Category: Employment Law
Business Owners: Think Twice Before Gifting Stock to Employees
September 24, 2021 | Carole Clark Isakson
I receive regular calls from small business owners that want to show appreciation to their hardworking employees by gifting shares in the company. Sometimes, the goal is to incentivize an employee to work harder and in other cases, the employer hopes to keep the employee long-term and feels the gift will help with this. I generally dissuade these owners from share transfers and suggest other ways to bonus employees based on profits. Why? Because an owner of shares, no matter how small, has rights in the company that can cause issues for the well-meaning employer. Minority shareholders in Minnesota have a variety of rights. For instance, minority shareholders in privately held corporations have the right to request and examine the share register, the records of all shareholders, and board proceedings over the past three years. This includes all articles, amendments, bylaws currently in effect, certain financial statements, reports made to shareholders within the last three years, names and business addresses of all directors and principal officers, voting trust agreements, shareholder control agreements, and other types of agreements. While providing these documents may not be difficult, many employers would rather not share this information. When an employee comes to their employer, and owns a share in the company, this information must be provided. In…
Read MoreRemote Workers and Foreign Business Registration
July 14, 2021 | Carole Clark Isakson
Flexible and remote working was tested on a massive scale at the onset of COVID-19 sheltering restrictions approximately 15 months ago. It appears to have been largely successful and may have a permanent impact on how and where we work. Read our blog as we discuss the impact of remote workers on foreign business registration. The positive impact of working remotely Many media outlets have suggested that the ability to work remotely is a very important amenity to the majority of Millennial and Generation Z members. Other proponents cite the desire to live in a more affordable location, or to save on commute times and transportation related costs, or even to reduce their carbon footprint. Employers may find that allowing workers to work remotely improves retention and provides a greater pool of qualified employees to fill job openings. Parameters for multi-state employment If you employ people who reside in another state, you may need to register to do business in that state as well. Each state has its own parameters indicating what “doing business” in a state means, so make sure you know the rules. One interesting website, with which we have no affiliation, is https://www.makemymove.com. This site lists cities that offer cash incentives to workers who relocate. Some cities require that to…
Read MoreMinnesota Supreme Court Rules on Workplace Handbook Policies
April 16, 2021 | Scott M. Lepak
Authored By Scott M. Lepak and Claire Schmitz The Minnesota Supreme Court recently announced two important holdings in Hall v. City of Plainview regarding workplace handbook policies. First, the Court determined that general disclaimers in employee handbooks (generally at the front of personnel handbooks or manuals) do not automatically apply to all provisions within the handbook, including compensation and severance policies. The second ruling was that the state law providing a penalty for failure to pay wages promptly did not create an automatic right to paid time off (PTO) on its own absent a binding contract present. Read on as we discuss the specifics of the Minnesota Supreme Court rulings on workplace handbook policies. Background Facts In 2017, the City of Plainview terminated an employee who had accrued unused PTO throughout 30 years of work. When the employee was terminated, the City refused to pay him the accrued PTO, citing the employee handbook. The City claimed he had not given “sufficient notice” per a policy in their handbook. This employment handbook also contained a disclaimer stating that the provisions within it “should not be construed as contract terms” and that it was “not intended to create an express or implied contract of employment between the City of Plainview and an employee.” The employee…
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