Reminder to 501c3 Organizations - No Political Activity!

The presidential campaign has been heating up and is heading for the home stretch.  This is an exciting time in our nation.  Many charitable organizations have mission statements that often bespeak political leanings, perspectives, priorities and philosophies.  Please remember that all 501c3 organizations are "precluded from, and suffer loss of exemption for, engaging in any political campaign on behalf of, or in opposition to, any candidate for public office."  See IRS site.  Furthermore, "contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity."  See IRS site.  This means that political activity is absolutely prohibited for 501(c)(3) organizations, and will lead to revocation of exempt status and the imposition of certain excise taxes.

Prohibited political activity includes (but is not limited to):

• Contributions to political campaign funds;
  
• Written or oral statements in support of or in opposition to a candidate;
  
• Candidate rating (regardless of the objectivity of the criteria used for the evaluation);
  
• Offering resources such as mailing lists, office space, or other services available only to a favored candidate;
• Establishing Political Action Committees.

501c3 organizations can engage in certain non-partisan educational activities such as public forums open to all candidates, voter registration and publication of voting records of candidates. 

Bottom Line: 501c3  organizations should not engage in any political activity and should not engage in the permissible activities without consulting with counsel or other experts.  

Please contact me with any questions or visit my website for more information.   

Do You Really Want to Replace An Employee on FMLA Leave?

According to the Family and Medical Leave Act (FMLA), an employer must return an employee to the same or an equivalent position upon return from FMLA leave.  The question that many employers have is “What is an equivalent position?”

The regulations state that an "equivalent position" is one that is virtually identical to the employee's former position in terms of pay, benefits and working conditions, including privileges, perquisites and status. It must involve the same or substantially similar duties and responsibilities, which must entail substantially equivalent skill, effort, responsibility, and authority.  Still not clear?  The courts are might offer some guidance.   

Here's the scenario: 

A female computer teacher went on maternity leave.  Due to complications during delivery and a medical condition that her infant had, the teacher required a lengthy FMLA leave. Her school district hired a substitute teacher to take over her assignments during her leave of absence.   A few weeks later, the teacher on leave was informed by the school principal that he decided to replace her permanently.  The school district gave the teacher on leave the option of returning to a full-time classroom teacher position instead of a computer teaching position.  When she declined the classroom position, the school district terminated her employment.  The teacher is suing alleging FMLA interference and retaliation.  Read the filings here.

 

This case is currently being litigated but this scenario is not unique.  Employers are often tempted to make changes in their organizations when a current employee is out for period of time and especially when things seem to be going well with a new employee or the new arrangement.  However, replacing an employee on FMLA will likely expose your organization to litigation. 

The Bottom Line for Employers:

• Avoid permanently replacing employees while they're on FMLA leave.  Chances are, once you’ve found some way of insuring that their work is being performed, you can wait a few weeks or months until the employee returns to work.  

• If you can't wait and are returning an employee to an equivalent position, you should be able to articulate your reason for this decision (and its timing).  You should also be able to demonstrate that the new position requires the same level of duties, skill, responsibility, and offers the same compensation, earning potential, authority and career path and promotion opportunities within your organization as the prior position.  

Unpaid Intern, Volunteer or Employee??

Its that time of year again.  Students have returned to school, eager to work.  Recent grads are still looking for work and are eager to buttress their resumes.  The job market is tight so many are willing to work for free.  Sounds great, right?  Not so fast. . .

Background

Under the Fair Labor Standards Act (FLSA), individuals who are “suffered or permitted” to work must be paid.  Internships in the “for-profit” private sector will most often be viewed as employment, unless the following criteria are met.  Interns in “for-profit” private sector entities, who do not meet these criteria typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek.  NB: different standards apply for government and the non-profit sectors.

Why This Matters

The accurate classification of individuals that regularly perform services for your organization is a crucial undertaking.  Misclassification can expose your businesses to costly litigation, penalties and damages.  Please contact me if you need assistance in this are or a more detailed discussion. 

An Intern is an Intern If. . .

The following six criteria must be applied when determining if an intern is an intern:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If the intern is an intern, there is no employment relationship and the intern would not be entitled to compensation or overtime. 

Employers should be aware that simply labeling an employment relationship as an internship does not necessarily create an exemption from legal obligations to pay compensation for services performed.

Special Treatment For Charitable Organizations

According to DOL, unpaid internships in the public sector and for non-profit charitable organizations, “where the intern volunteers without expectation of compensation, are generally permissible.”

So What’s The Difference Between An Intern And A Volunteer?

According to DOL, volunteer status is available only to individuals performing charitable activities for not-for-profit organizations.  Private sector, for-profit entities cannot engage volunteers.  Under the FLSA, a volunteer doesn’t receive compensation other than expenses and/or a nominal fee to perform services, and such services are not the same type of service for which the individual is employed. 

Questions??  Contact me for a consultation or visit my website.