Tougher HIPAA rules for medical businesses

Medical offices and other businesses that are subject to the federal HIPAA medical-privacy law will have to comply with some new rules from Congress.

The changes include:

► If a breach of privacy occurs, you must now notify the affected individuals within 60 days. (Before, you only had to try to limit the negative effects of a breach.) If the breach affects more than 500 people, you must report the incident to the U.S. Department of Health and Human Services and the media. If 10 or more affected people can’t be contacted directly, you must post the information conspicuously on your website. [Read more…]

Careful: text-message advertising may violate federal law

If you’re thinking of using a text-message advertising campaign for your company, be aware of the possible legal hurdles. Recently, a company called Nextones began giving away free ringtones. In order to get one, customers had to agree to receive text messages from Nextones affiliates.

Nextones then licensed its list of customers to publisher Simon & Schuster, which used it to blast text ads for a Stephen King novel. The problem? According to a federal court in San Francisco, Simon & Schuster might have violated the “Telephone Consumer Protection Act,” a 1991 law that says you can’t make automated calls to a cell phone unless you have the owner’s consent. [Read more…]

Employers who use ‘promotional exams’ are facing a dilemma

Employers who use tests to hire or promote employees now face a tough dilemma if those tests end up significantly disfavoring minority workers.  If the employer uses the test results, it could be sued by the minority workers on the grounds that the test had an unfair impact on them.

On the other hand, if the employer throws out the test results, it could be sued by the non-minority workers on the grounds that they did better on the test and were discriminated against based on race. That’s the result of the Supreme Court’s recent decision in a case involving Connecticut firefighters. [Read more…]

Does an insolvent customer have a legal duty to pay you?

If a customer owes you money but is going under, who does it have to pay first: you…or its owners? This is a significant issue in a recession. A key test case in Wisconsin was supposed to provide a clearer answer, but the Wisconsin Supreme Court split 3-3 and couldn’t make a decision.

The case involved a company that made stereo speaker parts. The company (the largest employer in the county) defaulted on its loans and went into receivership owing more than $1 million to suppliers and banks. The receiver then filed a lawsuit against the two owners of the company. The lawsuit claimed that the owners bled the company of $10 million over the years through a variety of techniques including high salaries, management fees, bonuses, dividends, and charging excessive rates to lease equipment from other entities they controlled. [Read more…]

What to do if your child is a spendthrift?

Many people wonder about passing along their assets to a child who tends to overspend and hasn’t show an ability to manage money.  They worry that such a child will blow through an inheritance quickly and wont have the money to live on as he or she gets older.

Fortunately, there are ways to provide for such children while at the same time protecting them from themselves.

For instance, you can put assets into a trust and give the trustee detailed instructions stating under what conditions and for what purposes the assets can be given to the child. [Read more…]

How an executor can save taxes after someone dies

When a person dies, the value of his or her estate for tax purposes is its value at the date of death.  However, the tax isn’t due until nine months after death.  If the value of an estate plummets in the nine months after a person’s death, this can create very bad consequences for the heirs – namely, a large amount of tax is due but the assets that will be used to pay the tax have disappeared. 

As you can imagine, this happened fairly frequently following last years stock market crash, when the value of many estates rapidly diminished.  [Read more…]

How to prevent slip-and-fall claims

More than a million people suffer a slip-and-fall injury each year, and some 16,000 die as a result. Slip-and-fall injuries often result in significant legal awards against a business, so it’s wise to take precautions.

A recent study by the insurance company CNA makes the following recommendations for commercial property owners: [Read more…]

U.S. steps up pressure on companies over illegal workers

Increased paperwork audits could lead to fines; are you in compliance?

The Obama administration has announced that it intends to focus its immigration enforcement efforts on companies that hire illegal workers, by stepping up its audits of I-9 forms – the employment eligibility documents that businesses must fill out for every employee.

This is a change from the Bush administration, which had placed more emphasis on arresting illegal workers as opposed to levying penalties on employers. On July 1, Immigration officials kicked off the new effort by serving “Notices of Inspection” on 652 businesses around the country, announcing pending I-9 audits. That compares to 503 such notices issued by the U.S. during all of 2008. [Read more…]

Roth IRAs for estate planning get a big boost from Congress

Many people should consider converting a regular IRA or old 401(k) plan into a Roth IRA, as a result of a change that takes effect on January 1 of next year. 

With a regular IRA, contributions are often tax-deductable, but you have to take a certain amount of money out of the account each year once you turn age 701/2, and you have to pay income tax on the withdrawals.  If you leave the IRA to your heirs, they will have to pay income tax on the money they take out. [Read more…]

Glitches on credit card receipts are getting companies in trouble

A new federal “identity theft” law prohibits merchants from printing more than the last five digits of a credit or debit card number on a customer’s receipt. The law is triggering a lot of class-action lawsuits against companies that haven’t updated their receipt systems. For instance, many companies still print credit card expiration dates on receipts, which is prohibited by the law and can easily lead to a lawsuit.

These suits are dangerous – the law provides damages of between $100 and $1,000 per willful violation. Multiply $100 or $1,000 by the number of receipts that most merchants provide, and you can quickly have a very large number. [Read more…]

How to revoke a power of attorney

If for any reason you become unhappy with the person you’ve appointed to make decisions for you under a durable power of attorney, you can revoke the power of attorney at any time. But you must take a few steps to ensure that the document is properly revoked.

First, you should put the revocation in writing. This revocation should include your name, a statement that you are of sound mind, and your wish to revoke the power of attorney. You should also specify the date the original power of attorney was executed and the person who was selected as your agent. Sign the document and send it to your current agent as well as to any institutions or agencies that have a copy of the power of attorney. [Read more…]

You might be able to claim some Social Security benefits now, and more later

Although you can begin receiving Social Security benefits anytime after age 62, the longer you wait, the higher the benefit you will receive. Of course, many people need money right away and can’t afford to delay. But if you’re married, there is a strategy that might allow you to claim some benefits immediately and then claim more benefits later.

First, a little background: You have three options for when to begin taking your Social Security retirement benefits: You may begin taking benefits between age 62 and your full retirement age, you can wait until your full retirement age (which varies depending on your age), or you can delay benefits and take them anytime up until you reach age 70. [Read more…]

Can’t afford a long-term care policy? Consider cutting the length of coverage

Most people can’t afford to buy a gold-plated long-term care insurance policy that offers a large daily benefit and that will continue paying indefinitely. If premiums for this type of Cadillac plan are not in your budget, what should you cut – the daily benefit amount or the number of years of coverage?

Most financial experts advise cutting the length of coverage. This is because if you don’t use the full daily benefit, you don’t lose it. In fact, it can be used to lengthen your period of coverage. [Read more…]

How Medicare beneficiaries can fight a hospital discharge

 One of the major benefits of Medicare is its coverage of hospitalization. Medicare covers 90 days of hospitalization per illness (plus a 60-day “lifetime reserve”). However, if you’re admitted to a hospital as a Medicare patient, the hospital might try to discharge you before you are ready. While the hospital can’t force you to leave, it can begin charging you for services. Therefore, it’s important to know your rights and how to appeal. Even if you don’t win your appeal, appealing can buy you crucial extra days of Medicare coverage. [Read more…]

Retired? You might be able to save on insurance

Once you’re retired, your need for insurance changes. It is a good idea to look at your coverage options and figure out what you need (and don’t need) and where you might be able to achieve some savings.

Life Insurance. You might no longer need life insurance. If your spouse or other dependents won’t lose any income when you die, life insurance may be unnecessary and your premiums may be better spent elsewhere. 

On the other hand, sometimes life insurance can be used as part of an estate plan to help pay estate taxes or to build up a tax-free inheritance for your heirs. Your attorney can help you determine whether it’s wise to maintain your existing life insurance. [Read more…]

Social networking sites are a danger in divorce cases

The popularity of Twitter, Facebook, and other social networking sites has created a can of worms in divorce: These sites often contain evidence of a person’s whereabouts, “friends,” employment status and other information that can be used as evidence against them.

People often forget that the pictures they post and the things they write about on these sites are public information. Anyone going through a divorce should be cautious about their actions online, especially on social networking sites. The same is true for people who have been through a divorce but whose ex-spouse might still want evidence against them with regard to continuing alimony and support payments, child custody issues, etc. [Read more…]

Company not liable for employee’s drunk-driving accident

A nursing home supervisor took the home’s chef out for drinks after work one night in order to discuss work-related issues. The two had a fair amount to drink. The chef left the restaurant in his car and shortly afterward struck a 70-year-old pedestrian, who suffered serious injuries. The pedestrian sued the nursing home, claiming that it was responsible for the chef’s drinking.

But the state Appeals Court shot down the lawsuit in a 2-1 decision. Under Massachusetts law, a social host can sometimes be held responsible if a guest drinks and then drives. But the court said this is true only if the host controls the supply of alcohol, which wasn’t the case here. The pedestrian argued that the nursing home controlled the employee, and the employee wouldn’t have gone drinking if it wasn’t expected of him by his boss. But the court said there was a difference between controlling the liquor supply and controlling the person consuming it.

Laid-off employee must be paid for unused vacation time

An employee who was laid off from his job is entitled to be paid for any earned but unused vacation time, according to the state Supreme Judicial Court. A longtime employee was laid off by Electronic Data Systems, and didn’t receive any vacation pay even though he had only used one day of vacation all year, and the company had a written policy saying that employees were entitled to a certain amount of vacation time based on how long they had worked for the company.

EDS also had another policy that said if an employee was laid off, he or she forfeited any unused vacation time. But the court said this policy violated the state Wage Act, which requires that laid-off employees be given any pay they have earned up until their last day of work. [Read more…]

Discrimination settlement can violate union agreement

The MBTA offered a job to a man who wears a hearing aid, conditioned on his ability to pass a physical examination. During the exam, he wasn’t allowed to wear his hearing aid, and he flunked. The man sued, claiming he was discriminated against because of his disability. Five years later, the MBTA settled the case by hiring the man and giving him five years of retroactive seniority.

However, the union objected. It said the MBTA violated its collective bargaining agreement by giving five years of seniority to someone who hadn’t worked there for five years. This would mean that the newly-hired man would have more seniority than a fellow employee who had put in four years of service. Who was right? The state Supreme Judicial Court sided with the MBTA. It said retroactive seniority is a standard remedy in discrimination cases, and the public policy behind the discrimination laws trumps the public policy behind the collective bargaining laws. Interestingly, although the MBTA agreed to settle the case, it never admitted that it violated the discrimination laws, but the court said that didn’t matter in this case.

Bankruptcies skyrocket in Massachusetts

The number of bankruptcy cases filed in Massachusetts increased by 18% in the last year, and by a stunning 72% over the past two years. The vast majority of the cases are personal bankruptcies as opposed to business bankruptcies. While some businesses are going under, the spike in cases is largely the result of people losing their jobs in the recession.

Other common causes of bankruptcy include divorce, sudden large medical bills, and an inability to meet rising mortgage payments. Personal bankruptcies can be filed under Chapter 7 or Chapter 13. Under Chapter 7, the debtor’s assets are liquidated, creditors receive some percentage of what they’re owed, and the debtor gets to start over. Under Chapter 13, the debtor’s assets aren’t liquidated, but the debtor agrees to a payment plan under which creditors will be paid off over a period of time. [Read more…]

Non-compete agreement is valid even if employee leaves state

Suppose a Massachusetts employee signs a non-compete agreement, but then leaves to work for a competitor in California – a state that generally doesn’t approve of non-compete agreements. Can the agreement still be enforced against him?

Yes, according to a recent decision by the Massachusetts Superior Court. The employee was a vice president at the EMC computer company in Hopkinton, Mass. After 20 years with EMC, he quit to become vice president at Hewlett-Packard in California. [Read more…]

What happens if a seller can’t move out by the closing date?

Here’s a common scenario: Both parties to a real estate deal are ready to close, but for some reason the seller can’t move out by the closing date. Maybe the seller is moving to a new home or place of business, and the new place isn’t quite ready yet. Maybe the closing date is the last day of the month, a notoriously difficult day on which to hire a moving company.

One solution is to go ahead with the closing, but have the buyer rent the property back to the seller for a short period to give him or her time to move out. Is this a good idea? It can be … but it involves many more complexities than most people realize. At a minimum, you should have a written rental agreement that covers the most important issues. [Read more…]

Congress raises borrowing limits for reverse mortgages

You can now borrow up to $625,500 with a federally insured reverse mortgage – up from $417,000 – as a result of a change made by Congress that will help some seniors.

In a traditional mortgage, you borrow money against your house and pay it back in monthly installments over time. With a reverse mortgage, you borrow money against your house, but you don’t have to pay it back until you die, sell the house, or move, which means you don’t owe anything as long as you stay in your home. [Read more…]

Beware of ‘loan modification’ scams

Many people who are having trouble making their mortgage payments are turning to consultants who promise to help them modify their loans. The problem: Often, these “loan modification” businesses are actually scams. In a typical scam, a consultant demands a large upfront fee – sometimes as much as $3,000 – and then disappears without doing any work.

Prosecutors in 19 states have taken legal action against various “foreclosure rescue” businesses, as has the Federal Trade Commission, but many homeowners continue to be bilked. In Washington state alone, the attorney general’s office is investigating complaints involving as many as 100 companies. Be very careful before you hire a consultant who promises to negotiate for you. If you’re in debt trouble, your best bet is often to consult a reputable attorney.

Tenant evicted for filing personal injury claim

A landlord could evict a tenant who sued the landlord for a personal injury, according to the Alaska Supreme Court. The tenant was a handyman at a motel who rented a motel room at a reduced rate. He sued the motel after he slipped and broke his leg. The motel owners responded by throwing him out. According to the handyman, this was illegal retaliation against him that violated the state’s landlord-tenant law.

But the Supreme Court sided with the landlord. It said it was true that the state landlord-tenant law prohibits retaliation against a tenant who tries to enforce his rights under the law. However, in this case the handyman wasn’t trying to enforce his rights under the landlord-tenant law; he was filing a personal-injury lawsuit, which is a different matter. [Read more…]

Protect yourself in case your lender reneges on your loan

Over the past year, there have been a number of instances where a bank has agreed to provide a mortgage, then has changed its mind and reneged on its agreement at the last minute. In the past, such conduct was unheard of. It’s still rare – but the credit crisis has changed a lot about the way banks operate, and this is one result. As a buyer, you might want to protect yourself by spelling out in your purchase and sale agreement what will happen if the bank backs out.

Of course, many purchase and sale agreements already include a mortgage contingency clause, which says that the buyer’s offer is dependent on being able to get a mortgage. But you might want to be sure that the contract makes the offer contingent not just on getting approval for a mortgage, but on the lender’s actually following through and funding the loan at the closing.

What happens if a seller can’t move on the closing date?

Here’s a common scenario: Both parties to a real estate deal are ready to close, but for some reason the seller can’t move out by the closing date. Maybe the seller is moving to a new home or place of business, and the new place isn’t quite ready yet. Maybe the closing date is the last day of the month, a notoriously difficult day on which to hire a moving company.

One solution is to go ahead with the closing, but have the buyer rent the property back to the seller for a short period to give him or her time to move out. [Read more…]

$106 million ‘tip-pooling’ verdict is overturned

Starbucks’ policy of allowing shift supervisors to share in a “tip pool” is legal, says a California appeals court in overturning a $106 million verdict against the coffee-shop giant. The case was a class action brought by a group of “baristas” who claimed that the shift supervisors were management employees and thus ineligible to share in tips.

 But the court said that the customer tips in this case were intended to reward the entire team of service employees, including the supervisors, so allowing the supervisors to share in the “pool” was okay. This case has received widespread attention, and made many people aware of the highly complex rules that can govern which employees are allowed to participate in tip pools. The California decision only applies to that state and to the particular arrangement at Starbucks; the result elsewhere might be different.

Laid-off employee must be paid for unused vacation time

An employee who was laid off from his job is entitled to be paid for any earned but unused vacation time, according to the Massachusetts Supreme Court. The worker in this case was terminated after 21 years on the job. Under the company’s written policy, he was entitled to five weeks of paid vacation each calendar year – but he wouldn’t be reimbursed for unused time if he were laid off. According to state law, laid-off employees must be paid any compensation they have earned up until their last day of work. The employer argued that the employee hadn’t “earned” any vacation pay because of the terms of its policy.

But the court sided with the employee. It said the state wage laws are meant to protect employees’ right to wages, and they wouldn’t have any teeth if employers could simply create policies that negated the rules.Laws vary from state to state on this issue. We’d be happy to help you if you have any questions about what compensation is due at the time of a layoff.

Worker who took buyout can’t sue later

An employee who accepted a voluntary buyout package from her employer gave up her right to sue for sex discrimination, a federal appeals court has ruled. The employee worked for Ford Motor Company and accepted a $100,000 buyout. As part of the deal, she signed a contract giving up any legal claims that arose before the buyout, although she didn’t waive “any rights or claims that may arise after” the buyout.

She then sued for sex discrimination. She argued that this was okay because her claim of sex discrimination was filed after the buyout. But the court said that even if the lawsuit wasn’t filed until after the buyout, the alleged discrimination happened before the buyout. Therefore, the claim “arose” before the buyout, and the employee had signed away her right to bring it.

Supreme Court limits age discrimination lawsuits

Older workers will have a harder time suing for age discrimination as a result of a recent Supreme Court ruling. The ruling makes it more difficult to sue for age discrimination than it is to sue for other types of bias, such as sex, race, religion, or national origin.

This is true for two reasons:

● First, employees who sue for age discrimination now have to prove that age was the motivating cause behind their firing or demotion. They have to show that they wouldn’t have been fired or demoted but for their age. [Read more…]

Employers who use ‘promotional exams’ are facing a dilemma

Employers who use tests to hire or promote employees now face a tough dilemma if those tests end up significantly disfavoring minority workers. If the employer uses the test results, it could be sued by the minority workers on the grounds that the test had an unfair impact on them. On the other hand, if the employer throws out the test results, it could be sued by the non-minority workers on the grounds that they did better on the test and were discriminated against based on race. That’s the result of the Supreme Court’s recent decision in a case involving Connecticut firefighters.

In that case, the fire department threw out its test results because no black employees qualified for a promotion. The department was then sued by white and Hispanic firefighters who did well on the test.  The Supreme Court okayed the firefighters’ suit. [Read more…]

Can a company snoop on an employee’s e-mails with her attorney?

Shortly before a nursing director left her job at a home health-care agency, she contacted a lawyer about suing the agency for discrimination. She began e-mailing back and forth with the lawyer – using a laptop provided by the agency.

The employee didn’t use her work e-mail address; rather, she used a personal Yahoo! e-mail account with a password. But when the employee left, the agency scanned the hard drive of the laptop and found all the e-mails. It kept them for use in the lawsuit. Is this okay? [Read more…]