A little known fact about what lawyers do when we go to court- often we have to wait in the courtroom for our case to be called, and wind up sitting and listening to other people's disputes until it is our turn.  So it was for me last week in the Springfield Housing Court, which has led me to believe there are some things that both landlords and tenants in the Hilltowns should know about their rights and responsibilities.

Note: this piece is written about residential tenancy- the rules are a little different when you rent space for your business.

Your Home is Your Home: When you rent a house, an apartment, or even a room in a house, that space is under your control.  You have the right to allow or not allow access to anyone, including the landlord (though the landlord may access the premises to make repairs or other legitimate purposes with  notice to you, they cannot simply come into your space).

"Self-Help" Evictions are Against the Law: Even if there is a good reason to terminate a tenancy (non-payment of rent, or violations of the lease agreement, for example), the landlord must go through the proper court proceedings in order to get a tenant to move out.  A landlord cannot under any circumstances physically block a tenant from entering their home, remove their belongings, or attempt to block them from accessing the premises through a "no trespass order," unless they have gotten a court order allowing them to do any of those things.

Notice to Quit:  There are two kinds of notices to quit.  First, if you don't have a lease, or if your lease is close to expiring, a landlord can terminate a tenancy by giving a 30-day Notice to Quit.  This is usually a single piece of paper informing the tenant that their right to occupy the premises will terminate within 30 days.  Here is a confusing thing about a 30 Day Notice to Quit that you need to know: if your rental period runs from the first of the month to the first of the next month, the Notice to Quit must be served before the beginning of the rental period in order to be effective in 30 days.  For example, in a first-of-the-month rental period, a notice served on November 30 will effectively end the tenancy on December 31, but a notice served on December 15 will not legally end the tenancy until January 31.

The second kind of Notice to Quit is for non-payment of rent, which can legally terminate the tenancy 14 days after service, regardless of when it is served.

A Notice to Quit is Not a Court Order:  If a tenant does not leave by the time allowed in the Notice to Quit, the landlord still has to go to court to get an order of eviction.  That means in the example above, if the tenancy terminates legally on January 31, the landlord cannot bar access to the premises on February 1, or enter and remove the tenant's belongings.  Instead, they have to bring what is called a Summary Process action in either the District Court or the Housing Court.  A landlord who violates this rule can be liable for three months' rent and payment of the tenant's legal costs and fees, so it is super important to understand for both parties.

Warranty of Habitability:  This is a legal phrase which, put simply, means that when a landlord rents residential premises, they have an obligation to ensure that the premises are "habitable."  Beautiful and perfect- no.  But the premises need to conform to all local sanitary code regulations.  Common issues in this regard are heat and hot water, pest infestations, water damage and mold, and basic structural integrity of the unit.  If the premises do not meet the local codes, the tenant may have the right to legally withhold rent payments, and cannot be penalized for complaining to the landlord about violations.

Security Deposits Can be Dangerous:  A landlord can, but does not have to, collect an amount equal to one month's rent at the beginning of the tenancy to provide security for damage to the premises or unpaid rent.  The rules about these deposits are very strict- a landlord must keep the funds in a separate, interest bearing account, must pay the tenant the interest accrued on the account each year, and must return the deposit unless they can document allowable deductions at the end of the tenancy.  Doing it wrong automatically entitles the tenant to three times the deposit and payment of their legal fees and costs.  As a landlord, if you choose to require a security deposit, you should be meticulous in following these rules. If you are a tenant and believe your landlord has wrongfully withheld your security deposit, it is a good idea to find a lawyer to help you understand your rights in the situation.

Where to Go for Help:  At slnlaw, we can provide advice to either a landlord or a tenant about how to navigate whatever situation you are facing.  Because the law requires landlords to pay for a tenant's legal fees if they are held responsible for a violation, we can provide this service at minimal cost to tenants, and in any event have many flexible payment options for any client.  Even if you don't seek the assistance of a lawyer, you can generally appear in court and represent yourself.  The courts relevant to the Hilltown communities are:

• Western Housing Court - Springfield Session, 37 Elm St, Springfield, MA, (413)748-7838 (covers Hampden, Hampshire, Berkshire and Franklin Counties):
  
• Northampton District Court, 15 Gothic St., Northampton, MA, (413) 584-7400 (for actions involving properties in Chesterfield, Cummington, Easthampton, Goshen, Hatfield, Huntington, Middlefield, Northampton, Plainfield, Southampton, Westhampton, Williamsburg, and Worthington)
  
• Pittsfield District Court, 24 Wendell Ave., P.O. Box 875, Pittsfield, MA 01202  (413) 499-0558 (for actions involving properties in Becket, Dalton, Hancock, Hinsdale, Lanesborough, Lenox, Peru, Pittsfield, Richmond, Washington, and Windsor)
  
• Southern Berkshire District Court 9 Gilmore Ave., Great Barrington, MA,  (413) 528-3520 (for actions involving properties in Great Barrington serves Alford, Becket, Egremont, Great Barrington, Lee, Lenox, Monterey, Mt. Washington, New Marlborough, Otis, Sandisfield, Sheffield, Stockbridge, Tyringham, and West Stockbridge. Pittsfield District Court exercises concurrent jurisdiction in Becket and Lenox)
• Westfield District Court, 224 Elm Street, Westfield, MA 01085  (413) 568-8946 (for actions involving properties in Agawam, Blandford, Chester, Granville, Montgomery, Russell, Southwick, Tolland and Westfield).

Want more information?  Give us a call at (413) 667-2322, or send us a note at [email protected].  We are happy to schedule a free consultation to help you understand your options and whether you need legal representation.

One of the first questions people have when they lose a job is "can I get unemployment?"  Unemployment benefits are a safety net that most people have used at one point or another, but there are a lot of common misunderstandings about how these benefits work and who is eligible.  Here are the top 5 myths about unemployment in Massachusetts:

If I am fired for cause I cannot collect unemployment:  This is usually not true.  If you were fired for deliberate misconduct, you could be denied benefits. But "deliberate misconduct" means intentional behavior against the employer's interest or violation of a clear and uniformly enforced policy.  It does not include alleged poor performance, employee negligence, or absence or tardiness for legitimate reasons (so long as the employer is notified- a "no call/no show" situation without a compelling reason could be found to be deliberate misconduct).

I can't collect unemployment because I was paid as a 1099/independent contractor:  This would be true if you were properly classified as an independent contractor under Massachusetts law, but the truth is that most people paid as 1099 employees should be considered W2 employees (for more information about the rules on this, click here).  If, for example, your work was subject to significant supervision and control, or if you were not also in the business of offering the same services to others, or if the work you were doing was core to the employer's business, you probably should have been classified as an employee.  You can apply for unemployment even if your employer claims you are ineligible- you may be initially denied, but you can request a hearing, and if the DUA finds that you met the statutory definition of an employee, you should be able to collect benefits.

If I was paid severance I have to wait to collect unemployment: This is only partially true, and only in the rare situation where an employer provides a severance payment without requiring you to sign a release of potential claims in return.  Most severance agreements include a release (if you are not sure what to look for, it is generally a long and dense paragraph with references to dozens of statutes saying you  release, discharge, and/or hold the employer harmless for those claims).  If you have signed a release, the money you receive is not considered salary continuation, but instead the money you were paid in exchange for the release, and it does not count against your unemployment.  This means if you have a severance agreement with release of claims, you could be collecting the payments from your employer under that agreement at the same time you are collecting unemployment benefits.  You may have to show the severance agreement to the DUA, and you may be initially denied, but ultimately you should be entitled to benefits.

Resigning is better for me than being fired: Usually, no.  If you quit or resign your job, you may be automatically denied unemployment benefits.  In contrast, a termination "on your record" is in reality only on the record in your personnel file with your former employer.  Unless you anticipate applying for a job within the same organization or company, it is highly unlikely that a prospective employer will ever see the stated nature of your termination.  Also, a little known fact is that the information you and your employer submit to the DUA in connection with an application for unemployment benefits is confidential and protected by statute, and not a public record.  If you have agreed to resign or quit as your only option instead of being fired, when you apply for unemployment you should state not that you resigned but that you accepted a resignation in lieu of termination, so the DUA knows it was not actually a voluntary termination.

Once I apply for benefits, I will get all important notices in the mail:  Not necessarily!  We have found many people check the box for electronic notifications without realizing that means they will not get hard copy notices of important things like hearing dates or decisions.  More than once we have had a client whose email notifications went into a spam folder, or to an infrequently checked email account, and missed important deadlines for appealing an adverse decision or appearing for a hearing.  If you check this box, make sure you are actively checking the email address you provided, including your clutter and spam folders.

You should not wait to apply for unemployment- if you are denied and later go to a hearing and are awarded benefits, those benefits will be back paid to the date you applied, not to the date of your termination.  So while you may still have other questions about your termination- whether it was a wrongful termination, wages, vacation pay, or commissions that weren't paid to you at termination,  or whether you may have a legal claim against your former employer- you should apply for benefits on the first date you are allowed to after your termination.

For more information, you can call us at (413) 667-2322, or book a free consultation here.

Changes to the overtime rules that were supposed to go into effect in December 2016, but were delayed by litigation and changes in presidential administration, are now modified and finalized and scheduled to go into effect January 1, 2020.  The Department of Labor estimates that 1.3 million workers nationwide will become newly eligible for overtime pay when the rule takes effect.

These changes will almost certainly affect small business owners, so it is important to understand them and possibly get legal review of your employment policies if you are in doubt about how they affect you.

The Cost of Getting Overtime Pay Wrong
If an employee files a lawsuit claiming they should have been paid time and a half for overtime hours and wins, you as the employer could be on the hook not only for the unpaid amounts but for two or three times the unpaid amounts, plus the employee’s costs and attorneys’ fees.  That is on top of having to pay a lawyer yourself to defend the claim.  So it is important that you understand the rules- old and new- and how they could affect you and your business.

What Changed
Under the old rules, an employee could be exempt from overtime if they (i) are paid on a salary basis (the same amount each week or biweekly pay period); (ii) earn at least $455 per week, or a little over $23,000 per year; and (iii) perform duties that are considered “exempt” under overtime law (more on exempt duties further down).

The “salary basis” and “exempt duties” requirement has not changed, but the minimum earnings to be exempt from overtime have gone from $455 per week ($23,660 annually) to $684 per week ($35,568 annually). 

The second change allows an employer to bring employees up to the minimum salary through the use of non-discretionary bonuses and incentive payments, so long as those payments do not represent more than 10% of the employee’s salary. 

Why The New Overtime Rules Are Important
Prior to the implementation of the new rule, virtually every employee in Massachusetts met the salary minimum to be considered exempt from overtime, as $455 per week for a 40 hour week is less than $12 per hour, the current minimum wage in Massachusetts.  The new minimum is the equivalent of a little over $17 per hour, so there should be plenty of workers in Massachusetts who right now earn enough to be exempt from overtime but will not by January 1, 2020.  This means for anyone earning less than the minimum amount, they will have to be paid overtime for hours worked over 40 in a week no matter what their salary arrangement and no matter what kind of job they do for your company.

Why You Still Need to Pay Attention to the Old Rules
The minimum salary is only a piece of the puzzle.  What has not changed are the old rules that also require the employee to receive regular, consistent amounts, and to be engaged in duties that are considered exempt.  This means that even if your employees are salaried, they may or may not be exempt from overtime.

The list of specific exemptions under Department of Labor regulations is lengthy, but in broad strokes someone is exempt (meaning they do not have to be paid overtime) if they are a licensed professional (think lawyer, doctor, CPA, some nurses and some social workers), executive (supervising and managing at least two employees) or administrative (someone who supports the business in a role like HR and exercises independent judgment on matters of significance).  If you are in doubt about your employees’ duties and whether they are exempt, it is important to consult a lawyer because the lines are not always clear between “exempt” and “non-exempt” duties.

What Small Business Owners Can Do
First, look at all of the people who work for you who at times put in more than 40 hours a week.  If their regular salary is less than $684 per week, without doing any further overtime analysis, you already know that you will have to either increase their base salary (or catch them up with nondiscretionary bonuses or incentive pay), find a way to control whether and when they are working more than 40 hours a week, or resign yourself to paying time and a half for hours worked over 40.

You can control hours, by having and enforcing a policy that requires management approval to work more than 40 hours, and by implementing time reporting that allows you to monitor the time put in by your employees.  You may occasionally have to pay out overtime if something slips through the cracks, but you can avoid having potentially owed amounts add up over a long period of time.

You can use one time payments to bring people up to the required minimum salary.  Because this rule is so new, there is little guidance on how it will be interpreted, but typically a “non-discretionary bonus” is something that is tied to an objective metric- commissions, or specific amounts paid out when a person, team or department meets certain milestones in the business. 

Questions?
Even before the rules changed, overtime laws were often confusing for employers, especially small business owners without a full HR department or in-house counsel.  We can help- give us a call at (413) 667-2322 for a free, no obligation consultation to help you understand if you need to make any changes to your employment policies before the new year.
 

An "estate" does not mean you have a huge house on sprawling grounds, or many hundreds of thousands of dollars in the bank.  An "estate" is simply everything you own at the time of your passing, however big or small.

Many people are unsure about what they need in an estate plan, and worry about whether the investment of time and money in making a plan is worth it, especially if they feel they do not have a lot of assets.  The truth is, there is a "right-sized" estate plan for everyone.  Here are some common scenarios:

A family with young children and modest or minimal assets:  Without a will, in most cases the law will distribute all of your assets to your surviving spouse.  If this is what you want, the main things you need to be concerned about are: (i)  designating a guardian for your children if something were to happen to both parents; (ii) designating a personal representative to make the probate process simpler and less expensive; and (iii) making sure you and your spouse have health care proxies and durable powers of attorney so that someone can make medical and legal/financial decisions if you are incapacitated.  This can be accomplished at a relatively low cost by drafting a simple will, health care proxies, and powers of attorney.

A "blended" family: If your family includes children who are not all the children of both you and your spouse, making a will becomes even more essential, as the decisions the state will make about how assets are divided between your spouse and your children may not be what you want.  You can take care of the division of assets with a will, but may also want to consider establishing a trust to hold assets for your children, especially if they are minors.

A family whose main assets are real property:  This is a common scenario- the net worth on paper is high because of a family home, a farm, or other real estate, but those assets are not "liquid," and in many cases the individual or family does not want to sell the property.  If the value of the real property, combined with other assets, life insurance policies, and retirement savings might make your net estate worth $1 million or more, it is essential to make an estate plan that can shelter as much as possible from Massachusetts estate tax.  If your assets are worth $1 million at your passing, your estate will owe approximately $36,000 in taxes, but if the assets are worth $999,999, your estate will owe nothing.

Even if you are nowhere near the $1 million threshold, if it is important to you to keep a home, farm, or other real estate in your family, there are other estate planning tools you can consider, such as a realty trust which will pass the title to your beneficiaries without the need for probate.

Individuals and families without children:  Without a will, the state will divide your assets among your spouse, your parents, if they are living, and siblings or descendants of siblings if your parents are no longer alive.  If this is not what you want, or if you have other people in your life you want to take care of, you will need a will to make your wishes clear and enforceable.

Small business owners: your business has a value, and will be part of your estate.  You may want to have the business liquidate on your passing and maximize the value to your heirs, or you may want to make it possible for family members or others to inherit and continue to carry on the business.  Without a clear plan, your family members may struggle trying to run a business they are not used to running, or scrambling to get maximum cash value from the business.  A will, powers of attorney, and review of your company's corporate form and governing documents can help eliminate this confusion and achieve your goals for your business and your family.  

Whatever your situation, we are here to help you find the solution that meets your needs and your budget.  Give us a call at (413) 667-2322, or click here to request a call back from a member of our team.

After two weeks at our new office in Chester MA, it has become clear that there are a few questions that seem to be on the minds of people running small businesses in the hilltowns: when should you be registering your business name or logo as a trademark, and what are the things you should consider about forming an LLC or an S Corporation instead of continuing to operate as a dba ("doing business as").

Trademarks

What a trademark is: Once you begin using a name or a logo (a "mark") in business, you have some protection for that mark even if you do not register for trademark protection, if you are the first to use the mark and if it does not violate another company's registered or established mark.  The danger is that those are two very big "ifs," and you might find yourself building a following around your brand name only to be met with a cease and desist letter from some company you have never heard of who had previously registered that trademark- something that has happened to at least one hilltown business in recent years.

Why register a trademark: Registering a trademark will do 3 things for you:

1. The trademark application clearly marks the priority date if someone later applies for the same or similar mark.
2. The initial step of searching the US Patent and Trademark Office ("USPTO") database will tell you early on if you might have a conflict with someone else's registered mark.
3. Once approved, you have nationwide enforcement rights if someone else uses a name or a mark that is likely to confuse your customer base.

What qualifies as a trademark:  In order to get trademark protection, your mark must be distinctive, not generic.  For example, you cannot trademark the word "food," but trademarks have been granted for names like "myfoods,"  "bliss foods," and "food made fabulous." If you have a distinctive logo, that can also be protected, with or without words.

How to apply for a trademark:  You can apply on your own using instructions from the USPTO. The filing fee is $250 for each classification you are seeking protection in.  For example, if you were to register "xyz foods" as only "staple food products," you would pay one filing fee, but if you wanted to register it also under "meat and processed food products," you would pay a second filing fee.  If you choose to only do one, all that means is that you only have protection in that classification, and someone else could come along and register "xyz foods" under the second classification.

Should you use a lawyer? You have a range of options.  You can do it all on your own, in which case your only cost is your time and the filing fees to the USPTO. There are also online services that offer filing packages and a basic search for existing marks.  What is missing from both of those is a specific legal analysis of the likelihood that your mark will be accepted if there are other, previously trademarked names or logos that are similar to yours.  This could leave you out the $250 filing fee (or more if you are seeking multiple classifications) if the USPTO rejects your application as too similar to another registered mark.  If cost is a concern, you might consider hiring a lawyer to do that analysis for you, but actually submitting and following up on the application yourself, to minimize legal fees.

Incorporation

Why incorporate: You are not required to incorporate (as an LLC or S Corporation) in order to do business, but there are good reasons to do so.  The primary reason is liability protection.  If you are operating as a dba and your business incurs a significant liability (a debt or a lawsuit, for example), your personal assets are at risk. We often hear people saying they will incorporate as soon as they start earning real revenues, but it is important to remember that your business is likely to owe people money before it becomes profitable, which are exactly the liabilities you don't want to attach to your personal assets.

LLC vs. S Corporation:  An LLC is a limited liability company authorized by Massachusetts law.  For tax purposes, it is considered a "pass through entity," which means you as the owner only pay taxes once on the revenue.  An "S Corporation" is a corporation formed under Massachusetts law that is entitled to the same kind of pass-through tax treatment under a section of the federal tax code for small businesses that meet certain criteria.  From a legal and liability perspective, the benefits are the same with either type of entity, but there can be some differences in tax consequences that you should discuss with an accountant.  When in doubt, keep in mind that it is easier to change from an LLC to an S Corporation than it is to go the other way, which is why many of our clients choose to begin as an LLC.

How to incorporate: if you are the only owner of your business, the process of  forming a single member LLC in Massachusetts is pretty straightforward, and not difficult to do on your own using the Massachusetts Secretary of State's online filing system, or through an internet provider.  Even if you decide to do it on your own, however, it is a good idea to consult with a lawyer at least initially.  If you have a business partner and/or the business is operated by more than one person, you should consult a lawyer to make sure your operating agreement or shareholders agreement addresses all of the things you need to have clarity between the partners on key business and governance terms.

Questions?

Give us a call at (413) 667-2322 and we can schedule you for a call or meeting to help you understand your options.