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We would be happy to further discuss these or any other issues with you. Please call (262) 886-9720 to speak with your attorney or any of the following individuals:
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| Greetings!
Welcome to the Winter issue of our firm's newsletter. This issue contains legal information regarding business, employment, estate planning, litigation and real estate issues.
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Meet Your Attorney
Mark A. Brault
Mark practices in the areas of professional practices, employee benefits, employment law, construction law and general business law.
Mark received his Bachelors from the University of Wisconsin in 1986, and his law degree from Marquette University Law School in 1994.
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EMPLOYMENT AND BENEFIT LEGAL
CONSIDERATIONS WHEN REDUCING OR LAYING OFF EMPLOYEES
With the collapse of the U.S. economy, many employers are struggling just to remain in operation. As such, employers are reducing their biggest costs attributable to employees in the form of salaries and benefits. Employers trying to stay afloat must be cognizant of the fact that layoffs and other employee terminations may result in a "partial termination" of the employer's 401(k) plan or other retirement plan. In addition, any amendment to exclude an employee group from the plan could also trigger a partial termination.
If a partial termination occurs, the plan must 100% vest the accounts of all affected participants since the plan is treated as terminated with respect to those participants. Whether a partial termination occurs is a fact and circumstances test. Generally IRS guidance provides that if there has been a turnover of 20% or more of the workforce, a partial termination has occurred. There are defenses available to an employer when a partial termination claim is asserted, but the employer must be aware of this possible consequence when reducing the workforce. An employer must also be aware that a reduction of the workforce over a course of two or more years will also be factored into this test.
There are several employment laws that should be taken into consideration when reducing the workforce, including the Family Medical Leave Act, the Americans With Disabilities Act, the Uniform Services Employment and Reemployment Rights Act, the Older Workers Benefit Protection Act, Equal Employment Opportunity laws and the Consolidated Omnibus Budget Reconciliation Act. These various laws all could come into play on termination decisions. When determining which employees will be terminated and/or laid off, an employer needs to ensure that the criteria used is objective and does not create a disparate impact on a protected class. Often times, an employer will err in making compensation the sole criteria for determining which employees will be terminated. That is problematic because employees with the highest wage rates and positions generally tend to be older since their salaries have increased over time. This creates many potential discrimination issues. Rather, employers should insure they are using objective, legitimate business criteria to make their selections so as to avoid age discrimination claims and other related claims.
Finally, there are the plant closing and mass layoff laws which must be considered if you exceed a threshold total employee limit which is discussed in-depth with Mike Bannon's article. Employers should consult with legal counsel when they face these difficult situations to ensure they comply with all applicable laws. Employers should address these issues at the front end of the termination process before they become much more costly and time consuming after the fact.
For further information on this matter please contact Mark Brault.
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What do You Need to Know about
Wisconsin's Plant Closing Law
With this economy, I have answered more questions about Wisconsin's Plant Closing/Mass Layoff Law than ever. What basics do you need to know?
- Applies to any employer that has 50 or more employees in the State of Wisconsin that plans to cut at least 25% of its work force or 25 individuals, whichever is greater.
- If the law applies, the Company must give the employees, local municipalities and the state a 60 day advance notice that it intends to discharge more than the maximum employees allowable under the law.
- The Company must then wait the 60 days before it acts or face statutory penalties.
- Exceptions to the law include:
1. Unforeseen business loss of a major contract
2. Inability to obtain financing to keep the company operating
3. Man-made or natural disaster
4. Layoffs that last less than 60 days
- In calculating whether the business meets the threshold requirement of 25% of the workforce or 25 employees, whichever is greater, certain employees do not count towards that number:
1. Seasonal employees
2. Short-term employees (less than 6 months)
3. Low-hour employees (less than 20 hours per week)
4. Employees that are offered a transfer.
- Damages for violating the law is full wages and benefits to the affected employees for the number of days in which the employer failed to give notice.
There are ways to manage a Company's exposure if a reduction of force is necessary and cannot wait the required 60 days, but advance planning is critical.
For further information or assistance with this matter please contact Mike Bannon.
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AVOIDING PROBATE AND GUARDIANSHIP
Probate and guardianship are generally the result of failing to plan ahead!
Probate is the Court process for transferring the assets of a person who has died. The Court appoints a personal representative ("executor") to handle the person's estate including liquidating assets, paying bills and taxes and making distributions to the beneficiaries. A Will does not avoid probate - rather it is your instructions to the Court on settling your estate.
Ways to avoid probate include:
- Setting up a revocable trust
- Completing the primary and contingent beneficiaries on beneficiary designation forms for IRAs, life insurance, 401k plans and annuities
- Completing a Payable on Death "POD" form for bank accounts or a "TOD" form on mutual funds and brokerage accounts
- Holding property as joint tenants
Guardianship is the Court process to name a guardian to make financial and health care decisions for a person who is incapacitated. It is an expensive cumbersome process. Avoiding guardianship is simple and inexpensive by creating the following documents:
- Durable Power of Attorney. A Durable Power of Attorney names another person to act as your agent (sometimes referred to as an attorney-in-fact) to handle financial affairs if you are unable to do so yourself due to incapacity.
- Health Care Power of Attorney. A Health Care Power of Attorney names an agent to make health care decisions for you if you are unable to do so yourself
For further information or assistance on this matter please contact Kathy Bach
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The economic downturn has had a tremendous effect on the residential market. While the news reports have focused mainly on homeowners, the crisis is also affecting the rental market. Both residential and commercial landlords are experiencing higher default rates. As a result, small claims filings are skyrocketing.
While the small claims court can be very efficient and economical, it does contain pitfalls for the unwary. In particular, landlords are required to provide tenants with proper notice of the case, which can be difficult with a residential tenant who has moved away or a sole proprietor who has closed up shop. Not only can we assist with this process, but we can also advise you on how to put some teeth into your leases to compensate you for the risks and costs associated with an eviction.
For further information on this matter contact Tom Binger. |
MAXIMIZING RECOVERY WHEN A CUSTOMER FILES FOR BANKRUPTCY
If one of your customers files for bankruptcy there are steps that can be taken to minimize your losses and repayment time. You may make a reclamation claim requesting the return of goods sent within the last 45 days. Additionally, you are entitled to receive priority with respect to goods shipped within 20 days prior to the commencement of the action.
A reclamation claim entitles you to receive back goods shipped in the ordinary course of business within the last 45 days or receive a priority. Upon receiving the reclamation claim the bankrupt company should either segregate the unused goods and ship them back to you or notify you that the goods will be kept. If the bankrupt company elects to keep the goods you will receive a priority. Unfortunately, reclamation only applies to goods, and does not entitle a creditor to receive proceeds from the sale of goods or a security interest in goods that have been used. It is extremely important that the reclamation letter be sent out as soon as possible after notice of filing as the creditor will only be entitled to goods shipped within 45 days of the reclamation claim. Additionally, if the reclamation claim is not filed within 20 days of the commencement of the case the creditor loses its reclamation rights.
In addition to reclamation rights, which are limited to goods the debtor is in possession of, a creditor may receive a priority claim for goods shipped within 20 days prior to the commencement of the case. Unlike reclamation the priority will apply to goods that have been sold and used by the debtor. To receive a priority for goods shipped within the last 20 days a creditor must file an application with the Bankruptcy Court and provide proper notice. Once the application has been accepted by the Court the creditor receives an administrative priority and will be paid prior to other secured and unsecured creditors.
A creditor's reclamation claim and administrative priority application allow the creditor some relief in the event a customer files bankruptcy. Creditors greatly increase the likelihood of receiving payment in bankruptcy by taking the above steps. Timely filing of both the reclamation claim and request for priority are essential. Immediately contact us if one of your customers file bankruptcy to ensure you collect the maximum amount you are legally entitled.
For further information on this matter please contact Jeff Molinski.
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This document provides information of a general nature. None of the information is intended as legal advice. Additional facts and information or future developments may affect the subjects addressed in this document. You should consult with a lawyer about your personal circumstances before acting on any of this information because it may not be applicable to you or your situation. | |
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