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Pennsylvania is one of the only states in the country that still enforces Confession of Judgment clauses in a commercial lease. If you are entering into a commercial lease in Pennsylvania, it is likely that the lease will contain two types of Confession of Judgment clauses - one for rent and one for possession. A Confession of Judgment clause for rent states that upon signing the lease, the tenant has "confessed judgment" against him or herself. Therefore, simplistically explained, if the tenant is in default on rent, the landlord only needs to unilaterally go into court and present evidence of the default and the tenant, because he/she has already "confessed judgment", does not have any rights to defend the action (although there are some additional actions the tenant can take, I will not be discussing them in this article). Clearly this is a powerful tool for a commercial landlord in Pennsylvania and a terrible clause for a tenant. A Confession of Judgment clause for possession states that upon signing the lease, the tenant has confessed judgment against him or herself for eviction purposes. Read more »
Many people contact me who are interested in buying an existing franchised business, for example, an existing fast food restaurant, massage or weight loss franchised business. In advising them, I tell them that there are two critical aspects to evaluating this opportunity. One aspect is evaluating the existing business in the same way you would any existing business opportunity. The second, equally important evaluation is to determine if the franchise is good. Read more »
What are the implications of the new overtime regulations? How does it impact your business and what do you need to know as an employer?
The Department of Labor recently issued sweeping new regulations on the eligibility of workers, especially “white‑collar” employees, for overtime pay. Federal law requires that overtime be paid for nonexempt employees at a rate of one and one‑half of regular pay for all hours worked over 40 hours in a week. To be “exempt” is to be ineligible for overtime. Employers should update their employee handbooks to reflect the new law on overtime pay.
Since 1975, workers paid a salary of less than $155 per week ($8,060 per year) have been eligible for overtime, regardless of their job duties or how they are paid. Now that threshold has been raised considerably, to $455 per week ($23,660 per year). The “highly compensated employee” test will make workers with an annual salary of at least $100,000 exempt, if they perform office or nonmanual work and “customarily and regularly” perform one of the duties of either an exempt executive, administrative, or professional employee. The exempt duty need not be the employee's “primary duty.”
Manual laborers, other blue‑collar workers, licensed practical nurses, and “first responders,” such as police officers and firefighters, will be eligible for overtime regardless of salary. Read more »
What are the factors to consider when choosing the proper legal entity for a new business? This article discusses the most popular types of entities for start-up businesses.
The choice of an entity is often the first important legal decision that an entrepreneur must make. In the last few years the choices have become greater. An individual business owner can have a sole proprietorship, corporation (C or S) or limited liability company. An organization with several owners can be formed as a general partnership, corporation, or Limited Liability Company (“LLC”) (note limited partnerships and Limited Liability Partnerships will not be discussed in this article). On what basis does a firm make this important decision? Certain key factors help to form a guide in answering this question. Read more »
Responding to Employee Theft
To best protect its interests, an employer that suspects that one of its employees is stealing should immediately consult the company’s attorney for advice. Typically, the attorney will advise the employer to take steps that include the following:
Commence the Investigation Promptly: A small business owner should initiate the investigation of a purported theft by an employee immediately. This prevents the employer from running afoul of criminal and civil statutes of limitation.
Place a Third-party Employee in Charge of the Investigation: A management employee other than the supervisor who first observed or reported the theft should perform the investigation. This avoids the taint of bias that a more involved player would bring to the investigation. In addition, the employer should interview the accused in the presence of a witness. Read more »