Law Enforcement and School Safety

Educational law attorneys skillfully advise officials on law enforcement and school safety.In the wake of the 20th anniversary of school shooting in Columbine High School in Colorado last April and recent spate of gun violence in schools across the nation, school districts have had to institute additional school safety measures. School districts and law enforcement agencies have begun to work closely together to implement policies and school safety measures in schools nationwide. Many schools practice active shooter drills and have emergency response plans with local police.

Armed Officers and Teachers on Campus

Many schools have increased patrolling of schools by police officers. Several schools also place armed officers on their campus while school is in session. Because teachers are the first line of defense in a school shooter situation, some experts advocate arming teachers and training them in emergency response, handling and carrying guns. They argue that by the time the local police or armed officer on campus becomes aware of the active shooter, it may be too late.


Some school districts have opted for increased technological measures such as surveillance cameras, driver’s license scanners and metal detectors. Many schools have installed surveillance cameras that monitor the hallways and classrooms. In some areas, all visitors are made to scan their driver’s license upon entry and exiting the school. Visitors have to wear an ID tag that is printed after the driver’s license is scanned when they are on campus.

Information Sharing

Various experts agree that though increased security measures are useful, intelligence gathering and sharing are critical. Schools have also tried to enhance information sharing between agencies and schools to create instantaneous lines of communications between agencies so that in the event of an emergency critical information can be shared immediately.

Increased Communications Between All Stakeholders

School districts are encouraged to hold district wide school safety meetings where all stake holders participate. Meetings include teachers, law enforcement officers, parents, PTAs, counselors, school psychologists and administrators so that information can be shared and all perspectives represented.

Detectives and law enforcement officers have a made a practice to visit schools in their district on a regular basis and cultivate relationships at these schools with teachers, students and staff. During these meetings, appointed officers can assess each school’s social climate and address issues of bullying, intimidation and harassment.

When detectives talk and collaborate with schools, they are more sensitive and aware of the well-being of the school and its students. Students often know students who are having social issues and tendency for violence. They also are first to know when a fellow student is planning a violent act. Officers can serve as mentors and role models to students. When police officers are able to win the student’s trust, it is easier for students to report issues to them.

Anonymous Reporting of Issues

School districts should make it easier for students to report issues. A confidential anonymous tip line where students can report any problems, issues or planned acts of violence is good way to stay on top of issues in the school and the individual actors. Students want to be able to anonymously report these issues without being implicated by their peers.

Attorneys at The MacMain Law Group LLC Advise School Administrators

Our experienced educational law attorneys at The MacMain Law Group LLC represent many local schools, school districts, colleges and universities. To learn more about our services and what we can do for you, contact us online or call 484-318-7106. We serve clients throughout Pennsylvania, Philadelphia and Chester County from our office conveniently located in West Chester, Pennsylvania.

FERPA and Student Privacy

West Chester education lawyers advise school administrators on student data privacy.After a five year battle, the Department of Education has ruled that it is a violation of the 1974 Family Educational Rights and Privacy Act (FERPA) to require students and parents to supply personal identifiable information to third-party services as a condition of enrollment. Parents of a charter school student in Pennsylvania complained to the Department of Education in December of 2012 that their child’s rights to privacy had been violated by the school.

The complaint claimed that the school forced parents and students to accept third-party privacy policies as a condition of enrollment. The complaint further explained that the third-party servicers they were forced to accept allowed the student’s and parent’s personal identifiable information to be “used, reproduced, displayed, performed, adapted, modified, distributed, and promoted” in any way they wanted.

In the recent Department of Education decision, FERPA laws make it unlawful to require students and parents to use or agree to the policies of third-party services as a condition of enrollment into a school, educational training service provider, or any other educational institution. The decision of the Department of Education goes a long way in supporting the current efforts to clarify and enforce the mandates of FERPA law.

How the Recent Decision will Affect Schools

Now that the Department of Education has officially taken a stand to protect the privacy rights of students, a “FERPA Compliance Crackdown” is expected to ensure the privacy rights of students are being understood and enforced. Critics of the FERPA laws fault legislators for making the mandates of the legislation hard to interpret. Legislators and educational policymakers are working hard to interpret and confirm the stipulations of the law.

As technology is embraced and utilized by public, private, and charter schools nationwide, the need for clear policies to protect student privacy are becoming increasingly important. Students will continuously access websites and online educational programs throughout their educational journey, and parents need to feel that their child is safe from data breeches and hackers.

Educational technology companies have been profiting both financially and in their business development by misusing student data. Now that the Department of Education has taken a stand on the student’s right to privacy, more parents can feel empowered to enforce the rights afforded under the FERPA laws.

Educator Training is Vital to Student Privacy Protection

Technology has been exploding faster than many can keep up with, so the laws regarding protections for student personal identifiable information must evolve as well. Training of teachers, administrators, and staff of educational institutions is vital to protecting students from tech predators and avoiding potential liability for educational institutions.

Schools and educational institutions must develop clear and specific policies regarding student privacy. Teachers and administrators who are properly trained on how to protect student privacy will be able to empower students to actively protect their online data.

West Chester Education Lawyers at The MacMain Law Group LLC Advise School Administrators on Data Privacy

For information on data protection in schools, call the West Chester education lawyers at The MacMain Law Group LLC at 484-318-7106, or contact us online to schedule a consultation today. Our offices are conveniently located in West Chester, Pennsylvania and serve clients throughout Philadelphia, Chester County, and across the state.

Starting a Non-Profit Organization in Pennsylvania

Chester County business attorneys offer counsel for starting a non-profit organization in PA.Starting a non-profit organization in Pennsylvania requires a few simple steps. Incorporation is initiated by filing with the Pennsylvania Department of State Bureau of Corporations and Charitable Organizations (“Department of State”) and payment of fees.

A non-profit organization is an organization that is formed for either a charitable, educational, religious, scientific or literary purpose. Most non-profits are formed for tax purposes and are commonly referred to as 501(c)(3) organizations because they seek to have tax-exempt status with the Internal Revenue Service (IRS).

By pursuing certain steps and maintaining some formalities, a non-profit organization can begin operations and enjoy tax-exempt status. To form a non-profit organization, prepare for the following:

Choose a name for your organization. The non-profit should identify itself by a name that is distinguishable from all other names of corporations, business entities and non-profit associations already registered. The Department of State can be contacted to determine if the proposed name of the organization already exists.

Choose at least one director. The non-profit should choose at least one director to be on the board of the organization. Directors are responsible for the governance of the corporation. Though only one director is required to register the non-profit with the Department of State, in order to obtain tax exempt status, the non-profit will need at least three directors. Directors should also be at least 18 years old.

Registered Agent. The director must find and name an individual who will be appointed as the registered agent for the organization. This individual is responsible for receiving legal notices on behalf of the organization. This person must be a resident of Pennsylvania and should maintain an office during normal business hours.

Articles of Incorporation. The non-profit organization will need to draft articles of incorporation and file with the Department of State. It also provides an online form that can be used to create the articles. The articles should provide the following:

  • Name of the organization
  • Address of the registered agent
  • Stated purpose of the organization
  • When it was formed
  • Statement regarding members of the organization, if any
  • Address and name of the incorporators of the organization
  • Statement that the organization will not seek profits
  • Statement that the organization is based on the Non-profit Corporation Law of 1988
  • Name and address of the each of the incorporators of the organization
  • The stated term of the organization

Filing and payment of fees. Once the articles are drafted, they must be filed with the Department of State along with a filing fee.

Docketing Statement. Along with the articles and payment of a filing fee, a Docketing Statement must be filed. This statement is a form provided by the Department of State requiring certain information about the organization.

Publication of the Articles of Incorporation. Incorporators of the organization must publish the Articles of Incorporation in at least two newspapers. The organization must keep a copy of these publications in its records.

Bylaws. The non-profit organization must also prepare bylaws by which the organization plans to operate. The bylaws must also comply with Pennsylvania laws. These bylaws must be kept with the organization and utilized in conducting meetings, electing officers and define duties and responsibilities of directors and officers of the organization.

Employer Identification Number. The organization needs to apply for an Employer Identification Number with the IRS. This number can be used to open bank accounts, and file tax returns and obtain tax exempt status with IRS.

Chester County Business Attorneys at The MacMain Law Group LLC Offer Counsel for Non-Profit Organizations

The Chester County business lawyers at The MacMain Law Group LLC have facilitated the formation of several non-profit organizations for our clients throughout Pennsylvania. Schedule a consultation by contacting us online or call our office at 484-318-7106. Our office is located in West Chester, Pennsylvania. We serve clients in Philadelphia, Chester County and throughout the state.

How Employers Can Handle Opioids in the Workplace

Philadelphia business lawyers at advise employers how to handle opioids in the workplace.Employers in today’s business world are increasingly facing serious personnel issues related to the use of opioids in the workplace. The chance of an employee using opioids during the workday has become significantly higher throughout the last decade. For the first time, drug overdoses are now the leading cause of unintentional deaths in the United States, with 1 in 96 odds of an individual dying in an unintentional opioid overdose in their lifetime. Individuals suffering from the chronic pain of a workplace injury can be especially vulnerable to abusing prescription opioids.

Establishing a Clear Drug Policy

An employee’s use of highly addictive prescription painkillers can present a significant safety hazard. One of the most important steps an employer can take to reduce opioid abuse at work is to establish and communicate a clear drug policy to the entire company. A written drug policy should include the consequences and penalties for using, selling, and distributing illegal opioids at work. Guidelines regarding the use of prescription opioids and mandatory drug testing should also be put in place. Many workers’ compensation and occupational health programs include instructions to their participating providers regarding the prescribing of opioids to workers.

Drug Testing

In many cases, mandatory drug testing becomes a part of an employer’s drug policy.

Some of the most common opioids screened during employee drug testing include:

  • Hydrocodone
  • Hydromorphone
  • Oxycodone
  • Oxymorphone
  • Heroin
  • Codeine
  • Morphine

Employers should follow the Equal Employment Opportunity Commission (EEOC) guidelines when determining under what circumstances a drug test is required. In general, employers can demand drug testing when there is a reasonable suspicion drug use is interfering with an employee’s ability to perform an essential function of their job or is posing a direct threat to the safety of the employee or others.

When an employee fails a drug test, disciplinary actions usually follow. Employers should consult with legal counsel to ensure consequences do not violate federal laws like the Americans with Disabilities Act (ADA) or state laws which allow “reasonable accommodations” for drug treatment.

Educating Employees

By providing proper education on the risks associated with taking prescription opioids, employers can help prevent opioid abuse at work. Often there are alternative non-opioid medications available to workers, which educational programs can promote. Many employee assistance programs have drug-free workplace initiatives providing resources to individuals struggling with addiction. Part of educating employees also includes training supervisors to know the signs of impairment that often accompany opioid use.

Obtaining Legal Protection

If an employer fails to properly handle the use of opioids in the workplace, legal problems can arise. Many employers face difficult disciplinary decisions when they find out an employee is using drugs at work. With the help of an experienced employment lawyer, employers and employees can work together to avoid legal complications should opioid use at the workplace become an issue. Any drug policy instituted by an employer should adhere to state specific and federal guidelines. To navigate this sometimes complex area of the law, employers should seek out the guidance of an experienced business lawyer who can ensure proper legal compliance.

Philadelphia Business Lawyers at The MacMain Law Group LLC Serve Businesses Throughout the Delaware Valley

At The MacMain Law Group LLC, our experienced Philadelphia business lawyers represent businesses and employers throughout Philadelphia and Chester County, Pennsylvania in a wide range of legal matters. Our offices are conveniently located in West Chester, Pennsylvania. To schedule a confidential consultation today with one of our business attorneys, call us at 484-318-7106 or submit an online inquiry form.

Effectiveness of Police Body Cams

Civil Rights defense lawyers advise & represent law enforcement agencies concerning police body cams.Police body cameras are popular with the public because they supposedly provide an account of what occurred in a disputed confrontation with the police. Advocates for their use argue that the cameras foster trust with the community the police officers serve. Body cameras provide a means by which one can independently verify what occurred. However, the utility of the cameras in reducing allegations of police misconduct is undetermined.

Departments Control the Cameras and Footage

Effectiveness of the police body cameras is dependent on the police department in which they are used. Critics of their use argue that since police officers have control over the cameras they are wearing, they determine when to turn “on” or “off” their cameras. Therefore, they may not always record their confrontations. Furthermore, they argue that police departments have control over the footage after it has been recorded. Consequently, the perception that police departments may be secretive or protecting their police officers can lead to distrust if administrators do not make transparency a priority.

Body Cameras Do Not Prevent Violent Altercations

Body cameras alone do not reduce incidents of violence and therefore some argue that they are not effective in protecting police officers or civilians from being injured in a heated situation. Rather, training and retraining officers on transactional model communication and active listening is a better approach. Research has found that proper training and experience in simulated settings hones police officers’ ability to react in tense situations to diffuse the tensions and not resort to violence.

Body Cameras May Not Be Cost Effective

The biggest criticism for police body cameras is their cost. Cost of the camera is not limited to the camera itself, there are costs associated with storing the footage and maintenance of the cameras that can be prohibitive. Many large police departments need to allocate a substantial amount of their budget toward body cameras.

Civil Rights Defense Lawyers at The MacMain Law Group LLC Advise and Represent Law Enforcement Agencies

Civil rights defense attorneys at The MacMain Law Group LLC have successfully defended numerous police officers and law enforcement agencies throughout Pennsylvania from our office in West Chester, including those in the areas of Philadelphia and Chester County. To schedule a consultation or find out more, contact us online or call our office at 484-318-7106.

The Importance of Compliance in the Workforce

West Chester employment lawyers help businesses establish corporate compliance programs.All businesses, whether they are a small privately-owned business or a large conglomerate, are responsible to comply with federal and state laws. Unlawful discrimination, corrupt personnel practices, workplace harassment, employee safety, and wage, payroll, and benefit issues can wreak legal havoc on a business, costing owners hundreds of thousands of dollars in penalties and legal fees. Strong and clearly established corporate policies and procedures can help business owners avoid the hassles and legal problems that can come with noncompliance.

Benefits of a Strong Workplace Compliance Program

Federal, state, and international laws vary greatly, and keeping compliant in the fluctuating climate of our global business environment can be overwhelming. Keeping track of international, federal, and state laws governing the ethical and legal practices for an organization is an ever-changing process. Corporate policies and procedures need to be continuously evaluated and updated.

The main benefits of a strong workplace compliance program include:

  • Prevents illegal or unethical actions committed by uniformed employees
  • Encourages reporting of illegal and unethical actions of administrators, managers, and colleagues
  • Reduces the likelihood for waste, fraud, abuse, discrimination, and corruption
  • Sets employee expectations
  • Supports the goals of the organization
  • Increases productivity
  • Promotes corporate growth and sustainability
  • Prevents corporate crisis and failure
  • Helps in the defense of the corporation should a lawsuit occur

When employees are properly trained and educated on corporate compliance and its importance to corporate success, businesses can operate effectively and efficiently.

Elements of a Corporate Compliance Program

To reap the full benefits of corporate compliance, a company must establish a strong plan. The essential elements of a corporate compliance program include:

  • Training: Comprehensive training on business laws and ethical practices that relate to a business, and on the importance of corporate compliance needs to start with a company’s top administrators and trickle down to the general workforce. An employee that does not understand what the laws and regulations are cannot be expected to behave appropriately.
  • Hire a Corporate Compliance Officer: A corporate compliance officer is one that consistently reviews corporate policies, establishes a corporate plan, and enforces the policies and procedures that support the compliance program.
  • Establish Modes of Communication for Administration and Employees: Communication is essential to corporate compliance. Employees need to have an established mode of reporting non-compliant actions as well as one that counsels employees that violate rules.
  • Consistent Review and Evaluation of Corporate Policies: The federal, state, and international laws governing business are in a constant state of change and development. Consistent review of the laws and regulations as well as corporate compliance policies and procedures will ensure that business practices remain ethical and compliant.
  • Annual Risk Assessment: It is imperative that corporations identify the biggest risk areas for their corporation and annually evaluate their audit results, recent litigation, compliance complaints, employee claims, and policies affecting each risk area.

West Chester Employment Lawyers at The MacMain Law Group LLC Help Businesses Establish Corporate Compliance Programs

The West Chester employment lawyers at The MacMain Law Group LLC help businesses establish corporate compliance programs that protect them from lawsuits and penalties for non-compliance. Call us at 484-318-7106 or contact us online to schedule a consultation today. Our West Chester, Pennsylvania offices serve clients throughout Philadelphia, Chester County, and across the state.

Should Your Workplace have a Marijuana Use Policy?

Attorneys help Pennsylvania employers and workers understand cannabis law.As states across the country take up the issue of legalizing medical and recreational marijuana, a gray area remains where state and federal laws overlap and seem to contradict each other. Many Pennsylvania employers are questioning how to navigate the unique human resources concerns when the state approves medical marijuana use, but the federal government bans it.

Recently, The MacMain Law Group partner, Matthew J. Connell, offered his insight into the conundrum many state employers currently face regarding medical marijuana. Speaking before the Berks County chapter of the Society of Human Resource Management, Connell acknowledged the gaps and discrepancies in current marijuana laws.

Calling cannabis law in Pennsylvania, “new and untested by the courts,” Connell feels employers are left to figure it out as they go. He believes creating and enforcing a solid marijuana policy is essential for employers to protect their interests and prevent costly, time-consuming legal claims.

The following are some of the key issues surrounding medical marijuana in the workplace:

Job Discrimination

Like race, religion, and sex, medical marijuana use is protected by workplace discrimination laws. Workers who disclose their use of cannabis for any of the 21 state-approved conditions cannot be adversely affected in terms of hiring, promotions, or termination. Where marijuana use was once grounds for termination, legal use for medical purposes is now protected under the law – provided it is not smoked.

Worker Safety

While medical marijuana use is permitted under Pennsylvania law, there are obvious pressing safety concerns regarding impaired workers performing certain jobs. The part of the law addressing when employers can prohibit workers from doing more risky jobs like mining or working with high-voltage equipment is not clear enough to be easily enforced, leaving these guidelines open to employer interpretation.

Marijuana Testing Flaws

The law allows employers to prohibit workers with a blood content of more than 10 nanograms of active THC per milliliters of blood in serum from doing these high-risk jobs. This is a primary area of confusion in the law. Employers are not equipped to gauge what that amount is, let alone accurately test workers to make that determination. Testing is essentially useless because while THC can be detected in the blood, there is no way to determine if it is from legal or illegal use.

Beyond these key pressing issues, there is one larger overall problem with the nebulous cannabis law in Pennsylvania. What does it mean to be under the influence? Until THC testing is perfected, Attorney Connell recommends companies clarify and define observable, physical behaviors and incorporate that definition into their corporate policy. Workers who are obviously stumbling, slurring their speech, or behaving out of character may be under the influence and too impaired to do their job safely.

Attorneys at The MacMain Law Group LLC Help Pennsylvania Employers and Workers Understand Cannabis Law

Pennsylvania employment law attorneys at The MacMain Law Group LLC help human resources professionals consider every aspect of the law when creating their cannabis policy. To discuss your employment law matter with a skilled and knowledgeable attorney, call 484-318-7106 or complete an online inquiry today. Located in West Chester, we represent clients throughout Chester County and all of Pennsylvania.

Use of Nondisclosure Agreements to Protect Your Company

Pennsylvania business attorneys are well-versed in drafting enforceable contracts.Nondisclosure agreements, also referred to as NDAs, are a common legal instrument used by companies to protect sensitive company information. NDAs can be used to protect customer lists, patents, trade secrets and other information that gives a company a competitive advantage.

An NDA protects a company from unauthorized disclosure of its confidential information. Through an NDA, a business can ensure that, whatever information that it shares with others that gives it a competitive advantage, is not shared with competitors. In case the agreement is violated, the business will then have recourse and can seek damages.

When to Use an NDA

Employees – Employees need to have access to a company’s sensitive information to perform their jobs. However, in order to protect the employee from sharing this information with the company’s competitors, businesses should use nondisclosure agreements. An NDA can prevent the employee from taking the information accessed through the job to competitors or use it for its own gain.

Proprietary Information – When a company has proprietary information such as a trade secret, financial information or other sensitive information it should be protected from unauthorized use. An NDA will inform the other party of the confidential nature of the agreement so that the information is not shared with others.

Product Details – When a company is seeking investment from investors or considering licensing with another company to expand its business, it is important to have the other party sign an NDA. An NDA will ensure that the other party knows that the information being shared is proprietary and that it cannot take this information and use it to develop its own product.

Drafting an NDA

A nondisclosure agreement should be drafted such that it protects the company’s assets. An NDA should be clear and provide disincentives for violating it. Therefore, when drafting an NDA, it is important to clearly define the information that is sought to be protected. The terms of the agreement should clearly define the information. If the terms are too broad, the agreement may not be enforceable. It is advisable to clearly define the confidential information.

The agreement should also clearly specify the parties to the agreement as well as the duration of the agreement. Finally, the NDA should create a disincentive for its violation. Usually, a term regarding prevailing party is entitled to attorneys’ fees creates the necessary disincentive. If the party violates the agreement and loses its case, it will not only be liable for damages but also attorneys’ fees.

Every business should utilize a reliable NDA that it can use with employees, investors and potential partners. Drafting an NDA requires diligence, strategy and clarity.

The Pennsylvania business attorneys at The MacMain Law Group LLC are well-versed in drafting enforceable contracts and can assist your business in developing a strategy and ensuring that your business protects its proprietary information through a strong nondisclosure agreement. For assistance in drafting an NDA, contact us online or at 484-318-7106. Our office is located in West Chester, Pennsylvania. We serve clients throughout Chester County, Philadelphia and Pennsylvania.

Pennsylvania’s Sovereign Immunity Act

West Chester attorneys have successfully defended government entities from liability.The U.S. government inherited the doctrine of sovereign immunity from England where the king or sovereign was immune from liability. Under the sovereign immunity doctrine, the U.S. government and its employees are immune from suit by virtue of their status as a government entity. The policy behind this immunity is to allow legislators and other government entities to govern without interference from lawsuits.

Even though Federal and state governments may not be sued under this doctrine, there are some exceptions to the rule. Generally, if the government action involves some type of negligence, then the government immunity no longer applies, such as when a person slips and falls on the sidewalk maintained by the state where the dangerous condition of the sidewalk was known and the state did nothing to correct it. Another example would be when a state employee is involved in a motor vehicle accident while on duty. However, a plaintiff who wishes to pursue a negligence claim against the government has to provide strict notice and undergo other procedural hurdles.

Pennsylvania’s Sovereign Immunity Act (Act) waives Pennsylvania’s sovereign immunity in certain limited cases. The Act provides a list of specific instances where the state has waived its immunity. Government entities risk exposure to lawsuits in the following instances.

  • Automobile accidents. When an automobile accident involves a government employee’s fault while on duty, sovereign immunity no longer applies.
  • Medical Malpractice. Negligent acts by public health care employees such as doctors, nurses and medical facilities of the state will trigger the exception to sovereign immunity.
  • Toxoids and vaccines. Government entities may be liable for negligent administration of vaccines or manufacture of toxoids and vaccines.
  • Care, custody or control of personal property or animal. If a person is injured because a government agency negligently cared for an animal or personal property in its’ custody, the injured party may pursue a lawsuit against that agency.
  • Premises liability. If a person is injured due to a dangerous condition on government property, that person can pursue a claim against the government entity in control of that property.
  • Dangerous conditions on roadways. State government is under a duty to maintain its roadways. If it is found that the state government agency knew of a dangerous condition on a roadway and did not take steps to repair it, it may be liable to the injured due to the condition of the roadway.
  • Liquor liability. If a person is injured due to the intoxication of another, they may seek damages against the person or place that sold the liquor. This law can extend to the government when it involves the negligence of state liquor control board.

Recovery is Limited

Plaintiffs who have a claim against a government entity must provide notice to the agency within six months of the occurrence of the incident. Failure to send the appropriate notice with all the necessary information may result in dismissal of the lawsuit. Furthermore, recovery for damages is limited to $250,000 in favor of a Plaintiff and $1,000,000 total recovery is permitted.

Attorneys at The MacMain Law Group LLC have Successfully Defended Government Entities from Liability

Attorneys at The MacMain Law Group LLC have obtained numerous dismissals and defense verdicts on behalf of government agencies. Contact our office at 484-318-7106 or online to schedule a consultation. Located in West Chester, Pennsylvania, we represent clients throughout Pennsylvania, including Philadelphia and Chester County.

Should Your Small Business Offer a 401k Plan?

West Chester business lawyers offer sound advice for small businesses offering a 401(k).Every small business should consider setting up a plan for retirement. Retirement planning can help a business owner save for the future, earn money on investments and help with taxes. Moreover, offering retirement benefits attracts good employment candidates. Once employed, the chances of employees remaining with the business increase when the business offers retirement plans as a benefit. Currently, many small businesses offer retirement plans known as the 401(k) Plan.

401(k) Plan

401(k) Plans are a form of retirement savings plan offered by employers that allows workers to save pretax earnings in a retirement account. 401(k) is named after the Internal Revenue Code section that governs these accounts. 401(k) Plans were offered as a supplemental retirement plan in the 1980s when employees realized that pension plans do not offer adequate income during retirement.

The money in the retirement account is invested in a selection of mutual funds. Employees can choose the type of fund they want to invest in depending on their risk profile. Mutual funds are composed of a variety of stocks, bonds, and money market investments. The income is taxed when the employee withdraws from the plan upon retirement.

Employers may choose to contribute up to a certain amount of money to the employee’s 401(k) plan when the employee elects to take the benefit. Employees are often restricted from withdrawing the money contributed by the employer until a vesting period is completed. Also, there are certain restrictions and penalties for withdrawing the money invested in a 401(k) before retirement.

Administration of a 401(k) Plan

Small business owners are busy managing their business and therefore are left with little time to take on administration of retirement plans. Thankfully, today there are many tools and services offered that make it easier for small business owners to administer 401(k) plans.

Technology. There are many technology tools are offered in todays market to help small business owners manage 401(k) plans. These are specific tools catered for small business owners. There are apps and technology tools today that allow companies to streamline the process of cost comparisons and automate the administration and assist employees with built-in investment advising.

Financial Services Company. Many financial companies also offer services to small business to help them manage their employee’s 401(k) plans and provide investment advice. Professional employer organizations, along with human resource and payroll assist in administration of 401(k) plans. When choosing an organization, it is important to choose one that has industry accreditation and minimum requirements.

Why a Small Business Should Offer a 401(k)

Today’s recent graduates are strapped with student loan debts. Increasingly they are searching for employers who will look out for their interests and help them save. Furthermore, higher costs of living associated with rising housing costs has also put pressure on individuals’ finances and their ability to save for retirement.

Offering a 401(k) with employer contributions is an important benefit that will attract good employees. Once these employees know their employer is helping them save and creating ways for their money to grow, they are likely to remain and contribute to the small business. Happy employees will translate into higher productivity and lead to a profitable business.

For information or advice on small business matters, the small business law group attorneys at The MacMain Law Group LLC offer a wide range of services. Do not hesitate to contact our West Chester office with any small business concerns. Contact us online or by phone at 484-318-7106. We serve clients throughout Pennsylvania.