Setting Expectations: Why Your Company Needs an Employee Handbook

By: Alina Pargamanik, J.D.

You have recruited the “ideal” employee to meet your staffing needs. He/she was thrilled to accept your job offer. What happens when it is the employee’s first day of employment and your company has no employee handbook to offer? No expectations, no rules, no formality, the list goes on… In order to avoid these issues, every company should have a well-drafted employee handbook in place and enforced.

What is an Employee Handbook?

An employee handbook does not have to solely consist of a list of rules and procedures for employees to follow. An employee handbook offers employees a clear outline of your company’s history, mission, values, benefits, and, of course, policies and procedures. A well-drafted employee handbook should, at minimum, include policies for the following: harassment, discrimination, discipline for policy violations, social media, compensation/leave, standards of conduct, and privacy/confidentiality. It is also important for the employee handbook to discuss the company’s employee benefits such as 401(k) plans or health plans. The employee benefits policy/provision should encourage employees to review any documents related to employee benefits plans, such as summary plan descriptions.

When distributing an employee handbook to employees, it is important to have the employee(s) sign a statement acknowledging that they have received, reviewed and agree to the policies set forth in the employee handbook. It is also crucial for employers to regularly review the employee handbook to ensure that all policies and procedures align with the company’s standards and comply with any changes in federal or state law. At minimum, employers should review their company’s employee handbook annually. The handbook should be updated as needed, with all changes being communicated promptly to employees.

Examples of Employee Handbook Provisions

Below is a list of provisions that you should consider incorporating in your company’s employee handbook:

  • Equal Employment Opportunity Policy
  • Anti-Harassment Policy
  • Anti-Retaliation Policy
  • Disability Accommodations Policy
  • Religious Accommodations Policy
  • Payroll/Compensation Policy
  • Paid Time Off/Sick Leave/Jury Duty Leave Policy
  • Family and Medical Leave Policy
  • Travel and Business Expense Reimbursement Policy
  • Tuition Reimbursement Policy
  • Attendance Policy
  • Standards of Conduct Policy
  • Performance Review Policy
  • Dress Code Policy
  • Social Media Use Policy
  • Remote Work Policy
  • Smoke-Free/Drug-Free Workplace Policy

Each company should assess which policies should be included in its employee handbook on an individual basis. The list above is not all-encompassing, so it is important to discuss which policies your company should have in place with an employment attorney.  

The Importance of Having an Employee Handbook

A well-drafted employee handbook protects both the employer and the employee. From the employer’s perspective, the handbook may be used as protection against discrimination or unfair treatment claims. The handbook is also a very valuable tool for setting expectations and communicating company policies and practices.

An employee handbook can also serve as an important defense tool for employers in the case of litigation. A handbook can serve as valuable evidence in court to show that the employer was not discriminating against or retaliating against an employee. For employees, an employee handbook could also prove that the employer is not acting in compliance with its own policies and procedures.

If your company or organization needs assistance in drafting or reviewing an employee handbook, please contact Batoff Associates. P.A. at 410-864-6211.

Major Corporate Governance Changes are Coming. Are You Ready for Compliance with the Corporate Transparency Act?

By: Michael P. Sawicki, Esq.

Effective January 1, 2024, the Corporate Transparency Act (CTA) goes into effect which will require almost every legal entity incorporated, organized or registered in a state to disclose information related to its owners, officers and controlling persons with the Federal Crimes Enforcement Network (FinCEN). The intent of the CTA is to reduce terrorist financing, money laundering and any other illegal activities. The CTA provides criminal (a $10,000 fine or 2 years in jail) and civil penalties (up to $500 per day) for individuals who knowingly provide false or fraudulent information or who fail to comply with reporting requirements.

Companies who will be required to report under the CTA include domestic and foreign privately held entities. A domestic privately held entity is a corporation, limited liability company, or other entity formed by filing a document with the secretary of state or similar office under the laws of that state. A foreign entity includes any private entity formed under the laws of a foreign country that is registered to do business in any state in the US. There are certain exemptions for large operating companies, SEC reporting companies, insurance companies, tax exempt entities and subsidiaries of exempt companies. A large operating company is exempt if it employs more than 20 full time employees in the US with more than $5 million in gross receipts or sales and operates from a physical office in the US.

Reporting companies formed prior to January 1, 2024, will have one year to comply with the CTA by filing initial reports. Reporting companies created or registered on or after January 1, 2024, will have 90 days upon receipt of their creation or registration documents to file initial reports. FinCEN will be creating an online portal called the Beneficial Ownership Secure System to collect and store reports. Reports filed with FinCEN will not be available to the public or subject to the Freedom of Information Act.

Companies subject to the CTA will be required to provide identifying information for the beneficial owners of the reporting company which is an individual who directly or indirectly either exercises substantial control over a reporting company or owns or controls at least 25% of the ownership interests of a reporting company. The CTA provides factors for determining substantial control (subject to certain exemptions) including: (i) serving as a senior officer of the company, (ii) having authority over senior officers or a majority of the board of directors, (iii) having substantial influence over important decisions, or (iv) having any other type of substantial control over the company.

Companies will be required to report all identifiable information regarding the company as well as the name, DOB, home address, US passport or driver’s license number and an image of the document for each beneficial owner of the company.

Now is the time to review and update your company’s compliance plan and determine if you will be subject to the CTA.

If you have any questions or would like to get more information regarding the Corporate Transparency Act, please contact Batoff Associates, P.A. at 410-864-6211.

Data Security: Do You Have Adequate Safeguards in Place?

By: Michael P. Sawicki, Esq.

For most companies that deal with confidential information like financial information, proprietary business plans, personal data, health information, or credit card processing, data security should be a top priority. The added complexity of cloud services and flexible work environments have altered how and where your employees connect to the office and where your company’s data resides. It is more important than ever that you protect your digital information from unauthorized access, corruption, or theft throughout its entire lifecycle.

A data security policy describes how a business handles confidential information and personal data. Its primary function is to protect the data and create transparency for the consumer and employees about how their data is processed, protected, and shared. A data security policy regulates the usage, management, and monitoring of data in an organization. Its primary goal is to protect all data used, managed, and stored by a company. Data security policies are typically not required by law, but can help organizations comply with data protection standards and regulations.

Types of data security include hardware security, software security, and legal security. Organizations are legally obliged to protect customer and user data from being lost or stolen or being compromised. Data security is also crucial to preventing the reputational risk to an organization that accompanies a data breach. Legal security can mitigate risk to the company in the event of a data breach.

The Maryland Personal Information Protection Act (MPIPA) was enacted to ensure that Maryland consumers’ personal identifying information is reasonably protected, and if it is compromised, they are notified so that they can take steps to protect themselves. Maryland data privacy laws specifically define what counts as personal information. This includes a Maryland resident’s first and last name or their initials. However, this information must be in combination with one or more of the following:

·  Official ID numbers (e.g., Social Security, passport, driver’s license, or tax identification numbers);

·  Financial numbers (e.g., account, credit card, or debit card numbers);

·  Personal health information, such as details of health insurance policies;

·  Biometric data; and

·  Genetic information.

If there is a security breach, businesses are required to conduct a prompt investigation into the breach and inform affected consumers within 45 days of the breach. Notices must be made to consumers in writing. Any notice must urge the consumer to change his/her passwords and security questions and must detail all compromised information, provide the business’s contact information, and include a statement that informs consumers how they can get advice on preventing identity theft via the Federal Trade Commission and Office of the Attorney General.

Compliance under MPIPA consists of organizations implementing a reasonable level of security to protect personal information. This requires creating, adopting, and maintaining a written security policy. It also requires businesses to take reasonable steps to prevent unauthorized access to personal information.

If you would like to get more information on the creation of a data security policy and speak to an attorney about your needs, please contact Batoff Associates, P.A. at 410-864-6211.

Trust Decanting Pours Forth Estate Planning Opportunities for Maryland Trusts

By: Joseph M. Fiocco, Esq.

                Are you thinking of modifying a Maryland trust?  Maybe you’re grappling with a drafting mistake or facing an unintended tax consequence.  Starting October 1, 2023, estate planners can use the Maryland Trust Decanting Act to come up with more flexible trust drafting and administration solutions.  Decanting a trust refers to a trustee’s power to distribute all or part of a trust’s assets to a second, often very similar, trust.

                Decanting Benefits

                The trustee does not have to obtain the consent of any interested person, but must only provide sixty days’ notice to those persons, including any person who has the power to remove them as trustee.  The Act allows the trustee to distribute assets to more than one trust, including trusts outside of Maryland.  Even if a trustee’s discretion is limited to distributing assets for the sake of a beneficiary’s health, education, maintenance, or support, the trustee’s decanting power extends to all trust assets.  The Act expressly preserves all marital deductions and charitable deductions for estate tax and gift tax purposes, and preserves the ability for gifts to the trust to qualify for the annual gift tax exclusion.  Decanting has the potential for enhanced administrative benefits, since the Act permits splitting fiduciary powers among trustees, trust protectors, guardians, investment advisors, and other professionals.  The Act particularly supports special needs planning, allowing trustees to decant assets into a special needs trust even if the first trust is not a special needs trust.

                Decanting Limitations

                Decanting cannot generally add new beneficiaries or shift the interests of beneficiaries.  Generally, the second trust has to provide for substantially similar interests to the same beneficiaries as the first trust.  If the trustee is dealing with a charitable interest, they must provide the Attorney General notice of the exercise of the decanting power.  Despite not requiring the consent of interested persons, the Act allows interested persons the opportunity to challenge the exercise of the decanting power in court, regardless of whether they do so outside the sixty day notice period.

                Estate planning requires careful consideration, and clear communication of your objectives with those managing your wealth and those who will inherit your wealth.  It is important to coordinate significant trust modifications with your financial advisor, accountant, and estate planning attorney. When considering a trust modification, you should discuss trust decanting with your estate planning attorney.

                If you would like to speak to an attorney about your trust and estate planning needs, please contact Batoff Associates, P.A. at 410-864-6211.

Does Your Company Have a Record Retention Policy? 

By: Alina Pargamanik, J.D.

Does your company have a record retention policy? If not, you could be putting your company at risk of significant legal repercussions.

What Is a Record Retention Policy?

Record retention policies specify the business’s processes and procedures for managing documents. A well-drafted record retention policy provides guidelines and procedures for the storage, organization, retrieval, and destruction of documents in accordance with both legal requirements and inter-company policy. Any record retention policy must provide a provision for the suspension of the policy in the event of litigation or upon the company’s notice of an investigation.

Depending on your company’s industry and the matter involved, there are various regulatory and legal standards for record retention. For example, the Internal Revenue Service requires organizations to retain employment tax records for a minimum of four (4) years; the Occupational Health and Safety Administration requires businesses to retain records on workplace injuries for five (5) years; and the Equal Employment Opportunity Commission requires employers to retain all personnel or employment records for one (1) year. The following federal laws also set forth specific record retention requirements:

  • Sarbanes-Oxley (SOX) Act: SOX created financial record keeping and reporting requirements for corporations to protect investors from fraudulent activity, including a five (5) year retention period for customer invoices, a seven (7) year retention period for tax returns and receivable or payable ledgers and an indefinite retention period for payroll records and bank statements.
  • Gramm-Leach-Bliley Act (GLBA): GLBA requires financial institutions to be transparent with consumers about their information-sharing practices and to make an additional effort to secure consumer data. GLBA does not require a specific retention period, but the general rule is to retain all financial records for a period of seven (7) years, in line with SOX.
  • Health Information Portability and Accountability Act (HIPAA): HIPAA is a regulation designed to protect patients’ private data against fraud and theft, but it does not set specific retention periods of medical records. It does, however, specify how long healthcare organizations must retain HIPAA-related documents. Healthcare organizations (or “Covered Entities”) are required to retain HIPAA compliance documentation for a minimum of six (6) years from when it was created or, in the event of a policy, from when it was last in effect.

Why Is It Important to Have a Record Retention Policy?

Having and implementing an appropriate and well-drafted record retention policy could prevent your business or organization from experiencing legal troubles should a government investigation or threat of litigation arise.

In 2005, the Supreme Court overturned the conviction of Arthur Anderson, a former Big Five accounting firm, for destroying documents related to a case involving Enron, an energy, commodities, and services company. Several weeks before the SEC launched an investigation into Enron’s accounting practices, Arthur Anderson destroyed approximately two tons of Enron work papers. The Supreme Court ruled that companies may destroy documents in the “normal course of business” and in compliance with a valid document retention policy. The destruction of documents in accordance with a record retention policy is permissible as long as the action is taken in “good faith” without any knowledge that the company is on notice of pending or anticipated litigation or a government investigation.

Even if your company has an existing record retention policy, it is important to regularly review and, if needed, revise the policy. Record retention laws and regulations are ever-changing, so it is critical to have an attorney confirm that your policy is in compliance and that your company is adequately implementing and enforcing the policy.

If your company or organization needs assistance in drafting or reviewing a record retention policy, please contact Batoff Associates. P.A. at 410-864-6211.

Watching the Sunset: Planning for the 2026 Tax Law Sunset

By: Alina Pargamanik, J.D.

Several provisions of the Tax Cuts and Jobs Act (TCJA) of 2017 are set to sunset, or expire, at the end of 2025. Without the proper planning, you may face some shocking tax consequences.

The TCJA set forth sweeping tax changes for businesses and individuals, particularly high-net-worth individuals, through permanent tax cuts to corporate profits and lower individual tax rates with a restructured tax bracket. The TCJA reduced the top business tax rate from 35% to 21% permanently, so businesses will not experience much of an impact in 2026. Nevertheless, the top individual, estate and trust income tax bracket would increase back to 39.6% from the current 37% rate.

For itemized deductions, according to the Tax Policy Center, “Under [the TCJA,] itemizers could claim deductions for all state and local property taxes and the greater of income or sales taxes (subject to overall limits on itemized deductions).” This policy is set to change upon the sunset of the TCJA. Although the TCJA repealed personal exemptions, the standard deduction almost doubled under the TCJA from approximately $13,000 to $24,000, but this amount is set to revert back in 2026. The TCJA also restricted itemized deduction for total state and local taxes to $10,000 per year. This cap will be eliminated after 2025.

Additionally, the TCJA doubled the lifetime gift and estate tax exemption from $5.5 million to $11.2 million. In 2026, the estate and gift exemption will revert back to pre-TCJA levels and is expected to be about $6.5 million per individual or $14 million for a married couple. When planning for the TCJA sunset, you should discuss various estate planning options such as annual gifting and Spousal Lifetime Access Trusts (SLATs) with your estate planning attorney.

Unless a significant legislative change occurs between now and 2026, taxpayers should stay vigilant of the upcoming 2026 tax law sunset. Having a plan for your financial affairs is the key to financial success. It is important to speak with your estate attorney and financial advisor to ensure that your tax and estate planning needs are in order.

If you would like to get more information on the 2026 tax law sunset and speak to an attorney about your estate planning needs, please contact Batoff Associates, P.A. at 410-864-6211.

Potbelly Signs Multi-Unit Development Agreement with Company Founder Bryant Keil

https://thedailyrecord.com/2023/07/24/potbelly-signs-deal-with-founder-for-27-stores-in-md/

Bryant Keil was represented by Justin Batoff and Alina Pargamanik of Batoff Associates, P.A. in Baltimore, Maryland.

27 Unit Deal Includes 15 New Shops and 12 Refranchised Locations in Maryland
CHICAGO, July 19, 2023 (GLOBE NEWSWIRE) — Potbelly Corporation (NASDAQ: PBPB), the iconic neighborhood sandwich shop, today announced that it has finalized a 27-shop agreement in Maryland with the company’s founder Bryant Keil and his son Hampden.
The agreement grants Mr. Keil exclusive territory rights in seven Maryland counties – Washington, Frederick, Montgomery, Prince George, Charles, Calvert, and St. Mary’s – to develop 15 new Potbelly shops in the next eight years. Additionally, Potbelly will refranchise 12 existing restaurant
locations as part of the transaction.
“The Potbelly brand we know and love was shaped by Bryant’s leadership. He has a keen understanding of the Potbelly vision and deep appreciation for the brand and what sets us apart,” said Bob Wright, President and CEO of Potbelly. “He oversaw years of incredible expansion for our brand, and we look forward to him accelerating our growth momentum in Maryland as we continue to execute our strategic franchise and growth strategy across the U.S. Along with refranchising several of our existing shops, this agreement will extend Potbelly’s presence in central and southern regions of the state over the next decade, giving residents and visitors more access to our delicious food.”
“For nearly three decades, I’ve believed in the strength of the Potbelly brand and the company’s growth potential,” said Mr. Keil. “I’m thrilled for this new partnership and the opportunity to open and operate additional shops on the East Coast. I’m especially excited to partner with my son Hampden to develop the market and our family business. He grew up in Potbelly and has significant restaurant experience. We are both very excited to join the system.”
Mr. Keil first purchased Potbelly in 1996, when it was a single antique shop in the Lincoln Park neighborhood of Chicago whose owners served sandwiches to their customers. As CEO, he leaned into the differentiated Potbelly business model – creating shops that serve delicious, craveable food in an environment prioritizing good vibes – and successfully expanded the company to 250 locations by 2008. Today, there are more than 425 Potbelly locations in cities around the U.S. Potbelly has a long-term goal of reaching 2,000 shops over the next 10 years, with at least 85% of those locations being franchised, as part of the company’s Franchise Growth Acceleration Initiative.
You can learn more about franchise opportunities with Potbelly at https://www.potbelly.com/franchising-why-potbelly.
About Potbelly
Potbelly Corporation is a neighborhood sandwich concept that has been feeding customers’ smiles with warm, toasty sandwiches, signature salads,
hand-dipped shakes and other fresh menu items, customized just the way customers want them, for more than 40 years. Potbelly promises Fresh, Fast & Friendly service in an environment that reflects the local neighborhood. Since opening its first shop in Chicago in 1977, Potbelly has expanded to neighborhoods across the country – with more than 425 shops in the United States including approximately 53 franchised shops in the United States. For more information, please visit www.potbelly.com.

Tomson Reuters Announces 2023 Maryland Super Lawyers

Batoff Associates, P.A. is pleased to announce that attorney Justin Batoff has been named to the 2023 Maryland Super Lawyers list for the 6th consecutive year. Additionally, Justin was recognized as a “Rising Star” by Super Lawyers in the corporate law practice field.
Published by Thomson Reuters, Super Lawyers recognizes only the top 2.5% of all Maryland attorneys as Rising Stars who embody excellence in the practice of law.
The 2023 selections have now been published in the Maryland Super Lawyers Magazine as well as in the January 2023 edition of Baltimore magazine

https://digital.superlawyers.com/2023selections

Let’s dish: Inside Faidley Seafood’s Catonsville restaurant and why you should eat ice cream with ants in it

Exciting updates from our friends and clients, the Devine family, as Faidley’s Famous Crabcakes head north to a new Baltimore County location.

https://www.thebaltimorebanner.com/FaidleysSeafoodCatonsville

Journey Acquires The Devhouse Agency, Expanding Their Metaverse Studio’s World Building, Gaming, And Web3 Capabilities And Offerings

The Devhouse Agency was represented by Justin Batoff of Batoff Associates, P.A. Journey / Growth Catalyst Partners was represented by Adam Arnett and Patrick Mock of Mayor Brown LLP

NEW YORK, Oct. 24, 2022 /PRNewswire/ — Fresh off of the launch of Walmart Land, Universe of Play and the production Electric Fest inside Roblox, Metaverse-leading design and innovation consultancy, Journey, today announced the acquisition of The Devhouse Agency (“Devhouse”). This new addition to Journey’s Metaverse Studio enhances the company’s metaverse, gaming, and web3 business offerings at a time of rapid-growth and increased client demand for world building capabilities and Metaverse offerings. 

The Devhouse Agency is a Dallas-based software development studio specializing in game development across a variety of platforms and industrial verticals, including gaming, NFT Utility, VR, AR, marketing and events. Founded in 2018, Devhouse’s team consists of highly-skilled and experienced Unity and Unreal engineers, 3D artists, Solidity developers, and game producers.

“The brands we work with are entering virtual worlds and launching web3 initiatives at record speed. This exciting acquisition expands our game development and engineering talent pool so we can better service our clients at a time of rapid-growth and increased demand from clients who look to Journey for an unmatched expertise,” said Cathy Hackl, Journey’s Chief Metaverse Officer, who has helped brands like Ralph Lauren, Clinique, P&G and Walmart with their Metaverse strategies and implementation. “We are seeing customers and brands realize the potential of virtual worlds and Web3, and now Devhouse will be an integral part of Journey’s mission to deliver immersive and industry-leading experiences for new and nascent customer touchpoints and journeys.”

Devhouse’s client base includes a PC and Console game for well known IP, as well as Roblox builds for major brands. 

“Our highly skilled team will aid Journey’s Metaverse Studio in scaling up its offerings, and help further support the kind of unique and forward-thinking ideas and experiences that Journey is creating across virtual, physical and digital,” said Jim Welch, Founder and CEO of The Devhouse Agency. “Our team is immensely proud of the work we’ve accomplished, and we are now thrilled to join Journey, allowing our team to continue, and substantially expand, our ability to create and execute amazing experiences in gaming, Web3 and beyond.” 

The Devhouse acquisition is the fourth that Journey has done in the last 10 months and the company will be announcing more strategic acquisitions in the near future. Journey is the agency of the futurescape and builds real products, with real technologies, to create meaningful experiences for real people – in whichever reality they choose. 

Journey’s Metaverse Studio, which is led by Hackl, offers both strategic and technical services such as game development in Roblox, Fortnite Creative, Rec Room, Core, VR Chat, Meta’s Horizon, Microsoft’s AltSpaceVR and more. The studio also specializes in custom development in Unity, Unreal, and Solidity while providing game testing quality assurance (QA), virtual concert production, motion capture and volumetric video production in multiple platforms and engines.

“Through this acquisition, Journey will be able to continue breaking ground in new worlds like never before, whether they be physical, digital or virtual,” said Andy Zimmerman, CEO of Journey. “Our capabilities are growing alongside our company’s size and influence, and we are thrilled to have The Devhouse Agency’s team joining us. They have worked on some of the most high-profile projects in the metaverse, and bring with them a one-of-a-kind expertise that is unmatched in this industry and we are proud that they are now part of our Metaverse studio.”

Devhouse has worked not only on game production, but has also helped web3 projects like Dippies and Chill Cowboys Country Club with their NFT development, games, drops and minting. 

About Journey

Journey is an innovation and design agency that enables companies to envision the futurescape, the next chapter of their end customer journey, designing, building and running 3D experiences in the physical, immersive and metaverse worlds at speed and scale. Backed by private equity firm Growth Catalyst Partners, Journey, founded in January 2022, was formed by the merger of ICRAVE, a physical design firm, Skilled Creative, a voice agency, and Future Intelligence Group, a metaverse consulting and design firm.  Marquee clients include Walmart, Clinique, Entertainment Weekly, HBO Max, JetBlue, Marquee Nightclub, STK, Warner Music Group, MoMA, Procter & Gamble, Wall Street Journal, Sloan Kettering, and other leading brands.

About The Devhouse Agency

The Devhouse Agency is an independent software development studio based in Dallas, Texas which specializes in crafting bespoke and stunning AR, VR, mobile and gaming experiences. 

About Growth Catalyst Partners

Growth Catalyst Partners is a middle market private equity firm investing in information, marketing and tech-enabled services businesses. GCP’s strategy involves targeting growth segments of industries and identifying and building market-leading companies with breakout potential. GCP partners with company founders and owners along with top executives within those industries and provides capital, proprietary deal origination and operating expertise to the management teams. GCP’s team has deep sector expertise and has led hundreds of transactions and successful investments in services businesses for over 20 years. Since the firm’s founding in 2015, GCP has completed over 75 acquisitions across its industry-leading platform companies. For more information, visit www.growthcatalystpartners.com