Miscellaneous

We get most of our new clients from people who visit one of our websites. For example, this Arizona LLC law website is the reason we have formed 9,000+ Arizona LLCs. I’ve invested thousands of hours into creating content on my sites and the investment has paid off.

We all know that a good website can generate business. Most business people, however, are unaware that another great source of business is Youtube. Youtube is owned by Google. Google may be the most visited website, but Youtube is the second most visited website.  Youtube can also be a great source of business.

Proposition 206, the Fair Wages and Healthy Families Act (the “Act”), was a ballot initiative approved by Arizona voters on November 8, 2016. The Act established a new Arizona state minimum wage effective January 1, 2017, and entitles employees to accrue earned paid sick time.  Effective July 1, 2017, employers of Arizona employees must accrue and provide paid sick leave for all employees except exempt employees.  Earned paid sick time is sick time accrued by an employee that is compensated at the same hourly rate and with the same benefits, including health care benefits, as the employee normally earns during hours worked.

Employees can begin accruing earned paid sick time at the commencement of employment or July 1, 2017, whichever is later. Employees may use earned paid sick time for themselves or for family members (see Arizona Revised Statutes § 23-373 to see who qualifies as a family member) in the following circumstances:

• Medical care or mental or physical illness, injury, or health condition;
• A public health emergency; (see Arizona Revised Statutes § 23-373 for more information about what qualifies as a public health emergency) ; and
• Absence due to domestic violence, sexual violence, abuse, or stalking.

An employee who earns sick time is every person who performs work for compensation, whether full-time, part-time, or on a temporary basis, as an employee. For purposes of determining the number of employees, an employer has 15 or more employees if it maintained 15 or more employees on the payroll for some portion of a day in each of 20 different calendar weeks (the weeks do not have to be consecutive) in the current or preceding year.

Earned paid sick time shall be carried over to the following year, subject to usage limitations based on employer size. Alternatively, in lieu of carry over, an employer may pay an employee for unused earned paid sick time pursuant to Arizona Revised Statutes Section § 23-372(D)(4).  An employee of an employer with 15 or more employees may carry over to the following year a maximum of 40 hours of unused earned paid sick time. An employee of an employer with fewer than 15 employees may carry over to the following year a maximum of 24 hours of unused earned paid sick time.

Employers Must Give Employees Notices of Accrued Sick Time

Employers must give employees written notice of the following at the commencement of employment or by July 1, 2017, whichever is later:

• Employees are entitled to earned paid sick time;
• The amount of earned paid sick time that employees are entitled to accrue;
• The terms of use guaranteed by Arizona’s earned paid sick time laws;
• That retaliation against employees who request or use earned paid sick time is prohibited;
• That each employee has the right to file a complaint if earned paid sick time is denied by the employer or the employee is subjected to retaliation for requesting or taking earned paid sick time; and
• Contact information for the Industrial Commission.

See the Industrial Commission’s 2017 model earned paid sick time employee notice.

Employer’s Record-keeping Requirements

An employer must also provide employees either in or on an attachment to the employee’s paycheck:

• The amount of earned paid sick time available to the employee;
• The amount of earned paid sick time taken by the employee to date in the year; and
• The amount of pay time the employee has received as earned paid sick time.

An employee may use earned paid sick time as soon as it is accrued. However, an employer may require an employee hired after July 1, 2017, to wait 90 calendar days after the start of employment before using accrued earned paid sick time.

Employers’ Recommended Reading Assignment

If you or your company is an employer that employees people who are covered by the Act then the employer must comply with the Act.  All employers should read one of the following:

• the Arizona Industrial Commission’s pdf version of frequently asked questions about the Act.
• the Arizona Industrial Commission’s online FAQ

Posters Employers Must Post for Employees

Arizona law requires employers to post SIX notices, or “posters,” and each notice must be posted in a conspicuous place where employees will see it.  Go to the Industrial Commission’s required notices page to see the list of required notices and download each notice.

If you own real property in Arizona do not fall for the “you need to get a copy of your deed” rip off.  Companies send real property owners official looking letters that contain language intended to convince the reader that it is important to have a copy of their deed.  One of the letters says:

“The U.S. Government Federal Citizen Information Center website recommends that property owners should have an official or certified copy of their deed. If you don’t already have this important document, you may obtain one now. This document provides evidence that your property was transferred to you.”

Each letter offers to send you a copy of your deed for a price 2 – 5 times the cost of purchasing the deed directly from the county recorder.

If you get one of these letters throw it in the trash.  If you own real estate you would have gotten the original deed when you acquired the real estate.  If you need a copy of your deed you can get a copy at no cost from the county recorder’s website or from the county recorder’s office for a nominal fee if the county does not have its documents available on the internet.  To get a copy of a deed from the Maricopa County Recorder, go to the recorder’s excellent website.

Three companies that send out these letters are:

• First Documents
• Local Records Office
• National Record Service Inc.

Because my firm, KEYTLaw, LLC, is the statutory agent for 2,000+ Arizona LLCs and we form a lot of LLCs (448 in 2016) we get a lot of mail addressed to our LLC clients.  We get a lot of letters addressed to our LLC clients from Personnel Concepts.

If you get a letter from Personnel Concepts, throw it in the trash.  The letter looks like an official government letter because the sender wants to fool you into buying a labor poster your company doesn’t need.

A bona fide business poster company says this about these types of letters:

“All in One Poster Company, Inc would like to warn its customers as well as other small business owners to avoid mass mailer scams informing them that their labor law posters are outdated while pressuring them to purchase an overpriced product for their employee and business.  These mailers are false, misleading, deceptive and even threatening. . . . Even when posting is required, the individual notices are provided at no charge by the U.S. Department of Labor as well as various agencies within your state’s labor department.

See the 178 reviews on Yelp giving this company one star out of five stars and the 20 Facebook reviews that give the company 1.4 stars out of five stars.

Here’s the Personnel Concepts envelope.

What follows below is the actual text of the very official looking letter.

On November 8, 2016, Arizona voters approved Proposition 206, the Minimum Wage and Paid Sick Time Off Initiative, by a 59% to 41% margin.  Effective January 1, 2017, the Arizona minimum wage increases to $10.00 per hour.  The minimum hourly wage increases to $10.50 on January 1, 2018, $11 on January 1, 2019, and $12 on January 1, 2020.  Beginning January 1, 2021, and every January 1 thereafter the minimum hourly wage will increase by the increase in the cost of living increase per the U.S. consumer price index.

The paid sick time component is effective July 1, 2017. The new law includes the following sick time provisions:

• For every 30 hours worked the employee accrues one hour of sick time.

• If an employer employs 15 or more employees the employer may cap maximum annual accrual of paid sick time at 40 hours.

• If an employer employs less than 15 employees the employer may cap maximum annual accrual of paid sick time at 24 hours.  Note:  This means that an employer that has ONE employee is subject to this sick leave accrual law.

• An employee that is exempt under the Fair Labor Standards Act of 1938 is deemed to work 40 hours per week when calculating paid sick time accrual unless the employee’s normal work week is less than 40 hours.  When an exempt employee works a less than 40 hours the employee’s accrued sick time is based on the actual hours worked.

• If an employee does not use sick time accrued during a year the unused amount will be carried forward to the next year unless the employer adopts a procedure that eliminates the carry forward.

• New employees are subject to a 90-day probationary period that provides the employee is not entitled to any compensation for accrued and unused sick time during the probationary period if the employee is fired before the expiration of the 90 day period.

Today my son Richard C. Keyt and I finished teaching a class on Arizona LLC law to second and third year law students at Arizona Summit School of Law.  It’s the fourth year I’ve taught the class and Ricky’s third year.  I always get charged up by interacting with young people who will soon graduate and become lawyers in this new era of the practice of law dominated by technology.

The Arizona legislature passed Senate Bill 1238, in April of 2013.  Governor Brewer signed the bill on April 30, 2013.  SB 1238 provides for the creation of a new type of Arizona corporation called the “benefit corporation” beginning January 1, 2015.  As of the date of this post, 27 states have adopted benefit corporation statutes.

The benefit corporation is not a type of nonprofit corporation. An Arizona benefit corporation is a type of for profit corporation that seeks higher standards of corporate purpose, accountability, and transparency.  The Articles of Incorporation on an Arizona benefit corporation must state that the corporation is formed for a general public benefit.

An Arizona benefit corporation may also promote one or more “specific public benefits.”  Arizona Revised Statutes Section 10-2402.5 provides that “specific public benefits” include:

(a) Providing low-income or underserved individuals or communities with beneficial products or services.

(b) Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business.

(c) Protecting or restoring the environment.

(d) Improving human health.

(e) Promoting the arts, sciences or advancement of knowledge.

(f) Increasing the flow of capital to entities with a purpose to benefit society or the environment.

(g) Conferring any other particular benefit on society or the environment as specified in the benefit corporation’s articles of incorporation.

I want to thank California attorney Mark G. Lerner of the Lerner & McDonald law firm in Santa Ana, California, for his recent very nice testimonial about my LLC formation services.  He said:

“As a California attorney, I have used Richard Keyt’s LLC formation services for many of my clients as well as myself over the past 7 years.  Richard and his staff do an excellent job of creating high quality documentation in a very efficient manner. I have always been quite satisfied with each time that I have used Richard Keyt to form an Arizona LLC. I would strongly recommend his LLC formation services to others as we.”

See the great testimonials many other happy LLC clients have given me.

Effective October 1, 2013, all businesses that  have $500,000 in annual revenue and one or more employees are required to give written notice to every employee about the Affordable Care Act’s health-care exchanges.  An employer who fails to give the required notice to all employees will be subject to a $100-per-day fine. This written notice requirement applies to any business regulated by the Fair Labor Standards Act.  After September 30, 2013, these employers must give the written notice to all new hires within 14 days of the date, according to the Department of Labor.

The U.S. Department of Labor issued a notice that states:

“A. Employers Subject to the Notice Requirement

In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies.⁽⁴⁾ The FLSA also specifically covers the following entities: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state and local government agencies.⁽⁵⁾

B. Providing Notice to Employees

Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.

C. Form and Content of the Notice

Pursuant to the statute, the notice to inform employees of coverage options must include information regarding the existence of a new Marketplace as well as contact information and description of the services provided by a Marketplace. The notice must also inform the employee that the employee may be eligible for a premium tax credit under section 36B of the Code if the employee purchases a qualified health plan through the Marketplace; and a statement informing the employee that if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

D. Timing and Delivery of Notice

Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the Department will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date.

With respect to employees who are current employees before October 1, 2013, employers are required to provide the notice not later than October 1, 2013. The notice is required to be provided automatically, free of charge.

The notice must be provided in writing in a manner calculated to be understood by the average employee. It may be provided by first-class mail. Alternatively, it may be provided electronically if the requirements of the Department of Labor’s electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are met.”

Today I will speak to a group of young military personnel who will soon leave the service and seek employment outside the military.  The U.S.Small Business Association’s Phoenix chapter of Service Corps of Retired Executives (SCORE) sponsors the two day workshop called “Operations Boots to Business from Service to Startup.”  I enjoy speaking to the young people and trading “war” stories from my five years flying the F-4 Phantom in the United States Air Force in another life.