Welcome to the Siegel Brill newsletter.
Knowing you and your businesses is our goal at Siegel Brill. There are always interesting things happening at our firm and people willing to share their knowledge; some of which just might benefit your business. We hope you enjoy our newsletter and getting to know us just a little better.
Required Update to Minnesota Employee Handbooks
Employee Handbooks can be an invaluable tool in setting expectations for both employers and employees in the workplace. Workplace practices, drug testing, leave-taking policies and disciplinary procedures are just a few of many areas in which an Employee Handbook can be beneficial. And, while Employee Handbooks are obviously a helpful introduction to an employer’s culture for employees, they can also be a great starting point for business owners thinking through the formal policies they want in place for their managers and employees.
However, Employee Handbooks can be a trap for the unwary. They can land an employer in hot water when drafted without a full knowledge of Minnesota and Federal laws -- laws which are often protective of employee rights. Because of our institutional knowledge and ability to keep up to date on new rules and regulations, Siegel Brill offers a great resource for clients thinking about implementing an Employee Handbook, or for those clients who have an Employee Handbook but want to keep up with changes in the law that might affect their current policies.
One such recent change comes from the Women’s Economic Security Act (WESA). Under WESA, employers in Minnesota are now required to include certain language in all Employee Handbooks. The act provides new protections for employees, and has implications on employee leave policies, wage disclosure, and required employer accommodations for pregnant and nursing women. It is important for employers to be aware of the law in order to avoid inadvertently denying employee rights, which can lead to civil fines and penalties.
Under WESA, employers with 21 or more employees are now required to provide at least 12 weeks of unpaid pregnancy and parental leave to an employee who has worked at least half-time for a period of at least twelve months. While this leave may be unpaid, employees are entitled to return to their same job and position upon returning from pregnancy or parental leave. Additionally, employees who meet WESA requirements may be eligible for “sick and safe” leave, which may be taken to care for a sick family member, or to receive assistance related to sexual assault, domestic abuse, or stalking.
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The keeping of corporate minutes (and various associated formalities such as the annual election of board members and officers) is something most business owners know they should do, but often do not. At minimum, the owners of a business should meet annually to review the business operations for the previous year, address any corporate issues that require board or owner-level approval and re-elect officers and members of the board. Minnesota’s Business Corporation Act and Minnesota’s Limited Liability Company Act and recently enacted Uniform Limited Liability Act all call for annual meetings of shareholders or members as applicable. For businesses on a calendar fiscal year, the first quarter of the new year is the perfect time to review these matters.
The conduct of a meeting is usually set forth in the governing documents for the business. For a corporation, this could be its Bylaws or Shareholder Control Agreement; for LLC’s, it could be an Operating Agreement (or Member Control Agreement for LLC’s formed prior to August 1, 2015) and for partnerships (general or limited), this could be the Partnership Agreement. The meeting format is simple and the tasks such a meeting is designed to accomplish can be accomplished via a formal meeting or in some instances, a written resolution (commonly referred to as a “Written Action”) in lieu of an actual meeting.
Regardless of form, the documentation of annual approvals at an ownership level is important to maintain the corporate formalities of a business in order to make sure business decisions are made with proper corporate approval and to further maintain the important separation between a business and the individuals that own or manage it. For businesses with diverse ownership groups, the proper documentation of decisions is essential to avoid costly and time-consuming ownership disputes. Moreover, the review and approval of such matters on an annual basis allows owners to re-evaluate the persons holding officer or board positions. For businesses looking at a strategic transaction, be it a purchase, sale or incursion of debt, the maintenance of corporate formalities is essential to the effectuation of such a transaction in an efficient manner.