The Practice of Excellence

3 DIVERSITYCelebrating Valiant Women of the Vote

SPRING 2020

DRESSMAN BENZINGER LAVELLE pscNorthern Kentucky: (859) 341-1881 Cincinnati: (513) 241-4110Louisville: (502) 572-2500

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A report on emerging legal trends from the attorneys of DBL Law

© 2020 Dressman Benzinger LaVelle psc. All Rights Reserved. EXCELLENCE is a publication of Dressman Benzinger LaVelle psc. The contents are intended to provide information of general interest and should not be construed as legal advice. Questions about individual situations should be discussed with the attorney of your choice.

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4&5 FIRM & ATTORNEY NEWS

5 EMPLOYMENT & LABOR U.S. Department of Labor Issues Final Ruling To Update Joint Employer StatusInterpretation

1 EMPLOYMENT & LABORU.S. Department of Labor Issues Final Ruing For Calculating ‘Regular Rate’ Of Pay

For the first time in 50 years, the U.S. Department of Labor (DOL) has updated the definition for what perks employers should include when calculating the regular rate of pay. A final rule took effect on January 15, 2020.

“Regular rate” is used to calculate overtime premiums under the Fair Labor Standards Act (FLSA). It currently includes hourly wages and salaries for non-ex-empt workers, most bonuses, shift differentials, on-call pay, and commissions. It currently excludes health insurance, paid leave, holiday, and other discretionary bonuses and certain gifts.

DOL noted in its announcement on the new ruling that some employers were uncertain about whether some perks had to be included in the regular rate of pay, and therefore chose not to offer competitive benefits. The new rule clarifies what employers may exclude from the regular rate calculation, including: • Wellness programs, gym access, onsite specialist treatment, and fitness classes • Discounts on retail goods and services • Parking benefits • Tuition benefits • Adoption assistance • Unused paid leave • Certain penalties employers are required to pay under state and local scheduling laws • Business expense reimbursement for things like cellphone plans, credentialing exam fees, and organization membership dues • Travel expenses above the maximum travel reimbursement under the Federal Travel Regulation system or the optional IRS substantiation amounts for certain travel expenses. • Select sign-on and longevity bonuses • Discretionary bonuses • Complimentary office coffee and snacks • Benefit plan contributions for accidents, unemployment, legal services, and other events that may cause a future financial hardship or expense.

U.S. Department of Labor Issues Final Ruling For Calculating ‘Regular Rate’ Of Payby Bob Hoffer rhoffer@dbllaw.com

2 REAL ESTATE Treasury Issues Final Opportunity ZoneRegulations

6 EMPLOYMENT & LABOR New Regulation Impacts Employers WhoHire Commercial Drivers

3 EMPLOYMENT & LABORMandatory Kentucky Labor Law Poster

Change

The Department of the Treasury and the Internal Reve-nue Service released Final Regulations governing the tax benefits from investing in qualified opportunity zones (“QOZs”). Under the QOZ program, individuals make eq-uity investments in qualified opportunity funds (“QOFs”) which deploy the invested capital into qualified oppor-tunity zone business property (“QOZ Business Property”) and, as a result, the investors obtain deferral of certain eligible capital gains, and permanent exclusion of future capital gains realized on the appreciation of their invest-ment.

The QOZ program was first introduced by the 2017 Tax Cuts and Jobs Act (“TCJA”). Since then, two sets of proposed regulations were issued in October 2018 and May 2019, respectively. More than 300 comments were filed in response to the two sets of proposed regula-tions. The IRS reviewed and, where appropriate, incorpo-rated these comments into the Final Regulations, which became effective this year.

The Final Regulations clarify the rules contained in the previously-issued proposed regulations and also add several new rules. Some of the more taxpayer-friendly rules include: 1. Eligible Section 1231 Gains. Section 1231 gain generally arises when a taxpayer sells depreciable or real property used in its trade or business. Under the proposed regulations, only net section 1231 gain was treated as an eligible gain under the QOZ rules. The final regulations relaxed this rule by re-defining eligible gain to include gross section 1231 gain, without reduction for 1231 losses. 2. Asset Sales by QOFs and QOZ Businesses. There was some concern from taxpayers and practi-tioners regarding the treatment of the proposed regula-tion of a QOF’s sale of assets, and how this would affect taxpayer-investors. The final regulations allow investors in certain QOFs to exclude gains and losses from all sales or exchanges in the ta=xable year, rather than just capital gains or losses.

3. QOZ Business Property - Aggregation. The final regulations provide aggregation rules for the sub-stantial improvement requirement. For example, mul-tiple buildings conveyed by the execution of one deed may be treated as a single property. Likewise, buildings on contiguous parcels of land may be treated as a single property, subject to a myriad of technical requirements. The final regulations also clarify that any costs that are added to the basis of the property will count for pur-poses of substantial improvement, including demolition costs, permitting, professional fees, and site preparation

costs, infrastructure, brownfield site remediation, and profes-sional fees. 4. Vacant Property. The proposed regulations provided that, where a building has been vacant for at least five years pri-or to being purchased by a QOF, the purchased building will satisfy the original use require-ment. With respect to property that was vacant beginning prior to the designation of a QOZ, the

final regulations now provide that only a one-year vacan-cy period will be required. 5. Cure Period. The final regulations adopt a six-month period to cure certain defects that caused the business to fail to qualify as a QOZ Business. Moreover, a QOF can assert a defense of reasonable cause if the QOF becomes subject to a penalty for failure to satisfy the 90% investment standard. This “reasonable cause” relief presently exists under various sections of the Internal Revenue Code, and the inclusion of such relief within the final regulations will allow taxpayers to avoid costly penalties in the event of defects with their investment into the QOF. 6. Effective Date. The final regulations become effective 60 days after they are published in the Fed-eral Register. For investments made prior to this time, taxpayers can either rely on the final regulations or the proposed regulations but must apply either the pro-posed regulations or final regulations on a uniform basis. This will ensure that taxpayers who made investments in QOFs or organized QOFs in reliance on the proposed regulations will not be penalized or affected, so long as they complied with the proposed regulations.

DBL Law SPRING 2020

Treasury Issues Final Opportunity Zone Regulations

by Ryan Whitaker rwhitaker@dbllaw.com

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During March, DBL Law's Diversity Committee com-memorates Women’s History Month and the vital roles of women in American history. Every year, the National Women’s History Alliance selects an annual theme for Women’s History Month. The 2020 theme is “Valiant Women of the Vote.” This theme honors the 100th anni-versary of the 19th Amendment, which granted women the right to vote.

The long path to women’s suffrage began in the early decades before the Civil War and took nearly a century to achieve. In 1848, a white women’s suffrage group led by Elizabeth Cady Stanton gathered at the Seneca Falls Convention in New York to discuss women’s rights along-side abolitionist Frederick Douglass, boldly asserting in their Declaration of Sentiments that “all men and women are created equal.” In 1851, abolitionist Sojourner Truth spoke at a women’s rights convention in Akron, Ohio, and delivered her infamous “Ain’t I A Woman?” speech.

After the Civil War, the 14th and 15th Amendments to the Constitution spurred further discussions of suffrage. The 14th Amendment guaranteed “all citizens” the right to vote, but defined “citizens” as exclusively male. The 15th Amendment guaranteed African-American men, but not women, the right to vote. During this time, some wom-en’s suffrage groups, such as the group led by Stanton and Susan B. Anthony, opposed the 15th Amendment and argued that giving African-American men the right to vote would degrade the progress of women’s suffrage. Rather than joining African-American men and women in the fight for racial justice, some white suffragists ignored the ways in which the two causes of racial and gender equality can coexist and further the other.

Other groups, such as those led by Lucy Stone and Af-rican-American suffragist Mary Church Terrell, however, advocated for a more intersectional view of women’s suffrage. Around 1896, Terrell penned the motto “Lifting As We Climb” for the National Association of Colored Women, implying that the causes of racial and gender equality are intertwined. Her speeches forced white women in her audiences to reflect on the oppression and systemic violence that African-American women endured during slavery.

Starting in the 1910s, Western states began extending women the right to vote, but Southern and Eastern states resisted. Although World War I in 1917 delayed the cam-paigns, the work of women on behalf of the war effort helped to advance their cause and prove they were just as deserving of citizenship as men. Finally, on August 18, 1920, Congress ratified the 19th Amendment. The 19th Amendment guarantees that the right to vote shall not be denied or abridged on account of sex. The passage of the 19th Amendment is widely considered the single most significant achievement of women in that era. It was the largest extension of democratic voting rights in U.S. history and it was achieved peacefully through the democratic process.

Today, the legacy of these original suffragists lives on through the work of other notable figures in U.S. history, such as those who fought against voter suppression in the period leading up to the Voting Rights Act of 1965, and contemporary figures who fight for equity in the workplace through equal pay and the #MeToo Move-ment. DBL Law is proud to recognize all if its women em-ployees and celebrate women’s achievements in creating a more “gender-equal world.”

Celebrating Valiant Women of the Vote

by Rebecca Sheehan rsheehan@dbllaw.com

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by Nick Birkenhauer nbirkenhauer@dbllaw.com

Mandatory Kentucky Labor Law Poster Change

The Kentucky Labor Cabinet has added information about the Occupational Safety and Health Standards Board to its labor law poster. Effective January 8, the change requires employers to place new posters in break

and other common areas. To download the latest poster free of charge, visit https://labor.ky.gov/standards/Pages/Wages-and-Hours.aspx#Required_Workplace_Posters.

DBL Law SPRING 2020DBL Law SPRING 2020

Firm & Attorney News More at dbllaw.com/news

DBL Law has promoted Justin Knappick to Partner. Justin practices in the area of commercial and collections litigation. He joined DBL Law in April 2013. Justin is admitted to practice law in Ohio and Kentucky.

Patrick Reagan practices in the firm’s Civil Litigation practice group. Patrick earned his law degree from the Univer-sity of Cincinnati College of Law, magna cum laude.

Managing Partner Bob Hoffer has been named a 2020 Horizon Nonprofit Award recipient. Bob was recognized by St. Elizabeth Healthcare, the St. Elizabeth Healthcare Foundation and American Heart Association as the MVP Board Member of the Year.

Kevin Hoskins, a partner in DBL Law’s civil litigation, employment & labor and administrative law sections, has joined the Cincinnati Parks Foundation Board of Directors.

Partner Kelly Holden has been invited to speak at this year’s National Associa-tion of College and University Attorneys conference. Kelly, who leads the firm’s employment and labor practice group, will share current legal insights and in-formation during her presentation titled “Coaches’ Code of Conduct and Player Abuse Allegations.”

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Firm Honored For Commitment To Employee WellnessDBL Law has been named to the 2020 Best Workplaces in NKY list by the publishers of NKY Magazine. Editor Kevin Michell cited DBL Law’s commitment to employee wellness, as a key factor in being recognized. DBL Law founded its Wellness Committee in May 2019. Committee members represent partners, associates, staff members and nurses from all three of the firm’s offices, working collectively to maintain and improve employee wellness in all facets.

Three DBL Law Partners Named Leading LawyersCincy Magazine has released its 2020 Leading Lawyers list and three DBL Law attorneys are among the 296 being honored this year. For 16 years, registered lawyers in Southwest Ohio, Northern Kentucky and Southeast Indiana have been invited by the magazine to submit ballots nominating the best among their colleagues. This year’s DBL Law honorees by specialty area Jim Dressman, Banking, Mark Guilfoyle, Employment & Labor, and Chris Markus, Civil Litigation.

13 Listed As Super Lawyers 2020Each year, no more than five percent of the lawyers in each state are selected by the Super Lawyers research team to receive this honor. This year, Partner David Kramer was named to the Top 50 Kentucky Super Law-yers List and these DBL Law attorneys were named to the 2020 Super Lawyers List:

Ohio Rising StarsKatie Tranter, Employment & Labor

Kentucky Rising StarsNick Birkenhauer, Employment & LaborDavid Dirr, Health CareMike Enzweiler, Medical MalpracticeJustin Knappick, Civil LitigationRyan McLane, Civil LitigationAndrew Pellino, Medical Malpractice

Kentucky Super LawyersMark Guilfoyle, Administrative LawBob Hoffer, Employment & LaborDavid Kramer, Medical MalpracticeRick Meyer, Business LitigationBetsy Weber, BankruptcyKent Wicker, White Collar Crimes

Erin Shaughnessy practices in the firm’s Civil Litigation and Labor & Employment practice groups. Erin earned her law degree from the University of Louisville Brandeis School of Law, magna cum laude.

Attorney News Firm News

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DBL Law Welcomes New Associates:

The U.S. Department of Labor has issued a final ruling updating its joint-employer status interpretation under the Fair Labor Standards Act (FLSA). This is the first signif-icant update to this act in over 60 years.

The ruling, issued January 12, 2020, adopts a four-factor balancing test and rejects factors that have fueled recent litigation, such as a worker’s economic dependence on a potential joint employer, the business model of the pro-spective employer, and the potential employer’s unexer-cised power over the worker. The test is designed to help determine FLSA joint-employer status in cases where an employee performs work for one employer that simul-taneously benefits another person. The final rule took effect on March 16, 2020.

The U.S. Department of Labor’s four-factor test takes into consideration whether a business: • Hires and fires employees • Supervises and controls employees’ work schedules or conditions of employment to a substantial degree; • Determines employees’ rate and method of payment; • Maintains employment records.

According to the U.S. Department of Labor’s Wage and

Hour Division (WHD), the final rule: • specifies that when an employee performs work for the employer that simultaneously benefits another person, that person is considered a joint employer when that person is acting directly or indirectly in the interest of the employer in relation to the employee; • provides a four-factor balancing test to de temine when a person is acting directly or indirectlyin the interest of an employer in relation to the employee; • clarifies that an employee’s “economic dependence” on a potential joint employer does not determine whether it is a joint employe under the FLSA; • specifies that an employer’s franchisor, brand, and supply, or similar business model and certain contractual agreements or business practices do not make joint-employer status under the FLSA more or less likely, and • provides several examples applying the Department’s guidance for determining FLSA joint-employer status in a variety of different factual situations. The final rule outlines potential factors that could also be evaluated to determine joint employment.

DBL Law SPRING 2020

U.S. Department of Labor Issues Final Ruling To Update Joint Employer Status Interpretation

by Bob Hoffer rhoffer@dbllaw.com

Firm & Attorney News More at dbllaw.com/news

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Firm Announces Plans To Relocate HQDBL Law has announced plans to return to the city where the firm got its start, Covington, KY. Over 70 employ-ees will move into the $11.3 million, 30,000 square foot property located in the 100 block of East Fourth Street. Developer Alan Haehnle, known for his work reclaim-ing historic urban properties, will restore the Monarch Building and will fuse what once was a tool company with a new structure, capturing the historic beauty seen in Covington’s business district with a modern touch that embodies the vibrancy and growth taking place in the downtown core. The new four-story DBL Law

headquarters is being designed by PCA Architecture. It will feature two outdoor patio decks offering striking views of the Cincinnati skyline, and include a new build-ing fused into the existing historic beauty of the Mon-arch building. The firm plans to move from its Crestview Hills location in the Fall of 2021.

Firm Listed Among Top 100 Best Places to Work in KYDBL Law has been named one of the 100 Best Places to Work in Kentucky by the Kentucky Chamber of Com-merce, the Kentucky Society for Human Resource Man-agement (KYSHRM) and ClearPath Mutual Insurance Company.

The Practice of Excellence

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DBL Law SPRING 2020

RETURN SERVICE REQUESTED

There is a new requirement for employers who hire drivers for a commercial vehicle. Effective January 6, 2020, employers who hire commercial motor vehicle (CMV) drivers are required to query a new national Federal Motor Carrier Safety Administration (FMCSA) Clearinghouse database, which houses drug and alcohol test results of truck drivers.

The Clearinghouse is a secure online database designed to give employers, the FMCSA, State Driver Licensing Agencies (SDLAs) and State Law enforcement personnel real-time information about commercial driver’s license and commercial learning permit holders’ drug and alcohol program violations. The new regulation requires employers to search the database for current and prospective employees’ drug and alcohol violations before permitting those employees to operate a CMV on public roads.

by Kelly Holden kschoening@dbllaw.com

New Regulation Impacts Employers Who Hire Commercial Drivers