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Q. Sexual Harassment Policy
I run a small home cleaning business with seven employees aside from
myself. My staff gets along well, and I’ve never had any problems, but I
keep reading about sexual harassment litigation in the newspapers and
worry. Do I need a formal sexual harassment policy? And how should I
go about creating one? —SJ, Manteca, CA
A.
Sexual harassment complaints can cause
severe difficulties for companies of any
size. Even small businesses, where the employees are on good personal terms
can see their staffs become fractured by
tension and disagreement should an
incident, real or merely perceived, occur between workers.
The matter can turn litigious if the complaining worker feels that you as the owner haven’t taken the appropriate steps to deal with the problem, or have created a “hostile” working environment by failing to prevent such an incident. This can lead to expensive court or arbitration proceedings. But even if an incident
doesn’t result in a court battle, it can still
poison the office environment. It pays,
therefore, to take a proactive approach
and put a clearly
enunciated policy in
place. This offers you,
as owner, some legal
protection by making it
clear that you consider
sexual harassment
unacceptable in your
business and will take
action to deal with it
should it happen.
You should create a written policy that
clearly defines sexual harassment,
identifies conduct that qualifies under
that definition, sets out the steps that
employees who feel they have been
harassed should take, and clearly states
the penalties and consequences of such
behavior. The policy should also outline
the procedure for investigating and
adjudicating a claim of sexual harassment.
It may help to have a lawyer assist with
drafting the policy. Once a policy has
been created, it is important to make sure
that your employees are aware of it, and
that it will be enforced.
The policy
should be posted in a common area and
copies should be handed out to each
employee, each of whom
should read the policy and
sign a declaration that they
have read and understood
its terms. Should a claim
later arise, this allows you
to demonstrate that you
take sexual harassment
seriously and that all
employees were familiar
with your firm’s policies..
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Q. New Numbers?
When my business partner died, I purchased his share in the plumbing repair business we started together from his wife. It’s still the same business, with the same name. Do I need a new employer identification number from the IRS?
—MK, Kingstree, SC
A. In general, businesses do not need to
obtain a new federal Employer
Identification Numbers (EIN) even if the
business changes its name or relocates to
a new address. However, if your
company was structured as a partnership
and was reorganized as a sole
proprietorship after your partner’s death,
then the original partnership—the
business entity—was in fact dissolved by
the change and a new EIN will have to
be obtained for your business.
The rules determining whether a firm
requires a new EIN differ somewhat
depending on the sort of business and
what changes it experiences. For a sole
proprietorship, a new EIN is required if
the business incorporates, changes to a
partnership with the addition of
partners, or goes through a bankruptcy.
A new EIN number will be required if
the ownership of a sole proprietorship
changes, either through inheritance or
purchase. If, for example, you inherit
your family member’s small business,
assuming full ownership, then a new
EIN number will be required.
Incorporated businesses will require a
new EIN number if they receive a new
charter from the secretary of state, if the
corporation becomes a subsidiary of
another corporation, or if the company is
merged with another to create a new,
combined entity. Corporations do not
need new EIN numbers in the event of
bankruptcy, change of name or location,
or reorganization into an S corporation.
Partnerships must seek a new EIN if
one partner assumes full ownership and
operates the business as a sole
proprietorship or incorporates the
business, or if a partnership is
terminated. Partnerships must also seek
a new EIN number if ownership of the
business’s capital and profits changes by
more than 50% within the period of a
year. Like corporations and sole
proprietorships, partnerships do not
need to obtain a new EIN in case of
bankruptcy, or name or location
changes.
