Business contracts are an important part of operating any enterprise. These documents serve as the guidelines by which you will enjoy mutually beneficial relationships with your partners, vendors, subcontractors, and more. Today’s tips can help you better understand the purpose of these legal documents and how to best enter into an agreement that’s binding and fair for all.
Do I Really Need A Legal Contract?
In a nutshell, yes. Say that you open a business with a friend. You both agree that one of you will put up more financial capital and the other more time and effort into running the business. For this, you agree to split your profits 50/50.
However, despite your financial injection, your partner chooses to pay themselves a share of profits proportional to the time they put into the business. In this case, you may have a difficult time proving your verbal agreement. Keep in mind, however, that verbal agreements may be enforceable; they are just more difficult to prove.
A legally-binding contract will clearly spell out each of your roles and responsibilities, compensation, and expectations so that there’s no question of who gets what.
A Partnership Agreement Should Be Your First Document
With this thought in mind, it’s smart to create a general partnership agreement before you begin your business together. This is an unincorporated structure that outlines business responsibilities and, when written well, can help you overrule your state’s local default guidelines, which may or may not be in your and your partner’s best interest.
When drafting a partnership agreement, you will need everyone’s full legal name, their financial and physical contributions, expected administrative and managerial duties, and a list of procedures you expect to follow. This agreement offers simplified taxes, and you won’t have to file an annual report.
E-Signing Versus Physical Signing
Before the advent of the internet, contracts had to be signed in person, and this often required a notary to witness the event. While this is still common practice in many areas, you may want to try e-signing documents. This is more convenient, and you can use a tool that allows you to sign an editable PDF document, which can then be stored and shared securely.
There are many rules and regulations that go into electronic signatures, and these types of documents can easily be tracked for unauthorized changes. Keep in mind, however, that different countries may have different enforceable laws when it comes to e-signatures. However, the vast majority require, at minimum, that there be intent to sign electronically, a digital audit trail, signature protection, multiple copies, record retention, and an opt-out clause.
Your Words Matter
When drafting a legal document, it’s important that both parties understand the agreement completely. While it’s smart to have the document drafted and reviewed by an attorney, make sure that the wording is such that there is no question on meaning or interpretation. In this case, it’s better to use more common language instead of legal jargon. The goal is to have a complete understanding of each other so that there is no question of your intent and responsibilities.
Ultimately, having a legal agreement in place is one of the best things you can do for your business, whether you are a one-man show or a multi-level corporation. And whether you choose to electronically sign your documents or stick with an in-person signature and handshake, having a tangible and relatable agreement in place is one small way you can protect your interests and that of your business.
Contact Goodin Abernathy
If you’re a business owner or entrepreneur, it’s crucial to have a trusted legal partner on your side to help you create and review legally binding contracts. Goodin Abernathy law firm can provide you with the guidance and expertise you need to protect your interests and those of your business partners. Contact Goodin Abernathy today to learn how their team of experienced attorneys can assist you with your legal needs.
Why You Need to be Represented by the Attorneys of Goodin Abernathy LLP for Farming Accidents in Indiana
The Goodin Abernathy LLP trial attorneys are experienced with helping farm and field workers who suffer serious injuries in farming accidents. As Indiana’s harvest season begins, now is the time to use extra caution working in the fields and driving through the countryside.
The Hoosier State is ranked 10th nationally in total agricultural production and ranked in the top five states for crop production like corn and soybeans. It’s also ranked fifth in the nation for swine production and third for poultry. (https://farmflavor.com/indiana-agriculture/) With this high volume of production, numerous workers and large farm machinery are active daily in the fields of Indiana’s farms. Because of this heavy equipment, agriculture is a hazardous industry. Farmers are at a high risk for fatal and serious farm accident injuries. (https://www.cdc.gov/niosh/topics/aginjury/) These injuries are gruesome and can have long lasting effects. Over the years, Goodin Abernathy LLP’s personal injury attorneys have represented farm hands throughout Indiana, helping them understand the legal system and fighting to make sure they collect the legal benefits or damages they deserve following serious accidents.
Our initial consultations are free. More importantly, since each client’s farming accident experience is unique; Goodin Abernathy LLP does not charge a set contingency fee. Our fees depend on the level of legal work your claim requires. When meeting with us for the first time, no one will pressure you to sign a fee agreement or make any decisions right away. We prefer in-person initial consultations. If time and distance are a barrier for out of state clients, we handle video conferencing and telephone conferences at convenient times, all days of the week.
Goodin Abernathy LLP attorneys handle farming accident cases for injured clients and their families from all across the country. If the accident happened in Indiana, Goodin Abernathy LLP attorneys know the law. We handle state and federal lawsuits and are proficient at holding those responsible accountable for their negligence.
Since fall is when the harvest takes place, more accidents occur during this time of year. Most farm operations own and run their own semi trucks for hauling grain. Thus, more big trucks are driving throughout the countryside on state and country roads increasing possibilities that trucking accidents can occur. Grain trucks, filled full of heavy grain, are harder to stop. They can also enter the road at unmarked points during the day or night. Many do not have the proper, legally mandated, reflectors and lights. Some of these farm vehicles are even left on the side of the road without the proper materials to make them visible to other traffic on the road. Big farm machinery can also hit or run over workers in the field—especially those attempting to load produce.
Machinery accidents only allot for a portion of farming accidents. Here are some of the other accidents the attorneys of Goodin Abernathy LLP have handled:
a dairy farm hand who slipped in cold, frozen mud and fell into a manure pit where he died from toxic fume exposure;
a young teen who was working as a temporary farm hand and put his hand in an auger to dislodge material when the machine started running again and mangled his hand;
silo accidents where young or untrained farm hands get sucked into huge amounts of grain.
Goodin Abernathy LLP attorneys also realize that many of Indiana’s agricultural workers come from out of state or even out of the country. In fact, 73% of America’s farming labor force is comprised of migrant workers.
If you are injured in Indiana, Goodin Abernathy LLP is the firm to represent you. When Goodin Abernathy LLP attorneys take a farming accident case, we grab it hands-on and work to collect the details that accurately describe how and why the accident happened. Our experience handling medical testimony, using top quality experts and showing a jury the anatomy of an injury is just as important as our experience investigating accidents. We have the skills necessary to represent you, and the attorneys of Goodin Abernathy LLP CARE ABOUT OUR CLIENTS.
Goodin Abernathy LLP also offers all of these services, in Spanish, to the Indiana Latino community. Marca aquí por un versíon en Español – Legalmente Hablando Indy.
Indiana law allows farms to cover cases under Indiana Worker’s Compensation law or face a potential negligence claim. Worker’s compensation should provide you with medical, rehabilitation and income benefits if you are injured on the job. These benefits are provided to help injured workers return to work. It also provides benefits to the worker’s dependents if they die as the result of a job-related injury. The attorneys are Goodin Abernathy LLC understand the legal intricacies of farming accidents claims. We care about you and your families and are ready to help you fight for the maximum amount of compensation allowable by law.
Let Goodin Abernathy LLP guide you through your legal claim. We walk beside you through the entire process handling your case with the care and attention you deserve. We want to get to know you, discuss the legal process, provide you the opportunity to ask questions and explain our fee structure. Reach out to Goodin Abernathy LLP and let us show you how we set ourselves apart from other attorneys. Experience the care, wisdom, and experience Goodin Abernathy LLP has to offer by calling 317.843.2606 today for your free consultation.
Many clients visit or call asking me to evaluate problematic business contracts or rental agreements. Often my they are surprised about what the contract terms actually mean. Worse, there are times we discover the contract or other party’s promises are fraudulent.
Please learn this lesson from my experience with so many clients: Don’t be cheap at the beginning of a deal – Visit me, Lic. Jim Browne, to review the business contract, home purchase or lease before you sign it.
At Goodin Abernathy / Legalmente Hablendo Indy, many of our Hispanic clients admit they wanted to avoid using an attorney to save money. I understand that idea – it’s reasonable to think that way. But ALL those same clients acknowledge that if they spent a little money for a legal review before entering their agreement, it would have saved them a lot of frustration, time and money.
Rent-to-Own Agreements
Many Latinos enter Rent-to-Own contracts with the idea they are slowly buying their house. The concept, as they understand, uses their rent money to pay off the house. Before signing one of these agreements, make sure the seller also legally owns the house. Do they have the legal authority to sell you the property? Last year I saw an example involving total fraud. The seller did not own the property and collected my client’s $6,000.00 down payment. When they tried to move in, the locks were changed so they contacted the seller. He lived out of state and they did not have his address. He wanted more money for them to move in. Surprisingly, the young couple paid more money. Then, the seller asked for even more money and that is what finally made them think it was a scam. You should meet the seller in person and have their address. If they do not live in the same town or state where you are buying the property, take further steps to verify the ownership. You can check the county government’s records to match the seller’s name with the property’s title. Check if there are other mortgages, liens or taxes owed on the property. If there are, you need to make sure the seller is paying those obligations. If not, the seller will have your money and the lender will keep your house. You can find more information about rent to own fraud here: What you need to know about rent-to-own deals. Then see me for a specific review of your situation.
Business Lease Agreements
Individuals and small companies usually rent office space. One type of rental agreement, or lease, includes the terms for a “Triple Net” obligation. This means the renter makes a monthly payment. Then, at the end of the year, the landlord charges the renter additional money for other costs like property taxes, insurance, mowing, maintenance repairs, snow removal and other costs. This usually amounts to three or four times the cost of the monthly rent. If my clients don’t pay, the landlord changes the locks and denies them access to their equipment or business supplies.
Kitchen Table Contracts
Frequently, individual sellers and buyers sign a short contract over the kitchen table. My buyers think the contract is sufficient to protect their financial investments. Usually the agreement fails to address equipment inventory, describe the payment plan or handle many other practical terms they should have requested for a reliable purchase. Rarely do kitchen table contracts succeed.
Loans to Friends and Family
Monthly we get calls where a client asks if he can legally collect the money he lent a friend or family member. The first question is – Did you put the loan in writing? If not, the borrower may try claiming it was a gift. Besides friends and family, I see this a lot with individuals trying to buy or start restaurants. They will invest money to become owners but not have a written agreement. Usually they lose their money and are left empty handed. Get a written loan agreement signed. It should have terms like the length of the loan, repayment plan, interest, penalties, default provisions and litigation costs.
Subcontractor Agreements
My clients who are subcontractors start jobs expecting to get paid. Sometimes, they do not ask for written terms and hope to get paid. During the job, they pay for materials and equipment, travel and the cost of their own workers. Then when the job is finished, the contractor that hired them claims the property owner or general contractor did not pay – and often that’s a lie. These contractors frequently disrespect my Hispanic clients, threatening litigation or immigration problems. I also see this a lot with apartment complexes. They hire my clients to paint, clean or remodel many, many units. The apartment managers change and the new managers avoid paying the money owed. Or, the apartment managers claim the work was poorly done.
You work hard for your money and envision improving a future for you and your family. Protect yourself against the risk of loss.
Paying for a legal review BEFORE you enter a contract protects you against much larger heartache and financial loss later. Our legal review will be simple and communicated in terms you understand. We will help you think through the contract language that protects your business. Then, if you need me, I’ll help you negotiate the contract for a better result.
Contact Attorney, Jim Browne, by phone at (317) 843-2606 or submit an e-mail inquiry through our website.
Jim Browne: Hey, welcome to Goodin Abernathy. I’m attorney Jim Browne. We have a new member to our group, Garrett Lewis. He is a young attorney, and I thought we would spend a little time with him so you get to know who he is and what he can do for you. Come on in, Garrett.
Garrett Lewis: Alright, glad to be here Jim.
Jim Browne: Where are you from, Garrett?
Garrett Lewis: So, I’m actually from the South Bend area. I practiced there for a couple years before moving down here.
Jim Browne: What time of law did you focus on?
Garrett Lewis: We did Real Estate; we did Torts, which is contracts, defamation, things like that; and intellectual property, which is sort of copyrights, trademarks and patents.
Jim Browne: Do you have a typical client that you helped with the intellectual property?
Garrett Lewis: Yea, we dealt with small businesses. We had a few global businesses that we worked with and a lot of individual clients with patents and trademarks.
Jim Browne: What about people with inventions?
Garrett Lewis: All, all the time.
Jim Browne: Awesome.
Garrett Lewis: Yea, some that we knew weren’t going to anywhere right out of the gate and some that were very successful.
Jim Browne: That’s great. Where you go to school?
Garrett Lewis: So I went to Purdue and I studied business first, “Boiler up!” And then after that, I went straight from Purdue to Valparaiso for law school.
Jim Browne: I’m happy you joined us, remind me when did you start here?
Garrett Lewis: I started in April of this year.
Jim Browne: Right in the middle of the Covid.
Garrett Lewis: Right in the middle of it, right.
Jim Browne: And what areas of law are you focusing on right now?
Jim Browne: Well, what’s that? I mean is that employment law type of work?/employment-lawyer/discrimination-in-the-workplace/
Garrett Lewis: Yea predominantly. Yep.
Jim Browne: And you are helping clients – individuals with their questions about discrimination? Tell us about that for a second.
Garrett Lewis: Yeah, so it sort of depends – when it comes to the ADA – businesses, for example, have legal obligation to provide reasonable accommodations and….
Jim Browne: so, there are seven core areas – age, race, religion, sexual discrimination, physical disabilities – those are things that you’re focusing on?
Garrett Lewis: Correct
Jim Browne: Great. You’ve already had a jury trial in that area… and what court was it in?
Garrett Lewis: So that was actually in the southern district in the…
Jim Browne: A federal court?
Garrett Lewis: A federal court, yea.
Jim Browne: And that trial, what was it about?
Garrett Lewis: So, that case was about a woman who was working at a grocery store for about 12 years and because of her chronic conditions and disabilities, she needed to be able to use a chair, as necessary.
Jim Browne: And the new employer said “No, you can’t use the chair.”
Garrett Lewis: That’s exactly right.
Jim Browne: So, it’s something probably a pretty easy fix.
Garrett Lewis: It was a very easy fix.
Jim Browne: You had a nice result with that jury trial?
Garrett Lewis: We did.
Jim Browne: You were able to learn some things.
Garrett Lewis: Yes.
Jim Browne: Give me one thing that stood out to you about that process.
Garrett Lewis: Well, first thing is you know maybe as a last resort everybody paid attention on the jury, which was nice – and whereas outside of the courtroom, Covid has sort of made remote working a little bit more convenient, inside the courtroom it’s made it much more of a challenge.
Jim Browne: I understand, so you’re preparing and you’re going to teach us old guys what to do about those technological challenges right?
Garrett Lewis: Yep.
Jim Browne: Well, I’m glad you’re on board Garrett. If you have questions about any of those areas of law please call us at Goodin Abernathy. A lot of your questions can be answered by phone, and we really care about the quality and responsiveness of our work, so please call us at 317-843-2606. You’ll get in touch with whichever attorney probably best suits the area of law you’re looking for, and we appreciate you tuning in to Goodin Abernathy.
Whether you are classified as an employee or a sub-contractor may have significant legal and tax obligations. Many people don’t realize that there’s a difference between employees and sub-contractors in Indiana. However, sub-contractors or independent contractors as they are often referred to, don’t receive the same legal protections from the government and don’t have the same rights in the event that you are not paid for your work. Whether you’re an employee or a sub-contractor, you need to spend some time studying the rules and regulations regarding your position and become aware of your rights. If you’re a business owner, it’s even more crucial to distinguish between the two because you have some tax liabilities and obligations.
The Difference Between Employees and Sub-Contractors
Both employees and independent-contractors provide services to you and both get paid for their services. That’s the only commonality between the two types of associates. The IRS states that you can distinguish between employees and independent contractors based on three different categories:
Behavioral Control – Who determines how much control you have over how the job is done. Is it you or is it your boss? Does the employer provide instructions, methodology, training in that methodology, and directions on how and when to carry out the job. If so, this looks and smells like an employer/employee relationship. However, if you are independent, can control the scope of your own work, then your job has the characteristics of an independent contractor.
Financial Control – Who controls how you are paid? Do you bid for the work and then submit a bill or invoice? Or, are you paid an hourly wage? In some industries it may be more difficult to distinguish between independent contractors and employees. Who controls how and when the worker is paid, how they’re reimbursed for equipment used and services rendered, and who bears the profits and loss, etc. An employee can fully expect the employer to provide all necessary tools and equipment to perform their job, and to reimburse them for wear and tear of the equipment they might bring to the job. For example, an employee drives to different locations in their personal car to perform their job might expect to be reimbursed by the employer for the fuel, maintenance and repairs. However, and independent contractor is considered self-employed and must pay all of these expenses out of their pocket. These expenses aren’t considered the business owner’s concern. Think of an independent contractor as a small business owner.
Relationship between the Parties – The most significant difference between an employee and an independent contractor is their relationship with the employer. Subcontractors should have written contracts for every job they do or for a fixed duration. Employees, on the other hand, typically do not have contracts. They are employed “at-will” but they receive regular pay checks, and have taxes deducted from their pay. Employees also may have benefits associated with their employment such as health insurance, paid time off, and reimbursements for expenses
Why Is the Classification Between Employee & Independent Contractor Important?
This classification is very important because it impacts how you file your taxes. Here’s a brief description of your obligations based on whether you’re an employer, employee or a sub-contractor:
Employee – If you’re an employee, your employer is responsible for paying your social security and employment tax obligations by withholding the amount from your wages or salary. In return, you won’t need to concern yourself about the obligatory payments to the government.
Independent Contractor – If you’re a contractor, you’re responsible for your own self-employment taxes, which must be paid quarterly.
Employer – As an employer, the distinction is very important because you’ll need to pay the taxes, social security, and insurance on your employee’s behalf, and you will issue them a Form W-2 at the end of each year. You can deduct the needed amount from your employee’s salary and compensation. You will also have to pay state taxes and federal unemployment taxes on behalf of your employees. If you have independent contractors working for you, you are not required to withhold payroll taxes, and you will issue a Form 1099 at the end of the year.
Because it seems simpler to hire independent contractors, employers often misclassify their employees as such in an effort to avoid paying payroll taxes, etc. If you are found to be misclassifying your employees as independent contractors, you may be subject to fines and penalties issue by the US or Indiana Department of Labor.
Reporting the Earnings of Employees & Independent Contractors
As a business owner, you need to report every employee and independent contractor you have on hand. You also need to make sure you have classified them correctly. The Department of Labor is very stringent on the difference between an independent contractor and an employee. In fact, they have cracked down on entire industries that try to misclassify employees as independent contractors. You are also required to pay employees overtime for every hour over 40 hours in a given week. Overtime is 1.5 times the amount of your regular hourly rate. This is another reason why employers seek to classify their workers as independent contractors. That is, they are trying to avoid the overtime requirements of the Fair Labor Standards Act.
What Should You Keep in Mind?
There are significant penalties for employer who refuse to pay their employees’ wages. In Indiana, this can be up to 2 times the amount of wages, plus attorney’s fees. Failure to pay an independent contractor does not have these penalties. Rather, this is just a simple breach of contract claim. If you are an independent contractor, it is important to have a written contract. As part of the terms of that agreement, specify that you can seek attorney’s fees if you are not paid. Without such a clause, it may be difficult, and expensive to find an attorney to take your case.
If you believe your employer has misclassified you as an independent contractor, you should contact an attorney immediately. It may be that you want to report the company to the Department of Labor.
A common question that our clients ask us is, “Should my employer be paying me for overtime?” Both Indiana and Federal Law require the payment of overtime wages unless an employee is exempt. Some examples of exempt employees include outside salespeople, teachers, executive, administrative or professional employees, certain farm workers, and employees in certain computer-related occupations. The vast majority of hourly workers are entitled to receive overtime for every hour, over 40 hours, worked in a given week. Current Federal Minimum Wage is $7.25 per hour. Therefore, even if you are paid a salary, your average hourly wage, based on a 40 hour week, must equal $7.25/hr. If you are working more than 40 hours per week, your employer should be paying you time and a half for every hour over 40 worked during the week. A common misconception among employers is that all salaried employees are exempt from the overtime requirements. This is simply not true.
Another area where we often see abuses in wage and hour laws is in the case of tipped employees. Tipped employees are individuals engaged in occupations in which they customarily and regularly receive more than $30 a month in tips. The employer may consider tips as part of wages, but the employer must pay at least $2.13 an hour in direct wages.
The employer who elects to use the tip credit provision must inform the employee in advance and must be able to show that the employee receives at least the applicable minimum wage (see above) when direct wages and the tip credit allowance are combined. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the minimum hourly wage, the employer must make up the difference. Also, employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement.
Wages required by the FLSA are due on the regular payday for the pay period covered. Deductions made from wages for such items as cash or merchandise shortages, employer-required uniforms, and tools of the trade, are not legal to the extent that they reduce the wages of employees below the minimum rate required by the FLSA or reduce the amount of overtime pay due under the FLSA.
The United States Department of Labor’s Wage and Hour Division (WHD) is responsible for enforcing some of the nation’s most comprehensive federal labor laws on topics including the minimum wage, overtime pay, record keeping, child labor, family and medical leave, migrant and seasonal worker protections, lie detector tests, worker protections in certain temporary guest worker programs, and the prevailing wages for government-funded service and construction contracts. Collectively, these laws cover most private, state, and local government employment, and protect over 135 million workers in more than 7.3 million establishments nationwide. The Department of Labor has even created an app for employees to keep track of their time to determine if they may be entitled to overtime.
On June 30th, the DOL unveiled a proposed rule that would broaden federal overtime pay regulations to cover nearly 5 million more people and raise the minimum salary threshold required to qualify for the Fair Labor Standards Act’s “white collar” exemption to $50,440 per year in 2016, up from the current $23,660.
Employment law attorneys anticipate significant increases in the number of employees who will be entitled to overtime pay. Thus, even if you are currently considered an exempt employee, you may no longer be considered exempt under the new proposed rules.
