What You Should Know about Small Claims Court

Decorative Scales of Justice in the CourtroomPeople don’t always deliver on their word.  Even though you were sure to get a rock-solid contract, people disappear or a business may just plain refuse to pay. This bad behavior leads many people straight to the courtroom.  If the contract wasn’t worth a large sum to begin with, however, you may wonder, is it really worth the hassle to pursue legal action?

You may think that if you were only scammed out of a small amount of money, then pursuing legal action isn’t worth the work of initiating and following through with a lawsuit.  After all, there will be papers to file and courtroom appearances to make.  But before you make this decision, you should know what to expect in small claims court.

Here are five truths to consider before deciding whether or not it is worth the hassle to pursue a case in small claims court.

1)   In New York City, the maximum you can sue for in small claims is $5,000.  If you want to collect more than $5,000 the ease that Small Claims can often provide is not an option.

2)  You don’t need a lawyer.  New York City’s Small Claims Court is surprisingly easy to navigate without legal assistance.  The majority of claimants and defendants in small claims court don’t have attorneys. The judge and the court staff are used to dealing with people without legal backgrounds.  The judge makes an effort to speak in plain language.  You can initiate an action simply by filling out a form with the clerk.  These efforts can make a small claims case much easier to manage while going about your daily business.

3)   You can choose between a daytime or evening court time. Many people choose the evening time because they don’t want to miss work.  This can be a good call, but on the evening you are set to appear be prepared to sit in the courtroom until 10 or 11 at night, it can often take some time for the court to dispose of your case.

4)   You should be willing and prepared to settle.  Small claims courts encourage settlement.  After you serve the other party he or she may suggest a settlement.  This can be a very good thing because if you settle, you don’t have to worry about chasing the money down later, which can be the most difficult part of the process (see number 5 below).

5)  You should have a plan to collect the money.  Unfortunately, many people refuse to pay even after a judge has ordered that they must.  For a small claims case to be worth your time, you need to know how you will get the money if the other party still refuses to pay after a court order.  This can be as simple as knowing where the delinquent party banks, but it can sometimes be more complicated.  Small claims is probably not worth the hassle if you don’t have at least some idea of how you might get paid in the end.  If you are going to pursue the action, make sure you have a payment plan in mind.

Have you ever brought a case to small claims court?  Did you find the process hard to navigate?  What do you wish you had known before jumping in? I would love to hear from you!

Five Things to Ask for When You Can’t Get More Money

Ripped DollarThe first thing everyone wants is more money.  I don’t want to discourage anyone from asking outright for a larger salary or an increased hourly rate.  After all, I have never heard of anyone reneging on an initial offer just because a contractor or an employee asks for more money.

If the other party is not willing to talk about more money, don’t despair.  There are other things you can ask for that can be almost as good as a larger paycheck.

Here are five things to consider asking for:

1)   More Vacation Time – This is an obvious ask and doesn’t require any additional, up-front finances from the company.

2)   Professional Development and Education – Ask the company to cover you for the time and cost to take a class that interests you.  Knowing more about a topic usually makes you better at your job.  This could be anything from a public speaking seminar to computer programming classes to Spanish lessons.  If you are in New York City check out Smartt Talk, General Assembly, or Brooklyn Brainery to get some inspiration.

3)   Transportation or Travel Expenses – Your employer could offer to cover the cost of your daily commute or reimburse you for business travel.

4)   Special Provisions – The beauty of this is that it can be ANYTHING.  Picture your ideal job – Do you wish you could travel more or less? Do you want a nicer office? A company car? Something else that those lucky people at Google get?  Propose the wild idea and see how the other party responds.

5)   A Scheduled Time to Re-Visit the Issue – If you aren’t completely satisfied, ask the company to give you a date in three or six months to discuss your negotiating points again. Regular and more frequent meetings mean more face time with the people that matter and more opportunities to talk up your skills and hard work.

Have you ever been pleasantly surprised when asking for more at a year-end review?  I would love to hear how the negotiations went!

Starting a Business on the Side – Do Tell?

This economy has a lot of people thinking about starting a side business.  Starting a new company, freelancing, and contracting are all great ways to bring in some extra money while reducing your costs.  If you do it the right way you can see if the new business idea is really going to work while maintaining stability at your current gig.

Over the next four weeks I will talk about the various things you need to consider before launching a start-up side business or taking on a second job.

First: To Share or Not to Share

One of the first things you will need to decide is whether or not you are going to tell your employer about what you are doing.  If you decide to go the stealth route keep in mind that you probably want to keep it mum from the entire office.  Co-workers tend to talk and word will probably get back to your boss at some point unless you tell absolutely no one.

Remember to Check your Contract!

Before deciding to ‘fess up, you should also take a look at your employment contract (if you have one).  Many employment contracts limit an employee’s ability to get a second job.  Sometimes contracts require employees to jump through hoops like such as getting the employer’s written permission before taking on any other employment.  If you don’t follow the rules you expose yourself to being fired for cause.

If your contract seems limiting but you are still interested in working at a second gig and your contract discourages this you can always approach your employer and negotiate with him or her.

Once you know where you stand and how up front you are going to be, you are ready to consider the type of work you will be doing and how that work product may affect your employer.  Stay tuned for next week’s post on this issue and how to navigate it.

Hiring Independent Contractors

Start-up and small businesses often begin by hiring independent contractors instead of full fledged employees.  Independent contractors can be an amazing solution to a small business working with a budget and a specific project because an employer is not responsible to pay for or withhold the independent contractor’s payroll taxes or provide benefits.  If your business is planning on hiring an independent contractor, you should be aware that there is more involved than just calling the person an independent contractor.  Businesses can get in trouble with the IRS if they call someone an independent contractor who is in fact an employee.

Although there is no exact definition of what constitutes an independent contractor, there are certain factors that the courts consider when deciding if an individual is an independent contractor or an employee.  Here are some key questions to ask to determine if the person working for you is an independent contractor:

1) Does the individual work exclusively for the company or is he permitted to work for others at the same time?  Allowing the individual to work for others suggests an independent contractor status.

2) Does the business have a written agreement with the individual stating that the individual is an independent contractor and thus the individual  must pay all taxes?  A written agreement that clearly states the terms of the arrangement is always useful.

3) Does the individual control his own work schedule and the number of hours he works for your company?  If you require the individual to work a specific number of hours a week, as opposed to hiring him to complete a project, this may suggest to the court that he is an employee of your business.

4) Does the individual operate from his own workplace and use his own supplies or does he come to an office leased by your business?  If the individual works in his own space and uses his own supplies, as opposed to your company’s space and supplies, the courts are more likely to see him as an independent contractor.

There is not a single, easy answer to whether an employee is an independent contractor or not.  Instead, you should consider your situation in its entirety.