Resolving Workplace Conflicts

Workplace conflicts are inevitable. Almost 85 percent of employees experience conflicts in their workplace. Conflicts can lead to positive outcomes if management learns to resolve them with efficacy. When conflicts are dealt with quickly and effectively, they can be converted to greater understanding amongst employees, better solutions to problems, and even innovation and creativity. When management fails to act immediately, employee morale is lowered and productivity diminishes. Therefore, conflict resolution in the workplace is of utmost importance for a company’s bottom-line.

Conflicts occur in the workplace due to various reasons. Employees have to deal with different personalities, management styles, stress, discrimination, poor or differing styles of communication, and performance issues. Recognizing and understanding the different sources of conflict may be the first step toward a resolution.

Management-Related Conflicts

Managers come with various personalities and management styles. One manager may tend to micro-manage and control minute details of an employee’s work, while others may be too hands-off, leaving the employee in the dark as to what is required. Balancing a manager’s style with an employee’s needs is critical to creating a greater understanding of what may be required to complete the work at hand. Company policies should emphasize communication and accountability, as well as clearly define roles and expectations.

Performance-Related Conflicts

Conflicts can also arise when different departments do not follow deadlines or project requirements. Each department may be dependent on another department’s ability to fulfill their tasks in order to complete its own. Managers can play a critical role in avoiding such conflicts by delegating tasks clearly and ensuring that deadlines are being met along the way. Managers can also create incentives to ensure teams are motivated to complete their tasks on time, while also ensuring that teams are held accountable when they fail to meet requirements.

Clashing Personalities

Workplaces include individuals from different backgrounds, cultures, and socio-economic status. Diverse populations have differing and unique ways of approaching problems and people. Employees may have different styles in communicating and tolerances for others’ behavior. In these instances, managers should learn to listen to everyone’s grievances and empathize, sympathize, and communicate with sensitivity to address these conflicts in an equitable, equal, and uniform way.

Stress-Related Conflicts

Employees have to deal with different types of stress in the workplace. Employees may experience stress at work because they are being overextended, harassed, or discriminated against. Stress can cause resentment and lack of focus, leading to a decrease in productivity. Managers should identify the source of stress an employee is experiencing. This begins with first listening to the employee’s concerns with empathy and involve the Human Resources department if the stress is related to discrimination or harassment. If the conflict is due to lack of resources, managers need to address the issues immediately with flexibility and openness so that an equitable solution is reached.

What can Managers Do to Resolve Conflicts?

Managers can resolve conflicts that arise and improve outcomes when they focus on issues. First, a manager should actively listen to the employee’s concern to identify the issue. After recognizing the issue at hand, take immediate action by clearing up any misunderstandings between employees and facilitating open discussions. Also, managers can help resolve ensuing conflicts by reframing them in a positive light. Instead of referring to the issue as a conflict, a manager can reframe it to be a discussion or problem-solving session, turning the focus away from the conflict and toward open communication and resolution. A manager can also assist in conflict resolution by requesting workers propose solutions to the problems they are facing and mediate between them to reach a consensus.

The legal team at MacMain Leinhauser help clients with labor relations and employment law-related issues. For more information, contact us online or call us at 484-318-7106 for an initial consultation. Located in West Chester, Pennsylvania, we serve clients throughout Philadelphia, Chester County, and New Jersey.

Small and Mid-Sized Businesses Should Seek Counsel From Attorneys When Faced With Legal Issues or Lawsuits

When faced with a legal issues, small business owners have a lot on their plate. With limited funds, employees, and customers, small business owners are often in a position where the cost to fight legal battles is beyond what the budget will allow. However, it is inevitable that a small business owner will face legal challenges at some point. Therefore, it is necessary to be cognizant of the issues and have a plan in place to tackle a lawsuit.

Never Ignore a Lawsuit

First and foremost, do not ignore a lawsuit or a potential suit. When any legal document is served upon a business or a letter from an attorney threatening suit arrives, there may be a tendency to forget about it hoping it will go away. However, legal documents, such as complaints when not responded to in a correct fashion, can create more problems. When served with a legal document, it is essential to prioritize it by thoroughly reading the allegations and contacting an attorney immediately.  Also, when a threat of a lawsuit arrives, it may be the first, and in come cases the best, opportunity to eliminate exposure caused by the threatened litigation.

Cultivate Relationships with Lawyers

Ideally, before confronting a lawsuit, the business should have an attorney that works for the business either on payroll or a retainer so that they can be contacted immediately. The attorney should be knowledgeable of business operations, culture, and management so that they can quickly acquaint themselves of the issues and formulate a response. Most small businesses may not have a lawyer on retainer or payroll. Therefore, it may be necessary to rely on referrals from other businesses, friends, and family to request a legal consultation. It is very important that the owner seek legal counsel and follow expert legal advice when responding to a lawsuit or threat of litigation.

Contact an Insurance Agent

Some business owners may already have business insurance that provides coverage for business-related lawsuits. Employment matters, errors and omissions coverage, cyber liability, and general liability coverage are among coverages that should be considered. It is crucial to provide notice of the lawsuit so that the insurance company can act on the business owner’s behalf. Often, when coverage is triggered, the insurer will appoint an attorney to defend the lawsuit.

Types of Lawsuits Faced by Small Business Owners

Small business owners can be sued by their employees, customers, competitors, or even by state and local governments. It is important to know the type of lawsuit one is facing to retain the appropriate attorneys. From employment litigation to intellectual property litigation, practice types can vary, and it may be necessary to consult an attorney that has specific expertise required for a specific lawsuit.

Contract-Based Lawsuit. Small business owners may face a lawsuit from a disgruntled vendor, supplier, or customer. Businesses operate on the basis of various contracts and agreements. Failure to abide by contract terms can be the basis of a lawsuit.   When preparing contracts, it is a good idea to make sure that the terms are spelled out in writing and that both parties agree to the terms.  This can avoid issues going forward.

Employment-Related Lawsuit. Employees may sue small business owners for employment-related issues, such as discrimination, harassment, and missed wages. Businesses should be aware of federal and state laws regarding these issues and it is essential to have Workers’ Compensation insurance for work-related injuries.  A review of policies regarding overtime pay, harassment and anti-discrimination, and termination or disciplinary procedures are all important preventative measures small businesses should undertake regularly.

Intellectual Property Rights Violations. Small business owners may also face a lawsuit for violating intellectual property rights, such as the usage of a competitor’s trademark or patent, or copyrighted work without a license.

Personal Injuries. Personal injuries on the premises of a business are also cause for a lawsuit. For example, someone may slip and fall, or an object may fall on them due to a defect on the premises resulting in injuries.

The legal team at MacMain Leinhauser serves as general counsel to businesses of all sizes and provides  a wide range of services for small business owners. If you need legal counseling regarding business formation or defense of a lawsuit, we can assist you with daily compliance, employment, and human resource matters, as well as litigation representation. For more information regarding these services, please contact us online or call us at 484-318-7106. Located in West Chester, Pennsylvania, we serve clients in and around Philadelphia, Chester County, and across Pennsylvania and New Jersey.

How Can I Avoid Breach of Fiduciary Duty?

Fiduciary duty is legalese for certain duties owed by two or more persons who are party to a legal relationship. Doctors, real estate agents, attorneys, business partners, corporate officers, and board members typically have fiduciary duties toward their clients, partnerships, and corporations. In these relationships, the fiduciary is the individual who acts in the best interest of the principal or beneficiary.

In a doctor-patient relationship, the doctor is the fiduciary and must act in the best interests of the patient. Similarly, directors of a corporation are fiduciaries and must act in the best interest of the corporation. State and federal laws can also define fiduciary duties for specific relationships. The following are different types of fiduciary duties:

Duty of loyalty. This duty requires the fiduciary to be loyal to the beneficiary of the relationship. This means they must act in the best interests of the beneficiary without self-dealing or toward a personal benefit in conflict.

Duty of care. This duty requires the fiduciary to meet the standard of care set for their profession and perform their duties in a reasonably prudent manner. One must also ensure that they actively participate in making careful and informed decisions.

Duty of honesty. A duty of honesty requires the fiduciary to be completely honest and fully disclose any conflicts of interest. For example, a real estate agent has a duty to loyally represent the client in a real estate transaction and should not self-deal or have a conflict of interest. In a scenario where there may be a conflict because the agent represents both the buyer and seller, the agent should fully disclose the conflicting relationship and obtain consent for moving forward with the relationship from both parties.

Duty to Act in Good Faith and Fair Dealing. This duty requires that neither party will act in a manner to prevent the other party from receiving the benefits of the contract. This duty requires that both parties do everything expected of them in the relationship and the contract to accomplish its purpose. This duty also prevents parties from interfering with others’ performances.

How to Prevent Breach of Fiduciary Duty

Breach occurs when the fiduciary fails to uphold the obligations of the implied or enumerated duties, such as a breach of trust, failure to uphold financial obligations, or act in the best interests of the beneficiary. The party accusing the breach must prove that a fiduciary duty existed and that it was breached. The best way to prevent breach of fiduciary duty is to make sure there are company-wide policies regarding fiduciary duties and no tolerance for violations and self-dealing. It is also important to create best practices to prevent violations. The following suggested practices may minimize the risk of such violations:

  • Ensure that one is aware of their duties and obligations in the relationship.
  • If there are any issues in the relationship, address them immediately.
  • Avoid conflicts of interests and the appearance of impropriety.
  • Document all actions and decisions taken in the course of the relationship so that any doubts about the standard of care provided can be evaluated thoroughly.

Consequences of a Breach and Defense

When fiduciary duties are breached, legal actions may follow. The fiduciary may have to step down from their role in the company or business and pay monetary damages. Professionals, such as doctors and lawyers, may risk losing their license to practice. A common defense for those facing legal action based on breach of fiduciary is the business judgement rule that protects fiduciaries from legal action when their actions indicate that they acted with due diligence and reasonableness.

The legal team at MacMain Leinhauser helps clients involved in conflict of interest and breach of fiduciary duties. For cost-effective and forceful representation, please contact us online or call 484-318-7106 for an initial consultation. Located in West Chester, Pennsylvania, we serve clients throughout Philadelphia, Chester County, and New Jersey.

How Can I Promote Allyship for My Business?

When companies decide to create a workplace culture that is more inclusive and diverse, they cannot do so overnight. A workplace ally is an individual who will step up and support a colleague who is marginalized to make sure that colleague is heard and seen. Often, allies are individuals who do not simply assume that preventing discrimination in the workplace is about their own behavior, they see it as their responsibility to elevate those around them by encouraging systemic changes in behavior. Allyship requires one to constantly evolve through self-awareness, as well as pay attention to behaviors that are discriminatory and utilize tactics to improve conduct. The following tactics can increase allyship in the workplace:

Give credit where credit is due. Often, marginalized individuals in the workplace are not given credit for their ideas or opportunities to share them. An ally can implement strategies in meetings whereby contributions are encouraged. Doing so creates a level playing field so that good ideas are given their due credit. Additionally, this allows those who are usually quiet an opportunity to present their views.

Be respectful. Being respectful to others’ identities, roles, and time is a great way to increase allyship. Usage of irrelevant and vague verbiage perpetuates stereotypes. Becoming aware of the language used to describe colleagues and refraining from using common tropes about women, the disabled, LGBTQ+ individuals, and minorities can lead to self-awareness and expose innate biases.  Additionally, taking the time to listen with empathy can create a more inclusive workplace.

Provide mentorship. Allies are often in a position of power or privilege. Utilizing this privilege to mentor or uplift another can boost inclusive company culture. One can use his or her position to advocate, introduce, or recommend a marginalized colleague during employee performance evaluations for promotions and pay increases.

Confront bad behavior. Allies can also intervene when they see a colleague being harassed or discriminated against. Allies can defuse a tense situation by confronting the harasser, and offer support to the harassed, call for others in the company to intervene, or take the time to follow up and show their support. Creating a harassment-free culture in a company starts with encouraging efforts, such as listening with empathy and non-judgement. Allies can use tactics, such as directly intervening when bad behavior is occurring and speaking up when others engage in more subtle remarks that are prejudicial by gently creating awareness of the underlying prejudice and shedding light on each other’s microaggressions.

In order to encourage allyship in the workplace, it may be a good idea to create tools and tactics that help employees recognize and prevent discrimination, harassment, and microaggressions. A company benefits when it creates a safe workplace where all employees can be productive and good ideas can flourish.

The legal team at MacMain Leinhauser provides training services and employment seminars, as well as human resource counseling for businesses. Prevent costly litigation by training your employees on harassment, discipline, and other human resource issues. For more information regarding these services, please contact us online or at call us at 484-318-7106. Conveniently located in West Chester, Pennsylvania, we serve clients throughout Philadelphia, Chester County, and New Jersey.

Understanding Contract and Labor Disputes

Contract and labor disputes in corporations can take on many forms. Owners, managers, and workers must understand how these disputes occur, what issues they might involve, and how they will resolve them. Businesses and employees could be embroiled in these situations at any time, and it is best to anticipate future labor issues, work together, and call in an attorney when needed.

What Types of Labor Disputes Exist?

Businesses might not know how to qualify a labor dispute. Managers and employees cannot effectively negotiate the terms of a contract if they do not know what the problem is. Identifying the difficulty is one of the keys to negotiation. If the two sides are not negotiating on the same terms, they will never come to a resolution. Labor disputes include:

  • Disputes over the interests involved in a contract: This is a common disagreement. One side may want to have an equal share of the money made by the company and want to raise the percentage they earn. Because this is a familiar dispute in American media, it is easy to see everything that is involved. These interests can also include pay increases, bonuses, increased vacation time, paid time off, raises, and even retirement benefit contributions.
  • Disputes over rights provided to workers: Workers’ rights include Workers’ Compensation, hazard pay, working conditions, opportunities for advancement, and even the ability to unionize.

Most contracts will involve both of these disputes in one way or another. Employees must sit down with management to determine what to negotiate. Because these negotiations can be complicated, it is best to have a lawyer present.

What Causes Contract and Labor Disputes?

Businesses may wonder what causes contract disputes, or employees may want to organize their colleagues around a singular cause. The following issues may contribute to the decision of your workforce to see representation or to collectively bargain:

Economics: Employee pay, benefits, raises, and the economic conditions under which the company works are often a key to labor disputes. For example, employee perception of the company’s overall profitability or cashflow in relation to employee pay may cause workers to be dissatisfied, believing they are not compensated fairly. Conversely, management and employees might disagree over the wording of a contract revision during a recession as workers are asked to take pay cuts, give up raises, and forgo pension contributions.

Managerial issues: These could be clerical problems that are reflected in employee paychecks or work that is difficult for everyone in the office. Managers that are ineffective communicators, inadequate tools, clothing, or protective gear for workers are all issues that could be addressed by owners and may come up in bargaining.

Political cause: Changes in the political climate can cause a business to experience difficulty. Workers or managers might adhere to a particular ideology that might alter the trajectory of the business. A city or county might pass new wage laws, and the two sides will need to negotiate a contract implementing those new rules.

Psychological reasoning: The perceived motivations of people on the job could cause a friction in the workplace that leads to a labor dispute.  While these motivations are difficult to judge, they could become part of a heated contract dispute if unclear or not addressed.

Who Can Prevent Contract and Labor Disputes?

Owners, managers, and workers can help prevent labor disputes by taking affirmative action, such as:

  • Ensuring work areas are clean and organized.
  • Everyone within the organization, up to and including the CEO, should be held accountable for the work they must do.
  • Everyone should have the opportunity to apply for and receive promotions or raises to positions they are qualified to hold. Likewise, all job opportunities should be posted so that anyone can apply.
  • Ensure that managers and ownership have a positive working attitude and a good working relationship with the employees. This is one of the best ways to avoid organization in your workplace and to make labor negotiations effective where a union exists.
  • Review all salaries and bonuses annually to ensure they are aligned with industry standards or averages.

A simple audit of a business will reveal problems that can be solved quickly and avoid a union organization campaign. Employees join a union for many reasons, but most often because they believe they are not being treated fairly by their employer.  Most employees would prefer to avoid going on strike, hold up the productivity of the business, or create needless animosity. If both sides work well together, union organization could be averted and most contract disputes can be avoided.

How Can Both Parties Resolve Labor and Contract Disputes?

Most labor disputes can be resolved using the following styles of conflict resolution. Every business is different, and each company should work closely with its counsel and employees to determine which method will help both sides achieve their goals:

  • Employee Policies and Training: A company with effective employee management policies and relationships can avoid union organizing altogether.  Hiring and training good managers and executives to address employee concerns, establish industry appropriate pay rates and reasonable expectations for employees and are the best way to avoid union organization altogether and have a productive workforce.
  • Grievance management: Companies, even those without a union, can implement and use a grievance management model to hear and address each grievance from employees. If grievances are handled property and the employees are treated consistently, then this process can avoid many labor disputes.
  • Collective bargaining: If a union is formed, a clear and well-crafted Collective bargaining agreement will set the tone for employee and management interactions. Bargaining can be used to resolve issues and also alleviate employee concerns over the workplace issues.
  • Mediation: When bargaining is ineffective or stalled, sometimes a mediator can lead the parties into a conversation and offers solutions. Mediators often resolve problems for both sides while helping them write a new contract.

The experienced legal team at MacMain Leinhauser help businesses resolve contract and labor disputes. Call us today at 484-318-7106 or contact us online for an initial consultation. Our offices are located in West Chester, Pennsylvania, and we serve clients throughout Philadelphia, Chester County, and New Jersey.

Employee Training Regarding Data Protection

Data breaches have become a new reality and an important consideration for all businesses. A business needs to make cyber security a priority or risk loss of important intellectual property and/or private consumer data. Businesses need to develop and implement a company policy and plan to protect their computer systems. These methods need to include technical safeguards, trustworthy employees, and safety measures to prevent vulnerabilities

Most data breaches are not caused by sophisticated backdoor attacks by unknown entities. In fact, most common causes of data breaches occur due to human error and breaches by employees. A company must make employee training a primary aspect of their policy when dealing with cyber security.  A company policy should also include the following best practices:

Background Checks. A business should always conduct background checks on potential hires. It is important to hire trustworthy individuals, especially information technology (IT) professionals who have access to the company’s computer systems. It is important to ensure that the IT staff has been vetted properly.

Confidentiality Agreements. All employees and new hires should sign a confidentiality agreement for securing sensitive company information, including data confidential.

Data Security Agreements. All employees must have access to the company’s data security standards policy and sign an agreement to abide by the agreement.

Limit Employee Access. Limit access of employees to important information, such as Social Security numbers. Only give access to employees on a limited, need to know basis.

Provide Training. Provide frequent training and reminders on the company’s best practices regarding data security so that employees are aware of how attacks happen and how to prevent them.

Passwords. Insecure passwords are the easiest way to hack into protected networks. Train employees on creating passwords that are harder to crack.  Make it a policy to create complex passwords and change them frequently.

Prevent Human Errors. Create awareness among employees of how human error can cause data breaches. Train them to not send important emails over unencrypted hardware devices, to not share account information with others, to not leave important paperwork unsecured, or to not send important information to the wrong recipient.

Reward Reporting of Suspicious Behavior. Reward employees who report suspicious activity or behavior.

Discipline Violators. Discipline employees who violate company data security policies.

Train Employees on Phishing Attacks. Train employees on how to spot phishing attacks and require that they independently verify all requests for sensitive information.

Secure Building Access. Prevent non-employees from entering office buildings by requiring security codes and request employees not give access to non-employees without permission.

Report Lost Equipment. Require all employees to report lost company equipment, including laptops and cellular phones.

Personal Devices. Limit the use of personal devices for business purposes and vice versa.

Software. Do not allow employees to download unauthorized software onto company computer systems, laptops, cell phones, and other devices.

Termination of Employment. When an employee is terminated or resigns, it is important to terminate their access to company information, papers and other sensitive information immediately.

An educated work force that is vigilant and alert is the best way to tackle threats to a company’s computer systems. Building employee awareness is a big step toward securing company data.

If you have concerns about creating a company cyber security policy for your business, contact the attorneys at MacMain Leinhauser. We provide human resource support and review employer policies to limit exposure to litigation. For further information on how our firm can assist you, contact us online or call us at 484-318-7106. Located in West Chester, Pennsylvania, we serve clients throughout Chester County and Philadelphia.

Judge Denies Chester Community Charter School Proposal to Take Over K-8 Schools

In the first effort of its kind in Pennsylvania, a local charter school recently announced their intention to take over all kindergarten through eighth grade (K-8) education in its local district. Currently, Chester County Charter School (CCCS) serves most elementary and middle school students in the Chester Upland School District. They asked a Delaware County judge for approval to convert all remaining schools to charter schools, a request that was denied last month.

CCCS asked the court to accept proposals to convert any K-8 schools not currently operating under the charter company. Yet, the judge said that while some charter school expansion may be necessary to fortify the financially strapped school district, he felt the CCCS petition was premature at this time. This spring, he will hear a new plan for the district’s financial recovery.

A Closer Look at Chester County Charter School

CCCS currently educates more than half of all grade-school aged children residing in the Chester Upland School District and operates the largest charter school in Pennsylvania with more than 4,300 children. After the district was unable to get out of debt, the state took over through a process called receivership. Under this system, all financial recovery efforts and leadership changes must be approved by a local judge, including adding more schools to the CCCS roster.

Opposition to the Charter School Takeover

Members of the Chester Upland Education Association and some public-school teachers were concerned a full charter school takeover would limit school choice, impacting students who may not thrive within the charter school model.

The Vice President of the CUEA works with special needs students who are not getting their needs met in CCCS. Without an alternative, she worries these children may fall through the cracks and she may have valid reasons for her concerns. According to the most recent test scores, district-run schools perform on average the same and sometimes better than charter schools.

Some parents with students in the district filed a lawsuit claiming a takeover would prevent any community input and put the students at an academic disadvantage based on the charter school test scores. Unions representing district teachers and other staff are also concerned a takeover would mean certain termination for their members. Others feel it will fix the underlying problem of inadequate funding. A financial recovery plan for the district was expected to be submitted late last month. If approved, it may delay the charter school takeover.

The education law lawyers at MacMain Leinhauser resolve complex legal matters facing today’s educators and educational institutions. We ensure schools are compliant with local, state, and federal regulations and defend them in all types of litigation. We are on top of ongoing changes in education so you can feel confident you are receiving the most effective and informed guidance for your legal issue. Call us at 484-318-7106 or contact us online for an initial consultation. Located in West Chester, Pennsylvania, we represent clients throughout Philadelphia and Chester County.

Do I Need A Lawyer for My Non-Profit Organization?

A lawyer specializing in non-profit organization law has expertise in incorporation, maintenance, and tax filing requirements for a non-profit organization. Much like a corporate lawyer who specializes in corporate formation and maintenance, an attorney for the non-profit sector has specific knowledge that is tailored to non-profit entities.

A non-profit organization must ensure proper compliance of the rules and laws to maintain its status as a tax-exempt organization. Failure to do so can lead to the organization losing status as a tax-exempt organization and become liable for fees and penalties.

Navigating the Different Types of Non-Profits

There are many different types of non-profits. An attorney that specializes in this field can provide advice on the appropriate entity for the organization’s needs and goals. A charitable organization has different tax and legal obligations from a religious, political, or private philanthropic foundation.

Preparation of Legal Documents

A lawyer can prepare and file the appropriate forms with the government and Internal Revenue Service (IRS) to form the entity and take advantage of its tax-exempt status. A lawyer can also draft bylaws and amendments of the organization. Furthermore, a non-profit organization may also wish to file for trademarks, copyrights, or other intellectual property. An attorney can evaluate the organization’s intellectual property rights and advice on such issues.


An attorney can negotiate contracts with vendors, employees, and third parties. Additionally, an attorney can counsel the organization on liability issues so that litigation may be avoided or minimized.


Lawyers can also provide advice on management and maintenance of the organization. The organization will need to form a board of directors and appoint officers. Attorneys can advise board members, executives, and employees on compliance with various regulations to ensure that the organization’s status is maintained.

Choosing an Attorney

When choosing an attorney, choose one who is not already on the board. It may seem easy to consult with an attorney who is on the board of the organization, but this attorney will have a conflict of interest. As a board member and counsel to the organization, an attorney from the board cannot represent the organization in litigation and may even be called as a witness.

The best way to identify an attorney for consultation may be a referral from another organization that benefitted from their services, which is a tried and tested way to retain counsel. Other means of finding an attorney are through referral services organized by the local state bar association or through online portals. Having a non-profit attorney prepare the legal documents and advise on the appropriate tax-exempt entity for the organization should provide piece of mind, prevent common pitfalls, and set up the organization on a course for successful operations so that it achieves its goals.

MacMain Leinhauser understands that non-profit organizations have unique needs. Our attorneys provide specialized knowledge for counseling such organizations. For an initial consultation, please contact us online or call us at 484-318-7106. Located in West Chester, Pennsylvania, we serve clients throughout Philadelphia and Chester County.

What Do I Need to Know When Distributing Holiday Bonuses?

The holidays are a great time to show gratitude toward employees. They will value gifts from employers at this time as this can boost morale at the office and create a positive work environment. A way to show appreciation that is not monetary in nature may be to grant days off during the holidays so employees can spend more time with their families. However, if the office budget allows, a holiday gift in the form of a cash bonus may be the most valued, as it may ease employees’ financial stress from holiday shopping and travel.

When choosing to give a monetary bonus, employers should be cognizant of tax implications and federal labor laws to avoid tax liability, labor law violations, and anti-discrimination lawsuits.

IRS Regulations

Most employer gifts have tax implications and need to be reported.  However, in limited circumstances, a gift may qualify as a de minimis fringe benefit. To qualify as such, it must be one for which, considering its value and frequency with which it is provided, is so small as to make accounting for it unreasonable or impractical.

The Internal Revenue Service’s (IRS) definition does not provide any dollar limits for the de minimis gifts exception. A qualifying gift does not require reporting. Even when the gift is of limited dollar value, it should be given infrequently, if it is given on a regular basis, then it will not qualify as a de minimis benefit and will have to be reported. It is prudent to consult with a qualified lawyer to determine whether the bonus qualifies as a de minimis gift.

Fair Labor Standards Act

According to the Federal Labor Standards Act (FLSA), nonexempt employees are entitled to overtime pay when they work over 40 hours in a workweek. The overtime rate is based on the regular rate of pay. The regular rate of pay is determined by dividing the total pay in the workweek by the total number of hours an employee has worked. When calculating the overtime rate, it is important to consider whether the bonus is also included in determining the rate as certain bonuses should be used to calculate the rate of pay. Failure to do so will expose employers to labor law disputes and violations.

Bonuses that are discretionary and classified as gifts are not used to calculate the rate of pay to determine an employee’s overtime rate. Sums paid as gifts and payments in the nature of gifts made at Christmas time or other special occasions are excluded from determining the rate of pay. Therefore, to qualify as a gift, it must not be related to the hours worked.   These payments must be discretionary, not part of any employment contract or agreement, and the employee must not expect such payments regularly. A one-time holiday payment that is based on an employee’s two-week salary is considered a discretionary bonus if it was not already part of the employee’s contract, according to the Department of Labor’s regulations.

For legal advice on distributing holiday bonuses to your employees, consult the lawyers at MacMain Leinhauser. For an initial consultation, contact us online or call us at 484-318-7106. Located in West Chester, Pennsylvania, we serve clients throughout Philadelphia and Chester County.

Understanding the Federal Tort Claims Act

West Chester business lawyers advocate for clients facing federal tort claims act issues.Not every personal injury lawsuit is filed against a private individual or commercial business. In some cases, injured individuals will sue a government entity such as a police department or public housing authority or other public employees for damages. Filing a medical malpractice claim against a veterans hospital or a slip and fall claim against the IRS after falling on an icy sidewalk in front of the building are common examples. Litigation involving government entities can raise unique issues especially if the matter is subject to the Federal Tort Claims Act (“FTCA”).

Applicable Claims

In many cases, the doctrine of “sovereign immunity” bars an individual from filing a lawsuit against the government. The FTCA has strict guidelines setting forth when a claim can be brought against a public entity. Only those claims against the government specially allowed by the state law of the location where the injury occurred will fall under the FTCA. While this generally includes claims for injuries resulting from wrongful or negligent actions of government employees, there are some exceptions. These include claims based on the actions of independent contractors or based on any conduct outside the scope of the government employee (including actions taken while the federal employee is “off duty”).  Although the FTCA typically covers only acts of negligence, certain claims involving the intentional misconduct of federal law enforcement officers are permissible.

FTCA Procedures

Filing for compensation against the government is not as simple as filing a complaint in federal court. Pursuant to FTCA regulations, injured individuals first must file an administrative claim with the specific government agency allegedly responsible for the negligence. Many government entities have their own specific claim forms that a potential plaintiff must file such as the Standard Form 95 available from the United States Department of Justice. Under the FTCA, the government agency has six months to respond to the compensation request during which it may agree to pay some or all of the alleged damages. After six months, the injured individual may proceed with filing their lawsuit.

Claims Against Government Health Centers

Injured individuals seeking to bring malpractice claims against medical providers employed by the federal government or public entity health centers also need to follow the procedures outlined in the FTCA. Federal employees of qualified health centers are immune from private lawsuits with the government acting as their primary insurer. Administrative claims against government medical facilities and their employees will be reviewed and litigated if necessary by the United States Department of Health and Human Services Office of the General Counsel.

Defending FTCA Claims

Government entities sued under the FTCA need experienced counsel who understand the complexities of federal and state law in this area. Defending these matters requires extensive knowledge of the exceptions and procedural requirements of the FTCA which can only be gained by years of experience.  At MacMain Leinhauser, our experienced attorneys have a proven success record in defending government agencies from FTCA matters throughout the state.

Philadelphia Business Lawyers at MacMain Leinhauser Defend Federal Tort Claim Act matters

At MacMain Leinhauser, our experienced Philadelphia business lawyers proudly defend a wide variety of government entities in Federal Tort Claim Act matters throughout Pennsylvania. With offices conveniently located in West Chester, Pennsylvania, we represent clients throughout Philadelphia and Chester County, Pennsylvania in a wide range of legal matters. To schedule a confidential consultation with one of our experienced business and Federal Tort Claims Act attorneys today, call us at 484-318-7106 or submit an online inquiry form.