BizLawBuz …. The Power of Know

Determining Whether Your Business is Covered
Few pieces of federal employment legislation have proven more difficult to untangle and to administer than the Family and Medical Leave Act of 1993 (FMLA). At its core, the FMLA allows eligible employees to take as much as twelve weeks of unpaid leave to deal with their own or a family member’s medical needs with the assurance that their jobs will be held pending their return. That sounds simple enough, but administering FMLA leaves with your work force can be a real challenge. And if you run afoul of the FMLA’s requirements, your business can face a claim for back pay, future pay, liquidated damages (basically a penalty), mandatory interest and attorney fees. For all of these reasons, it is imperative that covered employers understand and comply with the FMLA.

Who is a Covered Employer?
An employer is covered by the FMLA if it has employed at least 50 employees for each work day of 20 or more workweeks in the current or prior calendar year. This includes all full or part-time employees on the payroll, including unpaid employees (e.g., someone out on an unpaid FMLA leave still counts toward the 50). It does not include employees who work outside of the United States or its territories.

Notice that the test is not whether the employer currently has 50 employees. It is based on the current or prior calendar year, and it is based on any twenty weeks in that year. The weeks need not be consecutive.

Joint Employers and Integrated Employers Beware!
More than once, I have had clients tell me they needn’t worry about the FMLA since they lease their employees from a Professional Employer Organization (PEO). In most of these instances, the business will be deemed a “joint employer” along with the PEO and will be equally responsible for assuring compliance with the FMLA.

Likewise, two or more businesses with closely entwined ownership or management may be deemed “Integrated Employers” whose workforces will be counted collectively to test the 50 employee FMLA threshold. According to the applicable federal regulations, courts will analyze the following factors to decide whether multiple employers are integrated under the FMLA: (1) common management; (2) the interrelationship between the companies; (3) whether control of labor relations is centralized; and (4) the degree of common ownership or financial control. Typically, courts will be especially influenced by common management and shared control of the labor force.

You Can’t Comply if You don’t Know Your Obligations
Though cumbersome, compliance with the FMLA can be managed effectively with proper attention and planning. The first step is determining whether your business is covered and conducting periodic checks for any change in its status. If you need help, please feel free to give us a call.

Dirk A. Beamer

As the world grows smaller thanks to technology, Wright Penning & Beamer finds itself with clients and friends literally across the globe. We welcome new friends and new opportunities, but we still trace our values, like our roots, to the Michigan communities we call home. Like many of you, we are grateful for opportunities to give back when and where we can.

Founders Festival
The entire Farmington area - and much of southeast Michigan with it - celebrates its roots annually at the Founders Festival. Throughout the weekend, festival goers will enjoy fine wine, great food and live music at Alley Regally - hosted by the Greater Farmington Area Chamber of Commerce and Legato Salon, with proceeds to benefit the Farmington/Farmington Hills Afterschool Program. Wright Penning & Beamer is happy to join other local businesses as a sponsor of this venue.

Annual Duck Race
Capping off the Festival weekend, the Farmington/Farmington Hills Foundation for Youth and Families sponsors its 7th Annual Duck Race on Sunday, July 17th at 3:00 p.m. at Shiawassee Park. As a corporate sponsor, Wright Penning & Beamer will launch its decorated duck.

(Artwork courtesy of the Beamer children but with no resemblance to any attorney they might know).

If you have ever thought we’re “all wet,” come out on Sunday for proof!

Farmington Farmers and Artisans Market
Starting in May and running through harvest time, the Farmington Farmers and Artisans Market brings fresh Michigan produce, exceptional baked goods, fine art and a variety of unique, artisan-made products to downtown Farmington. Wright Penning & Beamer is delighted to join with our friends at Mid-American Studios and Montgomery, Wiethorn and Burke, CPAs, in sponsoring live music at the market every Saturday. Enjoy the sights and sounds every Saturday from 9:00 am to 2:00 pm at Riley Park in downtown Farmington.

Leelanau Conservancy Annual Picnic and Auction
In Suttons Bay we are supporting and serving as a sponsor of the Leelanau Conservancy’s 2011 Picnic and Auction. The Conservancy’s Annual Picnic and Auction will be held Thursday, August 4, 2011. Over 700 people attended the 2010 auction and over $100,000 was raised to help the Leelanau Conservancy in its mission to conserve the land, water and scenic character of Leelanau County. If your schedule permits, attend the picnic, donate an item, make a bid online or in person and volunteer to make this annual event a success. Visit their website at www.theconservancy.com to get your tickets to support this event too!

Suttons Bay Fireworks Display and Celebration
Another important community event Wright Penning & Beamer sponsors is the Suttons Bay Annual Fireworks Display and Celebration held during Labor Day weekend. It’s a way for us to give something back to the families of the local community at the close of the summer season. Held at dusk at the Suttons Bay Marina Park. Grab a blanket and pack a picnic basket full of snacks and beverages and join us after sunset to enjoy the fireworks display as it lights up the night sky over Suttons Bay. It’s a fun night for all who attend.

None of these events would be possible without the tireless efforts of community leaders and countless volunteers. We share our heartfelt thanks with our many friends and neighbors who work hard to celebrate and strengthen our communities. Whether in Farmington or in Suttons Bay, we look forward to seeing you “downtown” and “down by the bay.”

Dirk A. Beamer

On March 24, 2011, the Equal Employment Opportunity Commission (EEOC) published the much-anticipated final regulations regarding the Americans with Disabilities Act Amendments Act (ADAAA), which was signed into law by President Bush in September 2008, and took effect on January 1, 2009. These regulations significantly change the existing legal framework on disability law, and employers should be aware of how the regulations impact their obligations. A couple highlights of these new regulations and their impact are addressed below.

Impairment that “Substantially Limits” a “Major Life Activity”

The ADAAA defines “disability” as:

• A physical or mental impairment that substantially limits a major life activity;
• A record of such impairment; or
• Being regarded as having such an impairment.

The regulations now provide more guidance to assist in determining whether a “substantial limitation” exists. Employers should note that the regulations make it clear that the term “substantially limits” should be construed “broadly in favor of expansive coverage.” It is not intended as a “demanding standard.”

Furthermore, the term “major life activity” should not be interpreted strictly so that it unintentionally creates a demanding standard for determining existence of a disability. “Major life activities” include major bodily functions such as hemic, lymphatic, musculoskeletal, special sense organs and skin, and cardiovascular functions, to name a few. The activity need not be one that is “of central importance to daily life.” Consequently, many more activities may be covered by the ADAAA.

Examples of Impairments
Impairments can be permanent or long-term, or episodic and short-term, and under the regulations and rules of construction, there are certain impairments that will always be considered disabilities: including, for example, diabetes, epilepsy, major depressive disorder, autism, HIV infection, obsessive compulsive disorder, bipolar disorder, cancer, and post-traumatic stress disorder.

Conclusion
At the end of the day, employers should focus on how they might reasonably accommodate an employee’s impairment, rather than on determining whether a disability (or substantial limitation) exists. While the regulations are useful in clarifying the focus and meaning of the ADAAA, they also may increase employers’ exposure to liability if reasonable accommodation for an impairment is not afforded to the employee. The analysis will center on whether the employer met its obligations and whether discrimination occurred, and no longer on the question of whether the individual is substantially limited in a major life activity.

For additional questions regarding the ADAAA and how it might apply to your business, please contact Wright Penning & Beamer.

Julie P. Cotant

On Thursday morning, June 23, 2011, the IRS announced that it was increasing the optional business standard mileage rate for the final six (6) months of 2011. The rate will increase from 51 cents per mile to 55.5 cents per mile and will apply to all business miles driven between July 1, 2011 and December 31, 2011. Also increased was the rate for computing deductible medical or moving expenses. The new rate, which will likewise apply for the last six (6) months of 2011, will be 23.5 cents per mile, up from the current 19 cents per mile. The rate for providing services to charitable organizations is set by law, as opposed to the IRS, and will remain at 14 cents per mile.

Mid-year adjustment
While the IRS typically considers adjusting this rate in the fall of each year, to be applicable in the next calendar year, this mid-year adjustment was made in recognition of increased gas prices and the impact of those prices on all Americans. In addition to gasoline, the calculation of the mileage rate includes other factors such as depreciation, insurance, and other fixed and variable costs associated with operating a vehicle.

A simpler method
While taxpayers always have the option of tracking and deducting actual costs associated with using their automobiles for business, the optional business standard mileage rate provides a much simpler method. As opposed to keeping track of actual expenses, mileage alone is sufficient to compute the deductible costs of operating an automobile for business. The business standard mileage rate is also used by many businesses as the rate at which they will reimburse employees for the business use of their personal automobiles.

Further information can be found in IRS Announcement 2011-40.

Duane L. Reynolds