring compliance with state law, which we’ve detailed in this earlier post.

The City’s definition of sexual harassment starts with the notion that people of all gender identities can be victims.  Among the acts that fall within the definition are unwelcome sexual advances or sexual conduct, requests for sexual favors or conduct of a sexual nature, and sexual misconduct—an addition to the definition—that involves coercion, abuse of authority or misuse of the alleged accused’s employment position. 

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Subchapter V for Small Business Owners

For the past two years, small businesses whose bottom lines were impacted by the onset of COVID-19 enjoyed greater protections while going through Chapter 11 bankruptcy reorganizations in the form of higher debt limits under the Small Business Reorganization Act.

That act, passed in August 2019 and enacted as of February 2020, established what came to be called “Subchapter V” of the SBRA, aimed at providing a simpler, less costly and ultimately more beneficial Chapter 11 process for small business debtors who would struggle to afford administrative and other costs.

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Repayment of Student Debt by Employers

Retaining employees, and attracting new ones, has always been at the forefront of employer’s minds, but never more so than right now.  An extension of the student loan repayment plan for employers is one attractive way to stabilize your workforce.

The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) extended tax-free employer sponsored student loan repayment through 2025.  This means that employers can give each employee up to $5,250 of non-taxable money to pay off student loans per year.  The amount the employer contributes is deductible by the employer and it is not income to the employee.    It is the best situation for both employer and employee!

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