Articles & Resources

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Originally published in the November 21, 2018 issue of ROI-NJ

According to statistics, women in New Jersey are paid 82 cents for every dollar paid to men. Until recently, New Jersey’s pay equity protections mirrored those of the Federal Equal Pay Act of 1963, mandating equal pay for men and women performing “equal work.” Under these laws, pay disparities could only be justified if the differential was based on a bona fide seniority or merit system, or “any factor other than sex,” an exception that gave employers significant room to defend wage disparities by pointing to the applicant’s pay history or other factors unrelated to gender.

With the passage of the Diane B. Allen Equal Pay Act in March 2018, New Jersey now takes a more aggressive approach towards eradicating pay disparities. While principally aimed at the gender wage gap, the act applies to all protected classes, thereby paving the way for disparate wage claims on the basis of race, age and any other status protected by the New Jersey Law Against Discrimination. In addition, employees can point to higher rates being paid to counterparts outside the protected class who are engaged in “substantially similar work,” as compared to the narrower “equal work” standard under prior law. “Substantially similar work” will be viewed “in light of the employees’ skills, effort and responsibility.” Because there are no regulations interpreting this ambiguous phrase, employers must look beyond mere job titles to all aspects of all positions to identify those that involve “substantially similar work.”

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How many of us remember the iconic holiday party in the movie “Scrooged?”  As Bill Murray is passing out mail, the staff is drinking more than they should, employees are groping each other, and how can anyone forget the employee who is copying their bottom while sitting on the Xerox machine? “Enjoy yourself, it’s the Christmas party.”

How many of us have attended such events?  Probably more than we would like to admit.

Regardless of your point of view, times have changed.  Sexual harassment is the law. Drunk driving jeopardizes public safety and can cause you and/or your employees to end up in jail.  Social mores no longer condone the conduct demonstrated in that now famous “Scrooged” party.

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In August 2018, Westfield’s town council voted unanimously in favor of an ordinance that would allow microbreweries and craft distilleries to operate in Westfield’s central business district (the “CBD Zone”). In October of the same year the Town Council introduced and plans to vote on three new ordinances that would further encourage development in the CBD Zone and other non-residential areas of town. These three new ordinances would permit ground level patio structures for dinning in all non-residential zones, relax parking requirements in the CBD Zone and permit rooftop patio dining to those establishments with direct access to a rooftop in the CBD Zone. These recent ordinances, which only apply to commercial structures and not single-family home or multi-family developments, are all geared towards encouraging development in downtown Westfield.

The relaxed parking requirements would permit business owners who do not meet the parking requirement to bypass the hearing before the Planning Board when they can demonstrate no change or no increase in the parking deficiency by more than thirty spaces. This would afford business owners a substantial cost benefit in not having to appear before the Planning Board.

The proposed rooftop patio ordinance would permit seasonable dining on rooftops in the CBD Zone. However, this opportunity would only be afforded to establishments that are located directly below or adjacent to rooftop access points. Properties which possess other uses on the floors in between the restaurant and the rooftop are not eligible to provide rooftop dining. This caveat restricts many restaurants in the CBD Zone as only a few have direct access to a roof. In order to obtain a rooftop patio approval under the proposed ordinance, the applicant would need to obtain reviewing Board approval in the form of submitting an application, design plan, lighting plan and landscaping elements. Interested applicants will most likely have to obtain the assistance of a structural engineer to prepare these plans and testify at any necessary hearings. The applicant and engineer will need to be prepared to speak about both the anticipated design as well as being able to establish that the roof being considered is structurally sound and able to withstand the added weight of tables, chairs and restaurant patrons. The addition of rooftop patio square footage would not have an impact on the parking requirement for the Applicant as the additional square footage afforded by the roof will not be subject to parking requirements. Importantly, additional requirements will be triggered if an applicant wishes to serve alcoholic beverages in connection with a liquor license on a new rooftop patio. Serving alcoholic beverages in a newly created and unlicensed space would require an applicant to seek approval from the NJ Alcoholic Beverage Control Board for a place-to–place transfer of the active license to expand the licensed premises.

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One of the useful documents in the estate planner’s tool kit is the power of attorney.  Briefly, a power of attorney allows a person (the “principal”) to name another individual (the “agent” or the “attorney-in-fact”) to act on the principal’s behalf, typically in financial and health matters. A power of attorney may be “general” or “limited,” meaning it can authorize the attorney-in-fact to act broadly on the principal’s behalf, or it may restrict the attorney-in-fact’s authority to certain enumerated types of conduct (i.e., a limited power of attorney may apply solely to acts involved in the sale of a principal’s real estate). In addition to being “general” or “limited,” a power of attorney may also be “durable,” meaning the power of attorney remains effective in the event of a future disability or incapacity of the principal. For purposes of this article, the power of attorney is to be considered a durable general power of attorney, meaning the power of attorney is effective immediately upon execution, it authorizes the attorney-in-fact to act broadly on the principal’s behalf, and it remains effective in the event of any subsequent disability or incapacity of the principal.

New Jersey’s Revised Durable Power of Attorney Act, as codified in N.J.S. 46:2B-8.1 et seq. (the “Act”), grants broad authority to an attorney-in-fact to act on a principal’s behalf. The Act provides: “All acts done by an attorney-in-fact pursuant to a durable power of attorney during any period when the power of attorney is effective in accordance with its terms, including any period when the principal is under a disability, have the same effect and inure to the benefit of and bind the principal and the principal’s successors in interest as if the principal were competent and not disabled.” N.J.S. 46:2B-8.3. This section purports to state that the acts of the attorney-in-fact are binding upon the principal and the principal’s successors in interest, suggesting that the acts of the attorney-in-fact have the same effect as if the principal had acted himself or herself. While this is true, the law in New Jersey requires more.

New Jersey law imposes a higher duty upon an attorney-in-fact acting on behalf of a principal under a power of attorney. An attorney-in-fact in New Jersey has a fiduciary obligation to the principal and must act “within the powers delegated by the power of attorney and solely for the benefit of the principal.” N.J.S. 46:2B-8.13.a [emphasis added]. A common situation in which a power of attorney may expressly authorize an attorney-in-fact to act, but where the act will be prohibited, involves lifetime gifts. While an individual generally has broad power to make lifetime gifts of his or her own property, unfettered by any restrictions or constraints, an attorney-in-fact operating under a power of attorney does not have that same authority. An attorney-in-fact may not use the principal’s resources unilaterally to favor himself or herself in ways that are contrary to the principal’s wishes.

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State and local tax deduction workarounds rejected. The workarounds to the new federal cap on deductions for state and local taxes (“SALT”) are not likely to be effective, according to proposed regulations issued by the IRS in late August. The Tax Cuts and Jobs Act, signed into law by President Trump in December 2017, capped the SALT deduction at $10,000 for taxpayers who itemize their deductions. As a workaround, several states (including New Jersey and New York) have permitted municipalities to establish charitable foundations to collect property taxes, thus allowing residents to claim a charitable deduction for the property taxes paid, and the states have enacted state tax credits for such charitable donations. However, the IRS has indicated that these strategies will not work to the full extent envisioned by state and local leaders. The proposed regulations provide that taxpayers who itemize deductions shall be eligible for a federal deduction that equals only a small fraction of the state tax credits for such charitable donations. Local leaders have vowed to challenge these new regulations.

Income tax deductions for trusts and estates confirmed. The Treasury stated in Notice 2018-61 (issued on July 13, 2018) that trusts and estates are entitled to income tax deductions for administration expenses paid solely as a result of being an estate or trust. This guidance was necessary to explain the impact on trusts and estates of Internal Revenue Code Section 67(g), which was added as part of the Tax Cuts and Jobs Act. The new Code section suspends miscellaneous itemized deductions for individuals for tax years 2018 through 2025. Notice 2018-61 clarifies that trusts and estates may continue to deduct certain administration expenses, and states that Treasury intends to issue regulations confirming this position. Regulations will also be issued regarding the deductibility of such expenses for the individual beneficiaries of trusts and estates in the final year of administration, when deductions are typically passed through to the beneficiaries.

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Originally published in the October 2018 issue of HR News.

Combatting cyber-threats and protecting data is not only the job of an IT department. Human resource professionals play a critical role in safeguarding personally identifiable information as well. Indeed, if there is one area in every company that has in its possession a literal treasure trove of sensitive information, it is Human Resource. Who else has access to employees’ names, addresses, dates of birth, social security numbers, bank account information (for direct depositing of paychecks), health and medical information (originating form health insurance applications, flex plan reimbursement materials) and financial information, especially if your company has a self-directed 401K plan and contributions are automatically deducted from payroll. Needless to say, a data breach implicating your Human Resources department could be devastating. So what can you as a human resource professional do to assist in maintaining the integrity of your company’s data? Plenty.

Collaborate with IT and Legal departments:

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In many divorce cases, the most contentious issues are those regarding the parties’ children. The issues of physical custody, time sharing or visitation, extra-curricular activities, religious education and the cost for college education are routinely in dispute.

Often, well-intentioned parents insist that their proposed resolution on these issues is best. It may be in that particular parent’s best interest, but not necessarily those of the child.

Most experienced family law attorneys will point out to their client that any agreement should be based on what is in the child’s best interest. Attorneys often utilize a “Children’s Bill of Rights” as a guideline to set forth what should be considered by the parents.

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UPDATE: The ABC announced October 2, 2018 that it is suspending enforcement of the “Special Ruling” issued on September 21, 2018 regarding limited brewery licenses. The purpose of the suspension is to allow the ABC to engage in further conversations with stakeholders, including craft breweries and other alcoholic beverage license holders, about the impact of the Special Ruling.

Microbrewers throughout New Jersey will not be clinking beer mugs in response to the “Special Ruling” issued on September 21, 2018 by the Division of Alcoholic Beverage Control (“ABC”).

In 2012 the New Jersey Legislature passed an amendment with the intention of promoting the craft beer industry. The bill permits microbreweries to sell up to 1/2 keg (or approximately 6 cases) of beer for consumption off premise. Also, as part of a brewery tour, consumers are allowed to sample and purchase beer for consumption on premise.

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The Tax Cuts and Jobs Act of 2017 (TCJA), enacted by Congress last December, has created jobs for many individuals. It has also created additional work related to the issue of alimony for family law attorneys.

As interpreted under our New Jersey divorce statute, one spouse may be obligated to support the other spouse by the payment of alimony. The payments made by one spouse to the other which met the Internal Revenue Code definition of alimony would be deductible by the payer on his or her federal income tax return and included as taxable income to the recipient. This remains the case for alimony agreements or settlements signed prior to the end of 2018.

However, beginning in 2019, Congress has changed the rules. Payments made pursuant to an agreement or Court Order reached or entered after December 31, 2018 will no longer be deductible by the payer nor will they need to be claimed as income by the recipient. This major change in the tax law will not change the tax treatment of any payments made pursuant to an agreement which was entered prior to the end of calendar 2018.

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If you find yourself in a situation where you are contemplating divorce, there are several recommended steps you should take. The first of these is to consult an attorney who specifically practices in this area and devotes the majority of their practice toward divorce and family law matters. Contact the attorney to arrange for a consultation. You should not be put off by an attorney who charges an initial consultation fee. As with most things, you usually get what you pay for. Often times the consultation fee is a small initial investment in a major life changing event.

Next, if you are a parent, it is important to never involve the children in the marital discord. No child should be placed in the middle of divorcing parents or the issues one of the parents may have with the other.

If you are not already, become knowledgeable about your family‘s finances. Try to secure copies of relevant financial documentation including, but not limited to, prior tax returns, W-2 and 1099 statements and paystubs, bank account, investment and credit card information pertaining to both you and your spouse. While you and your attorney will be entitled to obtain and review this documentation during any litigation, there is a cost savings involved when you can provide as much information as possible to your attorney.

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