We are happy to announce that Katherine H. Karl  was selected by The Best Lawyers in America®  as the recipient of the 2025 “Lawyer of the Year” award in Real Estate Law in Rochester, New York. Best Lawyers  awards "Lawyer of the Year" accolades to individual lawyers who received the highest overall peer-feedback for a specific practice area and geographic region. Only one lawyer is recognized as the "Lawyer of the Year" for a specialty and metropolitan location per edition. Kate is chair of Underberg & Kessler’s Commercial Lending  practice group and a partner in the Real Estate & Finance  practice group, Kate’s practice covers commercial real estate transfers, development, and financing. She has broad experience representing commercial lenders, owners, developers, and businesses in all aspects of acquisitions, sales, construction, development, and lease negotiations. Kate is a cum laude  graduate of Union University at Albany Law School and a magna cum laude  graduate of Bucknell University, where she earned her B.S. Best Lawyers recognitions are based on an exhaustive Purely Peer Review® evaluation. More than 184,000 industry leading lawyers from around the world are eligible to vote and provide evaluations on the legal abilities of other lawyers based on their specific practice areas.

We are proud to announce that 14 attorneys were recognized in the 2025 edition of The Best Lawyers in America ®  and two attorneys were selected to the 2025 edition of Best Lawyers: Ones to Watch in America ® . The attorneys selected by Best Lawyers  and their areas of recognition are: James A. Coniglio – Municipal Law, Geneseo, NY Patrick L. Cusato – Real Estate Law, Rochester, NY David H. Fitch  – Health Care Law; Litigation - Health Care; Medical Malpractice Law – Defendants, Rochester, NY Steven R. Gersz  – Closely Held Companies and Family Businesses Law; Corporate Law; Corporate Governance Law; Health Care Law; Mergers & Acquisitions Law, Rochester, NY Timothy P. Johnson – Real Estate Law, Buffalo, NY Katherine H. Karl * – Banking and Finance Law; Commercial Finance Law; Commercial Transactions/UCC Law; Real Estate Law, Rochester, NY Paul F. Keneally  – Commercial Litigation; Labor Law – Management; Litigation - Labor and Employment; Litigation - Municipal; Municipal Law, Rochester, NY Thomas F. Knab  – Commercial Litigation; Litigation – Construction; Litigation – Insurance; Litigation - Labor and Employment, Buffalo, NY Anna E. Lynch  – Corporate Law; Elder Law; Health Care Law, Rochester, NY Colin D. Ramsey  – Legal Malpractice Law – Defendants; Litigation – Insurance; Medical Malpractice Law – Defendants, Buffalo, NY Margaret E. Somerset  – Medical Malpractice Law – Defendants, Rochester, NY David M. Tang  – Health Care Law; Litigation - Health Care, Rochester, NY George S. Van Nest – Environmental Law; Litigation – Construction; Litigation – Environmental, Buffalo, NY Helen A. Zamboni  – Real Estate Law, Rochester, NY *Also awarded 2025 “Lawyer of the Year.” See related post here .   The attorneys selected by Best Lawyers: Ones to Watch  and their areas of recognition are:  Ericka B. Elliott – Litigation - Labor and Employment, Rochester, NY Andrew M. Washburn – Real Estate Law, Rochester, NY   Best Lawyers recognitions are based on an exhaustive Purely Peer Review® evaluation. More than 184,000 industry leading lawyers from around the world are eligible to vote and provide evaluations on the legal abilities of other lawyers based on their specific practice areas.

By Paul F. Keneally, Esq. and Ryan T. Biesenbach, Esq. Several new employment law changes were included in the recently passed 2024 New York State budget and signed into law by Governor Hochul. Three of the employment law provisions - paid lactation breaks, paid prenatal care, and the end of COVID-19 paid sick leave - bring notable obligations and some complexity for employers and human resources. While most commentators agree that supporting lactating women in the workplace and promoting prenatal care are positive initiatives, some are concerned that the impositions on employers have become too great. For similar reasons, and a sense that it is not necessary anymore, many believe COVID-19 paid sick leave should have already ended and it is unreasonable that it will not end until July 31, 2025. Paid Lactation Breaks (NYS Labor Law Section 206-c, Subdivision 1) Beginning on June 19, 2024, New York employees became entitled to thirty (30) minutes of paid break time for the expression of breast milk in the workplace. Crucially, there is nothing in the new law limiting how many thirty (30) minute lactation breaks may be taken; the employee need only have a reasonable need for each break. Prior to these amendments, Section 206-c only required New York employers to provide reasonable unpaid break time at least every three (3) hours, and to permit employees to use any existing paid break time or mealtime to express breast milk. If the employee reasonably needs more than thirty (30) minutes at a time, paid break time or mealtime may still be used. The right to paid lactation breaks lasts for up to three (3) years following childbirth. Unsurprisingly, the law also bans discrimination and/or retaliation against any employee taking paid lactation breaks. As with the prior requirements, the new amendments continue to require that employers provide a suitable, well-lit private room at the place of business nearby the employee’s work area with a door lock, a chair and flat surface (such as a table, desk, or counter), access to running water and, if the workplace has a refrigerator, the ability for the employee to store breast milk. Like before, notice of the law is required to be provided to employees at the time of hire, when they return to work following the birth of a child, and annually thereafter. Given that the effective date of these requirements has already passed, employers should update their policies immediately and provide the required notice to ensure compliance. Paid Prenatal Care Leave (NYS Paid Sick/Safe Leave Law-Labor Law Section 196-b) Beginning January 1, 2025, New York employers will be required to provide paid prenatal care leave of twenty (20) hours per year on top of any other paid leave offered voluntarily or as required by law. Employees will be able to use the leave in any fifty-two (52) week period. Prenatal care leave will include leave taken for health care services received by an employee during their pregnancy or related to such pregnancy, including physical examinations, medical procedures, monitoring and testing, and discussions with a health care provider related to the pregnancy. It is expected that the leave will include time spent with health care providers for advice on attempting to get pregnant. Paid prenatal leave does not appear to be an accrued benefit and the text of the amendment suggests that it must be made immediately available to employees in its entirety at the time they are hired. The paid prenatal care leave must be taken in hourly increments and per the amendment, employees are to receive compensation for this leave at the employee’s regular rate of pay or the applicable minimum wage, whichever is greater. The statute does not restrict the number of times paid prenatal leave can be taken by a single employee over the course of their employment, other than to limit the use to twenty (20) hours in a fifty-two (52) week period. Although the language of the law mandates an employee be provided with this leave during “their pregnancy,” additional information and guidance has yet to be issued by the state and it is still uncertain whether this benefit will also be available to expecting fathers. The law does, however, have specific limits on employers questioning the use of this leave by requiring documentation, so employers will be advised to tread carefully. Unused paid prenatal care leave is not required to be paid out at termination of employment. Like with paid lactation breaks, employees taking paid prenatal care leave are protected from discrimination and retaliation. Even though there is still time before this law goes into effect, employers are nonetheless encouraged to revise their policies in advance. COVID-19 Paid Sick Leave As noted above, COVID-19 paid sick leave, first passed in 2020 at the pandemic’s outset, will continue to remain in effect until July 31, 2025. The amount of leave available to an employee, and whether it is paid or unpaid, continues to be determined by employee count and a business’ net annual income. Employers concerned about potential false claims of COVID-19 paid sick leave are reminded that for the second or third attempted use by an employee, the employer may require a doctor’s confirmation of COVID or a PCR test result. Also, the CDC current standards on return to normal activities may help employers get their employees back to work. Employers should review and consider updating their policies and procedures to ensure compliance with the changes introduced by the budget, including revising your employee handbook to reflect updated requirements regarding paid lactation breaks and paid prenatal care leave and breastfeeding accommodations. Additionally, it is important to educate your managers and human resources professionals to ensure they understand the new requirements and the implications for your workplace. As chair of the Underberg & Kessler’s Labor & Employment practice group and partner in the Litigation and Municipal Law practice groups, Paul F. Keneally represents a wide variety of organizations, businesses, and individuals. He provides advice regarding labor law compliance, wage & hour matters, non-compete/non-solicit agreements, sexual harassment, all categories of discrimination and retaliation, family and medical leave, paid family leave, and more. He can be reached at pkeneally@underbergkessler.com . Ryan T. Biesenbach is an associate in Underberg & Kessler LLP’s Litigation and Labor & Employment practice groups. He focuses his practice on civil and commercial litigation and labor & employment law, including the development of employment policies, discrimination and harassment claims, wage and hour issues, employee benefits claims, and compliance with state and federal labor laws. Ryan can be reached at rbiesenbach@underbergkessler.com . Reprinted with permission from Rochester Business Journal and available as a PDF file here .

On April 29, 2024, the U.S. Equal Employment Opportunity Commission (“EEOC”) published its long-awaited Enforcement Guidance on Harassment in the Workplace  (the “guidance”). The guidance is the first update the EEOC has made in this area in 25 years and supersedes the five guidance documents it issued between 1987 and 1999. The publication is the result of a seven-year effort of a bipartisan task force charged with modernizing the EEOC’s workplace harassment enforcement protocols. At its core, the guidance attempts to incorporate notable changes in the legal landscape of employment disputes, including the U.S. Supreme Court’s decisions Bostock v. Clayton County and Zarda v. Altitude Express , as well as the ubiquitous role technology has come to play in the workplace, particularly in remote work settings. The guidance is intended to provide a resource to employers, employees, and practitioners on the standards applicable to workplace harassment claims under the federal employment discrimination laws within the agency’s purview, such as Title VII of the Civil Rights Act of 1964 (“Title VII”), the Age Discrimination in Employment Act (“ADEA”), and the Americans with Disabilities Act (“ADA”). Since the EEOC and other agencies rely on this direction when investigating or litigating harassment claims, the guidance is a significant tool for employers seeking to implement and enforce effective anti-harassment policies. That said, the guidance does not constitute legally binding precedent, but a “legal analysis of standards for harassment and employer liability applicable to claims of harassment under the equal employment opportunity (“EEO”) statutes enforced by the Commission.” The EEOC recognizes that the guidance does not have the force of law, and “do[es] not obviate the need for the EEOC … to consider the facts of each case and applicable legal principles when exercising their enforcement discretion.” The guidance is broken down into the three main components: Covered Bases and Causation The guidance details the EEOC’s position concerning what may constitute workplace harassment under a characteristic protected by the EEO statutes (i.e., race, national origin, religion, etc.). For example, in line with recently enacted New York laws, sex-based harassment under Title VII includes, but is not limited to, harassment based “on pregnancy, childbirth, or related medication conditions,” which “can include issues such as lactation; using or not using contraception; or deciding to have, or not to have, an abortion.” Consistent with the aforementioned Supreme Court decisions, sex-based harassment entails “harassment based on sexual orientation or gender identity, including how that identity is expressed,” such as epithets regarding sexual orientation or gender identity; physical assault due to sexual orientation or gender identity; outing (disclosure of an individual’s sexual orientation or gender identity without permission); harassing conduct because an individual does not present in a manner that would stereotypically be associated with that person’s sex; repeated and intentional use of a name or pronoun inconsistent with the individual’s known gender identity (misgendering) or “deadnaming” (using a name used by a person prior to their transition); or the denial of access to a bathroom or other sex-segregated facility consistent with the individual’s gender identity. For age-based harassment under the ADEA, harassment includes actions “based on stereotypes about older workers, even if they are not motivated by animus, such as pressuring an older employee to transfer to a job that is less technology-focused because of the perception that older workers are not well-suited to such work or encouraging an older employee to retire.” For disability-based harassment under the ADA and in addition to long-recognized areas of harassment, the guidance includes actions “based on the disability of an individual with whom they are associated” and gives the examples of an employee taking leave to care for a family member with “long COVID that meets the ADA’s definition of disability.” The guidance further outlines other “cross-based” issues of harassment, including perception-based harassment (“based on the perception that an individual has a particular protected characteristic” regardless of whether “the perception is incorrect”); intraclass harassment (“based on the complainant’s protected characteristic” and “the harasser is a member of the same protected class”); associational discrimination (“harassment because the complainant associates with someone in a different protected class”); and intersectional harassment (“based on more than one protected characteristic of an employee, either under a single EEO statute …or under multiple EEO statutes”). Harassment Resulting in Discrimination with Respect to a Term, Condition, or Privilege of Employment The guidance addresses the requirement that unlawful harassment affects a “term, condition, or privilege” of employment, and identifies workplace conduct that the EEOC believes satisfies this standard. At the outset, the EEOC states that unlawful harassment covers not only an “explicit change to the terms or conditions of employment” but also the “creation of a hostile work environment,” where the conduct is “both subjectively hostile and objectively hostile.” Acknowledging the pervasive role of technology, the guidance states that workplace harassment can occur in a “virtual work environment” and provides the following examples of “virtual” harassment: “sexist comments made during a video meeting, ageist or ableist comments typed in a group chat, racist imagery that is visible in an employee’s workspace while the employee participates in a video meeting, or sexual comments made during a video meeting about a bed being near an employee in the video image.” The guidance specifically notes that “postings on a social media account generally will not, standing alone, contribute to a hostile work environment if they do not target the employer or its employees.” Employer Liability The EEOC outlines several standards of liability that could be imputed against the employer. Which standard applies to any given situation depends on the relationship of the harasser to the employer and the nature of the hostile work environment. For example, if the harasser is a proxy or alter ego of the employer (such as a business owner, corporate officer, or high-level manager), the employer is automatically liable for the hostile work environment created by the harasser’s conduct. If the harasser is a supervisor and the hostile work environment includes a tangible employment action against the victim, the employer is vicariously liable for the conduct. In these scenarios, there is no defense to liability. Where the harasser is any other person, the employer is only liable for the hostile work environment created by the harasser’s conduct if the employer was negligent in that it failed to act reasonably to prevent the harassment or to take reasonable corrective action in response to the harassment when the employer was aware, or should have been aware, of it. Negligence provides a minimum standard for employer liability, regardless of the status of the harasser. Other theories of employer liability – automatic liability (for proxies and alter egos) and vicarious liability (for supervisors) – are additional bases for employer liability that supplement, and do not replace, the negligence standard. What’s Next? The guidance has not been without legal challenges. On May 13, 2024, a group of eighteen state attorneys general filed a complaint in the Eastern District of Tennessee against the EEOC challenging the guidance seeking injunctive and declaratory relief. The complaint alleges that the guidance attempts to “extend Title VII’s protections against sex-based discrimination to new contexts related to ‘gender identity’” and that the agency has essentially “amend[ed] Title VII to create a de facto  accommodation for gender identity – even though Bostock did not address the accommodations context.” A motion filed by the state attorneys general that seeks a stay and preliminary injunction prohibiting the EEOC from enforcing the guidance has been fully briefed and awaits the Court’s decision. Notwithstanding the challenge brought by the state attorneys general, employers should be mindful that the guidance still represents the EEOC’s views on actionable instances of harassment and will inform EEOC actions, including with respect to investigative and enforcement decision-making. Employers should refer to the guidance to ensure that their workplace harassment policies and anti-harassment initiatives are current under these updated standards. Ryan T. Biesenbach is an Associate in Underberg & Kessler LLP’s Litigation and Labor & Employment Practice Groups. He focuses his practice on civil and commercial litigation and labor & employment law, including the development of employment policies, discrimination and harassment claims, wage and hour issues, employee benefits claims, and compliance with state and federal labor laws. Ryan can be reached at rbiesenbach@underbergkessler.com .   Reprinted with permission from The Daily Record and available as a PDF file here .

Congratulations to Joshua B. Beisker , Leah Tarantino Cintineo , Patrick L. Cusato , and Paul F. Keneally for being selected to the 2024 Rochester Business Journal  and The Daily Record  Power Lists. This year, the power players selected for the Rochester Business Journal  and The Daily Record  Power 50 Law, and the Power Lists for Labor & Employment Law, Litigation, Tax Law, and Trusts & Estates are profiled in one special section in print and online in both publications. The Power Lists showcase power players in the Western New York legal community who are recognized as leaders in their area of practice. “The people on these lists help make sure the legal needs of Rochester’s companies and residents are met, and they have helped their own organizations, and their clients navigate unprecedented changes in recent years. They are working to push the Rochester legal community forward during a time of uncertainty, and we are excited to see what they are able to accomplish going forward," stated Ben Jacobs, Associate Publisher and Editor of Rochester Business Journal and The Daily Record . Joshua B. Beisker - Tax Law and Trusts & Estates – This is Josh’s fourth year being honored in the Trusts & Estates Power List and his first year being recognized for Tax Law. Josh, a partner in the Corporate & Business , Estates & Trusts , and Tax Law  practice groups, serves as chair of the Firm's Estates & Trusts and Tax Law practices. He focuses his practice in the areas of complex estate planning and estate administration matters. He also provides counsel to businesses on tax and succession planning, general corporate governance, and achieving tax efficiencies. Josh is a frequent lecturer at numerous organizations including the National Business Institute, universities and other educational institutions, adult education programs, financial planning organizations, alumni groups, and community organizations. He is a member of the Estate Planning Council of Rochester, and the Monroe County and New York State Bar Associations. Leah Tarantino Cintineo - Litigation – Leah is a partner and chair of both the Litigation  and Family Law  practice groups. She has been recognized by The Daily Record  in the 2022 and 2023 Power 20 in Family Law lists. She represents clients in divorce and post-divorce matters, pre-nuptial agreements, high conflict child custody litigation, and child support litigation. She also has years of experience handling divorce matters involving businesses, complex financial issues, and extensive marital estates. Leah practices in both Supreme and Family Courts throughout the Seventh Judicial District, serves on the Attorneys for Children panel for the Appellate Division, Fourth Department, and is a certified collaborative divorce attorney and member of the Collaborative Law Association of the Rochester Area (CLARA). Leah is a member of the New York State Bar Association, Monroe County Bar Association, and is a member of the 7th Judicial District Attorney Grievance Committee. She is also a member of the Greater Rochester Association of Women Attorneys (GRAWA), and a member of the Ontario County Bar Association, where she recently was President of the Association. In addition, Cintineo served for eight years on the Society for the Protection and Care of Children Board of Directors, including two years as Board Chair. Patrick L. Cusato - Power 50 Law – Pat is Underberg & Kessler’s Managing Partner, the Real Estate & Finance  practice group chair, a member of the Executive and 401K Committees, and the financial management partner for the Firm. He has been recognized by The Daily Record  for the past three years in the Power 20 in Real Estate Law list. He focuses his practice on commercial and residential real estate, mortgage banking, and tax credit development and finance projects, and affordable housing transactions. A strong proponent of being active in community and industry groups, Pat is an Executive Board member of the Mortgage Bankers Association, Vice President to the Board of Directors of the Bishop Sheen Ecumenical Housing Foundation. He is a past President of the Foundation, past Chair of the Project Development Committee, and past Chair of the Foundation's annual fundraising gala. Pat also serves as the Vice President of the Board of Directors of the Webster Soccer Association and President of the Board of Directors of the Sports Association of Webster, Inc. Pat is a member of the American Bar Association and member of its Real Property, Trust & Estate Law and Affordable Housing and Community Development Sections. Additionally, he is a member of the Monroe County Bar Association and past Chair of its Real Estate Section. He also previously served as an Advisory Board member for First American Title Insurance Company of New York.   Paul F. Keneally - Labor & Employment Law – This is Paul’s third year being honored in The Daily Record  Labor & Employment Law Power list. Paul is a partner in the Firm’s Labor & Employment , Litigation , and Municipal Law practice groups, and he serves as chair of Underberg & Kessler’s Labor & Employment practice group. He advises clients on a wide range of day-to-day labor and employment matters, helps resolve complex commercial, construction, and labor and employment disputes, and defends municipalities and public entities. Paul served two terms on the Literacy Rochester Board of Directors, and he currently serves as Legislative Representative to the Board of Directors of the Genesee Valley Society of Human Resources Management, and as Counsel to the Board of Directors and Management of the Tennis Club of Rochester.

Congratulations to Paul F. Keneally , partner in the Firm’s Labor & Employment , Litigation , and Municipal Law  practice groups, for being honored by Literacy Rochester with the Queenie Zuehlke Visionary Award. He received the award during Literacy Rochester’s 60th Anniversary Luncheon held on July 17, 2024. The Queenie Zuehlke Visionary Award was created as part of celebrating the 60th anniversary of Literacy Rochester and recognizes an individual or an organization that has helped Literacy Rochester over the years to be able to look past the present and to see the future impact of a project. Literacy Rochester  was founded in 1964 as a program of the local Church Women United group. A member of the group by the name of Queenie Zuehlke spearheaded the project. Working with Ruth Colvin in Syracuse, NY, she was able to train and launch an “Each One, Teach One” literacy program. In 1971, the “Each One, Teach One” program had grown so large that it broke away from the local Church Women United group and became its own nonprofit. Starting with just helping adults in the community to read, their programming has continued to grow and expand. Adding English language, math, and in 2013 officially launching a digital literacy program to help adults learn to use a computer and complete digitally based tasks. Literacy Rochester’s reading, math, and English language services are offered to any adult in Monroe County are no cost and is offered through one-to-one tutoring or small group classes. Paul, who earned his B.A. from Amherst College and his J.D., cum laude , from Fordham University School of Law, serves as chair of Underberg & Kessler’s Labor & Employment practice group. He advises clients on a wide range of day-to-day labor and employment matters, helps resolve complex commercial, construction, and labor and employment disputes, and defends municipalities and public entities. Paul served two terms on the Literacy Rochester Board of Directors, and he currently serves as Legislative Representative to the Board of Directors of the Genesee Valley Society of Human Resources Management, and as Counsel to the Board of Directors and Management of the Tennis Club of Rochester. In his acceptance speech, Paul mentioned impact the Literacy Rochester tutors have on the lives of students and the contributions of other Literacy Rochester Board members with him when the signature Brain Game fundraiser event was developed.

In a landmark decision, on June 6, 2024, the United States Supreme Court decided Connelly v. United States , No. 23-146, upholding the IRS position on how life insurance proceeds and redemption obligations should be treated for federal estate tax purposes. Background: Two brothers were the sole shareholders of a closely held corporation. In order to ensure the corporation would stay in the family if either brother died, they entered into an agreement that gave the surviving brother the option to purchase the deceased brother’s shares. If he declined, the agreement required the corporation itself to redeem the shares. The corporation also took out an insurance policy on each brother to fund the share redemption obligation. After one brother died, the surviving brother declined to purchase the shares. The corporation received the life insurance proceeds and redeemed the shares, at an agreed-upon price of $3 million. The surviving brother then filed a federal tax return as executor for his deceased brother’s estate in which he reported the value of those shares at the $3 million redemption price. The IRS audited the estate tax return. During the audit, the estate obtained a third-party appraisal that valued the shares at $3 million, with that amount being based on a valuation of the corporation that offset most of the life insurance proceeds with the cost of redeeming the shares. The IRS disagreed and took the view that the corporation’s redemption obligation was not a liability that reduced the value of the shares, and as a result, the IRS valued the corporation (and thereby the shares) at $5.3 million, which increased the amount of estate tax owed by an additional $889,914. The estate paid the tax and then sued for a refund. The District Court agreed with the IRS, and the United States Court of Appeals for the Eighth Circuit affirmed. The Supreme Court affirmed, holding that the corporation’s contractual obligation to redeem the shares did not diminish the value of those shares for estate tax purposes. The Court explained that because a fair-market-value redemption does not affect any shareholder’s economic interest, no willing buyer purchasing the deceased brother’s shares would have treated the corporation’s redemption obligation as a factor that reduced the value of those shares. The Supreme Court's decision in Connelly v. United States highlights the critical importance of careful estate planning and the potential tax implications of corporate agreements. In light of the Supreme Court’s ruling, owners of closely held businesses should review and possibly reassess their business succession plans to best ensure that the plan will yield the most tax-efficient results possible. If you have questions regarding this article or need help with business succession planning, please contact Joshua B. Beisker at 585-258-2879 or jbeisker@underbergkessler.com .

Without much publicity, back in November 2023 New York State Governor Kathy Hochul signed  Senate Bill S3539, which amended two sub-sections of New York General Business Law (“GBL”) Section 756, which is sometimes referred to as the Prompt Payment Act. The legislative intent was to improve cash flow to contractors by reducing withheld retainage. The new law contained in GBL Section 756-c applies to most construction contracts and caps the amount of retainage that can be held from general contractors and subcontractors to five percent (5%) of the contract sum. The law applies to contracts entered into after November 17, 2023, for private (non-public) construction projects with a contract sum in excess of $150,000. The law does not apply to: (i) residential construction projects for one, two, or three family residential dwellings; (ii) residential subdivisions with under 100 one- or two-family homes; (iii) any residential construction project of 4,500 square feet or less; and (iv) certain affordable housing projects with less than 75 units. Previously New York State required only that the withheld retainage amount be “reasonable.” Most commercial construction contracts typically required retainage of ten percent (10%) resulting in progress payments of 90% throughout the life of the contract. In addition to the new 5% statutory limit, it remains clear that no contractor or subcontractor can withhold any amount in excess of the actual amount retained by the owner. The legislation no longer permits the parties to require a percentage higher than a total of 5% in their negotiated contract documents. The legislation does not seem to prohibit an owner from holding increased retainage for a portion of the job and lowering the required retainage later in the job - provided that the total retainage withheld does not exceed the limit of 5% of the total contract sum. For example, it appears that owners could hold 10% retainage until the contract work is 50% complete, and then reduce the retainage withheld thereafter to zero. Violating owners, contractors, and subcontractors may be subject to the remedies set forth in the law, including potential suspension of work and interest penalties of 12% per annum from the date retainage was due if they fail to release the proper amount of retainage. The second amended sub-section affected by the new law, GBL Section 756-a, provides that a contractor can submit a final invoice for retainage upon reaching “substantial completion” as defined in the contract (rather than upon performance of all obligations under the contract). However, GBL still requires that retainage must be released by the owner to the contractor no later than thirty (30) days after “final approval of the work under the contract.” There may be a need for further clarification to avoid confusion about the terms of the new legislation relating to the timing of such releases For commercial construction lenders, it is important to note that the new law does not limit to 5% the amount of retainage withheld under a lender’s building loan contract with their borrower/contractor. However, contractors tend to structure their subcontracts to match the progress payments they will be receiving from their lenders. If a commercial lender continues to require 10% retainage under a building loan contract when the contractor is permitted to withhold only 5% from its subcontractors, then the contractor will almost certainly request their lender to reduce retainage to 5% to eliminate the “shortfall” of funds for the contractor to pay its subs. If you have any questions regarding the retainage changes or any Commercial Lending law question, please contact Kate Karl at 585-258-2883 or kkarl@underbergkessler.com.

Labor & Employment partner, Paul F. Keneally, was recently interviewed by News10NBC about the firing of a manager of a local Big Lots who was trying to stop a shoplifter. Paul spoke with reporter Berkeley Brean for the story “News10NBC Investigates scourge of retail theft, and what’s being done about it.” The manager describes how he saw the shoplifter take a swing at his assistant manager and he followed the man at a distance through the parking lot relaying his location to 911 in the hopes police could arrest him. However, two weeks later he was fired for not following company policies. Paul explained, “So they have a rule in place that the employees are not to do anything, and it’s unfortunate because it sounds like this person was trying to do the right thing.” The story also shares that this is not the only instance where a retail store manager has been fired over how they handled a shoplifter, and it digs deeper into the troubling increase in shoplifting in New York State. View the story on the News10NBC website here.

The Health Care and Corporate & Business Law practice teams at Underberg & Kessler LLP were proud to have advised St. John’s in its recently announced innovative strategic collaboration with the University of Rochester Medical Center (URMC). The collaboration leverages the unique strengths and resources of both organizations to address key challenges facing our community, including hospitals operating above licensed bed capacity because of a shortage of available long-term care beds and community services gaps impacting timely health care delivery. By sharing expertise, networks, and resources, the two institutions hope to create lasting impact and drive meaningful change in the lives of individuals and families throughout Rochester and the Finger Lakes region. St. John’s is a leading provider of a full continuum of services for older adults. Since 1998, Underberg & Kessler has assisted St. John’s with a full range of legal services to help them become a leader in senior living and care options in the Greater Rochester area. “We are thrilled to have played a role in this collaboration between two highly respected organizations with similar cultures and values,” said David M. Tang, chair of Underberg & Kessler’s Health Care practice. “This initiative is a great example of how thinking outside the box and working together can lead to a win-win situation.” The Underberg & Kessler team for the representation included David M.  Tang, Helen A. Zamboni, Patrick L. Cusato, Joshua B. Beisker, Colin D. Ramsey, and Andrew M. Washburn.

In a time of divided politics and policy, advocacy stands as a critical tool for communicating ideas, shaping legislation and driving change. Those who embrace the simple but powerful statement of Dr. Salk, the celebrated medical researcher who developed one of the first successful polio vaccines, are often moved to take action to fulfill a duty to future generations. Whether one is advocating for expanded access to healthcare services, Medicare and Medicaid policies or social or tax policy changes, advocacy skills and effective communication can significantly increase impact. Let us explore the importance of advocacy, a few government relations strategies, and some examples of smart communications for advancing healthcare policy objectives. The Significance of Advocacy. Advocacy is a cornerstone of democracy. It empowers individuals and organizations to engage in the policymaking process, influence decision-makers, and champion causes that matter. At its core, advocacy is about amplifying voices, raising awareness, and mobilizing support to address pressing issues. When advocating for policy change, individuals can contribute to creating a more just, equitable, and inclusive society. Essential Skills for the Effective Advocate. In my professional work, my colleagues and I represent providers and we advocate for specific outcomes; this can be in connection with a reimbursement issue, defending an audit inquiry or a regulatory matter or seeking to resolve a contract dispute. The rules that apply to effective advocacy in those contexts also apply when one is looking to effectuate policy change. Communication. Clear and persuasive communication is essential for good advocacy. Whether one is seeking to address health disparities or advocate for adjustment of reimbursement rates, the ability to articulate a message, concisely, and tailor it to specific audiences is key. The most persuasive advocates employ compelling storytelling techniques to evoke empathy and understanding from decision-makers. Research, Analysis. A deep understanding of the issues for which one is advocating is crucial. Be familiar with the data and evidence and analyze the policy implications to strengthen the credibility of your argument. Many professional organizations will have collected data points from across a wide spectrum for the impacted geographic area or community in which they might seek policy change. Honing the Message. Making time for strategy discussions and refining the pitch or the legislative “ask” is an important part of strategic planning and goal setting. Be clear about the objectives. If one is motivated to make a legislative request that is funding related, it will be helpful to know the history of prior appropriations. Prioritize the key initiatives for the current fiscal cycle and develop an action plan, ideally with measurable milestones, to enlist the appropriate constituents to support communication efforts and implement strategies. Networking. Partnerships can amplify advocacy. Are you part of an organization that brings together community leaders and key stakeholders to leverage collective expertise, resources, and influence? If not, do some research, talk to colleagues and formulate the easiest, simplest first steps to form a strategic partnership. Study other organizations who are effective in letter-writing campaigns or who utilize social media advocacy to amplify their message. If you are looking to influence policy on a state or federal level, build a collection of contacts who are connected with elected representatives in Albany or Washington, D.C. and well-positioned to inspire decision-makers to take action. Government-Relations Strategies. In the last few years, I have participated with an advocacy group that supports 100+ organizations around the country in securing and maintaining federal appropriations to support early education programs and services. Each year, the group organizes for a summit — to compare notes on local efforts in the prior year, share progress reports, celebrate wins, discuss challenges and to organize communications — by both industry leaders and lay (volunteer) advocates — to members of the U.S. House of Representatives and Senate, so that elected representatives stay well informed of the partner-organizations’ top priorities. Some action items for advocacy are detailed below. Relationship Building and Maintenance. Member organizations should identify local leaders and cultivate relationships with representatives and especially their senior staff, who are often influential sounding boards for members of Congress on policy matters and constituent affairs. Once you have been connected to a staff member, introduce yourself as a resource, offer to share information and constituent feedback and perspective on the subject issues that matter to your member. Develop a regular communication cadence. This might involve writing emails a few times a year, attending town hall meetings, or requesting or scheduling small group meetings to maintain the relationship, provide new information and receive feedback on legislative issues. Advocacy Organization. Join up with an advocacy organization that has already established relationships with influential representatives in Albany or on Capitol Hill. Participate in information or education programs, support candidates and campaigns and leverage the subject matter expertise and contribute to collective advocacy efforts to support strategy. Follow-up and Develop the Art of the Closing the Loop Technique. Having a top-notch follow-up process is an important skill for any advocate. After a meeting with an elected representative or decision-makers or their legislative staff, send a personalized thank-you note (email is fine), and also write with periodic updates during the year and to express appreciation following positive legislative developments. If you are playing the “long-game” to ensure that you have a readily-available channel through which to communicate your position on policy matters, maintain semi-regular contact with your representative’s office throughout the year. This way, when a need arises, the communication channel to advocate for a particular priority issue will already be established and open. Plan a Trip to Albany/Washington. If you are advocating for policy change, consider participating in a "Hill visit" in Washington or an “Advocacy Day” at the State Capitol in Albany. These are usually coordinated by governmental relations staff of industry associations. Traveling to visit a representative is one way to demonstrate your commitment to an issue. Engaging in face-to-face meetings with legislators and their staff to present your case, share personal stories, and advocate for policy solutions provides members of Congress or the State Legislature an in-person interaction to pair or match with the names of constituents, helps to build a two-way relationship and can have lasting impact. Recent Policy Objectives in Healthcare Advocacy. The American Medical Association has been focused on policies related to healthcare equity and access. In the last year, the AMA has advocated for (1) reversing rate cuts to ensure access to quality care for patients and fair compensation for providers, (2) more robust regulations of artificial intelligence (AI) in healthcare to ensure responsible and ethical use of new technology (this to safeguard patient privacy, mitigate biases in AI algorithms, and promote transparency and accountability in AI-driven healthcare systems) and (3) initiatives aimed at addressing health disparities by eliminating barriers to care and addressing social determinants of health to provide individuals the opportunity to achieve optimal health outcomes. The Health Care Education Project, which includes a number of hospital organizations, has pushed state officials for Medicaid rate increases to keep pace with the rising cost of care. LeadingAge NY has engaged in similar advocacy to reform and rationalize the nursing home Medicaid reimbursement methodology to address staff retention challenges and ensure quality of care for those who need it. Conclusion. Staying informed, voting and paying taxes are basic civic duties, and active participation is, likewise, a cornerstone of democratic society. By mastering essential communication skill sets, leveraging good government relations strategies, and aligning with organizations to work toward common goals, individuals can amplify their voice by championing causes, influencing policy, and advocating for meaningful societal change. My own advocacy work has been fulfilling: seeing positive change after engaging in advocacy efforts has reinforced my belief in the power of collective action and reaffirmed the importance of civic participation. If you have already been inspired to “be a good ancestor”, keep up the good work! Continue the effort to seek the policy or legislative change you want to see in the communities in which you live or practice. Whether you support education or tax reform or are focused on ensuring future generations of individuals enjoy more equitable and better health outcomes, let your perspective be heard. If you have not yet been active in advocacy, perhaps one of the ideas in this article will spur you take action to improve the lives of others. As Yogi Berra — the late, great Yankees catcher and manager — stated, “When you come to a fork in the road, take it.” Reprinted with permission from the May/June 2024 issue of The Bulletin from the Monroe County Medical Society and available as a PDF file here. David M. Tang, Esq. is a Partner at Underberg & Kessler LLP and serves as Chair of the firm’s Health Care and Creditor’s Rights Practice Groups. He advises, is active with and has served on the boards of a number of nonprofits providing healthcare, educational and affordable housing services. David can be reached at dtang@underbergkessler.com or 585-258-2845.

We are pleased to announce that Ericka B. Elliott, associate attorney in the Health Care and Litigation Practice Groups, has been appointed to serve on the Board of Directors of the Western New York Rural Area Health Education Center, Inc. The Western New York Rural Area Health Education Center, Inc’s (R-AHEC) mission is to “improve the quality of healthcare in our region through workforce development, education, and resources.” R-AHEC is part of the National Area Health Education Center (AHEC) Program and the NYS AHEC System and is recognized as New York State’s first AHEC. The National AHEC program was developed in the early 1970’s to recruit, train, and retain a health professional workforce committed to underserved communities with a vision to connect students to careers, professionals to communities, and communities to better health. R-AHEC, which is headquartered in Warsaw, New York, serves a predominately rural 12-county region. Counties include Allegany, Cattaraugus, Chautauqua, Genesee, Livingston, Monroe, Ontario, Orleans, Steuben, Wayne, Wyoming, and Yates, which covers 9,140 square miles. R-AHEC addresses the health needs of its rural and underserved communities by focusing on workforce development, housing, education, and health information technology support. Ericka advises businesses, banks, and individuals with contract disputes, debtor/creditor issues, in commercial litigation, and on corporate governance matters. She also represents hospitals, physicians, nursing homes, home health agencies and other health care providers on issues ranging from risk management and patient care to collections and regulatory compliance. In addition, Ericka has experience representing town and village boards in matters involving governance, the legislative and administrative process, economic development, planning, zoning, and litigation. She earned her B.S. from Cornell University and her J.D. from University at Buffalo School of Law.