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For South Carolina business and legal updates:

New Overtime Rule: What You Need to Know

Come December, 67,000 South Carolina workers will be newly eligible for overtime pay, following a revision of federal rules governing when overtime must be paid. Employers must take steps now to prepare for this rule, which goes into effect December 1, 2016 and will impact employees’ job duties, payroll expenses, and how work is assigned.

Depending on your point of view, the U.S. Department of Labor (DOL) regulatory change is either a severe burden for businesses – especially small businesses that may have less flexibility in how work is assigned – or a long overdue revision to allow lower-paid salaried workers to catch up to the rest of the economy.

Nationwide, the DOL estimates that about 4.2 million workers could benefit from the rule. In South Carolina, it will affect approximately 30 percent of salaried workers.

Announced May 18, the change addresses the overtime pay rule that is part of the Fair Labor Standards Act (FLSA). When Congress passed the FLSA at the tail end of the Great Depression, it mandated that workers had to be paid overtime at a rate of time-and-a-half for all hours over 40 worked in a given week. Exceptions were carved into the law, including exemptions for employees who worked in executive, administrative, outside sales, or professional jobs. (The logic behind these exemptions is that with this level of responsibility comes an obligation to get your work done, regardless of the clock.)

However, in addition to proscribing a baseline for the duties these employees engaged in on a day-to-day basis, Congress said employers could exempt only those employees who were paid a minimum salary. Since 2004, the minimum salary for each of these exemptions has been $455 per week, or $23,660 per year. In addition, employees compensated over $100,000 per year (and paid a weekly salary of at least $455 per week) could be exempt regardless of their job duties.

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Don’t Let Your Workplace Become Collateral Damage in the Cultural Wars

The so-called cultural wars have roiled politics since at least the 1990s and now have invaded the workplace.

However you feel about these issues personally, you should know they are going to spawn confusion and litigation in the workplace as employers try to make sense of conflicting mandates in the courts and legislatures. Uncertainty is the enemy of risk management, and unless you want to make an expensive public statement about your beliefs, we advise you to approach these issues with caution – and sound legal counsel – until the smoke clears.

Many date the cultural wars to 1992, when presidential candidate Patrick J. Buchanan delivered what became known as the “cultural war” speech at the Republican national convention, warning that “there is a religious war going on in this country. It is a cultural war, as critical to the kind of nation we shall be as was the Cold War itself, for the war is for the soul of America.”

You don’t have to agree with Buchanan’s politics to recognize that he was right about the nature of the battle. And with talk radio and cable TV’s insatiable appetite for controversy and our never-ending cycle of national campaigning, we don’t expect the cultural wars to abate, even following the election in November. 

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Shareholder Agreements Give Minority Owners Peace of Mind

When entrepreneurs start a business, they are long on optimism and short on contingency plans. That faith in free enterprise and the willingness to take risks has made America great. But businesses do hit speed bumps and the best-business-friends who worked so well together at the beginning of the enterprise sometimes find that their relationship unravels. When that happens, it can be frustrating if you’re a minority owner of the business.

As a dissenting minority shareholder, you can find yourself with no voice in a business where you invested money or sweat equity. That can include operations, hiring and firing, how profits are distributed, and mergers and acquisitions. While people often have honest disagreements over business strategy, the majority also can embark on a deliberate strategy to devalue a minority shareholder’s interest or shut him out of a fair share of profits.

As in most things, you often can avert headaches in a business relationship by assuming the best and planning for the worst.

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Forming an LLC? Don’t Forget to Have “The Talk”

About two-thirds of all new businesses in the U.S. start out as LLCs, or limited liability corporations. Entrepreneurs recognize that LLCs combine the protections of a traditional corporation with the operating flexibility that small businesses need. 

We’re big fans of LLCs, but they are not without potential pitfalls. When there are problems, it’s usually because the LLC members were in a hurry at the outset, and didn’t take advantage of all the safeguards and flexibility this business formation entity allows.

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Protect Your Loved Ones from Elder Financial Abuse

It’s a fact of life: as we get older, our powers of discernment diminish and our judgment of others – particularly their trustworthiness – often makes us vulnerable. Sadly, there’s a legal component to outliving our good judgment.

Elder financial abuse takes many forms, and the common denominator is theft. Sometimes a family member is involved. Sometimes it may be a caregiver who is a constant companion or someone met at church who seemingly just wants to help an older person manage his or her affairs. Families may seek legal help in regaining control over a loved one’s personal affairs or recovering squandered funds. Banks and others caught in the middle may seek legal help when they are unsure if granting a request for a joint account or other shared authority over finances is in the best interests of an older person. Lawyers called in on these types of cases often find that it is difficult to recover misappropriated assets, so if you suspect something is awry in an elderly person’s life you should seek legal counsel as soon as possible. 

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Business Visas Help Companies Fill Critical Positions

Immigration is much in the news these days as the presidential candidates discuss border security, terrorism and preserving jobs for U.S. citizens. These public policy issues deserve a thorough vetting of candidates, but they shouldn’t be confused with the legal business visa process that thousands of American businesses depend upon.

Unfortunately, our schools are not producing a sufficient number of graduates in some professional fields, and American businesses have to bring in foreign nationals to fill critical positions. There is a common misconception that these businesses are hiring cheap labor that displaces U.S. citizens, but that’s wildly inaccurate. American businesses are incurring substantial expense to bring in foreign workers with specialized skills, and they would gladly hire U.S. citizens but for the dearth of domestic talent in some professional areas. 

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Avoid These Legal Snares in 2016

We always like to look ahead and advise our business clients about legal issues that may receive more attention throughout the year. Some are pushed to the forefront by public policy and politics – immigration, for example. Other issues, such as data protection and workplace harassment training, always are important, but the beginning of the year is a good time to review whether your business follows best practices.

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Take the Extra Step in Product Warnings to Protect Your Company from Liability

For years, the assumption in South Carolina law has been that a manufacturer doesn’t have to warn about something that is obviously dangerous, such as a power saw. Do you really need to tell users to keep their hands away from spinning blades? The more challenging concept is: how do you effectively warn about a product that is beneficial when used properly, but that may have dangerous or unintended outcomes if used improperly?

A basic principle of product liability warnings is the concept of the “sophisticated user.” A professional carpenter who uses power tools in his job should be aware of the inherent dangers of a powerful, spinning cutting blade. In comparison, a skilled worker may – or may not -- be expected to appreciate the dangerous qualities of flammable or toxic substances that sometimes are integral components of the job site or the task at hand.  

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