All posts by Waltz, Palmer & Dawson, LLC

HIGH TIMES AHEAD OF ILLINOIS – CANNABIS REGULATION AND TAX ACT

On June 25, 2019, Illinois became the 11th state to legalize recreational cannabis and the first state to do so via its legislative body (without using a public referendum). The Cannabis Regulation and Tax Act provides for the production, sale, regulation, testing, decriminalization and taxation of recreational cannabis in addition to providing for social equity and criminal justice reforms.

LAWS ABOUT CANNABIS ARE ALSO REFERRED TO AS “MARIJUANA LAW, POT LAW OR WEED LAW”

PURCHASING, POSSESSING AND USING RECREATIONAL CANNABIS

As of January 1, 2020, Illinois residents, who are 21 years old and older, can purchase and possess up to 30 grams of raw cannabis, 5 grams of cannabis concentrate products and cannabis infused products containing up to 500 milligrams of THC. Non-residents of Illinois can purchase and possess approximately half the amount that Illinois residents can.

Those who wish to purchase cannabis and cannabis products must do so in person at licensed dispensaries. Once purchased, an individual cannot consume cannabis (or any cannabis products) while out in public or in certain other locations, such as by schools or anyplace where cigarette smoking is not allowed; consumption must occur within a private location, such as the purchaser’s home or a smoking lounge designated for cannabis consumption.

RECREATIONAL CANNABIS LICENSES

The Cannabis Regulation and Tax Act establishes five (5) different types of licenses for the production, sale and delivery of cannabis.

Dispensary Licenses

Dispensary licenses are to be issued by the Illinois Department of Financial and Professional Regulation (the “IDFPR”). These licenses allow for the purchase and acquisition of cannabis from cultivation centers, craft growers, processors and other dispensaries. Each licensed dispensary will be allowed to sell cannabis, cannabis–infused products, paraphernal, cannabis seeds (for medical users only) and related items.

Processor Licenses

Processor licenses will be issued by the Illinois Department of Agriculture (the “IDOA”). Processors are allowed to purchase to purchase and process cannabis for the purpose of extracting the chemicals and other compounds needed to produce cannabis concentrates and to produce cannabis-based products

Transporter Licenses

Transporter licenses will also be issued by the IDOA and are required for the transportation of cannabis, including transportation on behalf of other cannabis businesses.

Craft Grower Licenses

Craft Grower licenses will be issued by the IDOA. Craft growing licenses are required for the growth, cultivation, drying, curing and packaging of cannabis products for sale to dispensaries and processors

Cultivation Center Licenses – Cannabis

Cultivation Center licenses will be issued by the IDOA. Those holding cultivation center licenses will be allowed to cultivate, process and transport cannabis and cannabis-infused products to cannabis businesses in addition to other production-related activities.

Local Cannabis Regulations

The Cannabis Regulation and Tax Act grants certain control to individual municipalities within the State of Illinois. Municipalities are allowed to restrict and limit the location of cannabis-related business in addition to restricting the total amount of cannabis that each business is allowed to possess (provided that the restrictions do not conflict with the Act).

Approved Cannabis Facilities

All of Illinois’ existing medical dispensaries and cultivators currently authorized under the Compassionate Use of Medical Cannabis Pilot Program Act can apply for early approval to enter into the recreational cannabis market as of January 1st. Existing medical dispensaries are allowed up to two (2) recreational-use related licenses.

The IDFPR can issue up to seventy-five (75) conditional licenses by May 1, 2020. These conditional licenses can convert to dispensary licenses after specific pre-established criteria are met. The IDFPR can then issue an additional one hundred and ten (110) conditional licenses after January 1, 2021. In January 2022, the IDFPR can increase the number of available licenses to no more than five hundred (500).

The Cannabis Regulation and Tax Act also places restrictions on the number of cultivation centers, craft growers and infusers that the IDOA can license. In addition, it requires record-keeping, laboratory testing, and the regulatory enforcement of requirements placed on cannabis business, including the manufacturing, advertising, and destruction of products.

Financial Protections for Cannabis-related Business

In order to provide cannabis-related businesses the ability to use Illinois financial institutions (and to protect same), the Cannabis Regulation and Tax Act indicates that financial institutions which provided services to cannabis-related business are exempt from Illinois criminal laws as long as they follow all other applicable state laws. These financial institutions are required to keep the cannabis-related business’ information private and they may not make it available to anyone other than the cannabis-related business or a legal representative.

Monetary Matters – Tax Sales of Cannabis and Cannabis-related Products

The potential revenue to be earned by the State of Illinois due to the legalization of cannabis has been a hotly debated topic for many years. As a result, Illinois has developed a multi-tier taxing plan to address this new revenue source.

The State of Illinois has the ability to tax sales of cannabis and cannabis-related products by cultivators, craft growers, infusers and dispensaries. At the current time, the state’s cultivation tax is seven percent (7%) and retail excise taxes ranging from ten percent (10%) to twenty-five percent (25%); the amount of tax charged is dependent upon the THC level within the cannabis or cannabis-product.

All of the counties and municipalities may apply a retailer occupation tax to dispensary sales. Cook County is authorized to levy a three percent (3%) tax and certain other countries are allowed to impose up to a three percent (3%) retail tax on dispensary sales.

Employment Issues – Drug Free / Zero-Tolerance Policies

The Cannabis Regulation and Tax Act allows employers to establish drug-free or zero-tolerance policies in addition to being able to discipline and terminate impaired employees and those operating under the influence of cannabis while at work. Employees are prohibited from working or being on call while impaired. The Right to Privacy in the Workplace Act has been amended to protect employees who lawfully use cannabis-based products while on their personal time.

Social Justice Issues – Cannabis Convictions

In an attempt to make reparations for prior harm caused by cannabis laws, the Act offers financial assistance and certain benefits related to the license application process to those individuals who have been directly and adversely affected by the prior cannabis laws and enforcement of same. In addition, the Act establishes a fund that will provide low-interest loans and grants to those who have suffered emotional, psychological, and financial harm as a result of arrests, prosecutions and incarcerations related to cannabis.

The Act provides further relief to those negatively affected by the prior cannabis laws by providing a route for the expungement of records for those with minor cannabis offenses and, provided the Governor grants a mass pardon, for those with cannabis convictions as well. If an individual’s record was created before the Act but on or after January 1, 2013 must get expunged by 2021. Records created between 2000 and 2012 must be expunged by 2023. Law enforcement is given until the end of 2024 to expunge those records which were created before 2000. Individuals who were convicted of more serious offenses related to cannabis can petition a court for expungement.

To further level the playing field, the Act provides outreach activities, studies and other assistance to minorities, women, veterans, and those with disabilities who are interested in becoming equity owners of cannabis businesses.

Should you have any questions about recreational cannabis or any other laws that may affect your business, or would like to schedule a free initial consultation, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.

Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Business Immigration, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law, Collaborative Divorce & Mediation.

This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.

 

WHEN IS THE BEST TIME TO PLAN? The answer is simple—NOW.

Summer is coming to an end and kids are going back to school.  Summer vacations are now memories and we will all be back on schedules (if we were ever off them!).  Take some time in the next couple of months to consider your estate plan – whether doing it for the first time or updating — before the fall and winter holidays take hold of you.  This is really important for you and your loved ones.

We all know that bad things happen, and usually when you’re least expecting it.  We are all busy living our lives, day by day, trying to get through our endless “To-Do” lists.  But a life-changing, or life-ending, accident or illness can strike at any time and at any age.  None of us are immune from this.  So plan for it now.

A basic estate plan for everyone over the age of 18 should consists of:

  • Advance Directives for Health Care (i.e., Health Care Power of Attorney, Living Will, HIPAA Authorization)
  • Property (or Financial) Durable Power of Attorney
  • Simple Will

If you do nothing else, get these documents in place!  They can make a world of difference for you and your family if you ever become incapacitated or die.  And remember that, even though you may be only 18 years old, or you eat healthy and exercise every day, you are not invincible. Do you really want your family to suffer any more than necessary if something happens to you?

In addition to these basic documents, most people need to do a little more.  This is because protecting assets for our children or other beneficiaries and avoiding unnecessary court costs and legal fees upon your death or disability cannot be accomplished if you stop here.

In 2019, there is a federal estate tax exemption of $11,400,000 and an Illinois estate tax exemption of $4,000,000.  This is great news for most people, eliminating an estate tax as a concern, but you may be surprised by the time you add up life insurance policies, real estate, retirement accounts, CDs, brokerage accounts, and other assets how close you may be to these amounts.

Even if you are nowhere near these exemption amounts, there is a lot of planning you can do to protect yourself and your family from unnecessary expenses and disputes, creditors, and divorce, and possibly take advantage of income tax and capital gains tax planning strategies that are available.

There is no time like NOW to prepare or update your documents.

Consider this — If you are married and have estate planning documents (e.g., revocable living trusts with “A-B trusts” or “Marital and Credit Shelter Trusts”) that were done years ago, back when the estate tax exemption was somewhere between $600,000 and $2,000,000, you are likely to have a result that you do NOT want when you or your spouse passes away.  This is because those trusts were designed to work for you when we had a much lower estate tax exemption, but should probably be updated to reflect the current laws.

We would be happy to sit down and talk with so that you can take steps to provide for yourself and your loved ones.  Should you have any questions estate plans, or would like to schedule a free initial consultation, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.

Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Business Immigration, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law, Collaborative Divorce & Mediation.

This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.

WHEN TO EXPECT AN I-9 AUDIT AND THE AUDIT PROCESS

HOW DOES A BUSINESS OWNER KNOW WHEN THEIR BUSINESS IS GOING TO BE AUDITED?

Businesses can be audited at any time. Employers will receive a Notice of Inspection (NOI) and are given at least three business days to produce the Forms I-9.

The business employer may be requested to provide supporting documentation, such as a current employee listing, copy of their payroll, business licenses and or Articles of Incorporation.

 

WHAT HAPPENS WHEN A VIOLATION IS FOUND DURING AN I-9 AUDIT?

If violations are found, an employer is given ten business days to make corrections. For substantive and uncorrected technical violations, an employer may receive a monetary fine for each violation. A notice may be given to the employer regarding the audit. Below are some of the types of notices an employer may expect if violations are determined during the audit:

Notice of Discrepancies: ICE provides this notice to the employer when they are unable to confirm the employment eligibility of an employee based on the information provided on the I-9. The employee in question, is to be provided a copy of the notice and allow him/her the opportunity to submit additional documentation to prove work eligibility.

Notice of Suspect Documents: ICE will provide this notice to the employer when they have reason to believe that an employee at the business is unauthorized to work. The employer and employee will be able to addresses there concerns by submitting additional documentation to ICE within10 days.

Notice of Technical or Procedural Failures: This notice serves to inform the employer of Technical violations are less serious than substantive violations. This notice identifies the technical violations that were found during ICE’s inspection. The employer is allowed up to10 days to correct the issues. These technical issues will become substantive violations if not corrected about the 10-day period.

Notice of Intent to Fine (NIF) – This notice will state the violations that are substantive, uncorrected technical, knowingly hire and continuing to employ violations.

Employer who have received an NIF will have up to 30-days to request a hearing before the Office of the Chief Administrative Hearing Officer (OCAHO) or negotiate a settlement with ICE. If no action is taken after receiving a NIF, a Final Order will be issued by ICE. OCAHO will assign the case to an Administrative Law Judge (ALJ) if a hearing is requested. All parties will receive a copy of a Notice of Hearing and government’s complaint.

WHAT TYPE OF PENALTIES COULD AN EMPLOYER FACE?

The employer may be penalized with a fine(s) and required to suspend all unlawful activity for knowingly hiring/continuing to employ violations and in some cases, may be criminally prosecuted and or will be prevented from participating in future federal contracts and from receiving other government benefits.

EXAMPLE:  

The employer may be penalized with a fine(s) for substantive and technical violations that have not been corrected.

The number of violations will be divided by the number of employees for which a Form I-9 should have been prepared to obtain a violation percentage. Depending on whether this is a first offense, second offense, or a third or more offense, this percentage provides a base fine amount.

EXAMPLE:

  • A company has 86 employees. 22 of the forms are incorrect. The violation percentage is 26% and this is a second violation. The penalties assigned to this company would be 22 x $750 = $16,500!
  • A company has 24 employees. 13 of the forms are incorrect as several are missing information; some have information written in the wrong places, some newer employees completed expired forms. The violation percentage is 54%, but this is the first violation. The penalty assigned to this company would be 13 x $935 = $12,155!
  • A company has 55 active employees and 8 employees that termed within the last year. 63 of the forms are either missing or incorrect. The violation percentage is 100% and this is a first violation. The penalties assigned to this company would be 63 x $935 = $58,905.

 

HOW TO AVOID I-9 AUDIT VIOLATIONS

To avoid violations, employers should take steps prior to an audit to reduce potential violations that can result in fines from an I-9 audit. One step would be to seek legal counsel to ensure the correct forms and measures are taken to avoid penalties. Additionally, employers should keep all forms current and complete. For more suggestions, see our article “How to Prepare Your Business for an Increase in Workplace I-9 Enforcement.”

The attorneys of Waltz, Palmer & Dawson, LLC frequently counsel business owners on I-9 audits. If you would like to schedule an initial consultation at no charge to discuss questions you have about I-9 audits and any other legal needs for your business, please contact Waltz, Palmer & Dawson, LLC at (847) 253-8800 or contact us online.

 

Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law, Collaborative Divorce & Mediation.

 

This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.

 

 

 

 

THE NEW ILLINOIS NO SALARY HISTORY LAW: TOP 5 THINGS EMPLOYERS NEED TO KNOW

Under a new law signed by Illinois Gov. J.B. Pritzker on July 31, Illinois companies soon be prevented from asking job applicants or their previous employers about salary history. The new law amends the Illinois Equal Pay Act by adding prohibitions on employers from asking job applicants for past wages during the hiring process, among other changes.

 

Here’s what you need to know:

 

Number 1: When does the No Salary History Law start?

 

The No Salary History law will go into effect on September 29, 2019.

 

 

Number 2: What does the No Salary History Law do?

 

The new law amends the Equal Pay Act of 2003 and prohibits an employer from:

  • screening job applicants based on their wage or salary history, including benefits or other compensation
  • requiring that an applicant’s prior wages satisfy minimum or maximum criteria,
  • requesting or requiring as a condition of being interviewed or as a condition of continuing to be considered for an offer of employment that an applicant disclose wages or salary history.
  • Require that an applicant disclose wage or salary history as a condition of employment.
  • Discharge or discriminate against an employee for failing to comply with any wage or salary history request or requirement.
  • requiring an employee to sign a contract or waiver that would prohibit the employee from disclosing or discussion information about the employee’s wages, salary, benefits or other compensation.

Number 3: What damages does the No Salary History Law impose for violations?

 

Workers will be able to seek up to $10,000 in damages if employers violate the law. The law also allows for injunctive relief and provides that the costs and attorney’s fees can be awarded to the impacted employee or candidate. The law allows for recovery of compensatory damages as well, but only to the extent those damages exceed special damages. Claims can be brought up to five years after the date of the violation.

 

Number 4: What exceptions are there to the No Salary History Law?

 

The new law does include some exceptions for employers:

 

  • If the job applicant’s wage or salary history is a matter of public record under the Freedom of Information Act or similar law or is contained in a document completed by the job applicant’s current or former employer and then made available to the public by the employer, or submitted or posted by the employer to comply with State or Federal law; or
  • The job applicant is a current employee and is applying for a position with the same current employer.
  • The job applicant voluntarily and without prompting discloses his or her current or prior wage or salary history, including benefits or other compensation, on the condition that the employer does not consider or rely on the voluntary disclosures as a factor in determining whether to offer a job applicant employment, in making and offer of compensation or in determining future wages, salary benefits, or other compensation.

 

The law also makes clear that it is not a ban on employers or employment agencies, or an employee from voluntarily providing information about wages, benefits, compensation or salary offered in relation to a position or from engaging in discussions with an applicant for employment about the applicant’s expectations with respect to wage or salary, benefit, and other compensation.

 

Number 5: What do Employers need to do in the face of the No Salary History Law?

 

Essentially it is just this simple – do not ask candidates or their previous employers about salary history. But more specifically – Employers need to update their employee handbooks to comply with the law and need to educate the human resources employee, supervisor or similar employee who has access to compensation information on the restrictions contained in the new law.

 

HISTORY OF THE NO SALARY HISTORY LAW

 

According to the Chicago Tribune report, Advocates say asking applicants about their salaries at previous jobs helps perpetuate a wage gap between men and women doing the same jobs. Illinois lawmakers passed two previous versions of the legislation, but Pritzker’s predecessor, Republican Gov. Bruce Rauner, vetoed both.

 

“We are declaring that one’s history should not dictate one’s future, that no person should be held back from earning their true value because of how much money they were paid in a previous job,” Pritzker said during a bill-signing event at Chicago Women’s Park and Gardens in the Prairie District neighborhood on the Near South Side. “It’s no longer acceptable to wring quality work out of capable women at a discounted rate.”

 

NPR Illinois reports that State Rep. Anna Moeller, a Democrat from Elgin said low salaries often follow people from job to job — especially women. The new law will help break that cycle. “Half of all households are led by a working mother, when her income is depressed, that translates to lower wages for her children and for her family’s,” she said.

Under the measure, prospective employees can self-disclose a previous wage and negotiate wages — but a final salary can only be determined by skill or seniority.

During the signing, Pritzker called out the U.S. Soccer Federation which hasn’t paid four-time World Cup champion U.S. Women’s Soccer Team equal pay.

“Less than a block here sits the headquarters of the United States Soccer Federation, an organization that just this week defended a different kind of decision: to compensate its female players at lower rates than the men despite their substantially higher success rate – an act so questionable that the men’s team itself declared the justification inequitable and unfair,” he said.

“Here in Illinois, we know that women get the job done. It’s time to pay them accordingly.”

Former Republican Gov. Bruce Rauner vetoed the measure twice due to concern the law would hurt businesses.

At least 18 other states have passed similar laws.

Should you have questions regarding the No Salary History Law or other legal needs for your business or would like to schedule a no-charge initial consultation to discuss questions you, please contact Waltz, Palmer & Dawson, LLC at (847) 253-8800 or contact us online.

 

Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law, Collaborative Divorce & Mediation.

 

This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.

 

IS THERE A DISCONNECT BETWEEN YOUR WILL OR LIVING TRUST AND YOUR ASSETS?

 

Do you have a Will?  Or a Revocable Living Trust?  Does this document say how your assets will be divided among your family members at your death?  Example – “I leave everything to my children in equal shares.”

Now think about your assets.  Have you added someone as a joint owner on your bank accounts or real estate for convenience or for some other reason?  Have you named beneficiaries on your life insurance policies and retirement plans (IRAs, 401Ks)?  If you’re like most people, you probably have.

A recurring problem that we see with our clients is that their Will or Revocable Living Trust (sometimes called a “Living Trust” or “Declaration of Trust”) says one thing, but the titling of their assets, or Payable on Death/Transfer on Death (POD/TOD) beneficiary designations, say something completely different.  This leads to unintended results, family fighting, and often a lot of additional time and expense for your family to sort it all out.

Following are some points you must understand when planning for the disposition of your assets at your death:

  • Your Will only disposes of assets that are titled in your individual name at your death. If such assets total over $100,000 in value, or if you own any real estate in your own name at your death, then probate will likely be necessary to transfer such assets to the beneficiaries named in your Will.   A Will does not avoid probate.

 

  • A Living Trust will only control the disposition of assets that are titled in the name of the Living Trust, or payable to the Living Trust, upon your death. Thus, if you have executed a Living Trust, you must be sure that you have taken the necessary steps to fund your Living Trust by properly titling your assets and naming such trust as the beneficiary, as appropriate, so that your Living Trust will actually work the way you intend.

 

  • Bank accounts, stocks, real estate, and any other assets titled jointly with right of survivorship will pass by operation of law to the surviving joint owner, regardless of what your Will or Living Trust provides. Don’t assume that the person you added as a joint owner for convenience to help you during your life will then share the asset with other family members at your death.

 

  • If you have named primary and contingent beneficiaries on your retirement plan accounts and life insurance policies (which, hopefully, you have), these accounts and policies will pass to the named beneficiary, regardless of what your Will or Living Trust states (unless your estate or Living Trust is named as the beneficiary). If any of these beneficiaries are minors or disabled adults, a guardianship estate will need to be opened for such beneficiary.  If you haven’t checked your beneficiary designations recently, you may be surprised who you named years ago when you opened the account or purchased the policy.

Even if the person who is named on your bank account with you, or who is named as the beneficiary on your life insurance policy, chooses to carry out your wishes and share these assets with your other family members according to your Will or Living Trust, they, and your other family members, will need comply with gift tax and income tax filing requirements and sort out the tax consequences of such transfers between them.

Make it easier on your family.  Prepare your Will and Living Trust to provide for your intended distribution at your death.  And then make the changes on your accounts so that these provisions will apply to your assets.  In other words, “connect” your assets to your Living Trust.  Doing so will result in your wishes being carried out legally, and without relying on your family to “do the right thing” and forcing them into more tax filings than necessary.   It is important that you coordinate all of your estate planning documents, titling of your assets, and beneficiary designations to be sure that your intended beneficiaries actually receive what you want them to receive at your death.

Contact our office to schedule a no-charge initial consultation with one of our experienced estate planning attorneys.  We will address all of these issues, and more, to be sure that your final wishes for your hard-earned assets can be carried out.