LeBeau Thelen, LLP

Remote employers: Are you compliant across states?

2026-05-06T08:49:57Z

Remote work is here to stay — and so are the compliance headaches that come with employees living or working outside California. Wage laws, payroll taxes, leave mandates and employee classification may differ significantly by state and locality. Overlooking these nuances can be costly. Here is what business owners should keep in mind:

1. Wage and hour laws

If a remote employee moves to another location, the governing laws often depend on where the employee is physically situated and how the specific statutes are written. In some cases, employers may need to follow both California law and the laws of the employee’s new state. These rules can dictate overtime, meal and rest breaks and minimum wage requirements. Getting it wrong may result in wage claims, penalties and enforcement actions. Reviewing the relevant mandates and keeping clear records can help reduce that risk.

2. Payroll taxes and withholding

When employees live in another state, payroll tax obligations can change quickly. You may need to register with local tax and unemployment agencies, set up withholding for state income taxes (if applicable) and comply with employment insurance requirements. Missing these steps can lead to penalties and interest. For example, failing to withhold the correct income tax could trigger audits or fines within the employee's home state.

3. Leave and time-off policies

Jurisdictional laws on family, medical and sick leave vary widely. While California leave laws generally still apply, remote employees may also accrue additional rights where they live. Implementing clear policies based on location can help avoid the likelihood of unintended labor code violations.

4. Employee classification

Misclassifying employees as independent contractors can create liability. Ignoring differences in state rules can also cause problems, including unpaid wages and potential penalties. Even if the employee works remotely for a California business, their local classification laws may affect benefits, taxes and worker protections.

Protecting your business while supporting remote employees

Remote workers offer flexibility, but also add complexity. You can protect your business by auditing where employees actually work and confirming all applicable requirements. Update payroll systems for accurate tax withholding and review leave, overtime and classification policies. Keep employees informed about how rules apply to their specific location, and consult official HR guidance or state labor department resources early. Taking these steps can help California employers support a distributed workforce while minimizing compliance risks.

3 ways to prepare for a partnership buyout discussion

2025-04-28T20:49:09Z

People frequently begin business partnerships expecting them to last indefinitely. One partner may expect to continue working with the other until they retire, die or sell the business. However, those expectations may not necessarily be realistic. Partners may eventually start thinking about other opportunities. They may experience a change in their relationship with each other that makes their shared business less rewarding. Some partners choose to dissolve the company that they started together to move on with their lives. Other times, one partner proposes a buyout in which they purchase the other's interest in the company. A partner contemplating a buyout likely needs to plan carefully to optimize their chances of success when negotiating with their partner.

Reviewing the original agreement

The documents created when forming the business can play a major role in the buyout. The partners may have already set certain expectations for buyouts including how much advance notice is necessary and what investments each partner deserves to recoup in a buyout scenario. Looking at the original partnership agreement and the business formation paperwork is an important step when deciding how to approach a buyout proposal.

Conducting a thorough financial review

Business formation documents and partnership agreements aren't the only records a partner has to review before a buyout. They also need to look carefully at recent company financial records. They need accurate information to establish a realistic company valuation. They may also need operational and financial details to convince their partner that the buyout offer is appropriate. In some cases, a review of financial records can provide proof of misconduct or professional failures on the part of a partner that may help push them into accepting a buyout offer.

Making a reasonable but flexible initial offer

Especially if there have not been discussions of buyout previously, the partner proposing the transaction needs to be patient. They may need to give their partner time to consider the offer. Giving a partner an opportunity to review the offer and the financial records of the company used to justify that offer can be helpful. Partners may need to negotiate directly or may even need to attend mediation if they hope to settle their disagreements about what terms are fair given the investments each party has made in the shared business. Preparing fastidiously can decrease the likelihood of major disputes and operational disruptions when proposing a partnership buyout. Partners who make reasonable offers based on current financial circumstances may have a better chance of succeeding, especially if they remain cooperative and flexible as they negotiate terms with a partner.

Data breaches and good business practices

2025-06-10T04:53:01Z

Business owners today have to protect their customers’ data from online security threats. Data breaches are devastating lapses that can tank a company’s carefully curated reputation. Learn more below about how to respond to and prevent data breaches.

Impact of data breaches

Cyber vulnerabilities are readily exploited by criminals who can be located thousands of miles across oceans, making it even more challenging to hold the bad actors accountable for the damage they cause to customers and businesses alike. A company that experiences a data breach faces consequences to their bottom line, their company’s reputation and the operation itself. The costs of plugging the holes after the breach can far exceed the costs of preventative measures.

After a breach, transparency matters

It’s a bad day when any company has to announce to their shareholders and clients that their systems have been breached and sensitive data has been stolen. But transparency is what is most needed at those times to reassure investors and customers that the business is doing what is necessary to repair the damage.

Companies have responsibility to safeguard data

While there are no 100% unbreachable systems, there should be a series of checks and balances that safeguard data from the prying eyes of those who seek to exploit it. Risk mitigation could also include purchasing cyber liability insurance coverage that will kick in if customer data is ever breached by cyber criminals.

Seek guidance after a cyber attack

In the aftermath of a cyber-attack on your company’s databases, there is a sense of urgency directing your response. But it should be well-planned and carefully orchestrated so it will resonate with those most affected by the breach — your clientele.

Taking steps to safeguard your company’s intellectual property

2025-04-28T20:48:09Z

Protecting your company’s intellectual property (IP) is important when it comes to preserving your competitive edge, reputation and long-term success. Whether you’re running a startup or an established business, taking basic steps now can prevent serious problems down the road. Intellectual property includes everything from your logo and brand name to trade secrets, software, inventions and creative works. Without proper safeguards, others may misuse your IP—or worse, claim it as their own.

Crafting a thoughtful, focused plan of action

The first step in protecting your IP is identifying what you have. Make a list of the unique assets your business owns that contribute to its value. This may include product designs, marketing materials, proprietary formulas, software code, customer databases and business methods. Once you have a clear picture of your IP, you can start determining how best to protect each asset. Trademarks can help with brand protection. Registering your business name, logo and product names with the U.S. Patent and Trademark Office (USPTO) helps to ensure that others cannot legally use similar marks in your industry. This reduces the risk of customer confusion and protects your brand’s reputation. Copyrights protect original works of authorship, such as written materials, software and marketing content. While copyright protection is automatic upon creation, registering your work with the U.S. Copyright Office provides legal advantages, including the ability to enforce your rights in court. Patents protect inventions and unique processes. If your business develops new technology or products, talk to a lawyer early in the development process to determine whether a patent is appropriate. Trade secrets, such as formulas, strategies or client lists, must be actively protected to remain confidential. Use nondisclosure agreements (NDAs) with employees, contractors and business partners to better ensure that sensitive information remains private. Limit access to proprietary information and implement internal controls to reduce the risk of leaks or theft. Finally, make IP protection part of your business culture. Train employees on what constitutes intellectual property and how to handle it properly. Regularly review your protection strategies to keep up with changes in your business and in the law.

How should you respond to workplace accommodation requests?

2025-04-28T20:47:25Z

Employers with five or more employees in California are legally obligated to provide reasonable workplace accommodations for employees with qualifying disabilities and medical conditions. It means making the necessary adjustments to the work environment or job duties to ensure employees can effectively perform essential job functions despite their physical or mental impairments. Common examples of workplace accommodations include:

Modifying work schedules to accommodate medical appointments and manage fatigue
Making physical adjustments to the workplace like providing ergonomic equipment or assistive technology
Reassigning job duties to lighter tasks

As an employer, understanding how to handle an employee’s request for reasonable workplace accommodation is crucial to avoiding legal complications and protecting your business interests. Here is what you should do.

Initiate an interactive process

Once an employee requests reasonable workplace accommodation, California law requires employers to initiate a timely, good-faith interactive process to determine viable accommodations. Engage in a collaborative conversation with the employee to understand the nature of their disability, how it affects their ability to perform key work duties and the different accommodation options that could meet their needs. You may request supporting evidence if you have doubts about the employee’s condition.

Evaluate feasibility

Assess whether the proposed accommodation is reasonable or practical. If this is the case, implement it as soon as possible and monitor its effectiveness in meeting the employee’s needs. You are not legally obligated to provide workplace accommodations that would cause undue hardship to your business, like significant difficulty or expenses.

Document everything

Remember to maintain detailed records of all related communication, discussions, accommodations offered and decisions made. Proper documentation can prove handy should disputes arise down the road. Seeking qualified guidance can help you understand your rights and obligations when responding to workplace accommodation requests and ensure legal compliance.

What is the CROWN Act in California?

2025-04-28T20:46:46Z

Employees in California have several protections while they’re working. Some of these have to do with dress codes, discrimination and how those interact in the workplace. In 2019, California passed the Creating a Respectful and Open World for Natural Hair Act, which is known as the CROWN Act.

While some people think that hair is nothing more than a personal preference, it has great significance in some cultures. Additionally, there are some hair types that need to be put in a protective style so the hair can remain as healthy as possible.

How does the CROWN Act help California employees?

The CROWN Act makes it illegal for employers to discriminate against workers because of their hairstyle. It also prevents them from being able to create dress code restrictions against hairstyles, such as locs, twists, afros, or braids. Employers can’t forbid those hairstyles or others with cultural significance if they will disproportionately affect employees within a specific demographic.

By passing this act, California put an emphasis on employers being more inclusive for employees. Those employees no longer have to choose between keeping their job and their identity. Instead, they can work without having to worry that they’re going to face disciplinary action.

The CROWN Act sets specific penalties for employers who try to bypass the regulations set in the act. Employees whose rights are violated have the option of taking legal action. This must be done swiftly, so it behooves them to have someone on their side who’s familiar with these matters.

Meal break law requirements for California employers

2025-04-28T20:46:09Z

Employers must always ensure they’re in compliance with all applicable wage and hour laws. For those in California, doing this can be rather complicated because this state has protections for employees that other states don’t have. In this state, employers are required to provide employees with meal breaks if the employee’s shift meets specific requirements. Understanding these is critical, so the company doesn’t face legal claims by the employee or compliance penalties from the state.

What are the meal break requirements?

Meal breaks are unpaid as long as the employee is completely relieved of all work duties. If the employee has any work duties to perform, including things like watching for customers or answering the phone, the meal period must be paid. The break must be at least 30 minutes during which the employee isn’t under the employer’s control. They should be free to leave the premises. A meal break is required if the employee works five hours in a shift, but they can waive the meal break if they work up to six hours. If the employee’s shift is over 10 hours, they must have a second 30-minute meal break, but they can waive one of those two meal breaks if they work less than 12 hours. All employee meal break policies must be clearly established to ensure compliance. Any employer who receives a complaint from an employee about this should investigate the matter. Any non-compliance should be addressed swiftly. If an employee takes legal action, it behooves employers to have someone on their side who can assist with defending the company.

3 potential reasons for business partner disputes

2025-04-28T20:45:29Z

Business partnerships don’t always go smoothly. Serious disputes can arise. In some cases, these can even cause the business partnership to fall apart, and one partner may leave or they may need to dissolve the company. It can be helpful to understand why these disputes happen and what steps you can take. Below are a few examples.

1. Differing goals and priorities

First of all, business partners will sometimes have different priorities or goals for what they want the company to be. They may be working with a different vision in mind, or they may have different levels of commitment regarding how much time and effort they put into the business in the first place.

2. Financial issues

Financial inequality and similar issues can also cause strife. For instance, one business partner may take more of the earnings than the other. Even if earnings are split evenly, if one partner feels that they’re doing the bulk of the work, they may not think the division is truly fair.

3. Conflicts over roles and responsibilities

Finally, many partners run into trouble when they both want to take on the same roles or make decisions. Partnerships work best when people have complementary skills and clearly defined roles so they know what they bring to the company. But if two partners keep stepping on each other’s toes or making decisions on the other person’s behalf, it can lead to serious conflicts. It is possible to resolve disputes in partnerships, but it can be a complex process. Those involved need to know exactly what legal steps to take and what rights they have.

Can the state purchase commercial real estate via eminent domain?

2025-04-28T20:44:15Z

Businesses may invest in real estate as a means of diversifying their portfolios or controlling operational costs. Some companies acquire vacant parcels or unoccupied residential properties with the intent to sell them later for a higher price. Other times, companies rent properties out to others to generate revenue. Many businesses also acquire real property for their business operations. After a business acquires real property, the expectation is that the business has control over those holdings until leadership decides to sell those assets. Do businesses have to worry about the state interfering in their property rights by making an eminent domain claim against commercial real estate?

Any real property is subject to eminent domain claims

The unfortunate reality for businesses that have invested in real estate or acquired their own facilities is that no type of property is automatically exempt from eminent domain rules. When the state wants to acquire private property for a project intended for the public good, the entity overseeing the project can make offers to acquire any real estate parcels necessary for the completion of the project. Typically, property owners have a right to receive fair compensation for the property. If they refuse to sell, then the state may begin condemnation proceedings to force the sale of the property. There are several ways for businesses to respond to eminent domain purchase offers. Businesses might start gathering evidence that a project is not truly for public benefit. They might also work with professionals to establish that the amount offered for the transaction is inappropriately low. Learning about eminent domain laws can help business owners and executives respond effectively to a pending purchase offer. Commercial property and investment properties are theoretically vulnerable to eminent domain claims, but there are ways that they can potentially fight back.

What is clopening in California?

2025-04-28T20:43:00Z

Some employees have shift-based schedules that change often. There are certain scenarios that can make life and work very difficult for the employees. One of these occurs when an employee has to work a closing shift one night and then an opening shift the next day. This is known as clopening. This practice is common for people who work in hospitality, food service and retail. Clopening shifts aren’t outright forbidden in California, but they are restricted in some areas.

Local laws apply

Certain municipalities in California allow employees to decline clopening shifts if they meet specific requirements. For example, Berkeley and Emeryville employees can decline these shifts if there aren’t at least 11 hours between the closing shift and the opening shift. The time between shifts must be at least 10 hours for Los Angeles employees. In some cases, such as in Emeryville, there are minimum employee requirements. A company must have 56 or more employees in that municipality. Another requirement for some locations is premium pay. In Los Angeles and Berkeley, employees are entitled to 1.5 times their standard pay for the second shift in this situation. The pay increases even more if the employee is due overtime pay for that shift. All employers in the state should ensure they understand their employee’s rights and what pay they’re due for these situations. Employees may seek legal action if they feel the employer didn’t uphold those rights and pay requirements. California employers should ensure they have someone on their side who can help them to ensure they’re within compliance of all applicable laws.