Only a few weeks later, the customer has resubmitted their dispute with American Express and now we have been forced to respond again.

Here are a few points I have learned during this process:

1. Don’t just write-off a chargeback request. If the sale was legitimate, you can keep the funds, though the chargeback process requires some time and patience. Also, if you accumulate chargebacks your agreement with the credit card company may be negatively impacted.
2. Deadlines are important. Be careful to watch the deadlines for responding to the requests. The easiest way for a credit card company to dispose of these complaints is for the merchant to fail to respond to a request. If the deadline passes without response, you may not have any recourse against the credit card company.
3. Respond thoroughly but carefully. Consumers may not provide more than one or two sentences in their complaint and if you, the merchant, can thoroughly document the transaction and a valid sale the credit card company is more likely to side with you. However, be careful when you respond because any statements you make or documents you provide will be sent to the customer, and can be used against you in any future court action. If you believe the dispute may lead to a future court or administrative action you should take that into consideration when choosing how to respond. Your attorney can help you choose how to respond in these cases.
4. Don’t take no for an answer. If your request to overturn a chargeback is initially denied, don’t give up. There may be an appeal process, a supervisor, or it may be overturned by writing to the credit card company’s legal department. The departments making chargeback decisions are not necessarily thorough, and they make mistakes, so if at first you don’t succeed, try, try again.
5. Pick your battles. Some battles are just more trouble than they are worth. Should you hire an attorney to dispute a $5 chargeback request? Maybe not, so consider the amount of time and effort that has to go into responding, however, if you aren’t going to dispute the request, try to voluntarily resolve the dispute instead of permitting the chargeback to stand. A chargeback may hurt your relationship with the credit card company, but a voluntary refund probably won’t, or won’t have as significant an impact.

Finally, if you are experiencing a high number of chargeback requests, you need to look at y our business practices and work with your staff to reduce the number of requests. Sometimes this can be done by (1) improving the compliance during the sale, or (2) improving the response to disgruntled customers. Your attorney can help you to analyze your business practices to reduce the risk of chargebacks.

First, it is important to note that there is no prohibition on asking about very old felony convictions in Ohio. Some states do have limits on the length of time a felony is considered reportable, but in Ohio only convictions sealed or expunged by the court can be legally concealed from an employer. See http://codes.ohio.gov/orc/2953.33. Even then, a conviction that is relevant to a particular job may still be reportable, for instance the sex offender who applies to work in a daycare, or the bank robber who applies to be a bank teller.

Second, How would this law effect recruiters?. If this law were passed, it may pose some risk to recruiters who may be seen as influencing the hiring process. If a recruiter asked about a felony conviction and the person did not get the job, they could sue the employer and the recruiter and try to convince the court that both are in violation of the law.

Third, I understand that obtaining work is a key factor in preventing recidivism. Reliable work provides an ex-convict with legal income, and the ability to help support a family. This is particularly important because a second, or perhaps most significant factor, is the maintenance of a support network. An ex-convict with a supportive family to live with, friends to set a good example, and stable family relationships is far less likely to return to crime.

So, I would support legislation that helps ex-convicts to obtain employment. However, how do we tell an employer that they cannot ask about a past felony conviction? This legislation is particularly poor because it does not prevent the employer from discovering the conviction, or discriminating on the basis of the conviction. This legislation merely makes it more difficult for an employer to learn about the conviction, and prevents an ex-convict from being caught in a lie trying to hide the conviction. This encourages ex-convicts to hide their past instead of confronting it and learning to move past it.

How do we tell an employer that given the choice between two equally qualified candidates they cannot choose an individual without a felony over an individual with a felony conviction? Employers also face liability for hiring individuals with criminal history. A bar who hires an individual with a history of violence may be subject to liability if that individual attacks a fellow co-worker or a customer. A delivery company who hires a driver with a felony DUI may be subject to liability when that driver kills someone while drinking on the job. Private employers cannot afford to take that risk and ignore publicly available conviction records. The only group that can afford to take these risks are government employers, and they should hire more ex-convicts. This would free up good labor for the private sector, and put the ex-convicts to work.

So, in my opinion this law is bad, ineffective, and only places a burden on employers without helping the ex-convicts. I will put these thoughts into a letter for my representatives and I would encourage you to do the same. You can find your Ohio representatives here: http://www.legislature.state.oh.us/

Do you agree or disagree? Let me know in the comments.

House Bill 523 establishes a seven point test, summarized as follows:

“Employee” does not mean an individual who performs services for an employer and to whom the following conditions apply:

• (a) Individual control over how to complete performance;
• (b) Customarily engaged in an independently established trade, occupation, profession, or business;
• (c) Separate and distinct business entity from the employer;
• (d) Incurs main expenses and has continuing or recurring business liabilities related to the service performed;
• (e) Liability for breach of contract for failure to complete the service;
• (f) An agreement, written or oral, express or implied, exists describing
  (1) the service to be performed,
  (2) the payment, and
  (3) the time frame for completion; and
• (g) Services are outside of the usual course of business of the employer;

This new rule would replace the current case law which uses the following simple test:

“Whether one is an independent contractor or in service depends on the facts of each case. The principal test applied to determine the character of the arrangement is that if the employer reserves the right to control the manner or means of doing the work, the relation created is that of master and servant, while if the manner or means of doing the work or job is left to one who is responsible to the employer only for the result, an independent contractor relationship is thereby created.” Bostic v. Connor (1988), 37 Ohio St. 3d 144 (citing Marshall v. Aaron (1984), 15 Ohio St. 3d 48, 15 OBR 145, 472 N.E. 2d 335; Richardson v. Mehan (1982), 69 Ohio St. 2d 52, 23 O.O. 3d 90, 430 N.E. 2d 927;Behner v. Indus. Comm. (1951), 154 Ohio St. 433, 43 O.O. 360, 96 N.E. 2d 403.)

Asking for Litigation

HB 523 add unnecessary confusion to this relationship which will require decades of court decisions to clarify. Because the test requires the contractor to meet all seven requirements, courts will not have the ability to identify independent contractors on a case-by-case basis. Failing to meet any one of the requirements will preclude a finding of independent contractor and make that person your employee, irregardless of strong facts showing a clear independent contractor relationship.

First, the new law adds three tests (b), (c), and (g) requiring the contractor to be engaged in a business distinct from the employer. Who is going to decide whether your contractor is an independently established trade, occupation, or business? Hospitals traditionally hire some doctors as independent contractors to staff emergency rooms, radiology, and other departments,  yet, these doctors are in the same business as the hospital. General Contractors in construction hire sub-contractors on large projects to do everything from electrical and concrete, to carpentry and plumbing, but many of these general contractors perform the same tasks on other projects. Veterinarians frequently hire relief doctors to work during vacation days, but these doctors are in the exact same occupation, trade, and business. Each of these common examples fails test (g) because the workers are performing services in the usual course of business of the employer. Yet, in each of these instances, courts today would not hesitate to find that the workers are independent contractors because they have control over the methods of performance, and are primarily responsible for the result of their work.

Second, this law, in section (f), requires you to have an agreement with the independent contractor which defines three specific terms: (1) the service to be performed, (2) the payment, and (3) the time frame for completion. While this is certainly good advice, and I would insist that my clients have a written agreement with every independent contractor covering these terms and more, failure to obtain agreement on these terms should not make every worker your employee. It is not uncommon for the extent of services or time frame to be open terms, or vague terms such as, “services as requested” to be paid “when complete”. It is unclear from this statute what minimum definition is required to establish an independent contractor agreement.

Finally, it is unclear how this statute will impact existing case law. The concept of an independent contractor is important for tax purposes and liability for negligence. The test created here could be used by courts for both purposes.

What are they thinking?

Representative Debbie Phillips has said her purpose in sponsoring this bill is to “…create a more uniform definition of employee to be used by Ohio agencies in defining benefits and taxes. By working to ensure that all businesses are paying in to the system in a fair manner, we can help control the rising costs of some programs as well as create a more competitive and level field for honest businesses.”

Alternatives

There are other ways to accomplish the goal of ensuring taxes are paid. Some alternatives:

1. Require independent contractors to provide statements of tax and financial responsibility;
2. Use the newly required 1099 filings to track compliance.
3. Educate the public about the distinction with brochures, websites, television commercials, and print advertising.

I urge you to write your Ohio representatives and ask them to vote no on H.B. 523.

Find your representatives: Ohio House | Ohio Senate

The Supreme Court of Ohio ruled today that when a vendor charges its customer a nonexistent tax, the funds collected are not a tax collected for the benefit of the taxing authority and the customer may seek recovery of those payments by filing a civil action directly against the vendor. The Court’s 6-0 decision was authored by Justice Evelyn Lundberg Stratton.

It is unclear whether the hotel collecting this non-existent tax from its guests ever forwarded the money to the city or the county, and that may become a key fact when the case is remanded to the trial court. For me, the real question is why on earth would you charge anyone an unnecessary tax?