BOI Filing – The Final Rule

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This forum has been providing periodic reporting on the Corporate Transparency
Act, a federal law requiring certain companies to file their Beneficial Ownership Information to the Financial Crimes Enforcement Network (or “FinCEN”). The most recent update indicated that businesses had until the third week in March to file. This has changed.

In early March, the U.S. Department of the Treasury, through FinCEN, announced that it is going to issue an interim final rule requiring only foreign companies to file Beneficial Ownership Information with FinCEN. More specifically, only those entities that are formed under the law of a foreign country and have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office, are now required to file their beneficial ownership information. Foreign companies meeting this definition may still avoid filing their beneficial ownership information if they qualify for under exemptions under the Act.

On March 26, 2025, the U.S. Department of the Treasury published the interim final rule confirming that all entities formed in the United States are now exempt from the filing requirement. The interim final rule took effect immediately. FinCEN is currently accepting comments and intends to finalize the rule within the 2025 calendar year.

Here is a link to the final interim rule: https://www.federalregister.gov/documents/2025/03/26/2025-05199/beneficial-ownership-information-reporting-requirement-revision-and-deadline-extension

Stay tuned.

The Rapid Pace of Change

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Anyone experiencing anxiety or confusion over the rapid pace of change in the U.S. business world and economy right now is not alone. The news is a constant stream of information that raises more questions than can be answered. This post is highlighting some developments to watch as the year goes on.

There is ongoing litigation over whether the Trump Administration illegally fired the leadership of several independent agencies of the federal government. At the National Labor Relations Board, for instance, the new administration dismissed Gwynne Wilcox, a Democrat, from the Board. After this dismissal, only two members were left on the Board which meant the Board could not issue regulations and could not hear cases. The Board’s investigations were able to continue. On March 6, 2025, a Washington D.C. District Judge decided that Ms. Wilcox’s dismissal was unlawful because the law requires that the dismissal must be “for cause.”

Similarly, Cathy Harris, the Chair of the U.S. Merit Systems Protection Board, challenged her firing by the Trump Administration on similar grounds and prevailed in federal court. It is possible that these two cases will be consolidated and go before the United States Supreme Court. In hearing these cases, the U.S. Supreme Court will review a ninety-year precedent restricting the executive branch’s power to remove members of independent federal agencies.

Two Equal Employment Opportunity Commissioners fired by the Trump Administration have also indicated they may challenge their removals. The pace and number of removals since January suggests that there may be further challenges coming.

What does all of this mean for employers? Disruption in the operations of these agencies could certainly delay response times. Employers should also anticipate shifts in agency policies and priorities and be prepared to adapt.

This same advice applies to companies with diversity, equity and inclusion programs. There have already been stories in the news about large corporations scaling back or eliminating their diversity, equity and inclusion programs. The Trump administration directed the Department of Justice to investigate “illegal DEI” at private sector companies. Although it is too soon to know where the Department of Justice will draw the line between acceptable DEI and anti-discrimination law, companies may want to start to review their policies and practices.

Finally, there is new guidance from the Financial Crimes Enforcement Network. The deadline for BOI filings for most companies is now March 21, 2025. If you own a company impacted by this requirement, make sure you take steps to comply before this deadline.

Court Decisions Impact Overtime and BOI Filings

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In April of 2024, we reported on a finalized Department of Labor rule expanding overtime protections under the Fair Labor Standards Act.  Specifically, the rule updated the salary requirement of the overtime exemption test so that employee making an annual salary of $58,656.00 would be automatically eligible for overtime pay any time they worked more than 40 hours a week.  Previously, the maximum salary threshold was $35,568.00.

The rule was scheduled to go into effect on January 1, 2025.  In the meantime, employers were advised to review their employee salaries and consider making changes in advance of the rule change to ensure compliance.

In November 15, 2024, a US District Court for the Eastern District of Texas decision invalidated the Department of Labor’s final rule.  This means that the old salary threshold remains in effect.  The Department of Labor has the ability to appeal the ruling, but it remains to be seen whether the Department will pursue such a challenge under the new presidential administration.

At this time, employers who had not yet made any salary changes no longer need to do so.  Employers who did make changes are able to legally reverse course on those changes on a prospective basis.  The potential negative impact on employee morale and the possibility of a successful appeal of the District Court’s decision, however, weigh against the wisdom of such reversals.

In our most recent blog post, we noted that a federal court injunction suspended the deadline for BOI reporting.  Since the publishing of that post, the Supreme Court weighed in on the legality of the Corporate Transparency Act and lifted one of the federal court injunctions indefinitely delaying the filing deadline.  Legal consensus is that, while the Supreme Court lifted one injunction, a second injunction remains in place indefinitely delaying the filing requirement.

FINCEN’s website has the following notice posted: “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

Stay tuned for further legal developments on both of these topics.

BOI Filing Developments

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The Corporate Transparency Act, signed into law on January 1, 2021, established a requirement that many businesses file a Beneficial Ownership Interest Report with the Financial Crimes Enforcement Network (“FinCen”), a bureau within the US Department of the Treasury.

FinCEN’s mission is to safeguard the US financial system from illicit activity, money laundering & financing of terrorism as well as promote national security through strategic use of financial authorities and the collection, analysis and dissemination of financial intelligence. FinCen’s receipt of Beneficial Ownership Interest Reports will give FinCEN access to ownership information for many businesses registered and operating across the country, presumably aiding the Network in its mission.

There are 23 different exemptions that permit a business to avoid filing a Beneficial Ownership Interest Report. The practical result of these exemptions is to permit larger companies, publicly traded companies, and non-profit organizations from having to file. Small businesses are also exempt from filing if they meet three criteria, specifically (i) having more than 20 employees; (ii) operating a physical office in the United States; and (iii) filing federal tax returns demonstrating more than $5 million in annual gross receipts or sales.

Lawsuits ensued following passage of the law in 2021 resulting in an injunction suspending implementation of the reporting requirement. A Fifth Circuit ruling on December 26, 2024 lifted the injunction. By December 28, 2024, however, the injunction was back in place. Legal arguments before the Fifth Circuit over whether to keep the injunction in place while the broader lawsuit is heard by the full court are scheduled for March 25, 2025.

When the injunction was briefly lifted in December, January 13th became the deadline for a large majority of companies to submit their BOI reports. The deadline is once again suspended and the US business community awaits further information from the courts and FinCEN.

In the meantime, millions of US businesses have already completed their BOI reporting requirement. Business owners should discuss their strategy for BOI compliance with their legal counsel.

New York Offers Paid Prenatal Leave and Considers Pet-Related Leave

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There are two timely employment law updates for the last quarter of 2024 which are worth noting but do not necessarily warrant separate, independent posts.  Here is a summary of these two changes taking place in New York.

Taking effect January 1, 2025, New York labor law section 196-b will formally require employers to provide employees with twenty (20) hours of paid prenatal leave during any fifty-two (52) week period.  This means that employees will be able to take paid prenatal leave in hourly increments at their regular rate of pay or the applicable minimum wage, whichever is greater.  This paid prenatal leave is in addition to any other state or federal leave entitlements, including under the Family and Medical Leave Act, paid family leave, sick leave or safe leave. 

The amendment permits an employee to use paid prenatal leave for health care services during the employee’s pregnancy, including physical examinations, medical procedures, monitoring, testing and even pregnancy-related discussions with a health care provider.  The leave may also apply to infertility-related discussions and visits with a health care provider.

Further guidance from the State of New York Department of Labor is anticipated prior to the new year.  This additional guidance may also clarify whether expectant fathers can receive paid prenatal leave under this amendment. 

In October of 2024, New York City introduced first of its kind legislation that amends the New York City Earned Safe and Sick Time Act to allow employees to use leave to care for their pets and service animals.  This new legislation expands the current ESSTA by permitting employees to take leave for the “care of a covered animal that needs medical diagnosis, care or treatment of a physical illness, injury or health condition or that needs preventative medical care.”  A “covered animal” has been defined as an animal that is kept primarily for companionship or a service animal.  Stay tuned as we monitor to see if this legislation makes more headway.  Clearly, New York City recognizes the importance of pets to all New Yorkers. 

If you are an employer impacted by the above new law, be sure to consult with your legal counsel and take steps to make sure your company begins to work on revisions to their policies to ensure compliance.

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