Conducting Workplace Harassment Investigations

Blog Post by Anna M. Pepelnjak.

In addition to sexual harassment, workplace harassment can take many forms, including harassment based on disability, age, religion, race, gender or national origin. If the alleged harasser is the “alter ego” of the company, liability will almost automatically follow. For all other situations, however, it is not the harassment itself, but the company’s failure to react properly that triggers liability.

Upon receipt of a complaint of harassment or when an employer has reason to believe that a potentially harassing situation has occurred or is occurring, the employer must act promptly. It is imperative that an employer investigateall complaints completely and objectively. Accordingly, it is critical for employers to understand how to conduct a workplace harassment investigation.

Here are some guidelines that you may wish to consider:

  1. Promptness: An investigation must be commenced within 24-48 hours (excluding non-business days), and if not done in this time frame, there should be documentation outlining an important reason as to why it did not.
  2. Thoroughness: Prepare in advance, carefully select the investigator and outline your investigation plan to keep focused.
  3. Neutrality: Identify and collect all potential evidentiary items (including personnel files, policies, supervisor notes and complaints) and interview witnesses.
  4. Accuracy: Keep accurate records and consider having interviewees sign off on notes taken.
  5. Focus: Commit to maintaining to the purpose of the investigation and not to straying beyond that required by business necessity.
  6. Confidentiality: To the extent possible, discuss the investigation only with those who need to know.
  7. Ethical Restraint: Keep the investigation within the parameters of relevance and the alleged misconduct.
  8. Documentation: Take good, detailed notes, avoid using a tape recorder because of the “chilling effect” it may have on the witness. Consider writing a follow-up report.
  9. Corrective Action: Corrective action taken should be to the maximum reasonable under the circumstances to show the resolve of the employer to having a healthy working environment.
  10. Procedure: Make sure the terms of all policies, manuals, handbooks, collective bargaining agreements or employment contracts are followed. In addition, an employee making a complaint should be notified as to the outcome of the investigation once a final decision has been made.

There are at least four choices as to whom should perform the investigation: the employer or his/her designated representative, in-house counsel (if available), an outside attorney or a specialist in the field. In general, the more severe the harassment, the more an employer would benefit from using professionals to conduct the investigation.

Taking the time and spending the money to conduct a prompt and thorough investigation of a workplace harassment complaint is always worthwhile because it insulates the employer from liability.

Commercial Real Estate Loan Refinancing – Don’t Put Off Until Tomorrow…

Blog Post by Ann K. Chandler.

Many of us are aware of the difficulties real estate developers are experiencing in obtaining financing for the acquisition and development of new projects. However, many clients have been surprised to discover that the drought in real estate financing affects not only new transactions but also impacts the ability of clients to refinance their existing loans. Clients who never made a late payment and have complied with all other requirements of their loan documents are surprised to find out that when their mortgage note matures, their lender will not extend or refinance the note.

A client with a long-standing relationship with a bank that previously had only to call his loan officer to discuss the terms of the renewal may now be told that the bank will require an appraisal or if the property is located in a market out of favor with the lender (Florida, Arizona, Las Vegas), the lender may not even offer to pursue the renewal. When the appraisal reflects the depressed market value of the mortgaged property, a client who may have been making payments on a note for several years may be told that a renewal will not be approved unless the client agrees to pay down the amount of the note so that the required loan to value ratio reflects the lower appraised value of the property.

What steps should someone take if they have a mortgage note maturity date approaching? Start looking at refinancing options early. A borrower needs to give itself enough time to seek alternatives if its lender is unwilling to renew the note. A borrower should not rely on a past banking relationship in the refinancing of a property if the loan would not be the type of loan that the lender would approve in today’s market. Just because a borrower keeps all its accounts at a bank and has been a customer of the bank for thirty years, does not mean that the bank will be willing to continue to finance a loan that is not properly collateralized. Be aware that an appraisal may be required and that, unlike the good old days, the appraisal is likely to come in much lower than you believe the value to be and that a lender may require the loan to be reduced before the lender is willing to refinance.

Don’t Miss Out – Wisconsin Sales Tax Amnesty

Blog Post by Mark W. Siler.

Wisconsin recently enacted changes to its sales and use tax regime that put it in compliance with the Streamlined Sales and Use Tax Agreement (SSUTA). As a requirement of such compliance, at this time, Wisconsin is offering a sales tax amnesty program to all business not currently registered to collect Wisconsin sales tax. Therefore, if your business is required to be, but is not yet registered, it may be time to investigate this amnesty program. Generally speaking, a business must collect and remit sales tax if it makes sales of tangible personal property to customers at retail. This definition is subject to certain exceptions. However, if your business fits this general definition you should determine whether you should be registered to collect and remit sales tax to the State of Wisconsin.

If you do need to register, the sale tax amnesty program being offered by Wisconsin may help your business save money in the process. If you meet the eligibility requirements and register (available at the Wisconsin Department of Revenue’s website – www.dor.state.wi.us), you won’t be liable for any Wisconsin sales tax on sales made prior to registration. It is important to note that any business that participates in the amnesty program must register to collect and remit not only Wisconsin sales tax, but also any sales taxes due on sales they make in any states whose laws comply with the requirements of the SSUTA. This program appears very attractive for Wisconsin businesses, and in most cases, it is. However, if yours is a business that makes a significant number of sales into other states which comply with the SSTUA but your business does not have nexus with those states and does not collect and remit sales tax on those sales, you may not want to register. The reason being, registration will require you to collect sales and use tax in those states. Therefore, you may be better off exploring a voluntary disclosure with the state of Wisconsin. The amnesty program is available through September 30, 2010.

Tax Issues In Starting A Business: Doing It The Right Way Can Help Avoid Tax Problems In The Future

Blog Post by Robert B. Teuber.

Starting a business can be one of the most exciting times in one’s life. However, it can also be one of the most time consuming. Because starting an entrepreneurial venture can require so much time to ensure its success, many times the owners of new businesses will overlook certain aspects of starting a business that should be addressed early on. These issues can lead to larger problems in the future. One of the most important aspects of starting a new business is insuring that the business is set up properly. From this perspective, it is immaterial whether the business is organized as a limited liability company, a partnership, a corporation or otherwise. Rather, the important part is to make sure that whatever entity you choose is formed properly.

This is particularly true where there is more than one owner of that business. Proper formation is important because later disputes between owners can be very costly to the success of a business if the structure for resolving those disputes is not spelled out in advance. Another costly oversight can be the decision to avoid dealing properly with tax obligations.

When it comes to taxes, most business owners are aware that income, employment, sales and use taxes exist; however, not everyone is aware of their obligations with respect to those taxes. The best way to resolve any future potential tax problem is to avoid having the problem in the first place. This means that all new businesses should develop a relationship with an accountant that can advise them on the business’s tax obligations and assist them in fulfilling those obligations. The new business owner should also maintain appropriate records of income, expenses, sales, purchases and other items. A skilled accountant can use this information to assist your business in complying with tax laws.

Unfortunately, however, it is a fact that not all businesses do avoid future tax problems by addressing the tax compliance issues at the outset of a venture. It is also possible that a prior interpretation of the tax laws is reinterpreted or interpreted for the first time by the government so that your business now owes tax for something it previously believed did not owe tax. Regardless, when one of these problems arises, there are procedures in place at both the federal and state levels for resolving tax disputes. While conceptually straight forward, based on the complexity of the business venture, its income, its expenses, its assets and its liabilities, it may be appropriate to hire a professional to assist you in resolving tax problems. These issues may include an inability to pay an income or employment tax liability, the filing of unfiled tax returns (known as non-filers), the personal assessment of employment or sales taxes against an officer of the business, the availability of entering into a deal with the government for less than the total amount of tax due (Offers in Compromise) and so forth.

While procedures exist to resolve tax issues that a new business may face, avoiding these issues in the first place is always the best part of a new business plan.

Sales Tax – How Does Personal Liability For Wisconsin Sales Taxes Happen?

Blog Post by Robert B. Teuber.

The Wisconsin Department of Revenue has the power to assert that an individual is personally liable for a business’ sales taxes. This post gives some generic examples as to how this can happen.

While the circumstances leading to the non-payment of sales taxes often come from entirely different directions, the consistent part among all of these situations is that the Department of Revenue believes that sales taxes that are owed and have not been paid. This could be the result of an audit that increased the amount of sales tax owed, a start-up business whose busy owner was unable to keep up with his sales tax obligation or a struggling business decides to use the sales tax collected to pay suppliers rather than the State.

In tougher economic times, a business that is struggling to maintain its operations may make the decision to use the collected sales tax to pay its suppliers instead of to pay the tax. This may be understandable, after all, if the business does not pay its supplier, it will not be able to continue operating and, therefore, could not pay the sales tax that is owed. The business owner’s belief is that if he buys additional supplies, he will generate enough sales to pay off the past due sales tax and any sales tax that arises. Unfortunately, most often the sales are insufficient and the sales taxes cannot be paid again. This problem often cascades into an unwieldy amount of tax, interest and penalty that can become the problem of the business owner.

As the Department of Revenue gets wind of the problem, they will take action to collect the liability from the business. When those efforts prove unsuccessful, they will look to any person who could possibly be responsible for the liability.

The above scenarios are not the result of good business decisions. Regardless of whether it seems like a good source for a bridge loan, using sales taxes to operate a business is not, and cannot come to good. The taxing authorities have collection powers that are the envy of all creditors. Unlike many creditors, the Wisconsin Department of Revenue can (by virtue of a specific statute) look right through any corporate or LLC liability shield to collect sales tax from individuals.

The point is, if you want to avoid having to hire an attorney to keep the Department of Revenue out of your personal lives, make sure that the sales taxes your business collects get turned over to the state. If it is too late for that, there can be several options for resolving the problem, but it is best to avoid the issue in the first place.

Disclaimer

The comments and opinions expressed in this blog are intended for informational purposes only and do not constitute legal advice. Reading or using the information in this blog does not create the existence of an attorney-client privilege. Due to the changing nature of the law, the blog posts may contain dated material. For an update on the current law and the application of the law to your particular facts and circumstances, consult a legal advisor. The information contained herein is not a substitute for obtaining legal advice from a qualified attorney licensed in your state.