North America

ESTATE FREEZE OR RE-FREEZE

An ‘estate freeze’ is a common tax planning strategy. The owner of shares of a private company can ‘freeze’ the value of his/her shares and transfer the future growth of the company to other family members. The benefit of a freeze from an income tax perspective is that the future taxation of the growth of the company can be transferred to other family members particularly children, thus limiting the tax liability of the owner on death and deferring the tax to the next generation. If the shares qualify as ‘qualified small business corporation’ shares, a freeze can enable such other family members to claim the lifetime capital gains exemption. A freeze is most commonly used to freeze the value of a company that owns a business, real estate or public securities. If the owner has already implemented a freeze, a ‘re-freeze’ at a lower value can be effected if the value of the company has dropped.

A freeze or re-freeze should be considered in a down market because it may provide the owner with the opportunity to freeze his/her shares at a lower value than would otherwise have been possible.

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CFIUS AND EXPORT CONTROLS: A DETAILED ANALYSIS OF THE PROPOSED MANDATORY FILING CHANGES

Pursuant to the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), the Committee on Foreign Investment in the United States (“CFIUS”) is authorized to review and take action to address national security concerns arising from certain investments and real estate transactions involving foreign persons. On May 21, 2020, the U.S. Department of the Treasury (“Treasury”) published a Proposed Rule that includes two important changes impacting mandatory filings.

In October 2018, Treasury published the “Pilot Program Interim Rule,” an interim rule that implemented—on a temporary basis—a pilot program which imposed a mandatory filing requirement for certain foreign investment transactions involving a U.S. business across the five types of critical technologies as defined by FIRRMA; and with a nexus to specified industries identified in the North American Industry Classification System (“NAICS”). For more details about the critical technologies pilot program, please see our previous article.

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Attorneys Appointed/Reappointed to Committees within the Illinois State Bar Association

ROYAL OAK, Mich., May 21, 2020 – Royal Oak-based law firm Howard & Howard is pleased to announce that three of our attorneys have been appointed/reappointed to committees within the Illinois State Bar Association for the 2020-2021 term.

The attorneys and their appointments/reappointments are as follows:

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U.S. Department of Labor Allows Employers to Give Bonuses and Other Extra Pay to Fluctuating Workweek Employees Continue Reading…

For the second time this week, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) has issued a Final Rule involving the overtime provisions of the Fair Labor Standards Act (the “FLSA”).  Following closely on the heels of the revisions to the section 7(i) exemption regulations discussed here, on May 20, 2020 WHD released its revisions to the regulations regarding the “fluctuating workweek” method of paying overtime to salaried non-exempt employees.  And, as with the 7(i) Final Rule, the fluctuating workweek Final Rule eliminates confusion caused by WHD’s previous rulemaking efforts.

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Law Firm ILN-telligence Podcast | Episode 2: Michael Slan, Fogler Rubinoff LLP | Toronto, Canada

In our second episode of the Law Firm ILN-telligence Podcast, we welcomed Michael Slan, who is the managing partner of Fogler Rubinoff LLP in Toronto, Canada, and a member of the International Lawyers Network. In this episode, I had a candid conversation with Michael about the importance of communication in this time of pandemic, why deep cuts may not be the best cuts, and what leadership looks like in the face of market downturns and global lockdowns.

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New Jersey Affidavit of Merit Statute Applied to Nursing Case Despite “Common Knowledge” Claim

The Supreme Court of New Jersey unanimously held in Linda Cowley v. Virtua Health System (A-47-18) (081891) that the “common knowledge” exception of the Affidavit of Merit Statute applies only when a simple negligence standard is at issue, and does not apply when a specific standard of care must be evaluated.  In this case involving if and how to reinsert a removed nasogastric tube, the Court reversed the judgement of the Appellate Division and dismissed the plaintiff’s complaint with prejudice because she failed to submit an affidavit of merit within the time required by the Affidavit of Merit Statute.

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Time Is Money: A Quick Wage-Hour Tip on … California Overtime

California law has specific requirements regarding the payment of overtime to employees. An employer’s failure to pay overtime—or failure to pay the correct overtime rate—can result in a litany of unintended Labor Code violations, which, in turn, can lead to enormous liability. Therefore, it is critical that employers understand when overtime is due and how to calculate the overtime rate of pay.

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Supreme Court of California Holds That Claims Under the UCL and FAL for Civil Penalties Do Not Guarantee A Jury Trial

On April 30, 2020, the California Supreme Court (“Court”) ruled on April 30, 2020 that claims brought pursuant to California’s Unfair Competition Law (“UCL”) and the False Advertising Law (“FAL”) are not entitled to a jury trial.

In Nationwide Biweekly Administration, Inc. et al., v. The Superior Court of Alameda County, the federal Consumer Financial Protection Bureau (“CFPB”) brought an action against Nationwide Biweekly Administration, Inc. (“Nationwide”) and others, alleging that Nationwide and the other defendants falsely advertised their services and as a result operated unfairly relative to their competitors in violation of the UCL and the FAL. The CFPB sought both injunctive relief and civil penalties.

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California Court of Appeals Finds Uninvolved Joint Employers are Innocent Bystanders, Cannot Be Held Liable for Harassment and Discrimination Claims

On April 7, 2020, the California Court of Appeals (the “Court”) upheld summary judgment for two professional employer organizations (referred to in the decision as a “staffing agencies”) accused of harassment and discrimination by one of its “leased” employees. In Ducksworth v. Tri-Modal Distribution Services, the Court found that joint employers—and more specifically staffing agencies—cannot be held liable for harassment and discrimination claims absent a showing that they participated in or were involved in the alleged wrongful conduct.

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U.S. Department of Labor Withdraws the “Retail” and “Not Retail” Lists That Have Long Complicated the FLSA Section 7(i) Exemption Continue Reading…

From the time of its original enactment in 1938, the Fair Labor Standards Act has contained an exemption for certain employees of a “retail or service establishment.”  In 1961, the Department of Labor’s Wage and Hour Division (“WHD”) issued interpretive guidance to aid in determining whether an establishment is or is not “retail or service” for purposes of what was then the section 13(a)(2) overtime and minimum wage exemption.  Part of the test includes whether the business is in an industry in which a “retail concept” exists.  See 29 C.F.R. § 779.316.  WHD created two lists, each containing dozens of industries that the agency believed may (29 C.F.R. § 779.320) and may not (29 C.F.R. § 779.317) have a retail concept.

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