Legal Updates for Business and Property Owners
What You Need to Know About the Corporate Transparency Act (CTA):
The Corporate Transparency Act (CTA) went into effect on January 1, 2024, and impacts millions of small businesses across the U.S.
The CTA was created to combat financial crimes such as tax fraud and money laundering by capturing ownership information for entities operating within the U.S. The CTA requires companies to report beneficial ownership information (BOI) about who owns and controls them to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Companies that are required to report are called “reporting companies” and include business entities such as corporations and limited liability companies. Reporting companies will be required to submit their beneficial ownership information electronically to FinCEN. Certain entities are exempt from the new reporting requirements, and a list of exempt entities can be found on FinCEN’s website (www.fincen.gov/boi).
If your business entity was created or registered prior to January 1, 2024, you will have until January 1, 2025 to comply with the CTA. Business entities created or registered on or after January 1, 2024 must report within 30 days of creation or registration. Failure to comply with the CTA will have serious adverse consequences, including criminal and civil penalties.
If you’re a small business owner, you should consider consulting with an attorney to discuss whether you need to report and, if so, to determine what must be done to timely comply with the CTA.
Department of Labor Issues a Final Rule on Determining Independent Contractor Status:
On January 10, 2024, the U.S. Department of Labor issued a “Final Rule” on the determination of independent contractor status under the Fair Labor Standards Act (FLSA). The Final Rule will become effective March 11, 2024.
The Final Rule broadens the circumstances under which workers may be considered employees as opposed to independent contractors under the FLSA. Six non-exhaustive factors are to be considered in determining whether an individual is an employee or independent contractor under the final rule:
(1) Opportunity for profit or loss a worker might have;
(2) The financial stake and nature of any resources a worker has invested in the work;
(3) The degree of permanence of the work relationship;
(4) The degree of control an employer has over the worker’s work;
(5) Whether the work is essential to the employer’s business; and
(6) The worker’s skill and initiative.
None of the listed factors have a predetermined weight, and additional factors may also be relevant. Essentially, the U.S. Department of Labor is reverting to the “totality of the circumstances” standard to make a determination whether an individual is to be considered an employee or an independent contractor.
According to the Department of Labor, the 2024 Final Rule is intended to “reduce the risk that employees are misclassified as independent contractors while providing a consistent approach for businesses that engage with individuals who are in business for themselves.” Understanding and correctly applying this new analysis is critical given the implications of worker misclassification under the FLSA.
In light of the Final Rule, employers should assess their current and future independent contractor agreements to ensure they meet all compliance requirements and mitigate potential legal risks.
A Shift in Premises Liability Litigation:
This past summer, the Michigan Supreme Court all but eliminated the open and obvious doctrine as a complete defense in premise liability litigation. Under the open and obvious doctrine, a possessor of land had no legal duty to protect or warn invitees of dangers that were determined to be “open and obvious.” Defendants in Michigan premises liability cases could assert that a hazard or condition which caused a Plaintiff’s injury was so obvious and discoverable that a reasonable person would have avoided the hazard, and therefore, would not have sustained an injury.
As a result of the Michigan Supreme Court’s decision, a land possessor now owes a duty to exercise reasonable care to protect invitees from an unreasonable risk of harm caused by a dangerous condition on the land, even if the dangerous condition is open and obvious. More recently, the Michigan Court of Appeals recognized that this new standard for premises liability litigation will apply retroactively to cases already filed in Michigan trial courts or the Court of Appeals.
The practical impact of the Supreme Court’s decision should cause all commercial and residential property owners to assess the condition of their properties, any dangerous hazards that may exist, and implement reasonable measures to prevent liability. The decision may also lead to an increase in insurance rates for property owners.
If you need assistance, please contact Attorney R. Paul Vance.
Office: 810-232-3141; Cell: 517-648-1807; Email: email@example.com
Attorney Paul Vance specializes in providing innovative and strategic legal counsel on business and litigation matters for individuals and companies, and serves as general counsel to a wide range of small to medium sized businesses. Paul has extensive experience in commercial and business law, employment law, residential and commercial real estate matters, civil rights, products liability, premises liability, and personal injury.