Seller Beware: Don’t Market Your Business Without Doing A Presale Legal Audit

Selling a business involves significant risk and is something that most owners do only once in their lifetime. A seller must “do it right the first time” and avoid pitfalls that can result in a reduced number of interested buyers, a reduced sale price, unfavorable payment terms, a large at-risk escrow amount, or a deal that does not close. If a deal doesn’t close, substantial management time is likely to have been spent, tens of thousands or hundreds of thousands of dollars in professional fees are likely to have been incurred, confidential information about the seller’s business will have been disclosed, employees may leave, and a multi-million dollar payday will have vanished.

New York City Amends Its Sick Leave Law To Align With New York’s Statewide Sick Leave Law

On September 28, 2020, Mayor de Blasio signed into law amendments to New York City’s Earned Safe and Sick Time Act (the “Act”). The amendments, which went into effect on September 30, 2020, generally align the Act with New York’s recently enacted statewide sick leave law that also went into effect on September 30, 2020. However, several important differences described below exist between the two laws.

New York City Enacts Ban On Pre-Employment Marijuana Testing

Last year the New York City Council by a vote of 40-4 enacted Int. 1445-A (the “Law”), which amends the New York City Human Rights Law to prohibit employers and staffing firms from pre- employment drug testing for marijuana and THC (the active ingredient in marijuana). The Law will go into effect on May 10, 2020. It is applicable to employers with four or more employees who physically work in New York City and, pending further guidance, only to those employees who physically work in New York City (including temporary employees of staffing firms).

New York State Enacts Covid-19 Sick Leave Law

In response to the COVID-19 pandemic, Governor Cuomo signed into law on March 18, 2020 the New York COVID-19 Sick Leave Law, S. 8901 (the “Law”). The Law, which was effective immediately, requires employers regardless of size to provide sick leave to their eligible employees who physically work in New York State. The sick leave to be provided is paid or unpaid leave, depending on the size and net income of the employer. Guidance issued by New York State on March 25, 2020 is attached to this Legal Advisory.

Families First Coronavirus Response Act

In response to the coronavirus pandemic (COVID-19), President Trump signed into law on March 18, 2020 the Families First Coronavirus Response Act, H.R. 6201 (the “Act”). This sweeping Act temporarily expands the federal Family and Medical Leave Act (“FMLA”) relating to COVID-19, creates a temporary federal paid sick leave program relating to COVID-19, expands unemployment insurance benefits, mandates insurance coverage of coronavirus testing, and expands nutrition and food assistance. This Legal Advisory focuses on the Act’s FMLA expansion and the paid sick leave program it creates, and includes the most recent attached guidance issued by the U.S. Department of Labor (“DOL”).

New York Enacts Statewide Ban On Salary History Inquiries

On July 10, 2019, Governor Cuomo signed into law bills A. 5308-B and S. 6549 (the “State Law”) that amends New York State’s Labor law to prohibit, statewide, employers from inquiring about or relying on the salary history of a job applicant or current employee in determining whether to offer employment to an individual or in determining the compensation of an individual. The State Law follows and supplements similar laws previously passed in New York City, Albany County, Suffolk County, and Westchester County, of New York State, and will go into effect on January 6, 2020.

U.S. Department Of Labor Issues New Overtime Rule

On September 24, 2019 the United States Department of Labor (“DOL”) issued its new final rule for determining whether executive, administrative and professional employees are exempt from overtime pay under the Fair Labor Standards Act. The rule, which will take effect on January 1, 2020, will increase to $684 per week ($35,564 per year) the federal salary threshold that must be met to qualify for the so-called “white collar exemption.” The new salary threshold will not be indexed for inflation.

New York State And New York City Enact Sweeping Laws To Prevent Workplace Sexual Harassment

In response to the #MeToo movement, New York State and New York City have recently enacted sweeping and partially overlapping workplace anti-sexual harassment laws, some provisions of which have already gone into effect while others will go into effect between now and April 1, 2019 (as indicated below). The new laws apply to both staff employees (full-time and part-time) and, for staffing firms, consultants/temporary employees who are their employees. Perhaps the most significant of the new provisions is mandatory annual sexual harassment training for employees.

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New York

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Miami

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LLP

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Miami, FL 33131

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Singapore

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Singapore 049319

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