Whether a financing, merger or other acquisition, or other major transaction, parties often outline the major provisions in a non-binding term sheet or letter of intent. A principal benefit of this approach it to help the parties identify major areas of disagreement early to avoid wasted expense on additional diligence and drafting of the definitive agreements.
Human behavior and motivation has a critical role in the design of websites. Does the website for your startup cater to your audience and create a pleasant user experience?
Negotiating a lease for your company’s office or facility can be precarious. Real estate is not your core business, and you do not want to spend tremendous time (or expense) finalizing the lease document. In addition, start-ups and emerging companies without strong financials do not enjoy significant leverage in strong real estate markets.
If there is a ground zero of potential liability, this is it. Cash-strapped federal regulators and states are focusing on misclassification cases with renewed zeal and enthusiasm. And companies, even with the best of intentions, often mischaracterize employees as independent contractors (consultants or advisers). Independent contractors are not subject to wage and hour laws, meaning they don’t need to be paid minimum wage or overtime, are not subject to payroll taxes, and are not entitled to meal and rest periods. Some companies use the “try and buy” approach of hiring a “contractor” for a few months before “converting” him or her to a full-time employee. But companies and contractors are not free to decide what type of relationship they are creating. Federal and state laws alone dictate what constitutes an employee versus an independent contractor relationship.
As a founder of a new company, you’re probably overworked, underpaid, and swamped with problems that everyone is looking to you to fix. You probably also have some valuable people working with you and you want to keep them happy and healthy. For small employers, the Affordable Care Act created a tax credit that could make it easier for you to afford to offer health coverage to your employees. Of course, there are limits and conditions (this is an IRS program, after all).
Going Back to Cali: The Pitfalls of Contracting for Works Made for Hire From Consultants in the Sunshine State
It is essential for start-up companies to properly characterize their service providers who are individuals (i.e., natural persons) as either employees or independent contractors (i.e., consultants). Among other matters, a company is required to pay payroll taxes and comply with minimum wage and hour laws for its California-based employees but not its contractors.