Last month was a good month. I was flattered to have been selected by my colleagues as an Austin Monthly Top Attorney in Austin! It is truly an honor when clients call me to assist with their legal troubles, and I appreciate nothing more than the compliment I am paid when a colleague referred them to my office. Sending appreciation all around.
Congratulations Jennifer Ward!
We are so proud to announce that Jennifer Ward has been given 3 different awards recognizing her as a top attorney and it couldn't have happened without the support of all of our amazing clients. Jennifer was recognized by the Austin Monthly Magazine Best of ATX as one of Austin's Top Attorney's for 2022. She has also received TWO recognitions from Super Lawyers as a Top Rated Lawyer in 2022 and also as a Top Rated Women Attorney in Texas in 2022. We are so extremely proud of her and all of the hard work and time she dedicates to her clients. We are also so thankful for the client base we have. Thank you to everyone who nominated and voted for Jennifer.
We look forward to serving you and seeing what the year 2023 has in store!
2022 Top Rated Women Attorneys in Texas Publication
The Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) establishes the federal minimum wage, requirements for overtime pay, and limitations on child labor. You have more than likely seen the required poster explaining employees’ rights under the FLSA displayed in your workplace.
The FLSA applies to a broad range of public- and private-sector workers, but the law carves out a few noteworthy exceptions. One such exemption is for outside sales personnel. Merely having the title of “Outside Sales Representative” does not necessarily mean that you are covered under this exemption; rather, two substantive criteria must be met in order to qualify:
1. The employee’s principal responsibility is making sales; and
2. The employee routinely works away from the employer’s workplace.
In other words, while an outside salesperson may have minor duties outside of their core role and may spend some of their workweek in the office, an outside salesperson qualifies for the exemption if and only if (1) their main focus and most important function is sales and (2) their deals are made at the customer’s place of business rather than their employer’s.
It is important to note that any fixed location used by a salesperson to make sales, including a home office, is considered the employer’s place of business. Salespeople who make deals primarily over the phone, mail, or Internet thus do not, in most cases, qualify for the exemption. The exemption is aimed specifically at individuals who sell door-to-door or travel to their customers’ workplaces.
The Department of Labor, tasked with enforcing the FLSA, has published a fact sheet to clarify the scope of the exemption. They provide precise definitions of terms such as “sales” and “employer’s place of business.” Nevertheless, whether a particular employee qualifies for the exemption is rarely black and white and will always depend on the facts specific to their situation. It may depend on how the employee’s duties compare to those of their co-workers in similar roles, for example, or whether the employee holds certain licenses required to perform their duties.
A recent court case in Massachusetts provides an informative example of an ambiguous case.[1] Brand representatives whose jobs required them to travel to retail stores, set up displays, and present demonstrations of their company’s products argued that they did not meet the definition of outside sales and were thus owed overtime pay. The court found that although the brand representatives did not exchange their products directly for payment, their efforts to “persuade shoppers, who then can demonstrate some intention… to buy a product by placing it in their shopping carts or baskets,” meet the FLSA’s definition of “sales.” The employees were deemed to qualify for the outside sales exemption and were not awarded the overtime pay they sought.
If there is any doubt over whether you or your employee qualify for the outside sales exemption to the FLSA, it is best to consult an attorney, since employers who violate the FLSA are subject to hefty fines for each violation.
[1] Modeski v. Summit Retail Solutions, Inc., 1st Cir., No. 20-1747 (Feb. 25, 2022).
Employee Rights Expanded with Recent Changes to Texas Law
There are some major changes to Texas’ sexual harassment laws that went into effect on September 1, 2021: SB 45 and HB 21 drastically expanded employee rights and increased employers’ obligations relating to sexual harassment in the workplace. You may be wondering, what does this mean for me?
Employees
For employees, your rights to protection from sexual harassment have been expanded in several ways. Perhaps the biggest change is that all employees are now covered under the law, whereas before, only those whose companies employed 15 or more people were protected. This is very important for employees who work for small businesses where they may be one of only a handful of employees. Even domestic workers are protected.
The statute of limitations has also been lengthened. You now have 300 days after you experience sexual harassment to file a charge of discrimination with the Texas Workforce Commission if you wish to file a lawsuit. Prior to the enactment of these bills, the statute of limitations was 180 days. (It is important to note that this change only applies to sexual harassment claims, not discrimination based on other protected classes.)
Employers
All employers are now covered by Texas’ sexual harassment laws, not just those with 15 or more employees as was previously the case. That is not the only way the definition of “employer” has changed; it now includes anyone who “acts directly in the interests of an employer in relation to an employee,” meaning that managers, human resources representatives, and other employees may also be held personally liable when sexual harassment occurs. This is a major shift in the legal landscape. Previously, Texas law did not provide a way to hold individuals liable for sexual harassment.
Employers are now required to take more significant steps to address sexual harassment in the workplace. The standard of care is higher. It is no longer sufficient to take “prompt remedial action” after an employee complains of sexual harassment. An employer is liable where the employer or its agents: (1) know or should have known that the conduct constituting sexual harassment was occurring; and (2) fail to take immediate and appropriate corrective action. This places a greater burden on employers to ensure their workplace is free from harassment.
Addressing the Changes
If you have not done so already, it is imperative to review your handbooks to make sure they adequately and comprehensively address sexual harassment and comply with the law. This may mean overhauling your current reporting, investigative, and corrective action policies if they do not meet the new standards.
All employees who are now at risk of being held personally liable for sexual harassment complaints (especially managerial and human resources personnel) should be educated on the changes to the law and their own responsibility to uphold it. Solid policies, clear communication to management staff, and regular trainings are all important steps to become and remain compliant.
If you have any questions about these new legal developments, you should contact an experienced employment law attorney.
Emergency Action Plans
It is crucial that employers have an emergency action plan in place for when the unexpected occurs. As we learned all too well during the winter storm of 2021, even Texas needs to be prepared for severe winter weather this time of year. Forming an emergency action plan may seem daunting, but it is much better to start thinking about one now than to be caught off guard when you urgently need it.
Create a Plan: OSHA provides insight on what should be included in your emergency plan. Be sure to include the following:
how the plan will be activated
contact information for individuals in charge
assignments of specific action items to specific individuals
how to report the emergency to the proper authorities
evacuation instructions
a means to account for all employees
an inventory of equipment available and where to find it
Managers should also familiarize themselves with common warning terminology and signals, nearby emergency shelters, and alternative evacuation routes.
When it comes to weather-related closures, we recommend following the lead of the school district in which your office is located – if the school closes or announces a delayed start, your office follows suit. By making this a formal policy, your employees will know exactly how to find out whether the office will be closed, and it takes the responsibility for making tough decisions out of your hands.
You’ll want to set well-defined policies regarding employee pay during emergency closures. Is an emergency cancelation treated as a paid day off? Alternatively, consider work-from-home options that can be made available during an emergency closure. Set clear policies regarding accessing work systems from personal devices, and make it abundantly clear under which circumstances employees are authorized and/or expected to do so.
When formulating your plan, give particular consideration to individuals with disabilities or other medical needs. If evacuation or prolonged shelter-in-place becomes necessary, they may require additional assistance.
Gather Resources: Consider preparing an emergency kit with supplies to help you deal with power outages, prolonged shelter-in-place directives, natural disasters, etc. Your kit should contain food, water, medicine, light sources, batteries, a first aid kit, and other potentially useful equipment. Be sure to store it in an easily accessible location. Remember that many of these items have expiration dates, and do not forget to replace them regularly.
In the age of the pandemic, it is advisable that you maintain a stock of extra PPE such as masks and hand sanitizer should your employees be required to shelter together in close quarters for an extended period.
The materials you choose to include in your kit will depend on circumstances specific to your office’s location. If your office is located in close proximity to a nuclear power plant, for example, you ought to be equipped with plastic sheeting and duct tape in case you must seal off windows and air vents; if you are located in an area with a high risk of flooding, you should probably have a battery-powered pump and make sure to waterproof your emergency supplies.
Your kit should also include employees’ personal contact information in case any personnel are unaccounted for during an emergency. Consider collecting an emergency contact from employees during onboarding and storing this information in the kit so that you can keep their loved ones informed as the situation unfolds.
We also advise that you specify how to report water/electric/internet outages, how to contact security or the police, and how to activate other resources that may be required to respond in an emergency situation. Keep in mind that depending on the nature of the emergency, normal means of communication may be impracticable; backup equipment such as mobile hotspots and fully charged cell phones may be prudent. Local maps may help with an orderly evacuation in the event that GPS systems go offline.
For further suggestions, visit ready.gov.
Distribute the Plan: It is important that all individuals in the office have access to, and have familiarized themselves with, your emergency action plan. You might provide a copy in the employee handbook and/or post one in a common area. Employees must be trained on certain actions that may require their involvement and be given the opportunity to ask clarifying questions.
You should regularly review and update the plan and immediately inform employees of any changes.
While it certainly does not hurt to make the plan available digitally, be sure that physical copies are also available, as power and internet outages may very well coincide with more drastic emergencies.
Enact the Plan: When disaster strikes, it is easy to panic amid the chaos, but sticking to your plan as closely as possible ensures that all necessary safety measures are taken and that everyone is accounted for. Those in charge must evaluate the level of danger and implement the appropriate course of action. If your employees are well-prepared to execute the emergency action plan, everyone is able to play their part in carrying out a coherent response.
When it comes to emergencies, preparation is key. You cannot control when, where, and how an emergency strikes, but you can remain prepared for all possibilities so that you can jump into action when it does. The small cost of a well-formulated emergency action plan will prove invaluable if the time ever comes that you need to activate it.
Interview with Entrepreneuer Jessica Shields
With the holiday season already in full swing, this month we are featuring a Q&A with Jessica Shields, owner of the mission-driven corporate gift-giving service beCAUSE minded. If you've been putting off your holiday shopping, we hope that this interview will spark some inspiration!
Tell us a little about your background and your experience as a business owner.
I started my first business at 27 years old, and have been an entrepreneur ever since. My first company focuses on sampling health and wellness products at events and in grocery stores. Most recently, I started a corporate gifting business called beCAUSE minded that combines my passions for women's rights, empowering the vulnerable and environmental causes. We create brandable corporate gift boxes with products sourced for companies that either employ the vulnerable or give at least 50% of their profits to a cause.
What does it mean to be intentional about your business partnerships and the products you offer?
Every aspect of your business makes an impact on people and the planet. Where you source your supplies is one of the biggest. Look at your suppliers. Do they have sustainable practices? Do they have a diverse workforce? Do they give back in a significant way? These are things we look at when we are sourcing products for our gift boxes, but also our shipping boxes, storage containers, and even when we hire photographers, CPAs, printers, etc. Every part of your supply chain makes an impact.
What are some of the benefits of collaborating with other women or minority-owned businesses?
Women and POC-owned businesses are unfortunately not represented equitably in corporate America. By collaborating with these businesses, you are giving momentum to social change. You are leveling the playing field. You are increasing diversity in the corporate sector. But, you are also expanding your network to include new points of view, which can ultimately lead to more ideas, more inclusive marketing, and ultimately more sales.
What advice do you have for women entrepreneurs who are looking to start a business?
It's really hard to pick one, but if I have to focus on one singular piece of advice, it's got to be to focus on what you can be the best at. What do you offer that no one else does? At beCAUSE minded, we focus on luxury corporate gifts that give back. We know this won't be the right fit for everyone, but we believe business owners who are looking to impress clients AND change the world at the same time will find value in our offerings. Don't try to do everything. Find your niche and own it.
How do you balance work and home life as an entrepreneur?
I draw lines in the sand. I don't work between 6 and 9pm. I always read my daughter a bedtime story. I run at an average of 5 days/week. And I keep my quiet time consistent. While at times I do work on a weekend or miss a school field trip, these hard lines ensure my mental, physical, and parenting life don't get swept away in the demands of entrepreneurship. I recommend to new entrepreneurs to choose these non-negotiables early and build your business around them.
Check out the wonderfully curated gifts offered by beCAUSE minded: https://becauseminded.com/
IRS Tax Exemption Filing for Nonprofit Organizations
Most nonprofit organizations must apply to the Internal Revenue Service to qualify as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, 1986. Once an organization is approved and recognized as tax-exempt, it will receive a determination letter from the IRS describing its tax-exempt status and qualify to receive tax-deductible charitable contributions.
The IRS has provided two application processes for this purpose – Form 1023, or the much simpler Form 1023-EZ. In this post, we will discuss the features and eligibility requirements for each of the applications.
Form 1023-EZ
Form 1023-EZ is simpler and more convenient and consists of 5 parts spread over 3 pages. It contains questions about the details of the nonprofit organization, its officers and directors, and its organizational structure. It also asks questions regarding the specific activities and classification of the nonprofit organization.
Eligibility
The instructions for Form 1023-EZ provide an eligibility worksheet to help determine if a nonprofit is eligible for this form. The main eligibility criteria are as follows:
- Projected annual gross receipts must not exceed $50,000 in any of the next 3 years
- Actual annual gross receipts must not have exceeded $50,000 in any of the past 3 years
- Total assets must not exceed $250,000
- The organization must not be a foreign organization, LLC, successor to a for-profit entity, church, school, or hospital
- The organization must not request classification as a supporting organization or a private operating foundation
- The organization must not maintain or plan to maintain one or more donor-advised fund
Submitting the Application
Form 1023-EZ can be filed electronically on the Pay.gov website. Applicants must pay a filing fee (currently $275) through Pay.gov when the application is filed. Currently, the IRS takes approximately two to four weeks to process applications submitted on Form 1023-EZ.
Form 1023
Form 1023 is a long-form document consisting of 11 Parts and 8 Schedules (A to H). The form requires details about the nonprofit organization, its organizational structure, its officers and directors, a description of its activities, and financial information. Depending on the type of activities, the organization may also be required to complete one or several Schedules. Additionally, this form requires applicants to submit several supporting documents that provide more information about the organization, such as the articles of incorporation, bylaws, the conflict of interest policy, and actual or projected financials for 2-3 years.
Eligibility
All nonprofit organizations organized and operating exclusively for religious, charitable, scientific, literary or educational purposes can apply for federal income tax-exempt status using Form 1023. Certain other activities are prohibited or restricted, including, but not limited to, the following. A section 501(c)(3) organization must:
- Absolutely refrain from participating in the political campaigns of candidates for local, state, or federal office;
- Ensure its assets and earnings do not unjustly enrich board members, officers, key management employees, or other insiders;
- Not further non-exempt purposes (such as purposes that benefit private interests) more than insubstantially;
- Not operate for the primary purpose of conducting a trade or business that isn’t related to its exempt purpose(s);
- Not engage in activities that are illegal or violate fundamental public policy; and
- Limit its legislative activities.
Submitting the Application
Form 1023 can be filed electronically on the Pay.gov website. Applicants must pay a filing fee (currently $600) through Pay.gov when the application is filed. Currently, the IRS takes as little as three months or as long as twelve months to process applications submitted on Form 1023.
Timing Is Key
A nonprofit organization should file Form 1023 or 1023-EZ within 27 months after the end of the month in which it was legally formed. Once approved, the effective date of the exempt status is the legal date of formation of the organization. If filed after 27 months, the date the form is filed is the effective date of the organization’s exempt status.
How We Can Help
We can help you determine which form is most appropriate for your organization and help you file for 501(c)(3) exemption. While Form 1023-EZ may be much simpler, it may not always be the most appropriate. Many organizations that file Form 1023-EZ are ineligible for 501(c)(3) status even if approved by the IRS, potentially causing legal issues down the road. You should consult with a tax professional and/or an attorney before deciding which form is best for your organization.
TWC Unemployment Fraud
What’s Happening
With the rise in unemployment claims due to the pandemic, the number of fraudulent unemployment claims has tripled. A new type of fraud involving identity theft has become widespread. The scammers will steal the identity of an employee and file an unemployment claim in their name. This will then send a notification to the employer that this person is trying to file for unemployment. This can be confusing and alarming because oftentimes the employee whose name has been stolen to make a fraudulent claim is still currently employed with the company. Identity thieves have even tried to file claims using the names of two current Texas senators, who were both clearly still employed. These victims of fraud are sometimes experiencing backlash from employers, doubling the extent to which they are victimized.
TWC Press Release
The TWC issued a press release on March 28, 2021, urging employers to recognize fraud and report it. Employers who receive a claim notice for an employee who is still employed should respond to the notice immediately stating the claimant is still employed. See the link to the press release below.
https://www.twc.texas.gov/news/employers-encouraged-recognize-and-report-fraud
Combatting a Nationwide Problem
This new type of fraud is not unique to Texas. States across the country, including Washington, Pennsylvania, North Carolina, Ohio, Virginia, Iowa, and New York, are dealing with rising numbers of identity theft and fraudulent unemployment claims. It is important that employers everywhere stay hypervigilant to combat this form of fraud, and report suspected fraud to state and federal agencies immediately. Employers should also notify their employees of the prevalence of this scam, warning them to be on the lookout for unrequested funds or unemployment notifications. The DOJ, DOL, FBI, and Secret Service are all working in conjunction with state agencies to identify, investigate, prosecute, and prevent fraud.
Evidence in a TWC Hearing
Employers and Claimants who participate in a Texas Workforce Commission Unemployment Appeal Hearing should provide ample evidence to support their arguments during the hearing. This overview will help you identify the evidence you should submit and explain the process for presenting it to TWC.
Start Gathering Evidence Early
It is a good idea for participants in an unemployment proceeding to gather evidence early. Start by identifying types of information that will be relevant to the claim being considered. Evidence can be in the form of witnesses (people who have firsthand knowledge of events in your case) or documents. Witnesses should have firsthand knowledge of events relevant to the claim. Some examples of documentation that would be useful in these types of hearings would be hiring information, termination information, performance records, and paystubs. Depending on your individual scenario, other forms of documentation may also be appropriate, such as email or text communications, medical records, or other internal documents.
Submit Your Evidence to the TWC
If an appeal has been filed, then both the claimant and the employer may present evidence in support of their position. The hearing participants will be able to provide live testimony during the hearing. If there are any witnesses with firsthand knowledge of the events related to the claim, then those witnesses should attend the hearing if at all possible.
Instructions on how to submit documentary evidence can be found be on the first page of the hearing packet. There will be an address and a fax number for the TWC Officer in charge of your appeal, as well as an address for the opposing party. All documents should be sent via US Mail, facsimile, or both, to each party. Any last-minute documents should be sent via email in addition to one of the other methods. The email to submit last-minute evidence to the TWC is: appeals.evidence@twc.state.tx.us. Sending documents as far in advance as possible is important because documents that are not provided within enough time before the hearing begins may not be included in the hearing. It is also vital to remember that any documents submitted must be sent to both the TWC and the opposite side.
Evidence Will be Admitted During the Hearing
During the hearing, witnesses will be placed under oath. They will identify how they are familiar with the claim that is being viewed. The hearing officer will determine what topics are relevant for discussion during the hearing. The hearing officer will also rule on any objections made by either side.
The documents provided by the employer and the claimant will be reviewed to determine whether they are admissible. There are procedural rules regarding what can and cannot be reviewed. Evidence will only be considered in the hearing after it has been admitted as an exhibit. These exhibits will be an important part of arguing your case to the TWC Officer.
If you have any questions about submitting evidence for a hearing, or about TWC Hearings in general, our office is happy to be of assistance.
Hiring Interns
Hiring interns is a hot topic this time of year as we get closer to summer. There are legal restrictions on interns that have changed in recent years. As always, the best way to ensure compliance is to consult with an experienced employment law attorney. Here is a brief overview to help point you in the right direction.
Wage and Hour Restrictions
There are special wage and hour rules that apply to interns. Paid interns are considered employees for the purposes of the Department of Labor and Fair Labor Standards Act and are thus entitled to the same protections as employees. In the public and non-profit sectors, interns may be unpaid under certain circumstances.
In 2018, the Department of Labor changed its requirements to determine whether unpaid interns are employees and thus entitled to minimum wage and overtime provisions. The new standard is called the “primary-beneficiary test.” This test can be challenging to apply to a particular fact pattern because none of the factors are determinative.
As a starting place, the “economic realty” of the employer-intern relationship is an important factor. If the intern is the primary beneficiary of the internship, then they do not have to be paid. To put it another way, if an intern is not receiving monetary compensation, they must clearly be receiving other kinds of benefits from the position. For example, the intern could be receiving industry-specific training or academic credit.
Primary-Beneficiary Test
The Department of Labor utilizes the primary-beneficiary test to determine whether it is appropriate for interns to be unpaid. The primary-beneficiary test factors:
1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee – and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
This Department of Labor Fact Sheet is a great resource: https://www.dol.gov/agencies/whd/fact-sheets/71-flsa-internships
Health Coverage
If you are considering a paid internship, it is important to understand how the Affordable Care Act may apply. Larger organizations are required to offer health care coverage to their full-time employees, which includes interns if they work more than 30 hours per week. There is a very narrow exception for “seasonal employees”, but most interns do not fall into this category. Employers are not required to offer health coverage to unpaid interns, even if they work more than 30 hours per week.
This is a complicated area of the law. In order to avoid penalties, you should consult with legal counsel before hiring interns.
What is the EEOC?
The Equal Employment Opportunity Commission (“EEOC”) is a federal agency that works to enforce federal laws that make it illegal to discriminate, harass, or retaliate against a job applicant or employee because of their race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, disability, or genetic information.
Filing an EEOC Claim
When a job candidate or employee believes their rights have been violated, that person can file a claim with the EEOC. An EEOC claim is called a Charge of Discrimination. Claimants who believe they have suffered discrimination, harassment, or retaliation cannot file a lawsuit until they have filed a claim with the EEOC or a parallel state or local agency.
A party filing a complaint can submit their allegations through the EEOC Public Portal. The first step is to make an inquiry through the EEOC’s website about potentially making a claim. Then, the EEOC will conduct an interview to find out more about the specific inquiry. This type of complaint is quite serious, so there are several steps to the process to ensure the allegations are accurate and meet requirements under federal law before the Charge of Discrimination is finalized.
Mediation and Investigation
Once the Charge of Discrimination has been filed, the complaint will follow one of several possible paths. First the EEOC will offer to mediate the claim. A mediation is a form of alternative dispute resolution where a third-party acts as a “mediator” so both sides of the dispute can achieve a favorable outcome. Approximately three-quarters of cases that go to mediation are settled favorably. Last year, the EEOC was able to retrieve $333 million dollars for victims of discrimination in the workplace through mediation alone.
If the parties elect to forego mediation, or the mediation process fails, then the EEOC will investigate the case. An investigator will be assigned to the claim. They will typically collect information from both parties. They may interview witnesses and review documentary evidence. After completing its investigation, the EEOC will occasionally file a lawsuit on behalf of the claimant. In deciding which lawsuits to file, EEOC officials consider the strength of the evidence, the issues involved, and the impact a lawsuit would have on public interests.
The EEOC is an important agency in the United States. If you have questions about EEOC claims and procedures, consult with an experienced employment attorney. The Law Office of Jennifer D. Ward is available as a resource at any point.
Transferring your business to Texas: Mergers and Conversions
Texas has long been a popular destination for business owners and professionals seeking to relocate. Booming real estate and job markets, a thriving tech industry, and business-friendly tax laws make the Lone Star State an attractive environment for a range of businesses, from tech giants to entrepreneurial start-ups.
When business owners move to Texas, they may want to relocate their business here as well. This will allow them to take advantage of the tax benefits in Texas law. Business owners should proceed cautiously, however, because each state has different rules regarding how to transfer a business across state lines. Here, we will provide an overview of the process for moving businesses from California and New York. These are the two most common states we get calls about.
Transferring an entity from California to Texas
A corporation or a limited liability company (LLC) that originated in California can be converted to a Texas entity. The first step will be to confirm the name availability with the Texas Secretary of State (TSOS). Next, several documents will need to be prepared and filed with the TSOS. These might include a plan of conversion, a certificate of conversion, and a certificate of formation for the new Texas entity. After the initial filings, the business owners must go through a tax clearance process with the Texas comptroller of public accounts.
Once these steps are completed, the transfer must also be filed with the California Secretary of State by preparing and filing a California certificate of conversion. Finally, owners should prepare a company agreement for the new Texas entity and any additional documents appropriate for the circumstances.
Note that there are filing fees associated with these steps, so it is a good idea to be sure everything is done correctly the first time. An experienced business attorney is your best resource for this.
Transferring an entity from New York to Texas
The process for transferring an entity from New York to Texas differs from the California model. Importantly, New York does not allow its entities to convert out of state. There are a few ways to move your business to Texas, and an experienced attorney will be in the best position to analyze the options. One option is to merge a New York entity into an existing Texas entity, or one formed expressly for this purpose.
As with the California model, the first step will be to confirm the name availability with the TSOS, then documents will need to be prepared and filed with the TSOS, including a certificate of formation and a certificate of merger. The business owners must go through a tax clearance process with the Texas comptroller of public accounts. Once the new Texas entity has been formed, the owners should transfer the assets and liabilities of the New York entity to the Texas entity and prepare a company agreement for the new Texas entity. Additional corporate documents may be appropriate depending on the circumstances.
An experienced Texas-based lawyer will be able to guide you through each of these steps. Please call our office if we can be a resource at any point.
Texas Employers Firing Alleged Rioters Who Have Been Identified Following Viral Videos at the US Capitol
Principal Attorney Jennifer Ward was recently featured on KVUE to discuss employers’ right to terminate employees alleged to have participated in the riot at the U.S. Capitol. Employers across the country, including in Texas, have taken action against such employees, many of whom have been identified through social media.
"Texas truly is an employment-at-will state, and so what that means [is] the default rule is that employers can terminate as long as there's not a particular law that you can turn to saying that termination is illegal.
“Employees have a right to privacy, so on the one hand, you do have that and anything that you are doing outside of work under private circumstances, you would expect your employer can't access, but of course things we put on social media aren't private; you don't have much of a leg to stand on."
Interview with Photographer Greg Daily
Our new office is decorated with incredible photographs of the Austin cityscape shot by local photographer Greg Daily. We decided to ask Greg a few questions so that we can get to know him better, and so that you can too! You can find out more about the services Greg offers, including real estate and branding photography, by visiting his website: mytexasphotographer.com
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Your portfolio includes a variety of subjects, from abstracts to wildlife to real estate. Tell us a little about the wide range of services you offer.
Early on in my photography career, I decided to specialize in just a few areas. My thought was that I would work on getting really good in a few areas rather than being just OK in a ton of areas. Most of the time when I tell people I am a fulltime photographer they assume that I do weddings, family portraits and events. Actually I don’t really do any of those. My focus is on fine art, real estate and lifestyle photography. I also incorporate my images into architectural designs.
I take a lot of photos for real estate agents who are looking to market their listings through the MLS and other marketing efforts. They may be residential or commercial agents and I shoot both interior and exterior of homes and buildings. In addition to the real estate shots, I shoot a lot of lifestyle / branding for people who are looking to promote themselves or their brand in social media and their marketing campaigns. My fine art photography is often found in homes and offices as statement pieces.
You do work with digital glass. What exactly is digital glass and what is it used for?
Digital glass is something that is relatively new and as far as I know I am the only one in Austin who is focused in this medium. Digital glass or printed glass is glass that has an image infused into the glass by using ceramic inks and then placing the glass into a kiln and baking it over a period of time. Although printing on glass has been around for a while, in 2007 ceramic inks were introduced which opened up the opportunities to incorporate printed glass into architectural designs.
There are machines that print digital glass with sizes up to 12 feet long or 7 feet wide in a variety of widths up to ¾ inch thick. You are starting to see TV Ads for printing on glass. Most of these are for much smaller images and just intended to hang on the wall versus being incorporated into architectural designs.
Digital Glass in Commercial applications can include elevator panels, stair railing, glass walls and corporate signage just to name a few. On the residential side of things you can now create kitchen and bath backsplashes. This will be one pane of glass in most cases and it can be back lit, which creates an extraordinary statement piece.
In your view, what makes a good photograph and how do you achieve it?
I am not sure how to answer this question. When I was not as experienced in photography as I am now, I used to think that I had some really good photos. In fact all of my friends and family told me so time and time again and I finally started to believe them. Now I look back at what I thought was a good photo, I am almost embarrassed to show anyone or display them.
Now I have more experience, I know what I think is a good photo and even others might think it is a great photo but nothing ever happens with it. It might make it on my webpage but it does not really speak to anyone or get any additional exposure. So I guess the eye of the beholder applies here.
As far as to the second part of your question on how I achieve it, that is difficult to answer as well. I think anyone can take a good or even great photo. The question is how many bad photos do you need to take before you get a great one? Now that I have been shooting at a professional level for over 20 years, the number of bad photos I take as a percentage is much smaller. I could go into all of the lessons that are out there about the rule of thirds and composition but I never really studied those. I just naturally know what looks good and with experience I have learned to take fewer photos to get the great ones.
I have learned that once you have a good and interesting composition that editing the photo will take it to the next level. I have taught myself a lot about editing the photos. In fact, I never intended for this to happen but people often think that my photos are paintings. I heard that comment so frequently when it came time for me to design my logo, I incorporated paint brushes into the design and I call many of my images fine art.
There are so many beautiful spots in the Texas Hill Country, what are some of your favorites?
I don’t really have any favorite places to shoot. I love to take road trips and run the back roads and just see what I can find. I especially love to do this during the wildflower season. I Love to shoot lone trees, old trucks and cars, old barns and fields of wild flowers. To me if the day is cloudy it is a much better day to go out and take pictures than a day that is bright and sunny. Completely opposite of what most people think.
You’ve said that your second passion is cooking. Have you discovered any recipes you really love and would like to share?
I love to cook however I don’t follow any recipes. I often will look at recipes in a cookbook or online just to get some ideas and then I end up doing my own thing. My Dad was a good cook and I believe I gained the passion from him. Now I am fairly creative in the kitchen and after learning the basic skills from my Dad, I remember in college buying spices and looking on the label to see what they went with. So if I was making soup, I would find the spices that said, goes well with soups and add them to the pot. Eventually cooking shows started to appear on TV and I would watch them and get inspired and pick up a few tips and tricks. I don’t have a specialty but just enjoy cooking and I love my leftovers.
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Interview with Attorney Sehar Aijaz
We are excited to announce that attorney Sehar Aijaz has joined our office! Ms. Aijaz is a business law attorney serving entrepreneurs, small businesses and nonprofits in the Austin area. This year, she was named a Texas Rising Star by SuperLawyers and listed as one of Austin’s Top Business Law Attorneys by Austin Monthly Magazine. We wanted to share this recent interview with Ms. Aijaz so you can get to know her better.
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How did you decide you wanted to practice business law?
My interest in business law started with my first internship in the mergers and acquisitions team of a top tier business law firm when I was still in law school. After that, I focused on business law courses in law school and interned with a boutique law firm that specialized in business and investment law and joined the firm as an Associate after graduation. I also joined my universities’ Center for Corporate Governance and was the editor of the Journal on Corporate Law and Governance in 2013.
What do you want your clients to know about you?
I am always learning. I do not think any question is too simple or any problem too complex. I believe in working collaboratively with my clients as much as possible, especially when it comes to business and brand protection. I encourage my clients to ask questions and understand as much about the legal side of their business as they can. While my effort is always to take care of the legal formalities so my clients can focus on doing what they do best, I am always happy to explain and discuss their questions or concerns.
Is there an aspect of your community involvement that you’ve found particularly impactful?
I think it takes immense courage for anyone to start a new business and I admire all new entrepreneurs. I especially enjoy working with women creators, small business owners and entrepreneurs. I am a part of several women entrepreneur focused networking groups and often give speaking presentations on the legal basics that they should be aware of while running their businesses. I also enjoy working with local non-profit organizations.
What is your favorite thing to do in Austin?
Chasing sunsets at Mt. Bonnell, Kayaking at Lady Bird Lake, ACL and SXSW season and trying out new restaurants.
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We hope you will have an opportunity to meet Ms. Aijaz soon.
Austin Monthly Magazine Names Top Attorneys of 2020
Principal Attorney Jennifer Ward is honored to be named one of Austin's Top Attorneys! Ms. Ward is one of only six honorees in the Business Law category. Honorees are selected through a peer-voting process and recognized in the August 2020 issue of Austin Monthly Magazine. Ms. Ward is grateful for the appreciation of her esteemed colleagues in the Austin law community. Ms. Ward and her staff strive to provide quality services to each client they work with and feel this award reflects their commitment to excellence.
How Self-employed Texans File for Unemployment
Self-employed Texans can now apply for unemployment benefits
The CARES Act gave self-employed workers the ability to qualify for disaster unemployment benefits, also called Pandemic Unemployment Assistance (PUA). Self-employed workers who meet minimum qualifications could receive a base weekly benefit amount of $207, plus the additional $600 Federal Pandemic Unemployment Compensation (FPUC) payment per week. If you are a self-employed worker whose work hours have been negatively impacted by COVID-19, it is well worth your time to explore these benefits as potential financial relief. Let’s look at what is needed to qualify and how to apply for Pandemic Unemployment Assistance.
How to qualify for Pandemic Unemployment Assistance
You likely qualify for PUA if you are self-employed, a contract worker, or previously worked in a position that did not report wages and you are experiencing reduced hours are a result of COVID-19. In some cases, workers who are experiencing reduced hours but still have a steady income from a separate full-time job may not qualify. PUA is meant for struggling workers who are truly unemployed.
What you will need to apply for Pandemic Unemployment Assistance
Unless your net profit for 2019 exceeded $20,800, you will not need to submit supplementary documents with your unemployment application. That amount marks the lowest threshold for qualifying for more than the base benefit amount of $207 per week. If your net profit was $20,800 or more and you would like that factored into calculating your weekly benefits, you can submit your 2019 IRS 1040 Schedule C, F or SE by using the TWC’s online UI Submission Upload portal. Supplementary documents may also be mailed or faxed.
Applying for Pandemic Unemployment Assistance
Get started by creating an account with the Texas Workforce Commission. Once logged on, follow the prompts to begin your application for unemployment benefits. When asked for the reason for their job separation, select “reduced hours,” then select “COVID-19” under the disaster impact section. You will need to answer just a few more questions to complete your claim. Important: After filing you will receive a message saying you have been denied regular unemployment benefits. Do not be alarmed, as you will then be automatically enrolled in PUA.
If you have continued trouble with receiving benefits, or you are still not sure if you qualify, you should contact the Texas Workforce Commission or an experienced employment law attorney.
Submitting a Wage Claim Under Texas Payday Law
What is a TWC wage claim and why would someone need to file it?
The Texas Workforce Commission (TWC) has a dedicated division to assist workers recover unpaid wages from their employers. Workers can submit a Wage Claim Form to this division and get assistance recovering any wages TWC determines they are owed. The TWC offers specific guidelines to ensure wage claims are processed correctly and in a timely manner. Let’s discuss what you will need to get started, how to monitor the claim once submitted, and what options you may have if you don’t agree with the final determination.
What is needed to file a wage claim online?
To file a wage claim you should start by creating a TWC User ID. Set this up on the website by providing your name and email. Once you have this, log in and select “Submit New Wage Claim” to access the digital Wage Claim Form. To complete the form, you will need:
names and addresses for you and your employer,
the dates you worked for them,
your regularly scheduled paydays,
the reason for separation if separated, and
a breakdown of the amounts in question.
If you have any supporting documentation that confirms this information, you should submit it with your wage claim. For example, supporting documentation might include calendar entries or communications showing the dates and times you reported for work, copies of paystubs, or other similar types of evidence. It is important to submit as much relevant documentation as possible so TWC can substantiate what occurred. You can provide these items via fax, email, or mail.
Once you file your wage claim, be sure to keep the TWC updated on any changes that occur while it is pending. It is your responsibility to notify the TWC if you move addresses, additional wages become owed, or you are paid the wages in question.
When is a decision made?
After the TWC receives your claim, they will notify your employer and allow them 14 days to respond. An investigator will be assigned to your claim. The investigator will review documentation from both sides and may ask for additional information. They will issue a determination within 12 to 14 weeks.
What if I don’t agree with the decision?
If either you or your employer disagree with TWC’s determination, each party has 21 calendar days following the date the determination was mailed to submit an appeal to the Wage Claim Appeal Tribunal. The TWC only accepts appeals by mail or fax. Click here to find everything you will need to submit the appeal. After the Appeal Tribunal receives your appeal, within six to eight weeks they will send you a hearing packet with information about your upcoming telephone hearing. You are permitted to have an attorney present for this hearing, so it may be a good idea to consult with one ahead of and during the appeals process.
The Arts in a Time of Crisis
Many of us turn to the performing arts for reprieve from the stresses of daily life. In times like these, we need the Arts more than ever. Even as many local theaters and concert halls are shuttered, they have enabled new ways to enjoy their artistry remotely.
Here is a collection of performing artists and productions that are now available for free online:
Free Metropolitan Opera Streams
New York Philharmonic - Archive and streams
Berlin Philharmonic - Voucher for 1 month free concert streams
The Long Center #CreateInPlace
The Vortex Theater Video Archive
Hideout Theater Live Virtual Improv Shows
Billboard's list of upcoming virtual concerts
NPR's list of upcoming virtual concerts
Enjoy! I know I will.
Some Central Texans Fighting to Stay Healthy and Employed
I was featured on KVUE yesterday on a report about how the current COVID-19 situation is affecting workers struggling to keep their jobs.
Employees who are affected by furloughs or layoffs should contact the Texas Workforce Commission to file an unemployment claim.
Where employees are experiencing symptoms associated with coronavirus, or they have a confirmed case, they should self-quarantine. An eligible employee may be able to receive two weeks of emergency sick leave under the Families First Coronavirus Response Act (FFCRA). If you qualify for benefits and tell your employer you qualify for leave under this new law, covered employers (with fewer than 500 employees) must provide paid leave at a rate that is two-thirds your regular base pay.
Importantly, employers can offset the cost of FFRCA paid leave through tax credits. Employers are prohibited from retaliating against employees who attempt to take emergency leave under this law.
Employees who are being required to report to the worksite and are concerned about exposure to COVID-19 should report their concerns to management. If the work environment still feels unsafe, then employees should consult the Occupational Safety and Health Administration (aka OSHA).
