Tuesday, July 17, 2012

Texas Employment Law Basics for Employers

Let's say you’ve started a business in Austin and it has now grown to the point where you need to employ someone other than yourself or your immediate family.  Congratulations!

But now you have to think like an “employer.”  That means you need to familiarize yourself with at least some basic employment law and human resource management principles.  In this blog, we’ll periodically post topics that can help guide you, but here are a few initial considerations:

Hiring – Employees or Independent Contractors?
Salary – Who is Eligible for Overtime Pay?
Job Applications – What Can I Ask, and What Should I Avoid?
Avoiding Illegal Workers
General Recordkeeping Requirements
Employee Discipline
Firing / Terminating Employees – Creating a Paper Trail
Avoiding a Discrimination Claim
Avoiding a Retaliation Claim
How to Handle an Unemployment Claim

Most employers have a pretty good handle on the day to day operation of their business once armed with basic information.  When in doubt, if something feels “wrong” on a gut level, it’s always a good idea to check with someone well-versed in employment law before taking any action which you may later regret.

ADA and the Online World

Excellent post on our friend Ryan Garcia's Social Media Law Blog (SoMeLaw Thoughts ) about the intersection of the Americans with Disabilities Act and online commercial websites.  In particular, there is a lawsuit by an organization (National Association of the Deaf) wanting the court to order Netflix to offer closed captioning for movies on their streaming site.  Excellent history of the regulations related to closed captioning is provided, and it is worth the read.  It is written by Curtis Edmonds, an attorney and writer from New Jersey well versed on the topic.

Thursday, July 5, 2012

Locating Lease Space for your Business in Texas: Things to Consider when searching for Commercial Lease Space

When searching for commercial lease space there many things to take into consideration such as, just to name a few, expenses, the lease term, parking and permitted uses and restrictions.

The total monthly cost of the lease is usually the primary concern for tenants and is determined by the type of lease you agree to.  There are two main types of leases – gross leases and triple net leases. Under a gross lease the tenant pays a set amount specified in the lease agreement while the landlord pays for all of the operating costs.  Under a triple net lease the tenant pays the set amount specified in the lease agreement plus its pro rata share of the operating expenses, which may include repair costs, insurance premiums, taxes, and utilities.  It is important for the tenant to determine up front what the anticipated expenses will be and understand that expenses could increase for various reasons such as maintenance issues or increases in taxes or utility rates.  There are also ‘hybrid’ leases that combine elements of the gross and triple net lease.

Many commercial leases will contain a personal guaranty, which means that the individuals signing the lease are also agreeing to be personally liable for all amounts due under the lease agreement.  Even though your business entity is the tenant, you will be personally responsible for the rent as well.  Some landlords may negotiate with prospective tenants if they can show a good rental history or are willing to put up collateral.

Most commercial lease space will need to be altered in some way to meet your needs, or in other words, the space will need to be “finished-out.”  The cost of finish-out may be paid by the landlord, may be the tenant’s sole responsibility, or the landlord may provide the tenant with a budget, and any extras will be charged to the tenant.  It is also important to determine whether the landlord requires that you use certain contractors for finish-out.

Other concerns will depend on the type of business you intend to operate.  Prospective tenants need to ensure there are no restrictions against operating their type of business, and they may want to ask the landlord for a restriction against other businesses similar to yours in the future to prevent competition from moving in next door.  You may need reserved parking or a sign; prospective tenants should determine in advance what they will need to operate their business and ensure the landlord will address these issues.

While commercial leases can be long and confusing, it is important to read and fully understand the lease agreement to ensure the space will meet your business needs and to prevent problems for years to come.

Prepared by Eric Rupe.  Edited by Sarah Berry, Attorney