Category: Uncategorized

By Jamie Herzlich

With new government rules proposed on overtime pay, compliance looms as a key focus for businesses.

The U.S. Department of Labor recently unveiled a proposed rule that would raise the minimum salary threshold required for eligible white-collar employees to be exempt from overtime pay from $23,660 to $35,308.

New York State already imposes much higher salary thresholds,  and they are slated to increase further.

So employers are encouraged to make sure they are correctly classifying their employees and understand true costs to make any necessary adjustments.

“Businesses should evaluate their compensation packages annually to make sure they are in compliance with overtime law and plan for anticipated changes,” said Arthur Yermash, a law partner at Campolo, Middleton & McCormick LLP in Westbury.

This is especially true on Long Island, where, as per state standards, eligible employees have to make at least $46,800 a year ($900 weekly) to qualify for an overtime exemption, up from $42,900 last year, he said. New York City and the rest of New York State have different thresholds. 

That state  salary threshold will increase again for Long Island on Dec. 31 to $50,700 ($975 weekly), and it will eventually hit $58,500 ($1,125 weekly) by Dec. 31, 2021, said Yermash.

While the nation’s proposed salary threshold is less, Long Island employers must abide by the higher regional threshold, says Alfred B. Robinson, Jr., an attorney in the Washington, D.C., office of Ogletree, Deakins, Nash, Smoak & Stewart PC and former acting administrator of the U.S. DOL’s Wage and Hour Division.

In the Fair Labor Standards Act there’s a provision that enables state and local governments to pass more “protective laws in terms of minimum wage or overtime standards,” he said.

In high-cost areas like the city and Long Island, “the federal salary threshold is probably too low,” said Robinson.

Still, employers feeling the pressure from higher overtime pay have to consider whether they should increase salaries so an employee doesn’t fall below the salary threshold for overtime, adjust  employee duties, or decrease overtime opportunities, he said.

 Exemption from overtime is based not just on salary, but also  on job duties, said Jeff Agranoff, a principal at Grassi & Co. CPAs and business advisers in Jericho, and there are different categories of exempt employees and different job duties tests for each.

In general, he said, a person would not be entitled to overtime under the white-collar exemption if he or she is managing people or a process or has responsibility for an area or function.

The criteria and duties test differ for those considered highly compensated; under the DOL’s proposal those employees could be considered exempt from overtime if they make at least $147,414 (formerly $100,000) and they perform certain job duties, said Agranoff.

More often than not, many companies incorrectly classify employees as exempt. “Most employees should be non-exempt employees,” he said.

To better understand whether it’s worth it to pay people for working overtime, employers should also do a cost-benefit analysis to see what value the company receives from someone working more than 40 hours compared to limiting worker hours to 40 per week, said Yermash.

On the plus side, at least local companies have the ability to plan accordingly because the State Labor Department has announced the amount of increases until 2021 for Long Island, he said.

Read more here.

In 1988, Suffolk County passed the nation’s first law banning polystyrene “Styrofoam” food packaging due to its threat to the environment, paving the way for other jurisdictions across the country to do the same. Today, at both a Town and County level, Suffolk County is once again leading the way on environmental issues with regard to plastic bags, plastic foam containers, and plastic straws – and these new laws just may help drive up business in the bargain.

Similar to legislation recently passed in Patchogue Village and the Village of East Hampton banning foam food packaging, the Town of Southampton recently passed Town Board Resolution 2019-203 requiring restaurants and food service establishments in the Town to transition from plastic (including straws and stirrers) and Styrofoam products to biodegradable alternatives. This law will go into effect on May 8, 2019 to give businesses time to use up their old stock and make the transition to alternatives which can include cardboard, stainless steel, renewable corn, or bamboo products.

Under the law, restaurants will be permitted to keep a small number of plastic straws on hand for those with physical disabilities who require them, but straws will not be distributed automatically. All other customers who ask for a straw will be given a biodegradable one.

The law applies to all food service establishments and beverage providers, including restaurants, delis, bakeries, bars/taverns, fast food restaurants, take-out, and ice cream stores. Failure to comply can result in a fine up to $1,000, or imprisonment for a term of 15 days or less, or a combination of these.

Similar legislation is also being debated at the county level. Bills introduced in the Suffolk County Legislature in February 2019 aim to reduce plastic litter by eliminating plastic straws and Styrofoam containers, plates, and cups in restaurants throughout the county. This legislation follows the plastic bag fee that went into effect in Suffolk County last year – and which has resulted in an 80 percent decline in the number of single-use plastic bags distributed in the county over the past year, according to estimates.

Food service providers may understandably be concerned about adding yet another to-do item to their never-ending list, but savvy business owners should not view this ban as a burden, but as a potential boon to business. (Indeed, according to 27east.com, the Town’s Sustainability Committee surveyed 80 of the approximately 240 restaurants in the Town, and between 90 and 95 percent agreed that banning straws and Styrofoam containers “was a move in the right direction.”) (Read the full article here.)

By demonstrating an understanding of local environmental and health concerns, Long Island food and beverage service establishments will provide new incentives for existing and potential customers to frequent their stores and restaurants and will be making a change in our world for the better. Many of today’s consumers, particularly millennials, are concerned for the environment and would be more inclined to dine at an environmentally friendly establishment.

Furthermore, Baby Boomers and older generations still remember when restaurants used cardboard takeout boxes and paper straws before the widespread use of plastic, and thus wouldn’t find an adjustment back to this material difficult or inconvenient. In addition, the growing number of food intolerances, food allergies (see our related article here), and alarming cancer rates means that any change in daily life that might decrease the chances of that happening will bring relief and acceptance from Long Island residents, proponents say.

Finally, most Long Islanders agree that environmental cleanup costs are sky-high, and a decrease in plastic litter can make a major difference. By helping to reduce this type of waste, restaurants can promote their forward-thinking attitudes and attract new customers.

Please contact us with any compliance questions you may have.

Much ado has been made recently about Amazon’s Long Island City venture. For better or worse (or we may never know), it seems that Amazon and New York have moved on from each other.

Here at Campolo, Middleton & McCormick, LLP (hereinafter, “CMM”), on the other hand, we have been able to succeed where Amazon has not, and our “HQ3” in Nassau County is open for business. As I write this article/post/op-ed or whatever it is, I stand proud as a member of the CMM Westbury legal team! Stay tuned for my next post, In Defense of Plaintiff’s Lawyers (if “they” let me publish again), to hear more about me and my journey.[1]

CMM is a different kind of law firm and business organization.  As a relatively new part of the team, coming on seven months now, I am settling in, and have had an opportunity to make a few observations: 1) young talent thrives here; 2) if you are not at the table, you are on the menu; 3) Joe Campolo commands a room like nothing you have ever seen; 4) we know why we do what we do (thanks, Simon Sinek); and 5) nobody works harder than we do.

This is not to say that other firms, companies, and businesses fail to match these observations. To the contrary, I have seen several who do just that and are extremely successful. But there is some magical formula here of leadership, a devoted following, openness, self-motivation, and an absolute need for success that draws clients and employees in like a black hole of hard work and happiness, and keeps our legs moving forward like a running back through a crowded line of scrimmage.

So what’s the difference between CMM and Amazon? How are we moving forward in the New York metropolitan area, while Amazon, a bona fide behemoth, was unable to close the deal?  In a phrase – embrace, don’t displace, your neighbors.  CMM’s unwavering devotion to its community is a reflection of its own success. Do good work for your community, and bring your community up with you.

For example, CMM recently participated in the Brentwood Job Shadow Day, hosting high school students interested in legal careers, and announced a $450,000 gift to support scholarships and programs at the Staller Center for the Arts.

CMM’s legal work also embodies its community mission.  Recently, a reputable property developer came to CMM partner Patrick McCormick and me with a solvable but taxing (pun intended) property dispute, causing a road block (pun not intended) in the development of a local property. The client’s problem boiled down to a simple point of tension: a neighbor. The prior owner of the property was involved with a land dispute with its abutting neighbor where each quite literally coveted the other’s property. Their dispute prevented our client from moving forward with its project. CMM was able to step in, and with minimal court involvement, solve the dispute on all sides, allowing our client to move forward with its project.
This case presented one of an infinite number of “simple” problems between local people and businesses where the involved parties are unable to solve on their own. Instead, they call in the problem solvers, the fixers, the litigators.

In this case, as in our business, problems can often be prevented or solved through embracing neighbors, working together, supporting one another, for a mutually beneficial result. Amazon had to learn it the hard way, but many locals felt that Amazon was not supporting or embracing their community needs. Agree or disagree with that analysis, if the community did not feel supported, Amazon could not have succeeded.

The lesson for today, thus, is that most problems can be solved through mutual understanding. Whether it is two entities disputing over adjoining property, or a business expanding its horizons, the needs of all involved must be met for all to succeed. Fortunately for us, CMM works hard with its neighbors to assure mutual benefit, and works hard for its clients to assure an effective end result at an unbeatable value.

[1] Please email me with reinforcement so that I can continue to write for the CMM blog!

By Bernadette Starzee, Long Island Business News

The new 3,108-square-foot space at 1025 Old Country Road in Westbury will be the first Nassau location for the Ronkonkoma-based law firm. Founded in 2008, the firm opened a satellite office in Bridgehampton five years ago.
“We now have offices across the spine of Long Island,” said Director of Communications Lauren Kanter-Lawrence.

“Our firm is growing, and now is the time to open an office in Nassau,” said Managing Partner Joe Campolo. “A lot of our attorneys have deep roots in Nassau County and the five boroughs, and this will bring us closer to our clients there.”

Attorney Arthur Yermash, who was elevated to the partnership at CMM at the start of the year, will serve as partner in charge of the Westbury office. Two additional attorneys and an office manager will also be resident in the office, while there are additional workstations for attorneys to spend part of their time there.

“Joe Campolo will probably spend one day a week there,” Kanter-Lawrence said. “Other attorneys will spend time there when meeting with their clients. There’s so much technology today, but there’s nothing like being able to meet in person.”

Read more here.

Corporate attorney Vincent Costa and Director of Communications Lauren Kanter-Lawrence lent a helping hand as special section editors for the 2019 January issue of the Suffolk Lawyer. They compiled, edited, and wrote articles related to Mergers & Acquisitions, a topic CMM is well versed in. The section also featured articles by CMM attorneys, including Representations and Warranties in M&A Transactions by Vincent Costa; Password Protected: Cybersecurity in M&A Transactions by Christine Malafi; and Why Is That My Problem? – Successor Liability in New York Asset Purchases by Don Rassiger.

The Suffolk Lawyer is the monthly newspaper of the Suffolk County Bar Association, one of the largest voluntary bar associations in New York State. CMM was happy to utilize this opportunity to share our knowledge of M&A with the legal community. You can read the issue here.

CMM was honored to host two ambitious students from Brentwood High School for the opportunity to shadow some of our professionals. Yessica and Marilyn, who plan to pursue legal careers, received an inside look from our attorneys at life as a lawyer and received advice for college, law school, and beyond. The students met one-on-one with many members of our team and enjoyed a group lunch where topics included the importance of diversity in law and keeping an open mind when making career decisions. By participating in community programs such as Brentwood’s Job Shadow Day as well as spearheading our own programs to engage young people on Long Island, CMM is working to guide students on their career journeys and achieve diversity in the legal profession.

By Gregory Zeller

A Stony Brook University alumnus is pumping a decade of support into the Staller Center for the Arts.

Ronkonkoma law firm Campolo, Middleton & McCormick LLP will donate $450,000 to support scholarships and arts programs at the Staller Center through a 10-year “gift commitment,” according to the firm.

The gift continues CMM’s run as “an annual major corporate supporter of the Staller Center for the Arts live season and Stony Brook Film Festival,” CMM added.

It was arranged by SBU grad (BA, history) and CMM Managing Partner Joe Campolo, a past president of the university’s Alumni Association and member of both the Staller Center Advisory Board and the Long Island High Technology Incubator Board of Directors.

Among the projects earmarked in the latest CMM gift: the Alumni Association Past President’s Scholarship program, new sound systems for the Staller Center’s main-stage theater and recital hall and the Joseph N. Campolo Award for Legal Studies.

The Staller Center said in a statement that gifts like the CMM donation directly benefit arts and education outreach across the Long Island community.

“The new sound system that CMM funded was a much-needed upgrade to both theaters and creates a new sleek look and dynamic sound performance,” the statement added. “The Staller Center for the Arts is extremely thankful to Joe Campolo and his CMM colleagues for their unwavering dedication to helping keep the arts thriving.”

Campolo isn’t the only CMM partner to personally support SBU. Senior Partner Scott Middleton – also a university grad (BA, political science) and past president of the SBU Alumni Association, now a member of the university’s Intercollegiate Athletic Board and the Stony Brook Children’s Hospital Task Force – is the namesake of SBU’s Middleton Family Student Athletic Alumni Award.

The 10-year donation also deepens CMM’s commitment to philanthropy. In 2018, the Ronkonkoma firm launched CMM Cares, an initiative designed to rally financial donations and volunteerism around community efforts.

By Christine Malafi

Almost daily, the headlines report new cybersecurity attacks, each more brazen and far-reaching than the last. Businesses may think their general commercial liability policy will cover their losses in the event of a cybersecurity attack, but often learn the hard way that insurance companies frequently deny coverage for these losses. Electronic data is not considered to be “tangible property” by most traditional policy terms, and because data breaches don’t typically involve loss or damage to physical property, general liability policies often do not cover the resulting expenses and damages. Whether your business is protected depends on the specific language of your policy and the circumstances of the loss. Here’s a look at how that played out in two recent examples – and some guidance on how to protect your company.

In one recent case, an employee received a fake email from the address of the company’s president, who had been hacked.[1] The employee believed the company president was directing him to make a transfer of money. Because the employee had essentially been tricked into causing the loss, in this instance the insurance company was obligated to pay on the claim because the hacking was a form of unauthorized use covered by the insurer.[2]

A restaurant that suffered a data breach under different circumstances, however, was not as lucky. In that case, cyber criminals hacked into a fast food restaurant’s network, then obtained and fraudulently charged the credit cards of several customers.[3]  A credit card company forced to reimburse its customers for the fraudulent charges filed suit against the restaurant for failure to keep the information safe.  The restaurant sought coverage from its insurance company, but its insurer denied coverage, asserting that no coverage existed for third-party claims arising out of the loss of electronic data.[4]  Ultimately, the Court agreed with the insurer, finding that the policy language clearly provided coverage only in the event of property damage.[5] “Property damage” was defined in the policy as “[p]hysical injury to tangible property… or … [l]oss of use of tangible property that is not physically injured.”[6]  The policy went further and stated that electronic data was not considered tangible for the purposes of insurance coverage.[7]  Therefore, the restaurant had no insurance coverage for the loss.[8]

If it seems that your coverage depends on your specific policy terms and the right set of circumstances, you’re right.  In today’s data-driven world, many insurance companies offer policies that cover electronic data claims, but exclusions from coverage and definitions can severely limit coverage. Some questions to consider:

• What minimum cybersecurity measures must your company implement for the policy to take effect?
• What types of cyber events trigger coverage and when does coverage commence?
• What aspects of your company’s technology infrastructure are covered?
• Against what type of legal actions is your company insured, and how much control will your company have to respond to those actions?
• Does the perpetrator or motivation of the cyberattack matter?

(More information on these questions here.)
Please call us to review your policy language and help you decide if the policy offers the protection you need.
 
[1] See Medidata Sols., Inc., 268 F. Supp. 3d 471, 476 (S.D.N.Y. 2017), aff’d, (2d Cir. 2018).
[2] Id.
[3] See RSVT Holdings, LLC v. Main Street America Assur. Co., 136 A.D.3d 1196 (3d Dep’t 2016).
[4] Id.
[5] Id. at 1198.
[6] Id.
[7] Id.
[8] Id.

Another year has come and gone. As we usher in 2019, business owners should know that New York State has also ushered in changes to the minimum wage and the overtime exempt salary threshold effective December 31, 2018.

Minimum Wage Increase
Employers generally must pay nonexempt employees at least the minimum wage.  Minimum wage throughout New York may vary based on the employer’s size, geographic location, or industry.  With some exceptions for the hospitality industry (please contact us for any questions you may have), the table below outlines New York’s 2019 minimum wage:

The minimum wage is expected to increase annually until it reaches $15.00 per hour by the end of 2021 for all of New York State.

Increased Salary Threshold for Overtime Exemption
Both federal law (Fair Labor Standards Act (FLSA)) and state law (New York Minimum Wage Act and applicable regulations) generally require the payment of overtime wages for work performed after 40 hours per week.  However, there are exemptions for certain salaried employees from federal and state minimum wage and overtime pay requirements.  In addition to New York’s minimum wage increase, the minimum salary that must be paid to workers classified as exempt under New York State Labor Law’s administrative and executive exemptions increased as of December 31, 2018. As with minimum wage, the salary thresholds vary depending on the employer’s location and the number of employees.  The table below outlines the revised thresholds in New York State:

*Numbers provided are pursuant to New York State law and are higher than the federal FLSA thresholds.
Employers should review their wage and hour practices annually to ensure that their employees are properly classified as exempt or non-exempt and that current minimum wage and overtime rates are being paid to qualified workers.  Take advantage of the new year to give your practices a fresh look.
If you have questions about minimum wage, overtime, or wage and hour exemptions, please contact us.

To view 2020 minimum wage requirements, click here.