What happens when you get conflicting information? Do you trust your attorney if s/he conflict with other sources you consult?
Listen in as I discuss the Pros and Cons of trusting only one source; even if that source is your attorney! Plus find out who I have awarded HR Superstar for Episode 2! Want a clue? Ok – a family business isn’t always easy. Sometimes your brother is a real dictator!
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EPISODE 2: SHOULD I TRUST MY ATTORNEY?
Small business spoonfuls is a twice a week Q&A with Lisa Smith providing the answers to questions you have about running your small business.
Welcome, welcome, welcome. Thank you so much for tuning in again today. This is Lisa Smith. I am so excited to be bringing some more spoonfuls of small business to you guys. I hope you all are having a great week so far. I know I am. We are so busy here at beauditsecure.com. We have recently uploaded some more videos and case law information to our authority library and we are just having a great time over here keeping businesses audit secure. If you have not checked us out yet, stop by. We have this awesome free content library. I think we have 20-25 free videos and Elearning courses and audio files and just all kinds of awesome stuff in there. Stop by and check us out at beauditsecure.com.
The thing that we are going to be talking about today is a question that comes up in class occasionally and I saw a news article this week on a law suit that s being filed against an attorney firm. I thought, okay, this is the topic we need to be discussing. Here we go. We are discussing the question I get, Hey, Lisa, you are telling me to do it this way but my attorney or my CPA said to do it this way. Who do I trust because I have two different answers for the same question and they both really kind of seem to make sense? That s a great question. Normally, my answer to that is if you are going to trust somebody, trust your attorney.
Your attorney can actually give you that advice in writing. They can give you that advice in the form of an email. You are paying them to advise you so they are representing you as an officer of the court so to speak. They have gone to school, passed the bar and theoretically, anyway, they should know the right answer to the question you are asking. I am not an attorney. I will be the first one to tell you if you have to pick between your attorney and me, pick your attorney. That being said, I recently read this article that we are talking about where a very large law firm here in Atlanta, where I m based is under a class action law suit by some of their employees and former employees because they are doing it wrong.
They are doing it wrong under one of the most crucial issues of employment law which is the wage an hour section. How do we pay our people, getting that right is imperative. The funny thing about this law firm, it s public information, you can look it up, it s Morgan and Morgan, they are personal injury law firm. They are huge. I don t know how many attorneys they have. I think they are pretty big. They have all these TV commercials Morgan and Morgan, For the People. That s their slogan. For the people. My joke has recently been for the people unless you work for them, because the question that has come up has been, are they classifying workers as exempt, which means they are not being paid overtime and that correct? Because the law suit that is up and the investigation that is being held right now is stating they have been misclassifying workers. They have called them exempt and denied them at least minimum wage and overtime protection and the jobs those workers were doing did not really qualify to be exempt. In my previous episode, we discussed, can all my employees be exempt. I thought this was a nice carry on to that episode.
Yeah, clearly, we talked about that. Not all workers can be exempt. The job that they do has to qualify for this exemption. Apparently, Morgan and Morgan are getting it wrong. We will find out for sure after the investigation has been conducted and the true verdict is in, but it looks like they are going to have to pay a bunch of back wages and overtime and so on and so forth to these employees who are misclassified. Tune in to that. Look it up on the site on beauditsecure or on any website that you source, because more and more of that information is going to be coming out as that progresses. There you go, there s the answer to your question, can I trust my attorney or should I trust my attorney over what you say, Lisa? Well, I would say generally, yes, but sometimes even the attorneys get it wrong. Now do I believe that Morgan and Morgan were really out trying to rip off their employees? No, I don t know them personally, but I would just say they probably were not out to just rip anybody off. However, that s what it looks like.
Unless they can prove why they classified workers in a certain way and they come back and they make a good argument for it, then they may very well be charged with these errors that even could be called egregious and willful if they cannot make their case. It is very important to use what I call the rule of 3s and always establish reasonable basis for everything you do. I will put some links in the show notes that refer back to details on my rule of 3s and reasonable basis so you can learn more about that. We have got to make sure that as employers and as business owners, no matter what we re doing, whether we are classifying a worker or we are performing any other sort of policy and procedure in our organization. If someone comes in and says what made you think you could do it that way? We have got to be able to give a good answer. If that good answer is I have it from my attorney in writing that this is the way I should be doing it, then go for it. That offers a level of protection.
It doesn t mean you won t get fined and you won t have to be paying back wages and you are doing it right. It just means you won t be called willful and egregious and neglectful because you did consult someone of authority to get that information. If you don t have an authority out there that you re working with and you want to say I go to Lisa Smith s beauditsecure.com, and she wrote a blog post and it said here and it gave me these links out to this and I looked it up here for myself and I felt really comfortable that was true, that is also reasonable basis. That s why I talk about the rule of 3s. Don t just believe what I say. Go out and double check and triple check me. Don t just believe what your attorney says or your CPA says. Go out and double and triple and quadruple check until you feel like you have a really good, credible answer. Sometimes what employers fall into is a trap where we get the answer that sounds good to us. We say we kind of have our ears tickled a little bit. It means that is what I wanted to hear, so yay, I got what I wanted to hear. What you want to hear is not always the truth, right? What we want to hear is hey, Lisa, you look like a size 2, but I m not going to get that and if somebody says that to me, then I m going to have my ears tickled a little bit and feel all flattered, but inside I know that is not the truth. I need to consult other sources to find out if I really look like a size 2.
Maybe I would get on the scales and look in the mirror, and take some measurements and I would determine I m clearly not a size 2. Whatever it is that you need to triple check in your organization to make sure you are getting the right credible, solid answer. That is what you need to do and you need to have proof of that. You need to have something that you can point to, not just hearsay. Saying my attorney said so is not going to get you anywhere. You have to have proof of that. Anybody can say somebody said something but prove it. Think of it like that. My point of this little spoonful is even the attorneys get it wrong. Think about it this way, for every court case that is won, a court case was lost by the other side. Who represented the other side? An attorney, who may have truly believed they had the right answer. Recently there were a couple of huge class action suits settled. When I say recently, I mean in the last few years, specifically surrounding one statute of wage an hour law. We had hundreds and hundreds of employees who were going unpaid for overtime hours. The employer so called checked it out with their attorneys and were told they were doing it right. When the class action came, they all had to stand in front of the judge while the judge said, seriously, you thought that was right? These were major companies who had paid these attorneys major money.
Sometimes the attorney gets it wrong, too. I love attorneys. Actually, in beauditsecure.com authority and the help desk feature we offer in authority, where we have all this wonderful content we have curated for you and we explain it to you and we give you best practices and so forth, we actually have a lot of CPAs and attorneys who have purchased our service, because they understand they also need to go out and check and triple check and make sure they are doing it right, make sure they are getting the right answers. You know, nobody s perfect. Nobody is exempt from doing it wrong. Even if you do all of your homework and you have all of these credible sources that back you up, your auditor could still come in and say well, that is not the way I interpreted the law. So high goes to the auditor and you re doing it wrong. Well, darned if you do and darned if you don t is how it might seem sometime, right?
The thing is even in that scenario, at least you are not willful and neglectful and egregious in your errors. If you are ever painted with that brush, those penalties and fines and so forth can triple and be really ugly. Pay what you owe and start doing it right but not at the cost of having to be painted with this really negative title of egregious and willfully neglectful. Think about that. Who do we trust? Trust yourself and your sources that you pull from. That is what we all are out there for and at the end of the day we have to defend our own practices and saying that a professional told us to do it this way, will get us a little credibility but we have to make sure we are proving it to ourselves. You are in charge of you and you cannot farm out your responsibility to obey the law as an employer or small business owner. Not that any of you really want to but sometimes it s easier to say well, they handled that side of it for me. Unfortunately, you have to handle all sides for yourself in front of the judge.
I hope that answered your question. I hope that at least gave you some good pointers on what to think about as you are trusting the sources you consult. Go in and check out those show notes. Look at the videos on the rule of 3s and reasonable basis and really sink that in and understand it because it is definitely super important.
Next is our segment HR Superstar. This is the part of the show where I talk about something that I ve seen on TV or in a movie and how it relates to HR. Today I was thinking about this TV show that was out last summer and it s coming out again in June. I m so excited to be able to start watching it. It s called Tyrant. I don t know if you have ever seen Tyrant or not. It s about a dictatorship in the Middle East. The father dies who is the dictator. The next son assumes the new president as they call him of the country. Mayhem ensues with should we do it this way or that way. Now another brother comes in who is not for a dictatorship but acts more like a tyrant than some.
Anyway, very interesting TV show but it kind of got me to thinking about a family run business. Now that is an extreme family operated business and this business with the family, there is a fair amount of loyalty inside this family, or also what appears to be loyalty anyway. There is also a lot of treating each other like garbage inside this family. You look at how the family members are out there running the country 24 hours a day and they have uncle this and uncle that who are also involved in helping run the family business. They treat each other like garbage. They put each other in dangerous situations with no protection. They lie to each other and they back stab each other. You are thinking if this were really a business out there in America running day to day within a family, you couldn t get away with all of that. I don t know if we could or not. Maybe not to the extreme that they get away with it. Did you know in a family operated business, if it is strictly immediate family working together, there are very few regulations on what you have to do to protect your workers in this business? You still have child labor laws, but even some of those are slightly relaxed in certain areas. You still have basic child labor. As far as brothers and sisters and moms and dads and adult people working together in a family, you can kind of treat each other anyway you want to. Nobody really cares. You can bring each other to court over it, and you might get some kind of resolution over it. You are not going to be able to uphold some big employment law statute normally and say my brother did this to
You can bring each other to court over it, and you might get some kind of resolution over it. You are not going to be able to uphold some big employment law statute normally and say my brother did this to me, because it s a family business. If you start bringing in folks into the business that are not immediate family members, and your business grows and you have all these other employees, now we have to start treating everybody much more fairly and we have to observe OSHA guidelines and we have to do all these things, but if it is just us in the family, with very few exceptions, we can kind of do what we want. My HR moment goes out to Tyrant this week because as crummy as they treat each other, they can. Under employment law, there would really be no problem with that. HR Superstar kind of sort of salutes Tyrant because even as wrong as they get it, employment law says they are getting it right because it is a family operated business. That is my silly little commentary on TV for today.
Join me next time and we are going to be talking about some more great spoonfuls. I am going to answer questions that you may ask. Go to our website beauditsecure.com. You can see a link there for Small Business spoonfuls or you can just go to smallbusinessspoonfuls.com and leave your question there. Leave it in comment form. We have the speak pipe app there where you can speak your question into us. I love that. Do that. We will contact you back and if we use it on the air, we will send you a t-shirt and you will be able to be featured on an upcoming spoonful. There you go. I am going to leave you today and have a great rest of your week and weekend. This is Lisa Smith