NYC Updates “Ban the Box” Law

NYC Updates “Ban the Box” Law to Detail Per Se Violations and Procedures Employers Must Follow to Conduct Employment-Related Criminal Background Checks

By Greg Hessinger and Melvin Felton II

On August 5, 2017, important updates to New York City’s Fair Chance Act went into effect.  The Fair Chance Act (FCA), which regulates criminal background checks on employees and license holders, is the City’s version of a growing trend of so-called municipal “Ban the Box” laws designed to prohibit employers and agencies from denying jobs and licenses to would-be employees because of a criminal conviction(s), especially when the conviction is not directly related to the persons’ ability to perform the job.

The Fair Chance Act itself took effect on October 27, 2015 (see MSK’s prior alert here).  Since then, the New York Commission on Human Rights (Commission), the agency charged with enforcing the FCA, has published revisions that further clarify the law, provide guidelines for per se violations, and detail the analysis and process for legally withdrawing conditional offers of employment based on the results of a criminal background check.  It is those revisions that took effect on August 5, 2017.  (Click here for a copy of the rule).  (more…)

Trading with China – New Reasons to Be Wary!

By Susan Kohn Ross

portToday, President Trump signed into law H.R. 3364, the “Countering America’s Adversaries Through Sanctions Act”. The general press is covering this story by writing about Russia’s initial retaliation taking the form of cutting the staff authorized at the U.S. embassy in Moscow and the seizure of certain U.S. diplomatic property within Russia. When it comes to international traders, the impact on dealing with Russia, but also Iran and North Korea, takes the form of enhanced compliance efforts.

The new law will provide more in the way of direct and indirect sanctions. A direct sanction arises because the person (or company/entity) is listed by one of the relevant U.S. agencies on the appropriate blocked persons list. A secondary sanction arises because a blocked person (individual or entity) owns or has a controlling ownership in a company not otherwise listed as blocked. Of course, additional headaches exist when there is U.S. content in the good being sold, so the impact is on both exports and imports. (more…)

Nasdaq’s Change of Control Rule – Does It Apply in a Public Offering?

Tax inspector investigating financial documents through magnifyiBy Kevin Friedmann

Are you concerned about whether Nasdaq’s change of control rule will limit the size of  your public offering? According to the Nasdaq staff, you don’t need to worry about this, as long as you have a bona fide public offering.

Nasdaq Listing Rule 5635(b) provides that shareholder approval is required prior to the issuance of securities when the issuance or potential issuance will result in a change of control of the company. According to Nasdaq, a change of control would occur when, as a result of the issuance, an investor or a group would own, or have the right to acquire, 20% or more of the outstanding shares of common stock or voting power and such ownership or voting power would be the largest ownership position (the “Change of Control Rule”). See Nasdaq FAQ ID#195.

Nasdaq Listing Rule 5635(d) provides that shareholder approval is required for the issuance of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for less than the greater of book or market value of the stock (the “Private Placement Rule”). Under the Private Placement Rule, however, shareholder approval is not required for a “public offering.” (more…)

I-9 Update

By Jaclyn Granet and Frida Glucoft

July 31, 2017

Onboarding a new employee is a time-consuming process that requires diligent review of employment authorization materials. One major element of onboarding is the completion of the Form I-9, intended to document verification of the identity and employment authorization of each new employee. Form I-9 has seen many modifications and revisions over the years, including a significant update in 2013. The Department of Homeland Security (“DHS”), through the United States Citizenship and Immigration Service (“USCIS”), released a new edition of the Form I-9 on July 17, 2017. This newest version of the form may be used immediately. However, USCIS has authorized a grace period during which either the new version of the Form or the last version may be used. Following the end of the grace period, on September 18, 2017, all U.S. employers are required to use the new Form I-9 for all new hires. Employers should only complete the new Form I-9 for new hires and current employees requiring reverification. Given the significance of the Form I-9, it is important for all employers to familiarize themselves with the new features of the Form and the mandatory time frame for its usage. (more…)

Top Six Reasons NOT to Have an Estate Plan

09.17.15 l Blog l imgBy S. Eva Wolf

Tired of bossy blogs telling you to get an estate plan?  Good advice is boring.  Your life is exciting and should have a dramatic ending.  And you can have it.  All you have to do is nothing.  So the next time someone tells you that you need an estate plan, tell them:

  1. Annie is your favorite musical. When your children misbehave you daydream about the day when they will be forced to live in a grubby orphanage and be abused by a cruel, alcoholic supervisor.  And, when your children act like angels, you are comforted by the certainty that in time a billionaire will rescue them from the orphanage, and they will live happily ever after.
  2. You’ve slaved away at a job that you hate for decades to amass great wealth, and no lawyer is going to swindle you out of ten grand (or less) to protect it. If you spent that kind of money on something as practical as an estate plan, you might have to spend a little less on designer handbags or forego a mid-life crisis Maserati in favor of a mid-life crisis Corvette.
  3. Your favorite uncle is Sam. You’re thrilled that he could inherit your assets when you die and use them to fund a manned mission to Mars.
  4. Two words: Terri Schiavo. Your parents and spouse always hated each other, and being in a persistent vegetative state without an advance health care directive will give them an opportunity to work out their differences with the assistance of all three branches of government.
  5. It’s important that your children be wild and carefree. If they inherit your wealth when they turn 18 and blow it all on sports cars, parties, and rehab, you have done your job as a parent.
  6. You are obsessed with Law and Order. Death is your only chance to star in a courtroom drama (unless, of course, you end up in a coma first).  You’re hoping your loved ones will fight over family heirlooms, your secret child will come forward, and a family feud will ensue, lasting hundreds of years – all because of you!

 

IRS Gives Surviving Spouses a Second (or Third) Bite at the Portability Apple

By Jeffrey Eisen

“Portability” is the ability of a surviving spouse to use not only his or her own estate tax exemption, but also some or all of the exemption of the first spouse to die, as long as the first spouse died in 2011 or later.  With the estate tax exemption for 2017 at $5,490,000, this can allow estates of nearly $11,000,000 to escape estate tax. While a full discussion of portability is beyond the scope of this post, suffice it to say that portability can save the day in one or more of these situations: if proper estate planning has not been done, if life insurance, IRAs or retirement plans left to the surviving spouse constitute a very large portion of a couple’s assets, or if a couple’s assets of any type are worth near the value of one exemption but less than both (e.g., $4,500,000 to $10,500,000).

The catch is that if the deceased spouse’s assets are worth less than his or her exemption amount, the deceased spouse’s executor has to file a federal estate tax return (Form 706) for the deceased spouse to “claim” the deceased spouse’s unused exemption and thus invoke “portability.”   This is the direct opposite of the normal rule that if a decedent’s estate is worth less than the estate tax exemption amount (after taking lifetime gifts into account), no estate tax return filing is necessary.  But if the deceased spouse’s executor does not file a timely estate tax return for the deceased spouse (nine months after the date of death, or an additional six months thereafter if a request for an extension was properly filed by the nine month deadline), the ability to use portability is permanently lost. (more…)

Changes From the SEC: Confidentiality is Key

IPO (Initial public offering)By Melanie Figueroa and Blake Baron

In a recent effort to foster increased public offering activity, the U.S. Securities and Exchange Commission (SEC) announced on June 29, 2017 that it will permit all companies to submit voluntary draft registration statements relating to initial public offerings (IPOs), certain follow-on offerings and national securities exchange listings for non-public review. This process will be available for nearly all offerings made in the first year after a company has entered the public reporting system. This benefit will take effect on July 10, 2017.

So, why is this an important change? (more…)

California State Board of Equalization Gutted

By Jeffrey D. Davine

The Taxpayer Transparency and Fairness Act of 2017

Established by the California Constitution in 1879, the California State Board of Equalization (the “BOE”) has been the agency charged with administering most of the taxes imposed by California.  In addition, the BOE was the tribunal whose function was to decide taxpayer appeals of decisions by the California Franchise Tax Board (the “FTB”) concerning income tax matters.  All of this is about to change with the passage of AB 102.  AB 102, which is named the “Taxpayer Transparency and Fairness Act of 2017” (the “Act”), was signed into law by Governor Brown on June 27th.  The Act effectively cuts the legs out from underneath the BOE.

Background

In March of this year, the California Department of Finance issued a derisive report asserting that the BOE misallocated tax revenues, used BOE employees to assist elected BOE members with political activities, and attempted to improperly affect BOE audits.  In response, and at the urging of the Governor, the Act was passed by the California Legislature. (more…)

If You SEC Something, Say Something

Cybersecurity of network of connected devices and personal data securityBy Melanie Figueroa and Susan Kohn Ross

Just about every survey of General Counsels reveals the same #1 culprit of sleepless nights….. a cybersecurity hack. If you run a business in today’s global environment, it is hard to escape the fundamental reality that it is more than likely a matter of when, not if, you will face a cyber threat. And depending on the nature of your business, that threat can have a wide range of implications. If you are a public company, there is an additional issue to consider… what do you have to disclose to your investors and shareholders?

Being prepared for a hack with a comprehensive written information security plan and an equally robust incident response plan is just one component to be considered if you are a public company. You must also have a plan to meet your reporting and disclosure obligations to a variety of governmental bodies. While measuring your response needs in the wake of a hack, and determining if there are state, federal or international laws and regulations that require reporting, you must also pay close attention to possible disclosure obligations in your SEC filings. Specifically, if you have tripped a disclosure to a state attorney general or your company’s customers, then it is possible you may also have a disclosure obligation to your shareholders. (more…)

Three Tiers for California

By Daniel Hayes and Aaron Wais

Last week, California’s tied-house law – the Alcoholic Beverages Control Act (Bus. & Prof. Code §§ 23000, et seq.) – withstood a hard-fought First Amendment challenge.  In Retail Digital Network v. Prieto, the Ninth Circuit Court of Appeals was asked to decide whether Business and Professions Code § 25503(h) – which prevents manufacturers and wholesalers from paying money or giving anything of value to a retailer for advertising their alcoholic beverages – is an unconstitutional restriction on commercial speech.  The Court decided 8-1 that it is not:  “Section 25503(h) serves the important and narrowly tailored function of preventing manufacturers and wholesalers from exerting undue and undetectable influence over retailers.  Without such a provision, retailers and wholesalers could side-step the triple-tiered distribution scheme by concealing illicit payments under the guise of ‘advertising’ payments.”  The bottom line?  The barriers between the three tiers of alcohol distribution (manufacture, wholesale, and retail) set by the Golden State remain firmly intact. If you have any questions on the decision or how it affects your business, please contact us.