Every business has those key employees who you really do not want to lose. A common risk for this is when your customers see how well an employee performs and decides it would be even better to bring them in-house (cutting out you and your profit margin). Many businesses protect themselves against this risk with a “no-hire” clause in customer contracts where they agree not to poach employees from you. But that may no longer be possible here in Pennsylvania.
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This is the final installment in a three-part series about data breaches and the requirements of Pennsylvania law relating to data breach notification. The previous posts in this series are: Doing Business in 2019? You Should Be Thinking About Data Security; and When Does a Data Breach Require Disclosure Under Pennsylvania’s Data Breach Notification

This is part two of a three-part series about data breaches and the requirements of Pennsylvania law relating to data breach notification. Part one of this series was Doing Business in 2019? You Should Be Thinking About Data Security.

 The first post in this series made the case for why you should take data security seriously. Otherwise, you’ll need to worry about the daunting task of complying with a multitude of data breach notification laws and the public relations nightmare of being the next company that revealed its customers’ personal information.

But as the saying goes: the best-laid plans of mice and men often go awry.
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This is part one of a three-part series about data breaches and the requirements of Pennsylvania law relating to data breach notification.

If the events of the past few years are any indication, the scale and frequency of data breaches will only increase in 2019. According to Experian’s 2019 Data Breach Industry Forecast, in the first half of 2018, the number of records compromised exceeded the total number of breached records for all of 2017.

In the event of a data breach, legal compliance obligations can be daunting, particularly if your business stores personally identifiable information for residents of other states. All 50 states have data breach notification laws, each of which is slightly different. And do you store information about residents of the EU? Then you may need to worry about how the GDPR applies.
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Back in July, Matt Landis updated us on several of the stories confirming Lancaster’s technology sector continued to thrive in 2018. As we close out the year, let’s look at a few more that made the news in our area during the second half of the year!

  • Think self-driving cars are still an early-stage

The Internal Revenue Service has announced the 2019 optional standard mileage rates which are used to compute the deductible costs of operating a vehicle for business, charitable, medical or moving expense purposes.

Beginning on January 1, 2019, the standard mileage rate for use of a car, van, pickup or panel truck is 58 cents per mile driven for business use (up from 54.5 cents in 2018), 20 cents per mile driven for medical or moving purposes (up from 18 cents in 2018), and 14 cents per mile driven in service of charitable organizations.
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A few months ago I wrote about the Third Circuit Court of Appeal’s avoidance of ruling on whether employers have a duty to protect their employees’ personal information. We now have an answer to that question (at least in this Commonwealth) from Pennsylvania’s Supreme Court: Yes, yes it does.

On the eve of Thanksgiving the Pennsylvania Supreme Court released its decision in Dittman v. UPMC. This lawsuit was brought by employees of the University of Pittsburgh Medical Center over a data breach that leaked the employees’ names, birth dates, social security numbers, and bank account information. But the existence of a duty by UPMC to protect this personal information remained in doubt. The Court ended this debate by ruling:

an employer has a legal duty to exercise reasonable care to safeguard its employees’ sensitive personal information stored by the employer on an internet-accessible computer system.

For employees, this is a decision that should be heralded as an important protection against identity theft. After all, what choice does an employee have but to give personal data to their employer? That the employer must protect that information is just common sense.
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The Pennsylvania Department of Revenue, somewhat quietly, has issued a sales tax bulletin recently setting forth some guidance which lays the groundwork for the Department of Revenue to begin imposing a 6% sales tax on products served by Pennsylvania breweries in their taproom to customers. This would include draft beers that are sold onsite and six packs and growlers which are sold for off premises consumption.

There didn’t appear to be a lot of buzz when this guidance was passed by the Department of Revenue. Central Penn Business Journal published an article highlighting the double hit that many breweries are currently taking given the tariffs  that have been imposed by the Trump Administration on steel. What is of particular concern is the seemingly unfair and inconsistent manner in which the sales tax would be imposed on the sales made by breweries when compared to a restaurant.
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When the Pennsylvania Liquor Code was amended recently to allow distributors to sell growlers, some savvy individuals realized that the boundaries could be pushed, and other types of ready-to-consume beverages may be able to fit within the parameters of what beer distributors may now sell in a “growler”. One of the biggest trends in the beer distributor business has been the sale of alcoholic slushies. When this first started, there was much discussion and debate as to whether the liquor code actually permitted this practice and what position the Pennsylvania Liquor Control Board would take regarding the practice. Fortunately, within the last couple of months, the General Counsel’s office for the PLCB has issued some additional guidance which clarifies that under the right circumstances, a beer distributor may sell slushies for off-premises consumption.

The PLCB in its most recent guidance has acknowledged that the Liquor Code broadly defines what is considered to be a “refillable growler”, and any refillable container that can be resealed would generally meet the definition. In the context of the sale of these slushies, most distributors have been placing them in refillable plastic cups which have a lid which must be removed before the beverage can be consumed, or if the lid has a hole for a straw or a place to drink, a sticker or other seal is placed over that so that the container is completely enclosed.
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If you’re thinking about starting a business in Pennsylvania, an important part of the financial side of your business plan is to evaluate the impact of taxes on your new business. Your lawyer and your accountant are key members of your business team that can help you evaluate what type of entity to form, how that entity should be taxed, and the taxes applicable to your business.

Part three of this series discusses taxes associated with ownership of real estate and employment taxes. Part one discussed sales and use taxes and others that may apply based on the nature of the goods you sell or the services you provide. Part two discussed taxes that may apply depending on the way your business is organized.

This post is not intended to be a substitute for legal or tax advice from your lawyer or accountant – you should talk to them in order to obtain advice to address your specific situation. Need a lawyer or an accountant? We might be able to help you with that!
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