From the October 2009 issue of Investment Advisor • Subscribe!

No Work Allowed!

Sidebar to the Experts Corner article "Look Before You Lay Off"

More On Legal & Compliance

from The Advisor's Professional Library
  • Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.
  • Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.

The use of furloughs is increasingly popular throughout many industries, but when employees are furloughed, the employer must make it clear that the employee must not do any work whatsoever. Given the myriad of remote access devices that we all have these days (including laptops, PDAs, e-mail, voice mail), it is likely that some exempt employees will be inclined to check their e-mail, return phone messages, or otherwise "work" while on furlough. However, as exempt employees are entitled to pay for any workweek in which any work is performed, employers should clearly advise that work is not authorized during any furlough period without advance written approval.

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