I recently opened up a new mobile phone account for my business. The wireless company gave me the ability to buy an insane number of phone lines (like 50) without a deposit, for very little per month.
I’m thinking about whether I should provide cell phones to my staff to sidestep a common issue: does the business owner have to pay for an employee’s cell phone when she uses it for business purposes.
You may be surprised to learn that the employer may be required to pay for it, even if the use of the personal cell phone for business is not expressly at the employer’s request.
As always, the law is most restrictive in California, where reimbursements for gas, mileage, phones and other expenses is required and hard for employers to control.
For me, if I decide to get cell phones for my employees, I am going to tell them it is a benefit. Employees like benefits and they don’t need to know that I am hedging against other legal risks at the same time.
Watch this video to learn a little more about cell phone reimbursement requirements for employers.
Say your employee is “out in the field” a lot and uses her cell phone.
Do you have to pay her cell phone bill?
If she is using her cell phone for business, then you likely have to pay a portion of it.
You can give her a business cell phone to use and make a policy that prohibits the use of personal cell phones for business.
Or you can determine a monthly reimbursement amount up front.
Coming up with a flat amount that approximates the split of business versus personal use of a cell phone is a good way to go.
However, incidental or minimal use of a personal cell phone for work does not have to be reimbursed by the employer.
For all of you businesses in cool brick lofts, I’ve got some bad news for you. Grandfathering under the ADA is not a thing.
Everyone thinks it is, though. It’s a persistent rumor leading to poor decisions. I hear the grandfathering rumor all the time. All. The. Time.
So I feel the need to say it again. Just because the building is old doesn’t mean that your business doesn’t have to comply with the ADA. Grandfathering under the ADA does not exist.
Most California businesses find this out the hard way.
In California, a disabled plaintiff can get damages and attorneys’ fees for going to a business that is not to code under the ADA. So these suits are rampant and entire law firms exist just to bring them.
In other states, the availability of damages varies. So the attractiveness of a lawsuit to lawyers also varies. But, that doesn’t mean the businesses can’t or won’t get sued.
And if you are a commercial tenant, you probably won’t be able to blame it on the landlord. Quite the opposite: your landlord will also get sued and you’ll be required to indemnify him.
So beware. This is a trap for those who live in old towns, like our headquartered city of Saint Louis, Missouri.
Say your business is in a 100 year old brick warehouse.
I own a business, so I might as well have a target on my back that says, “SUE ME.”
It is seriously ridiculous. The lawyer part of me says, “why does anyone own a business?” The entrepreneur part of me says, “screw those guys, they aren’t taking me down!”
But I digress. I was sued. Why? Because I was driving a car when someone broadsided me in an intersection. As the insurance company dawdled on settlement, the woman who hit me learned that I owned a business (through the magic of Google, I presume). She thought she could threaten me and my business insurances and assets.
You see, if you or your employees are driving within the scope of business or employment, then the business can be liable if you cause an accident.
I wasn’t driving anywhere on business nor was I at fault, but those details didn’t seem to matter to her. Fortunately, I own a law firm, so her lawsuit did not last very long.
Still, it made me think about the employer liability rules for employees. Do you have a company car? Or do your employees sometimes go on errands, drive to see clients or take pit stops from lunch or work? Do they go to more than one office?
If so, you have some risk as a business and business owner if they get in an accident. (Uber’s strategy to avoid this is to classify everyone as independent contractors. It won’t work in the end and is not recommended. Uber has a lot of money to spare for legal fees so that they can delay and game the system; but most businesses don’t and this strategy will make things worse for them.)
Here’s a little video outlining some of the things you should consider when it comes to employees driving. Get insurance accordingly. And talk to your lawyer about ways to keep you lawsuit-free.
Say your employee got into a car accident driving home from work. Can you get sued or be held liable for the accident?
Like many questions in law, the answer depends on the facts.
The answer is “yes” if the employee was driving a company vehicle.
The answer is “no” if the employee was driving their own vehicle as part of their daily commute.
The answer is complicated when the employee sometimes uses his or her car for work during business hours.
Or if the employee is not commuting at the time of the accident.
For example, the employee is driving home from a different office or job site than usual.
Or from a side errand run for the employer.
In these scenarios, the employer may get sued, but may win at trial anyway.
A lot of people on the internet are starting to become familiar with copyright laws.
They know, for example, that you are not supposed to save and use a picture from someone else’s website.
Sure, theft of images online is pretty rampant. But honest business owners avoid copyright claims by writing their own web copy and blogs, and buying licenses from stock phone companies.
Or they use images listed on Google or the public commons wiki with permissive use licenses.
Using images with commons license can save you a little bit of money. But you want to make sure you read the license grant and know what you are allowed to do with the image. Sometimes they exclude commercial uses (and if you are in business, you are a commercial use).
Copyrights, though, are not the only issues that arise when you put pictures on your website (or any digital or print products).
Advertising laws, for example, can be triggered. Does your image imply a promise of something that is not true?
People in the health, nutrition, financial and self-improvement areas are prone to fall into that trap. For example, if you are selling a vitamin and imply that someone will lose a ton of weight by a picture you include, without a claim being substantiated, you may find the FTC knocking on your door.
Same story if you are implying from a photo that people will make certain incomes from your product or service. Don’t promise incomes or cures for cancer, even by implication!
Just ask Kevin Trudeau. He’s in a Federal prison now….
If you use a celebrity’s image, they also have a property right in their “celebrity,” which they sell when they endorse a product. Using their image in a commercial setting, even with a disclaimer, could get you sued for big, big bucks.
Sometimes it is fair to use a public celebrity image, though. Do you know how to tell the difference between fair use and stealing their rights to their publicity?
Watch our video if you want to learn more about when a celebrity image is permissible and when it raises red flags.
Say you found a public domain picture of a celebrity on Google Images. Can you put their picture on your website?
If you are a news website and using their picture to discuss something newsworthy about them, then sure.
If you are a parody website and using their picture as part of a parody, then go ahead.
But if you are selling a product or service of any kind and thought their picture would help sell it, then no way.
You cannot imply in any way that a celebrity approves, uses or endorses your product without their express permission.
How useful is a condom that is never taken out of its box and wrapper?
If you were the kind of person with enough forethought to buy a condom, you would probably want it to protect you from several things.
But it would not be very useful to go through the trouble of buying the condom and not taking the additional necessary steps to get its benefit.
Lawyers call certain legal services “prophylactic.” That’s because their purpose is to prevent problems and unwanted consequences.
Completing your necessary corporate compliance and regulatory paperwork is prophylactic. Buying an LLC and not taking it out of the box will not give you the desired results.
Say you filed an LLC using Legal Zoom. Are you personally protected from lawsuits?
Maybe a few, but mostly, no.
Because they don’t give legal advice, budget legal sites don’t tell you there are numerous things to do after you file the LLC to legitimately and legally set up your business.
After years of starting businesses, we have developed a list that is several pages long made up of single spaced bullet points.
If you don’t do all the things on this list for your LLC, then the “corporate veil” can be pierced.
But more likely, if you don’t do all of the things you are supposed to do to start up your business legally, you will violate one of several laws that carry personal liability even if you are incorporated.
Taxes take a big bite out of profits for small business owners.
True story: I pay five times my salary in taxes every year as the business owner. For every dollar I take home to feed my family, I have to earn five just for taxes.
Too bad those tax dollars don’t go to feed other families. I’d rather use that money to take care of orphans.
But I digress.
California is much worse for taxes (business and personal) than all other states in the country.
So it is not surprising that I am asked constantly whether a business operating in my home town of San Diego would be better off incorporating in Nevada.
Nevada takes advantage of this and encourages businesses to incorporate in their state.
But for most small businesses, the answer to where they ought to incorporate is the state in which they are doing business. You can’t get away from California taxes by incorporating in Nevada if you are going to do business in California.
You didn’t really think California would let you get away from taxes that easily?
Can I incorporate in Nevada to avoid California taxes?
You can incorporate in Nevada.
But if you plan to do business in California, you cannot avoid paying taxes in California.
No matter where you’ve incorporated, if you’re running a business in California you must pay taxes on any income earned from California sources.
This is the rule for any combination of states that you mention. California, while tax-greedy, isn’t the only state to have these laws.
But sometimes there are good reasons for incorporating in another state.
For example, you may be able to divert some of the income you earn to the more tax-favorable state.
And there may be other taxes, business laws, and regulations that favor incorporating in one state versus another.
The best way to figure out how to structure your business is to have a great CPA and business lawyer help you along the way.
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Alicia I. Dearn is the founder of Bellatrix PC, a woman-owned law firm with offices in Missouri and California. Bellatrix PC handles lawsuits and business transactions. We advise in business, employment, real estate, intellectual property, civil litigation, and election law.
The articles published by Bellatrix PC are for informational purposes only and do not constitute legal advice. If you have a legal issue, please get competent advice from a licensed attorney in your jurisdiction. Use of Bellatrix PC's site is subject to our Attorney Advertising Disclaimers.