THIS ISSUE'S HEADLINES

RI Employers: Wage Theft Becomes a Felony Beginning January 1, 2024

Are You Ready? The Corporate Transparency Act Becomes Effective on January 1, 2024

Why You Need to Update Your Power of Attorney Documents


RI EMPLOYERS: WAGE THEFT BECOMES A FELONY BEGINNING JANUARY 1, 2024

As businesses adapt to evolving labor models and employment structures, there has been a sharp rise in litigation to determine who should be properly classified as an independent contractor or employee. In a significant move to protect workers' rights and address employee misclassification and wage theft, the Rhode Island legislature amended the State’s Payment of Wages Act in 2023 to make “wage theft” a felony crime.

Beginning January 1, 2024, employers who “knowingly and willfully” fail to pay wages of more than $1,500 could face imprisonment for up to three years and/or a fine of up to $5,000. The amendment imposes harsh penalties for employers generally who fail to pay wages, and those in the construction industry specifically, that misclassify workers as independent contractors. The Wage Act has far-reaching impact and applies to all Rhode Island businesses with at least one (1) employee in the state.

PLDO Partner Matthew C. Reeber has issued an Advisory that examines the key components of the Wage Act, outlines the criminal consequences for any "knowing and willful" wage and hour infractions, and offers best practices to avoid penalties. To read the Advisory, click here.

The amendments that go into effect on January 1st are complex and could result in many employers making an unintentional misstep that leads to a criminal violation and/or fine. Now, more than ever, employers should seek counsel on compliance or defense strategies if your company is found liable of a violation. For more information, contact Attorney Reeber at 401-824-5105 or mreeber@pldolaw.com.

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ARE YOU READY? THE CORPORATE TRANSPARENCY ACT BECOMES EFFECTIVE ON JANUARY 1, 2024

The Corporate Transparency Act (“CTA”) was passed by Congress to establish reporting requirements for a wide range of business entities in an effort to combat money laundering, financing of terrorism and other illegal activities. The CTA also authorizes the Financial Crimes Enforcement Network of the U.S. Department of Treasury (“FINCEN”) to maintain a database of all information provided, and to disclose such information to government authorities and certain financial institutions.

As part of our ongoing effort to prepare companies for the CTA's reporting requirements that go into effect January 1, 2024, PLDO Partner William F. Miller issued a new Client Advisory with important information on:

1. Who must file as a reporting company.
2. Beneficial owners and applicants.
3. Filing deadlines.
4. Who has access to the database.
5. Practical takeaways to ensure compliance.

If you have questions or would like further information about the CTA, please contact Attorney William F. Miller at 508-420-7159 or email wmiller@pldolaw.com.

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Two important “tools” to have in place as part of your estate plan are healthcare and financial power of attorney. Most people think the purpose of an estate plan is to address what happens after your death. In actuality, these documents help plan for how medical and financial decisions will be made while you’re alive. They are also helpful in avoiding the expense of having a court appoint a “guardian” to handle your affairs in the event of incompetence or disability.

A healthcare power of attorney appoints another individual (known as the “agent”) to make healthcare decisions for you when you are unable to make decisions on your own. Even if you have a signed healthcare power of attorney, it’s important to review this document regularly. If any of the following are relevant, now would be the time to address:

• Age of your agent: If you selected your spouse or parent as agent, and they are now elderly or infirmed, it may be time to make a change. Your agent should be capable (mentally, physically, and emotionally) of implementing your wishes.
  
  
• Change of residence: While many financial tasks can be completed remotely, your healthcare agent should be able to converse face-to-face with your medical providers. If you, or your agent, have moved and now live more than a few hours’ drive apart, this could be an issue.

A financial power of attorney appoints someone to act on your behalf with regard to financial or transactional matters. These documents are usually “durable” meaning they are effective immediately upon signing and remain valid notwithstanding your subsequent disability or incapacity. Like your healthcare agent, you should consider the age of your financial agent, along with the following factors:

• Staleness: While durable financial powers of attorney, executed in accordance with state law, technically do not expire, many financial institutions will not honor old documents. When these documents become “stale” is a seemingly arbitrary decision by the financial institution; some will honor documents that are 4-5 years old, and some won’t honor a document that was executed more than 1 year prior. For our Rhode Island clients, since the state has not adopted the Uniform Power of Attorney Act, which penalizes institutions that refuse to honor power of attorneys for anything other than good cause, there is no recourse to enforce a valid financial power of attorney. It is important to check with your estate planning attorney and financial institution to determine their document policies.
  
  
• Divorce: Unlike a power of attorney for health care, a durable financial power of attorney is not automatically nullified in the event you separate from, or divorce, your spouse. This can obviously lead to disastrous consequences.

For these reasons, and many others, it’s a good idea to review your healthcare and financial power of attorney documents anytime there are “life changes” or - at the very least - every 3-5 years, to ensure your wishes are implemented if you are incapacitated and there is no ambiguity or problems down the road.

At PLDO, our attorneys have deep experience helping business owners achieve their goals - now, and in the future - and we provide a full range of estate planning, trust planning and administration services for both individuals and businesses. If you have questions or need legal guidance, please contact PLDO Partner David P. Craven, Esquire at 401-824-5100 or email dcraven@pldolaw.com.

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