Posted: September 1st, 2023
Event Date: October 12th, 2023
Scott Middleton, CMM Senior Partner and The 1957 Club General Counsel, invites you to join The 1957 Club for a night of cocktails, hors d’oeuvres, live music and casino games on Thursday, October 12, 2023 at Club 57 in Port Jefferson, NY.
The 1957 Club is a third-party non-profit organization that provides name, image, and likeness (NIL) opportunities to Stony Brook University student-athletes while helping promote charitable organizations located within the Stony Brook community.
Posted: August 25th, 2023
Kathleen DiLieto, CPA, is controller at the law firm Campolo, Middleton & McCormick, LLP (CMM). DiLieto directs all functions of the accounting department at CMM and has worked to build a strong team and collaborative, productive work environment. Her public and private sector experience enables her to analyze issues from all critical angles and work with firm leadership to effectively plan for the future.
DiLieto is responsible for all accounting matters for the firm, which has offices in Westbury, Ronkonkoma and Riverhead, including financial reporting, budgeting and forecasting, general accounting, cash and treasury management, internal control assessments, accounts receivable and accounts payable.
DiLieto has more than 20 years of accounting experience in both public accounting and private industry. She began her career at a public accounting firm focusing on audits, business consulting and tax preparation services before moving to in-house accounting roles in various industries including healthcare, manufacturing and construction.
Campolo, Middleton & McCormick, LLP is a premier law firm with offices across Long Island. Recently recognized as one of America’s Top Corporate Law Firms by Forbes, CMM is among the firm of choice for clients with respect to their most significant business transactions, challenging legal issues and critical disputes.
View the full Who’s Who book here.
Posted: August 3rd, 2023
Tags: corporate
UPDATE: On December 23, 2023, Governor Hochul signed Legislation S.995B/A.3484, which creates an LLC beneficial ownership database that can be accessed by Federal, State and local government law enforcement across New York State. Individuals who set up, or already have ownership of LLCs and meet the requirements for disclosure, will be required to identify the names of the beneficial owner(s) in the filing.
Owners of New York limited liability companies, or LLCs, have long enjoyed anonymity when it comes to the ownership of their company. Currently, LLC owners are under no obligation to disclose their personal identity to the public. However, last month, the New York State Senate and Assembly passed the LLC Transparency Act, a bill that would require LLC owners to disclose their full legal name to New York State, which would then be made available through a public database. As it stands, the bill is headed towards Governor Kathy Hochul’s desk.
As an owner of an LLC, there are a few questions to keep in mind:
What would the law require?
Under the proposed law, New York State would require LLC owners to disclose three pieces of information: (1) the LLC owner’s full legal name, (2) the name of the LLC, and (3) the address of the LLC. If an LLC owner fails to make such ownership disclosures, they may face penalties.
How would this law be enforced?
If an LLC owner fails to file the ownership disclosure for a period exceeding 30 days, the LLC will be shown to be “past due” on the records of the New York State Department of State. The LLC would have its past due status removed upon filing the ownership disclosure. This may hinder the LLC’s ability to participate in transactions such as obtaining a loan or selling assets.
If an LLC owner fails to file the ownership disclosure for a period exceeding two years, the Department of State will mail a notice of delinquency to the last known business address of the LLC. If the LLC fails to file the ownership disclosure within 60 days of receiving the notice of delinquency, the LLC will be shown to be delinquent on the records of the Department of State. An LLC may remove the delinquency status only upon filing an ownership disclosure and paying a civil penalty of $250.
Are there any exceptions to the proposed law?
The only possible exception is through a waiver. Waivers exist to protect companies with significant privacy interests. The bill provides that significant privacy interests include, but are not limited to, an LLC owner that is a whistleblower, using an LLC for the very specific purpose of filing false claims act lawsuits, or an owner participating in an address confidentiality program. Address confidentiality programs are available to victims of kidnapping, as well as reproductive healthcare service providers, employees, volunteers, patients, or immediate family members of reproductive healthcare service providers. If neither of those circumstances apply, LLC owners would need to demonstrate that their company similarly has a significant privacy interest and should therefore not be required to make such disclosures.
When would this bill go into effect?
If signed by Governor Hochul, the bill would be effective 365 days after becoming law.
The Takeaway
While the LLC Transparency Act has not yet become law, LLC owners should begin planning for the possibility of such disclosure requirements. Mainly, LLC owners should consider whether their company has a significant privacy interest. Please contact our corporate attorneys with any questions.
Thank you to Michael Nadeau for his research and writing assistance.
Posted: July 28th, 2023
Tags: labor & employment
As CMM’s legal blog has previously explored, last fall the U.S. Department of Labor proposed an independent contractor rule under the Fair Labor Standards Act (“FLSA”), which would undo the current rule put in place by the Trump administration in 2021 (the “Proposed Rule”). After conducting a notice and comment period, the Department of Labor is currently finalizing the Proposed Rule. What does this mean for your business? Read on for what employers need to know about the new rule.
1. What is the current test to determine what constitutes an independent contractor under the FLSA?
The distinction between independent contractors and employees is important because under the FLSA, employees are entitled to minimum wage, overtime pay, and other benefits, while independent contractors are not.[1]
Under the current rule, there is a five-factor test for determining whether an individual is an independent contractor or employee. The test evaluates:
This test considers the first two factors to be the most important, while the remaining three factors are considered less important. In other words, if an individual exercises substantial control over the work, or has a substantial opportunity for profit, or risk of loss, the individual will likely be classified as an independent contractor, without considering the other factors. This is significant because the current test makes it easier for employers to classify workers as independent contractors.
2. What is the test to determine what constitutes an independent contractor under the Department of Labor’s Proposed Rule?
According to the Proposed Rule, the test for determining whether an individual is an independent contractor or employee would consist of six factors. Unlike the current rule, rather than any factor(s) weighing more than the others, the Proposed Rule looks at the totality of the circumstances. This test evaluates:
Most notably, the Proposed Rule adds an additional factor which considers the amount of the worker’s investment in facilities, equipment, or helpers, the lack of which makes it is more likely to be considered an employee. As a result, this new test would make it more difficult for workers to be classified as independent contractors. For example, even if an individual exercises substantial control over the work, or has a substantial opportunity for profit, or risk of loss, the individual may still be considered an employee, depending on the other four factors.
3. The Takeaway
Although the Proposed Rule may be subject to change prior to a final decision, business owners should remain aware of the new distinctions to avoid investigations by the Department of Labor should their independent contractors be reclassified as employees. Business owners should conduct an annual internal audit to make sure that all workers are properly classified. Please note that New York State law may have more stringent tests than the test proposed by U.S. Department of Labor.
Please contact our office to discuss your specific business situation.
Thank you to Michael Nadeau for his research and writing assistance.
[1] Allen Smith, DOL Will Issue New Independent-Contractor Proposed Rule, SHRM, June 6, 2022, https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/dol-will-issue-new-independent-contractor-proposed-rule.aspx.
Posted: July 24th, 2023
Based on an often misunderstood and overlooked legal concept, a Hamptons real estate firm was recently ordered to pay both back pay and $200,000 in punitive damages for its retaliation against a former “at-will” agent who complained about racial discrimination and was thereafter terminated. (See, https://www.eeoc.gov/facts-about-retaliation).
Notably, the award was not related to any discrimination or harassment itself, but the termination effectuated two weeks after the claimant complained that she was not provided with the same mentoring as her non-minority counterparts. Simply, retaliation does not require direct discrimination or harassment, but is equally important for employers to understand.
State and federal law protects employees who engage in “protected activities” such as 1) filing or being a witness in an EEOC (Equal Employment Opportunity Commission) or NYSDHR (NYS Division of Human Rights) charge, complaint, investigation, or civil lawsuit; 2) communicating with a supervisor or manager about employment discrimination, including harassment; 3) answering questions during an investigation of alleged harassment; 4) refusing to follow orders that would result in discrimination; 5) resisting sexual advances, or intervening to protect others; 6) requesting accommodation of a disability or for a religious practice; or 7) asking managers or co-workers about salary information to uncover potentially discriminatory wages. Any “retaliatory action” taken, if causally connected to the protected activity, exposes the employer to a claim. Such an action could include: 1) denial of promotion; 2) non-selection/refusal to hire; 3) denial of job benefits; 4) demotion; 5) suspension; 6) discharge; 7) threats; 8) reprimands; 9) negative evaluations; 10) harassment; or 11) other adverse treatment that is likely to deter reasonable people from pursuing their rights.
Uninformed employers often believe they are free to terminate an “at-will” employee for any non-discriminatory reason, sometimes exposing themselves to a retaliation claim. Instead, employers should implement policies specific to preventing retaliation, and take all necessary steps to address the “protected activities” and protected complaints of workers.
Businesses encounter many challenges related to employment matters. Our attorneys can provide expert guidance on the most current employment policies and insights for business owners to be well-informed. Contact our attorneys for guidance today.
Posted: July 11th, 2023
Posted: July 10th, 2023
Tags: corporate
On May 5, 2023, New York Attorney General Letitia James released proposed legislation entitled the Crypto Regulation, Protection, Transparency, and Oversight Act (“CRPTO Act”) that seeks to eliminate conflicts of interest, increase transparency, and bolster protections for cryptocurrency investors in New York State. Essentially, businesses involved in cryptocurrency from or within New York would no longer be permitted to simultaneously act in separate roles such as issuers, brokers, and investment advisors. If taken up by the state legislature and enacted, it would expand New York’s surveillance of cryptocurrency enterprises conducting business within the state. The CRPTO Act would significantly change the way digital asset businesses operate from or within New York.
Under the CRPTO Act, a “digital asset” is defined broadly as any “type of digital unit, whether labeled as a cryptocurrency, coin, token, virtual currency, or otherwise, that can be used as a medium of exchange, a form of digitally stored value, or a unit of account.”[1] Therefore, businesses that utilize or engage with digital assets would be subject to the new restrictions. Most notably, the CRPTO Act would prevent:
To increase transparency, cryptocurrency platforms would be required to undergo mandatory independent auditing, publish audited financial statements, and provide investors with information regarding issuers of digital assets, including but not limited to risks and conflicts of interest. Cryptocurrency influencers and promoters would also be mandated to register and report their interest in any issuer whose cryptocurrency assets they promote. Similarly, it would be against the law to induce the sale of digital assets, which often occurs in connection with fraudulent financial schemes, such as “pump and dump” schemes.[3]
Additionally, the CRPTO Act aims to protect investors by requiring cryptocurrency platforms to reimburse their customers who become victims of unauthorized transfers or transfers due to fraud. When a customer opens an account with any cryptocurrency platform, the platform would be required to furnish the customer with a disclosure outlining the customer’s liability for any potential unauthorized transfer of digital assets. Moreover, every digital issuer, broker, marketplace, and investment advisor must create, implement, and maintain an effective cybersecurity program that satisfies requirements of applicable state and federal data privacy and cybersecurity laws.
If the CRPTO Act is passed and signed into law, the bill would permit the Attorney General to enforce the law by issuing subpoenas, imposing civil penalties of $10,000 per violation per person or $100,000 per violation per firm, collect restitution and damages, and shut down businesses that participate in fraud. Additionally, the New York Division of Financial Services would have authority to oversee the licensing of digital assets and license digital asset brokers, marketplaces, investment advisors and issuers before they are allowed to conduct business within New York.[4] Unlike the New York “BitLicense,” which permits New York businesses to apply for a license to engage in virtual currency activity, such as the transmission of money, the CRPTO Act would be applicable to all virtual currencies, other coins, tokens, and digital assets simply by operation of law.
The CRPTO Act will be submitted to the New York State Senate and Assembly during the 2023 legislative session. We will continue to monitor the legislation. If you have any questions, please speak with one of our attorneys.
Thank you to Keith O’Brien for his research and writing assistance.
[1] https://ag.ny.gov/press-release/2023/attorney-general-james-proposes-nation-leading-regulations-cryptocurrency
[2] See note 1.
[3] A “pump and dump” scheme involves fraudsters spreading false or misleading information to create a buying frenzy that will “pump” up the price of a stock, and then the fraudsters will “dump” the shares by selling their own shares at that inflated price.
[4] See https://spectrumlocalnews.com/nys/central-ny/politics/2023/05/05/ag-james-pushes-bill-to-create-cryptocurrency-regulations
Posted: July 6th, 2023
Event Date: October 25th, 2023
Save the date for CMM Cares Charity Masquerade Ball. The event will take place on October 25 at Flowerfield in St. James, NY. Mark your calendars and stay tuned for further details, as an unforgettable night awaits!
Posted: July 5th, 2023
Tags: labor & employment
New York City has joined a growing number of cities to ban discrimination based on height and weight.[1] In early May, the NYC Council passed Intro 209-A[2] (the “Bill”) in an effort to ban discrimination based on height and weight in employment, housing, and public accommodations. On May 26, 2023, Mayor Eric Adams signed the Bill into law, which will amend Section 8-101 of NYC’s Human Rights Law, adding height and weight to the list of characteristics the city has already protected against discrimination. The law will go into effect on November 22, 2023.
In the employment realm, the law bars employers from discriminating based on height or weight by (i) misrepresenting the availability of an employment opportunity, (ii) refusing to hire or employ an applicant, (iii) discharging a person, or (iv) discriminating against a person in compensation or in terms, conditions, or privileges of employment. Additionally, an employer may not circulate any application for employment which expresses any limitation based on height or weight, among other things.[3]
The law does carve out exceptions. Employers may consider the height or weight of an applicant when:[4]
Furthermore, even when no exception applies, an employer may still assert an affirmative defense that:[5]
With the law’s effective date rapidly approaching, NYC employers should revisit their anti-discrimination policies, as well as train their hiring teams on compliance with the new law. Please contact us with any questions you may have.
Thank you to Keith O’Brien for his writing and research assistance.
[1] Other cities include Binghamton, San Francisco and Washington D.C. Legislation to ban weight and height discrimination have also been introduced in states including New Jersey and Massachusetts.
[2] https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=5570369&GUID=DF289A07-73A5-4AFE-8932-7EA5D1FA6577&Options=&Search=
[3] Other things include age, race, national origin status, marital status, gender, etc. See note 2.
[4] See note 2.
[5] See note 2.
