An ounce of prevention: 

1. Have an attorney prepare your terms and conditions to maximize the enforceability of your contract, and to provide for collection interest, collection costs and attorneys fees.
2. Vet the customer thoroughly before you extend credit. Ask for trade references and do a credit check.
3. Familiarize yourself with the Fair Debt Collection Practices Act to know what you can and can’t do to collect the debt.
4. Require prepayment or partial payment from a new customer.

A pound of cure:

1. Call promptly after the first payment deadline is missed as a reminder and to make sure there was no problem with your goods or services. The longer you wait the harder it is to collect.  
2. Follow up with a formal demand letter after another month.  Give a firm deadline before further action will be taken and state what that action is. 
3. Work out a payment plan if necessary.  A small monthly payment or a reduced lump-sum payment may be better than nothing. 
4. Know the North Carolina collection laws if a lawsuit becomes necessary. But your goal is to prevent filing a lawsuit in the first place. 

The H-2A nonimmigrant visa program (“H-2A  program”) allows foreign nationals to enter into the U.S. to perform agricultural labor or services of a temporary or seasonal nature.  In order to employ foreign nationals under the H-2A program, employers must prove that no qualified U.S. workers are available at the time and place needed and that use of foreign workers will not create an adverse effect on the wages or working conditions of similarly employed US workers.  The employer must also provide housing (if employee cannot reasonably commute from home), three meals a day, and transportation. 

Although similar to the H-2A program, the H-2B nonimmigrant visa program (“H-2B program”) allows foreign nationals to enter into the U.S. temporarily and engage in nonagricultural employment which is seasonal, intermittent, a peak load need, or a one-time occurrence. H-2B workers are frequently used to fill labor needs in occupational areas such as construction, health care, landscaping, lumber, manufacturing, food service/processing, and resort/hospitality services. Like the H-2A program, employers must prove that no qualified U.S. workers are available at the time and place needed.  Up to 66,000 H-2B visas are granted each year with half reserved for jobs with start dates in the first half of the government fiscal year and the remainder reserved for the second half.  The employer must pay the employee’s transportation costs home if the employee is terminated early.  Unlike the H-2A program, H-2B program employers are NOT required to provide housing or meals for their H-2B workers. 

For more information about the H-2A or H-2B programs, please contact our offices.

In the January 15, 2010 statement released by Secretary Napolitano, she stated: 

“This is a disaster of historic proportions and this designation will allow eligible Haitian nationals in the United States to continue living and working in our country for the next 18 months. Providing a temporary refuge for Haitian nationals who are currently in the United States and whose personal safety would be endangered by returning to Haiti is part of this Administration’s continuing efforts to support Haiti’s recovery.”

For more information, please see our previous post on TPS.

For the time being, the answer is “no.”  On Wednesday, Homeland Security Secretary Janet Napolitano temporarily halted the removal (deportations) of Haitians with standing removal orders.  Those who do not have removal orders, but are detained in detention centers, will remain jailed. 

Since the earthquake on Tuesday, President Obama has been receiving increasing pressure from members of Congress and other special interest groups to grant Temporary Protected Status (“TPS”) those Haitians who are in the U.S. unlawfully.  This status is sometimes granted to countries when conditions in the country that temporarily prevent the country’s nationals from returning safely, or in certain circumstances, where the country is unable to handle the return of its nationals adequately.

 In plain language, TPS allows eligible nationals who are in the U.S. unlawfully to remain and work in the U.S. until such a time as that their home country reaches a point that DHS determines will allow for a safe return. Currently, El Salvador, Honduras, Nicaragua, Somalia, and Sudan are designated by the Department of Homeland Security for TPS.

Many of us at Sands Anderson have made personal donations to help the earthquake victims.  We encourage everyone to consider doing the same, but please be careful who gets your money.  It is unfortunate, but many people will try to make a buck off this disaster.  Don’t be a victim of a scam. 

Here are some tips from the Better Business Bureau on how to vet charities asking for Haiti donations:

• Rely on expert opinion when it comes to evaluating a charity; not every blogger or web site has researched its recommendations.
• Be wary of claims that 100 percent of donations will assist relief victims.
• Be cautious when giving online, particularly if you receive an email asking for donations.
• Find out if the charity has an on-the-ground presence in the impacted areas.
• Find out if the charity is providing direct aid or raising money for other groups; it may make your dollars go further if you avoid the middleman.
• In-kind drives for food and clothing—while well intentioned— may not necessarily be the quickest way to help those in need - unless the organization has the staff and infrastructure to be able to properly distribute such aid.

In addition, be very careful in donating by text message. Before texting, go online and verify the number.

Estate Tax and Possible Changes in 2010

Congress has done the unthinkable and now we are in a year with no estate tax. Everyone expects Congress will “patch” the current law by extending last year’s rules – taxing estates exceeding $3,500,000 – through the end of this year and making that change apply retroactively to January 1. But then, everyone expected Congress to extend last year’s rules before last year ended.

So, what does this mean for you?

If you are single, it will probably make no difference to the way you have made your will and other estate documents unless you have a plan where you gave the exempt amount to your beneficiaries and the amount above the exempt amount to charities. In that case, you should review and may need to change your documents.

If you are married and you had a plan that would create, on the first death, a “Family Trust” for the surviving spouse, under the current rules (no estate tax) it is likely that your documents will give everything to your spouse. If your children are not children of your spouse and you had a “Family Trust” to provide for your spouse and then pass back to your children, you will need to review and may need to change your documents.

If your children are all children of your spouse, you have a choice:
a. Do nothing and hope your survivor will get prompt advice about whether he or she should disclaim any of your assets passing to the survivor so they will instead pass to the “Family Trust” for the survivor and not be taxed as part of the survivor’s estate (see “looming danger” below).

b. Consider amending your documents to provide a trust for the survivor even if you die in 2010 and there is no tax. (Such an amendment could be as simple as providing that if you die in a year when there is no estate tax, that the document will be interpreted as though the 2009 tax rules applied for the purpose of setting up the Family Trust for the survivor).

Why is this important? — The “Looming Danger.”

If Congress does nothing at all (or just extends last year’s rules through 2010 as a “patch” and then does nothing further) starting in 2011 (less than one year), the exemption from estate tax will automatically drop to $1,000,000.

That will mean that if you die this year and you and your spouse have $2,000,000 (for example) and your spouse inherits everything, there will be no tax. But if your spouse then dies with a $2,000,000 estate in 2011, the children will pay over $400,000 in estate taxes.

Everyone expects (yes, that crowd of everyone again) Congress will pass a more permanent extension of the estate tax law setting the tax-free amount at a higher level, but Congress is full of surprises and, with an election coming up, Congress could easily do nothing about further estate taxes (just as happened this year) and let the exemption drop back to $1,000,000.

Whether single or married, it may benefit you to start planning now for that possibility and to review your plan with an trust and estate lawyer to make sure that your documents will send your assets to the beneficiaries and in the way you expected.

 How often do you check in with your estate planning specialist?

(This was posted earlier on the Virginia Business Lawyers blog.)

The NFIB survey asked 11,000 small business owners to choose their single most important problem from a list of ten factors, such as taxes, inflation, or government requirements and red tape.

The reported results indicate that inventory investment levels are at historic lows, capital expenditures are on hold, and businesses are contemplating additional layoffs.  But to me, the real news is that a third of participants cited poor sales as the greatest problem facing their business right now (an all-time high for this category).

Although the survey recognized pent-up demand is a bright spot (think cars), housing markets have stopped free-falling in many areas and the stock market is up, NFIB members remain exceedingly concerned about taxes and government regulation. 

But the other major concern is the level of uncertainty being created by government, the usually source of uncertainty for the economy. The “turbulence” created when Congress is in session is often debilitating, this year being one of the worst. Themes including “tax more,” “tax the rich even more,” “VAT taxes,” higher energy costs due to Cap and Trade, mandates and taxes for health care, threats of “stimulus II,” incomprehensible deficits, and a huge pool of liquidity created by the Federal Reserve Bank that threatens price stability and higher interest rates. The list goes on and on. There is not much to look forward to here and good reason to “keep your powder dry.” Uncertainly is the enemy of the real economy as well as financial markets.

What is the greatest problem facing your business and how do you plan to address it?

I appreciate the article because I would not want to appear completely self-serving when I advise that businesses of all sizes should meet with their attorneys (and accountants) at least once a year to head off potential problems.  I know there is a lot of belt-tightening going on right now, but penny-wise can turn pound-foolish in an instant.  For example:

• One of my first matters as a corporate attorney was “cleaning up” an IT company that had a founder’s friend do the formation.  He was an attorney, but a divorce attorney, and it took about 30 hours to unravel the mistakes that were made in setting up the stock, the shareholders’ agreement and stock-option plan.  It was pure luck that the S-corporation election was not invalidated by the way the stock was set up. 
• Another client got into a dispute with a supplier of wire and wanted to cancel the contract.  A low-level manager had written a contract that said the supplier would supply all wire needed by the company for the next three years (including a minimum purchase requirement).  There was no way to terminate the contract early.  It took many hours of negotiation to end the contract early when the telecom industry tanked and the client didn’t need the minimum order. 
• Finally, one of the saddest matters I have handled was a client who got into some financial trouble and didn’t pay state income taxes.  They owned a viable retail business, but the Department of Revenue padlocked them and put many people out of work. 

All of these situations could have been largely avoided (or handled quickly and possibly less expensively) if the clients had spoken with a business attorney early on.

Section 287 (g) was added to the Immigration and Nationality Act by the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) in 1996.  287(g) authorizes the secretary of the U.S. Department of Homeland Security (DHS) to enter into agreements with state and local law enforcement agencies, permitting designated officers to perform immigration law enforcement functions, provided that the local law enforcement officers receive appropriate training and function under the supervision of sworn U.S. Immigration and Customs Enforcement (ICE) officers.

Since its beginning, the 287(g) has been surrounded by a whirlwind of controversy with accusations of the program encouraging racial profiling.  Although many support the program, it has come under intense criticism more recently, with over 500 organizations, including the ACLU and the Congressional Hispanic Caucus, calling on the government to end the program.

So, what will happen with 287(g)?  Only time will tell.  It will at least have to wait until Immigration Reform hits Congress’ front burner.

Employers may resume filing H-1B petitions on April 1, 2010 for year 2011 (employment beginning on or after October 1, 2010).

For more information on the H-1B cap, please see our previous blog posts.

The H-1B visa is among the most coveted by U.S. employers because it allows foreign workers in speciality occupations with only a bachelor’s degree to be employed by the company. For many years, the H-1B has been a vital component for many company’s staffing needs.

Currently, U.S. law limits the number of H-1B visas to 65,000 per fiscal year (excluding H-1B non-immigrants who work at universities and non-profit research facilities). Laws also exempt up to 20,000 foreign nationals holding a master’s or higher degree from U.S. universities from the cap on H-1B visas.

In recent years, the H-1B non-masters cap has been met on April 1, the first possible day to file such petitions. However, this has been an unusual year with the cap having not been met as of December 14 (yesterday).  This drastic change is most likely attributed to two things: (1) current economic conditions affecting company growth and staffing needs and (2) the tightened rules on filing H-1B petitions for companies who have received TARP funding.

If your company wishes to hire an H-1B employee, it is imperative that the petition be filed as soon as possible.  Once the cap has been met, employers will have to submit H-1B petitions starting April 1, 2010 for employment beginning October 1, 2010. 

For more information on H-1B visa, please see our previous blog posts.  If your company is interested in hiring an H-1B worker, please contact our offices as soon as possible.