8 – 8:30am            Breakfast and Networking
8:30 – 8:35am       Panelist Introductions
8:35 – 9:45am       Panelists Presentations
9:45 – 10:15am     Open Q&A Between Audience and Panelists
10:15 – 10:45am   Coffee and Networking

Panelists Include:

Joseph DeMarco – DeMarco Sciaccotta, LLP
Jacqueline Camacho-Ruiz – JJR Marketing
Me – Labor & Employment Law & Human Resources Counseling
Susan Smith – Sandler Training, Selloquent
Brian Marshall – Alliance For Strategic Advantage

This free forum will be held at 20 South Clark, Chicago, IL on the 14th floor. Please RSVP with Blanca Campos at blanca@sbacil.org, or at (847) 990-7909.

The fact is no one is really sure how, when or if this new Act will be enforced. And, there aren’t any interpretive regulations yet (there are proposed rules available in PDF format at this link; if the link is expired, then search Google). The law basically provides more narrow but explicit definitions of what an independent contractor is, and it only applies to the construction, trucking, landscaping and related trades.

For my client, a trucking company, it’s not a big deal because the independent contractor agreement that I drafted for them months ago is already compliant with the new law. In fact, as long as a business’ independent contractor agreement strictly complies with federal and most states’ laws regarding independent contractors, that business will probably already be compliant. It’s a good idea for any affected business to audit their independent contractor agreements for compliance with this law–better safe than sorry (it’s also cheaper!).

The Act is enforced by the Illinois Department of Labor, one of our state’s more bureaucratic organizations (or as a colleague once said: “They screw everybody equally.”). The basic intent of the law is to prevent construction, landscaping, trucking and similar businesses from “misclassifying employees” as “independent contractors” in order to avoid paying payroll taxes, overtime, workers comp, insurance, etc.

So long as a business maintains strict adherence to the usual independent contractor rules of lack of control over the contractor, which includes hours, equipment, methods of work, etc., that business will probably be in compliance. Also, keep in mind that because the law is new and hasn’t been tested, the Illinois Department of Labor might go easy on businesses that, even though they may have violated the law, are acting in good faith. However, be mindful that the Internal Revenue Service, the Illinois Department of Employment Security, the Illinois Department of Revenue, and other business taxing agencies, might not take a lenient approach.

In short, don’t mess around with employee misclassification in any industry. Generally, the costs to clean up mistakes always exceed the costs to avoid them in the first place.

My part of the panel discussion concerning legal, accounting and cultural considerations for international trade was a general overview and discussion of factors to consider for assessing the legal and cultural environments of countries, regions, provinces, etc.

Presentation Handout: Legal & Cultural Considerations for International Trade (PowerPoint)

Due Diligence (DD) is Key to Addressing Legal & Cultural Considerations

• No matter which resources you use, whether people or documents, verify credibility.

• Create an alliance or relationship with a trustworthy foreign based contact or contacts
  • Do due diligence on those contacts
    • Invest at least 1-3 hours of research on each contact
    • Research name, addresses, legal actions, property ownership, how many other people have that name in that nation, region, province, city, etc., talk to references and ask those references for additional references
    • Use Lexis/Nexis, Westlaw, ProQuest, Factiva, FirstSearch, ERIC, any other legal, news, property databases.

• If possible, meet contacts in person

• But, conducting DD doesn’t always mean hours spent researching & analyzing

• More specifically, if you have a trusted resource that makes recommendations for you, then that could = DD
  • Use the WTCs, chambers of commerce, government agency or private company resources, matchmakers, databases, etc.
  • Let others conduct the DD for you

• Do DD on contractors & subcontractors

Legal & Business Climate

• Must understand the differences in their legal system versus ours
  • Is it a common law nation?
  • Do they have a uniform code of commercial
  • Do they respect property rights/ownership?
    • Real property
    • Intellectual property
  • If you use overseas human resources/human capital then what laws apply to your treatment of them?
  • Does our system of business entity designation mean the same there as is does here?
    • I.e., is a corporation, partnership, trust, etc., treated the same there as here
  • Does the country, state, region or province honor/uphold/enforce contracts between individuals or businesses?
    • How are contracts or agreements honored, upheld, enforced or terminated?

Government Structure

• Must understand the differences in their government structure and bureaucracies
  • How long does it take to obtain the needed recognition or licensing to legally conduct business?
  • What agencies/bureaus license?
  • What licenses, certifications, etc. are required?
  • What are the fees? When are fees due?
  • What paperwork is required?
  • What are the penalties for mistakes, unethical or illegal conduct?
  • Are bribes necessary?

Protect Yourself in Writing-If Possible

• It’s impossible to document everything

• There’s no such thing as an impenetrable contract or agreement

• But, IF POSSIBLE you want to capture your intentions is as much detail as possible
  • And you want the other party to acknowledge your intentions in writing too–initialize, signature, notarized (increasingly becoming antiquated), signed agreements, side agreements, etc.

• IF POSSIBLE, include language for exiting or terminating the agreement or contract

• IF POSSIBLE means does that country, province, region, state, etc., treat oral agreements or contracts the same as written agreements; what takes priority?

END