Employee Credit Checks Banned Effective January 1, 2011

Employers will be prohibited from doing credit checks on prospective employees under a new Illinois law. The new law that was just signed by Governor Quinn will be effective January 1, 2011. There are a few exceptions for employers in the banking and insurance industry and those dealing with trade secrets.

Here is a link to a Chicago Tribune article on the new law.

Disclaimer This is a passive blog and the materials contained herein are provided for informational purposes only. Nothing contained in this blog should be interpreted as a solicitation of business and none of the information contained herein constitutes legal advice. The law is subject to change without notice, and the local laws of your residence may be different from the general information displayed on this blog. You should not rely on the information provided on this blog without first consulting an attorney. Contacting this website does not establish and attorney/client relationship between you and its publisher Christopher W. Matern. An attorney/client relationship can only be established with Christopher Matern by engaging in direct person-to-person contact with Christopher Matern. Christopher Matern does not intend to practice law in any jurisdiction in which he is not licensed.

Springfield Believes in the Fountain of Youth for New Senior Citizen Property Tax Exemption

Our elected officials in Springfield apparently believe in the Fountain of Youth when they passed the residential property tax law that requires senior citizens to re-apply every year for the senior citizen exemption.

Thats right when you turn 65 and apply for your senior citizen property tax exemption, you will need to re-apply for the next year. Using normal arithmetic, the year after you turn 65 you would then be 66.

Using "Springfield Arithmetic" you might turn 64 the year after your 65th birthday. Perhaps our elected officials hope that "Springfield Arithmetic" will make the $13 billion deficit magically decrease over time too.

Their explanation for this amazing possibility -- that you will get younger after you turn 65 is they want the prevent the possibility of people 64 and younger inappropriately applying for the exemption. Apparently, they forgot that when you apply for the exemption you have to provide proof that you are in fact 65.

Here is link to a Chicago Tribune article on this new law.

Governor Quinn has promised to "fix" this provision. Let's hope he keeps this promise. Otherwise our senior citizens will have to remember to let our government know every year that they are still senior citizens--or risk overpaying their property taxes.

Disclaimer: This is a passive blog and the materials contained herein are provided for informational purposes only. Nothing contained in this blog should be interpreted as a solicitation of business and none of the information contained herein constitutes legal advice. The law is subject to change without notice, and the local laws of your residence may be different from the general information displayed on this blog. You should not rely on the information provided on this blog without first consulting an attorney. Contacting this website does not establish and attorney/client relationship between you and its publisher Christopher W. Matern. An attorney/client relationship can only be established with Christopher Matern by engaging in direct person-to-person contact with Christopher Matern. Christopher Matern does not intend to practice law in any jurisdiction in which he is not licensed.

Summer Interns - A Benefit or a Liability

Summer interns may be a good opportunity for both your business and the intern, but if the interns are not paid you may be exposing your business to significant liability.

The U.S. Department of Labor applies a six factor test to determine whether a for profit business may have an unpaid intern.

A copy this test and the Department of Labor's analysis can be found at the link below.

http://www.dol.gov/whd/opinion/FLSANA/2004/2004_05_17_05FLSA_NA_internship.htm

Briefly, the six factor test that permits a for-profit business to have an unpaid intern is

1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction;
2. The training is for the benefit of the trainees (rather than the employer);
3. The trainees do not displace regular employees, but work under their close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

If you have an unpaid intern and you do not meet all six factors of this test then you could be exposing your business to a Fair Labor Standards Act violation.

Disclaimer This is a passive blog and the materials contained herein are provided for informational purposes only. Nothing contained in this blog should be interpreted as a solicitation of business and none of the information contained herein constitutes legal advice. The law is subject to change without notice, and the local laws of your residence may be different from the general information displayed on this blog. You should not rely on the information provided on this blog without first consulting an attorney. Contacting this website does not establish and attorney/client relationship between you and its publisher Christopher W. Matern. An attorney/client relationship can only be established with Christopher Matern by engaging in direct person-to-person contact with Christopher Matern. Christopher Matern does not intend to practice law in any jurisdiction in which he is not licensed.

Making a Power of Attorney for Health Care More Useful

On March 26^th, I wrote about the importance of having Powers of Attorney for Property and Health Care. Today, I am continuing that story to mention a service that can make a Power of Attorney for Health Care more useful.

That service is called DocuBank. It provides a card the size of a credit card. The card contains

• your name,
• allergies or medical conditions that a hospital would need to know
• The person to contact in an emergency with multiple phone numbers
• A toll free telephone number and web site where a hospital can get your Power of Attorney for Health Care, Living Will and HIPAA authorization as well as a list of your current medications.

The DocuBank card is useful because it improves the usefulness of the Power of Attorney for Health Care. For example, if you are unconscious and taken to an emergency room. How will the hospital know who to contact? The hospital will look through your wallet hoping to find something in there that will give them a clue. Remember if you are unconscious, the hospital will have to look at your driver’s license just to find out your name.

If you have a DocuBank card in your wallet, the hospital will not only know who to call, they will also know about allergies and medical conditions—vital information for them. In addition, the hospital can call and get a copy of your current list of medications and your Power of Attorney for Health Care.

So, when the hospital reaches your emergency contact they will not have to ask your emergency contact, do you have a Power of Attorney for Health Care, and please bring it. That is one less thing that your emergency contact will have to worry about when they are focusing on getting to the hospital to see you as soon as they can.

There are similar services tailored to college students and children.

For your security, the card and the service do NOT contain any financial information at all.

The cost for this service is $25.00 per year (about 50 cents a week).

Below is a picture of a sample card

Disclaimer

This is a passive blog and the materials contained herein are provided for informational purposes only. Nothing contained in this blog should be interpreted as a solicitation of business and none of the information contained herein constitutes legal advice. The law is subject to change without notice, and the local laws of your residence may be different from the general information displayed on this blog. You should not rely on the information provided on this blog without first consulting an attorney. Contacting this website does not establish and attorney/client relationship between you and its publisher Christopher W. Matern.

An attorney/client relationship can only be established with Christopher Matern by engaging in direct person-to-person contact with Christopher Matern. Christopher Matern does not intend to practice law in any jurisdiction in which he is not licensed.

Powers of Attorney - Estate Planning Basics for Everyone

Everyone, young and old, from an eighteen year old high school senior to an eighty year old retiree need Powers of Attorney for Healthcare and Property.

Briefly, a Power of Attorney authorizes someone to act on your behalf for either financial matters (Property Power of Attorney) or health care decisions (Health Care Power of Attorney)

Powers of Attorney are not complicated documents and therefore they are not expensive to prepare. Nevertheless, they are very useful. They can help prevent a court guardianship case.

A court guardianship can be a very expensive process. It involves a court hearing to determine whether a person is competent to manage their health care decisions and or their financial affairs. Even if there is no one contesting the guardianship, it can involve several hours of an attorney's time. For financial affairs, which is called Guardianship of the Estate, annual accountings are required. In addition, the court must approve all financial transactions. All these court approvals require attorney's time to prepare the documents for the court. So, the fees can add up quickly.

These fees can almost always be avoided by having a Power of Attorney for Property and for Healthcare.

Disclaimer

This is a passive blog and the materials contained herein are provided for informational purposes only. Nothing contained in this blog should be interpreted as a solicitation of business and none of the information contained herein constitutes legal advice. The law is subject to change without notice, and the local laws of your residence may be different from the general information displayed on this blog. You should not rely on the information provided on this blog without first consulting an attorney. Contacting this website does not establish and attorney/client relationship between you and its publisher Christopher W. Matern.

An attorney/client relationship can only be established with Christopher Matern by engaging in direct person-to-person contact with Christopher Matern. Christopher Matern does not intend to practice law in any jurisdiction in which he is not licensed.

Why You Still Need An Estate Plan – Even if there is No Estate Tax

Currently, there is no federal estate tax. However, there are many reasons why you still need an estate plan. This post summarizes some of those reasons to still do an estate plan.

1. Incapacity If you become incapacitated, Powers of Attorney for Health Care and Property can help you avoid a court guardianship case. Court guardianship cases are both time consuming and costly. Additionally, Powers of Attorney for Property and Health Care let you pick the person that you trust to carry out your wishes. This might not be the same person a judge would pick.

For unmarried couples, Powers of Attorney for Property can provide that your domestic partner can continue to use automobiles and other property that is owned solely in your name.

2. Intestacy If you don’t have a Will, the State will provide one for you. But you might not like what State provides. Having a Will lets you decide who you want to leave your money and other property.

3. Guardians for Minor Children For parents of young children, one of the most important reasons to have a Will is to name guardians for your children. If you don’t pick a guardian, a judge will pick one for you. Minor guardianship cases are time consuming and costly.

4. Children Managing Money Do you have children or grandchildren that are mature enough to manage large sums of money (that are meant to pay for their support and college education)? If not, then an estate plan can leave the money in trust so that an adult whose judgment you trust can manage the money. A trust will ensure that the money is spent the way you intend.

Another reason not to leave money to minor children is that a court can decide that if the child inherits more than $10,000.00 (including life insurance and retirement plan benefits) that a guardian should be appointed to manage the money. The guardian will be permitted to hire a lawyer to represent them in the court hearings. These court hearings will occur at least once a year until the child reaches 18. All of the guardian’s fees and the lawyer’s fees will be deducted from the money left to the child. By the time, the child reaches 18 the guardian’s fees and the guardian’s attorney’s fees may have used up some if not all the money for the child’s college tuition.

5. Creditor Protection Creating a trust can protect the money from your children or grandchildren’s creditors. It also can be drafted to prevent their ex-spouses getting the money in the event of a divorce.

These are some of the reasons why it is important to have an estate plan without waiting for the situation on estate tax to be resolved. Even if you believe that estate tax might be applicable to you when Congress addresses the estate tax situation, relatively simple modifications can be made to an existing estate plan.

Disclaimer

This is a passive blog and the materials contained herein are provided for informational purposes only. Nothing contained in this blog should be interpreted as a solicitation of business and none of the information contained herein constitutes legal advice. The law is subject to change without notice, and the local laws of your residence may be different from the general information displayed on this blog. You should not rely on the information provided on this blog without first consulting an attorney. Contacting this website does not establish and attorney/client relationship between you and its publisher Christopher W. Matern.

An attorney/client relationship can only be established with Christopher Matern by engaging in direct person-to-person contact with Christopher Matern. Christopher Matern does not intend to practice law in any jurisdiction in which he is not licensed.

Worker's Compensation Insurance for Condominium Associations - Is it Necessary?

Do condominium associations need Worker's Compensation? For a large high rise with 24 hour security, building engineers and janitors the answer is obviously yes, since all these people are full time employees of the association. For smaller condominium associations the answer is less obvious.

Recently the board treasurer of a 16 unit condominium association asked me about whether his condominium association should have Worker's Compensation Insurance.

With only sixteen units, I asked whether they had any employees on their payroll. He said no. They do have a women who cleans the hallways twice a month. They also have a person who plows snow off the driveways. And they have a scavenger service that picks up the trash. Occasionally, they hire contractors to do work on the air-conditioning, paint, and do other repairs to the building.

Since they have no employees on their payroll, my question was why would you think that you need Worker's Compensation insurance. His answer was that his insurance broker suggested it. The insurance broker explained that since some of the contractors that they hire might not have Worker's Compensation insurance for their employees. Even if this was true, I questioned why Worker's Compensation insurance would be necessary since the condo association has general liability insurance coverage and general liability insurance covers suits by people injured on the property.

One of the arguments that insurance brokers and insurance companies make is what if the person files a Worker's Compensation claim. But unless their real employer has Worker's Compensation coverage, that person (and their lawyer) would probably prefer to file a traditional personal injury suit in the county court. By doing so, they would have the chance to get a much bigger verdict since they could make a claim for pain and suffering (usually several times the amount of their medical bills). Worker's Compensation claims are resolved under a different system and claims for pain and suffering damages are not allowed. Arguably, it would be malpractice for a personal injury lawyer not to file a lawsuit in the county court system where they could get their injured client more money.

The fundamental question is could the employees of the businesses that the associations contracts to perform services be considered employees of the association? The IRS has a number of criteria they consider in determining whether a person is an independent contractor or an employee http://www.irs.gov/businesses/small/article/0,,id=99921,00.html. The Illinois Supreme Court has considered this question too. The Illinois Supreme Court looked at whether the person's services relate to the business purpose of the company. In the Illinois Supreme Court case the company was in the trucking business and the person was an owner/operator of a truck. The court found that the owner/operator was an employee because the trucking company's business purpose was trucking and truck drivers were obviously necessary. In this situation, the business' purpose is a condo association. They are not running a cleaning service company. Similarly, the association is not in the business of snow removal, painting or roof repair.

Applying the IRS criteria, the cleaning lady should be considered an independent contractor. The cleaning lady can decide on what day of the week to come. She can decide what time to start (morning or afternoon). She can hire an assistant to help her. She can send a substitute. She receives a flat fee for the services. The few hours per month she cleans the association's hallways is not her only source of income. She cleans on the other days at many other places. All of these suggest that the IRS would agree that the cleaning lady is an independent contractor.

The snow plow company's relationship is similar. So, it too would be an independent contractor and not an employee.

Then why would the insurance broker and the insurance company think this association needs a Worker's Compensation policy.

There could be many reasons why an insurance broker would recommend that a condominium association with no employees purchase a Worker's Compensation policy. One reason is that the broker wants the client, the association, to be protected to the maximum extent possible. Another reason is that the broker wants to protect itself from a possible claim by the association against the broker for not recommending all the possible types of coverage. One could be cynical and say "follow the money." The insurance broker receives another commission. The insurance broker is going to sell the general liability policy anyway so selling the association a Worker's Compensation policy is an additional policy and an additional commission.

Following the money, the insurance company would rather place a claim under a worker's compensation policy than under a general liability policy because they are likely to pay less. Worker's Compensation claims are handled initially by the Industrial Commission, they are usually resolved more quickly and under Worker's Compensation law the claimant is not entitled to damages for pain and suffering (a significant part of the damages in a traditional lawsuit). So, insurance companies have an incentive to be able to handle a claim under a Worker's Compensation policy.

Whether a condominium association needs a Worker's Compensation policy depends upon the association's specific circumstances. But for many small buildings it may not be necessary.


Disclaimer

This is a passive blog and the materials contained herein are provided for informational purposes only. Nothing contained in this blog should be interpreted as a solicitation of business and none of the information contained herein constitutes legal advice. The law is subject to change without notice, and the local laws of your residence may be different from the general information displayed on this blog. You should not rely on the information provided on this blog without first consulting an attorney. Contacting this website does not establish and attorney/client relationship between you and its publisher Christopher W. Matern.

An attorney/client relationship can only be established with Christopher Matern by engaging in direct person-to-person contact with Christopher Matern. Christopher Matern does not intend to practice law in any jurisdiction in which he is not licensed.