© 2016 WARD AND SMITH, P.A.

E. Bradley EvansWard and Smith, P.A.P: 252.215.4025F: 252.215.4077E: ebe@wardandsmith.com

Agribusiness

THE FINE PRINT

Disclaimer: This is not legal "advice"

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Litigation/Litigation Avoidance

General overview of the litigation process Civil v. criminal Tort, statutory claims, contract claims Pleadings, discovery, trial Settlement Judgment Cost of litigation

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Corporate entities Insurance

Primary Methods for Asset Protection

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Types of insurance - property, liability, business interruption, etc.

Distinctions between coverage and duty to defend and value of each

Insurance

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Duties owed to guests and trespassers

Validity of waivers – regardless, they don't prevent you from being sued

Premises Liability and Waivers

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Trademark registration

Trademark infringement

Intellectual Property

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SL2015-50 - "Property Protection Act"

Chapter 99A of the North Carolina General Statutes

Civil NOT Criminal Penalties

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What to do if you have been damaged by someone's actions or failure to act

I have been sued (or I have received a "demand letter") - what do I do and not do?

Practical Tips for Handling a Dispute

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Formation of entity Why?

‒ Limit liability - still need insurance‒ Tax efficiency‒ Separateness for selling or continuity‒ Trademark considerations

General process– File articles with SOS– Create internal documents (operating agreement, bylaws,

minutes, shareholders agreement)– File annual reports with SOS

Business Planning

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Choice of entity‒ S Corp v. LLC‒ Income tax driven‒ Beware real property in Corp‒ Trademark considerations

Present use valuation for property tax– Beware recapture of last 3 years if sell or cease use

Estate tax– Does not affect most folks– Ability to plan with discounts if estate tax is a concern

Tax Considerations

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Importance of having a plan‒ Intestacy and surprising results‒ Trusts for your or spendthrift beneficiaries‒ Advance directives for incapacity

Estate Planning

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Transfer to family v. sale to key person or 3rd party (unlikely to happen without long term planning)

Real property issues‒ If not in entity, probate in each state and within each

county

Succession Planning for Business

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Requirement to hire only US citizens and aliens authorized to work in US– All employees must complete I-9– All employees must provide required document(s)– Within 3 days if employment more than 3 days; on first

day if employment less than 3 days Documents in support of I-9

– Must accept all proffered documents– No requirement to verify authenticity of document– Caution re employment discrimination

IRCA/I-9 Obligations of Employers

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Requirements under the Fair Labor Standards Act– Minimum Wage and Overtime requirements as

general rule

Minimum Wage and Overtime Requirements

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Agricultural exemptions– Overtime:• Generally, employers of agricultural workers are

exempt from overtime payment Will not apply if work performed on a farm is not incidental

or in conjunction with that farmer's farming operation Will not apply to operations performed off a farm if

performed by employees employed by someone other than the farmer whose agricultural products are being worked on.

Minimum Wage and Overtime Requirements

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Agricultural exemptions– Minimum wage and overtime• An employer in agriculture who does not utilize more

than 500 "man days" of agricultural labor in any calendar quarter of the preceding calendar year is exempt from minimum wage and overtime provisions of FLSA for that current year; A "man day" is any day in which an employee performs

agricultural work for at least one hour• Immediate family members• Those engaged on the range in the production of livestock

Minimum Wage and Overtime Requirements

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Agricultural exemptions– Minimum wage and overtime (continued)• Local hand harvest laborers who commute daily from

permanent residence are paid on a piece rate basis in traditionally piece-rated occupations, and were engaged in agriculture less than 13 weeks during the preceding year

• Non-local minors, 16 years of age or under, who are hand harvesters, paid on a piece rate basis in traditionally piece-rated occupations, employed on the same farm as their parent, and paid the same piece rate as those over 16.

Minimum Wage and Overtime Requirements

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Overtime exemptions for non-agricultural workers– Three requirements for exemption

• Duties test• Salary basis payment• Wage more than $455 per week

– Duties tests (most common)• Professional• Administrative• Executive

– FLSA changes on the horizon

Minimum Wage and Overtime Requirements

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The North Carolina Workers’ Compensation Act requires that all businesses which employ three or more employees, including those operating as corporations, sole proprietorships, limited liability companies and partnerships, obtain workers’ compensation insurance or qualify as self-insured employers for purposes of paying workers’ compensation benefits to their employees.

Workers' Compensation

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Exemption– farm laborers when fewer than 10 full-time, non-

seasonal farm laborers are regularly employed by the same employer;

– “sellers of agricultural products for the producers thereof on commission or for other compensation, paid by the producers, provided the product is prepared for sale by the producer.”

Workers' Compensation

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Payment of all wages promised– Vacation default rule

Records– Hours worked, rate– Burden of proof on employer

Withholding wages after separation

North Carolina Wage and Hour Requirement

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The increasing risk of misclassification

Employee vs. Independent Contractor

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Interns and Volunteers

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