The Basics
For purposes of this post, by “nonprofit” we mean a public charity exempt under § 501(c)(3) of the Internal Revenue Code, the most common type of nonprofit. Eligible to receive tax-deductible donations, 501(c)(3)s are prohibited from engaging in political campaign activity. Donations to political campaigns and committees are prohibited, whether monetary or in-kind (based on federal and local law). The rules apply at the primary stage of the campaign as well as the general election – wherever this piece or other guidance refers to different political parties, the guidance is really the same for the primary, and should be interpreted to refer to the various candidates.

Just because nonprofits cannot engage in political campaign activity doesn’t mean they can’t get involved in elections at all. Nonprofits, even 501(c)(3)s, can partake in voter education activities and voter mobilization, assuming both are conducted in a nonpartisan manner.  We’ve gone into greater detail, below, but the basic question nonprofits should ask themselves when considering whether an activity is permissible is – is this designed to help (or hurt) a particular candidate? If the answer is “no”, then the activity may be allowed.

Nonprofit Leaders
Nonprofit leaders tend to be leaders in their communities as well as leaders of their organizations. As such, their opinions and endorsements hold extra weight. While nonprofits themselves may be subject to restrictions (or outright prohibitions) on their ability to endorse a candidate, nonprofit leaders have a First Amendment right to speak their mind on the politics of the day, provided that the leaders are speaking in their personal capacities and not on behalf of their nonprofits.

Nonprofits
Further below we provide a list of activities that 501(c)(3)s may and may not engage in. The most popular activities in the run up to a high-profile election are generally candidate fora and voter education activities.

While public charities can host a candidate forum, the structure of the forum is important to ensure the nonprofit preserves its tax-exemption. The forum should be carefully thought through, from the selection of the moderator, the invitations to the candidates, the composition of the audience, and the questions that are asked of the candidates. With such a large field of candidates, nonprofits will have to make decisions about who to invite and how much time each candidate is allotted. It’s important to ensure that candidates are given comparable opportunities to voice their positions and respond to questions.

Some nonprofits also like to put together educational materials to distribute to their stakeholders. While this is permissible as well, it has to be done in a nonpartisan way to avoid violating federal, state, and city rules. Everything from the topics that are profiled and how candidates’ positions are communicated to voters has to be done carefully, and nonprofits should consult with counsel.

Other Types of Nonprofits
Other types of nonprofits (501(c)(4)s, 501(c)(6)s, etc.) do not face the same federal prohibitions on political campaign activity and therefore have more freedom to make statements about candidates and campaigns. However, NYC has strict campaign finance rules that prohibit contributions from corporate entities, meaning that nonprofits cannot donate (either cash or in-kind services) to a candidate’s campaign. While political action committees (PACs) may make certain donations and expenditures, a PAC cannot circumvent the prohibition on corporate donations by accepting a nonprofit’s money and then sending it on to the candidate. Campaign finance issues are closely monitored by the NYC Campaign Finance Board and any nonprofit that is considering creating a PAC or otherwise participating in political activity should consult with counsel before entering into the political fray.

What 501(c)(3)s Can and Cannot Do
Nonprofits are allowed to engage in non-partisan activities in the run-up to an election, such as voter registration drives or education around a particular issue – see our list below for a breakdown of specific activities that a 501(c)(3) can engage in. In addition, a 501(c)(3) is allowed to engage in lobbying (attempting to influence legislation) so long as the lobbying activity does not constitute a “substantial” part of its activities. Of course, “substantial” is a fuzzy term, so the IRS allows most nonprofits (but not churches) to set a monetary limit to their lobbying activity (called a 501(h) election) below which no tax penalties will be assessed, so that nonprofits have some certainty when their lobbying activities will trigger tax consequences. In addition, if a nonprofit focuses on lobbying around issues that are highly salient to the campaign, the lobbying may be considered by IRS as political campaign intervention. The IRS has given some guidance on the factors it considers when deciding if issue-advocacy may be considered political campaign intervention (see the section titled “Issue Advocacy vs. Political Campaign Intervention” and example 14).

What 501(c)(3) Organizations CAN Do
501(c)(3) organizations may safely engage in the following activities:

• Conduct or participate in a nonpartisan candidate forum, so long as the forum: (a) is open to all candidates, (b) is run in a balanced way, and (c) includes a broad range of nonpartisan questions for the candidates.
• Conduct voter registration drives and nonpartisan get-out-the-vote efforts, subject to the following limitations:
  • Drives must be designed to educate the public about the importance of voting.
  • Activities cannot be biased for or against any candidate or party.
  • Nonprofits can target areas in nonpartisan ways. For instance, nonprofits may target low-turnout areas, low-income populations, minority populations, and students.
  • Nonprofits may target registration and turnout efforts to the areas or people they serve.
• Educate the public on issues and generally encourage participation in the political process.
• Make presentations on your organization’s issue to platform committees, campaign staff, candidates, media, and the general public.
• Educate all candidates and political parties on your issues.
• Continue your normal lobbying on issues, subject to the limitations described above.
• Rent or sell mailing lists to candidates at fair market value, if made available to all candidates.

What 501(c)(3) Organizations CANNOT Do
To maintain 501(c)(3) tax exempt status, organizations may not undertake the following activities:

• Endorse or oppose a candidate—implicitly or explicitly.
• Contribute money, time, or facilities to a candidate.
• Coordinate activities with a candidate.
• Restrict rental of your mailing list and facilities to certain candidates.
• Set up, fund, or manage a Political Action Committee (PAC), established under section 527 of the tax code mainly for electoral activity

These restrictions do not in any way prohibit officers, members, or employees from participating in a political campaign as private citizens, assuming those individuals ensure their actions or statements are not attributed to the organization.

If you are in any doubt regarding whether your organization’s activities might risk revocation of tax-exempt status, be sure to reach out to a lawyer with knowledge of the non-profit sector for specific advice.

The post The Mayor’s Race and Nonprofits first appeared on Perlman Sandbox.

1. Schedule Mandated Annual Trainings; Keep Postings Current

Effective April 1, 2019, NYC employers with 15 or more employees (including independent contractors) have until December 31, 2019 to implement sexual harassment prevention training for all employees and then must conduct such training annually.  NYC Commission on Human Rights has recently updated its FAQ, clarifying the deadline and other guidance on the law as well as training materials. Training should be provided to employees in their primary language (though not legally required).

For New York employers outside NYC or those with fewer than 15 employees in NYC, the deadline to complete sexual harassment prevention training for all employees that meets New York State’s standards is October 9, 2019.  Schedule your training now!

As of January 2019, employers that are State contractors must now submit an affirmation to New York State in connection with bids for such contracts that they have a sexual harassment policy and provide annual sexual harassment prevention training .

Both the State and the City have enacted new laws last year that require posting in a visible location in the workplace, including sexual harassment prevention postings.  Make sure your postings are current. 

2. Update Employee Handbooks

There have been a spate of recent federal, State and New York City legal developments and so it’s a good idea to review your employee handbook and make necessary updates. Here are a few:

Employee Legal Protections under NYC and NYS Human Rights Laws

On January 20, 2019, the NYC Council passed a bill amending the NYC Human Rights Law to prohibit workplace discrimination by a covered employer against an employee for “sexual and reproductive health decisions.”   These are defined as “any decision by an individual to receive services, which are arranged for or offered or provided to individuals relating to sexual and reproductive health, including the reproductive system and its functions. Such services include, but are not limited to, fertility-related medical procedures, sexually transmitted disease prevention, testing, and treatment, and family planning services and counseling, such as birth control drugs and supplies, emergency contraception, sterilization procedures, pregnancy testing, and abortion.”  The law takes effect on May 20, 2019.

In January, New York State enacted Gender Expression Non-Discrimination Act (GENDA), amending New York State’s Human Rights Law to explicitly prohibit workplace discrimination based on gender identity and expression.

Lactation Accommodation (eff. March 18, 2019)

NYC employers with 4 or more employees must provide a “lactation room” unless doing so would pose an undue hardship to the employer and must implement a written lactation accommodation policy meeting certain requirements and provided to employees upon hire.  The lactation “room” must be a clean space, other than a bathroom, to express breast milk; it must be shielded from view and free from intrusion and have an electrical outlet, a chair, and a surface for a breast pump and personal items. The space must have access to running water and be in “reasonable proximity to” the employee’s work area.  There also must be a refrigerator suitable for breast milk storage “in reasonable proximity to” the employee’s work area.

NY Paid Family Leave (PFL)

New York Paid Family Leave may be used to bond with a new child, care for a family member with a serious health condition, or assist loved ones when a family member is deployed abroad on active military service.  In 2019, eligible employees are entitled to 10 weeks’ PFL at 55% of their average weekly wage, up to a cap of 55% of the current Statewide Average Weekly Wage of $1,357.11. The maximum weekly benefit for 2019 is $746.41.  Also, effective February 3, 2019, PFL may be used to care for a family member who is preparing for and recovering from surgery related to organ or tissue donation.

  Amended Rules for NYC Earned Safe/Sick Time Act (ESSTA)

In 2018, the NYC Department of Consumer Affairs Office of Labor Policy and Standards issued amended rules regarding ESSTA and updated its FAQ.

The updates include, but are not limited to, that covered NYC employers must distribute a written policy (“in a single writing”) addressing paid sick leave to all new hires, within 14 days of the effective date of any changes to the policy, and/or upon employee request and that the policy must also include a description of the confidentiality requirements of Section 20-921 of New York City’s Administrative Code. https://www1.nyc.gov/assets/dca/downloads/pdf/about/Paid-Sick-Leave-Law-Rules.pdf . It also updates and expands upon certain definitions.  Read more about the law in my earlier blog post. https://www.perlmanandperlman.com/nycs-earned-safe-and-sick-time-effective-may-5/

Temporary Schedule Changes

NYC’s Administrative Code was amended last year to required covered NYC employers to provide eligible employees with the opportunity to make temporary schedule changes for specified “personal events,” under certain conditions. Read more.   

3. Ensure Workers are Properly Paid

Eff. 12/31/18:  NY State Minimum Wage increased to $15/hour for New York City employers with 11 or more employees; $13.50/hour for NYC employers with 10 or fewer employees; $12/hr. for Long Island and Westchester employers; and $11.10/hr. for employers in other parts of New York State.  Effective 12/31/19, minimum wage increases to $15/hr. for all NYC employers.   Salary thresholds for executive and administrative exemptions to overtime pay requirements also increased to $1,125/week ($58,500 annually) for NYC employers with 11 or more employees, and to $1,012.50/week ($52,650 annually) for NYC employers with fewer than 11 employees.

Review Worker Classifications and Job Descriptions.

Job responsibilities change over time and the job descriptions should keep up with those changes to ensure workers are properly classified as exempt or nonexempt from overtime pay laws, to clarify the essential functions of the job (in the event you need to provide that job description to the health care provider of an employee seeking reasonable accommodation for a disability), and to ensure performance evaluations are aligned with expectations set out in the job description.  Review those worker classifications as well to make sure they are still accurate based on salary threshold (where applicable) and the job duties.

4. Know Your Obligations for Employees On Leave Or Out Sick And Know How To Handle Requests for Reasonable Accommodation

Whether your employee is out on disability, FMLA, NY Paid Family Leave, paid safe/sick (in NYC), short-term disability, worker’s compensation, or military leave, refresh your understanding of your legal obligations.

Refresh training of supervisors on legal obligations where an employee asks for a reasonable accommodation for a disability, pregnancy, childbirth or related medical condition, domestic violence victim status, lactation, sincerely held religious belief, or other legally protected category. Train your managers how to handle employee requests for reasonable accommodation, and how to engage in a “cooperative dialogue” now required under NYC’s Human Rights Law.  Read more.

5. Review Personnel Files

New York has so many notice and record-keeping requirements that it’s sometimes hard to keep up.  It’s a good idea to review your personnel files annually to ensure you have all current notices and records, particularly those that you’re required to provide upon hire.

Last but not least, consult with your labor and employment counsel to head off any potential legal problems and ensure it is smooth sailing for 2019!

Our employment law department conducts workplace trainings, audits of your employment/personnel practices, and updates policies and employee handbooks. Please contact Lisa Brauner, Head of Perlman & Perlman LLP’s Employment Law Practice, at: lisa@perlmanandperlman.com or 212-889-0575 if you have any questions.

The post Resolutions for 2019?  Here are a Few Small, Measurable Goals for New York Employers first appeared on Perlman Sandbox.

What’s New

Starting October 31, 2017,  all New York City private and public employers (regardless of size) are prohibited from:
a) inquiring about the salary history of a job applicant or
b) relying on the salary history of a job applicant in determining the salary, benefits or other compensation during the hiring process, under an amendment to New York City’s Human Rights Law.

This prohibition includes inquiries in advertisements/postings, interviews, and/or applications, and searching public records to find out about an applicant’s current or prior salary or benefits history.  The law applies to most applicants for positions for full-time or part-time employment, internships, and to independent contractors without their own employees.

Headhunters who qualify as employers, employment agencies, or agents of an employer, or who aid and abet a violation of the NYC Human Rights Law, may also be liable under the law.

Reason for the Law

Proponents of the law argued that employers’ reliance on salary history has perpetuated the gender pay gap where women continue to be paid less than their male counterparts for doing the same job.  The law was enacted to “disrupt the cycle of wage inequality for women and people of color” and “encourage employers to set compensation based on qualifications,” rather than salary history.

Who is Not Protected

The law does not apply to applicants for internal transfer or promotion with their current employer or applicants for public sector jobs where salary is governed by a collective bargaining agreement.

What Inquiries May an Employer Make

According to NYC Commission on Human Rights’ (NYCCHR) FAQ regarding the Salary History Ban, employers may:

• inquire about an applicant’s “expectations” for salary, benefits, bonus or commission structure, without inquiring about salary history;
• state the anticipated salary, salary range, bonus, and benefits for a position;
• ask about objective indicators of an applicant’s work productivity in her/his current or past jobs, such as revenue, sales, production reports, profits generated, or books of business;
• inquire of an applicant’s current or former employers or search online to verify non-salary information, such as work history, responsibilities, or achievements. However, if this results in the accidental discovery of current or prior earnings or benefits, the employer cannot rely on this information in making salary or benefits decisions;
• make inquiries about salary history that are authorized or required by federal, state, or local law;
• verify and consider current or prior earnings or benefits only if offered voluntarily and without prompting by the applicant during the interview process.

The NYCCHR FAQ on the salary history ban recommends, with respect to headhunters that: “To protect against liability, headhunters should obtain written confirmation from job candidates that they consent to the disclosure of their salary history.”  This recommendation seems problematic, however, as an “end run” around the prohibition against inquiring about salary history, and employers should be careful of such an approach that may be challenged in court as violative of the law’s intent.

Noteworthy

• Independent contractors without their own employees also are protected by this salary history ban.
• Intentionally “aiding and abetting” a violation of the law is also a separate violation so former employers offering salary information about a former employee to an inquiring prospective employer, “headhunters” and recruiting agencies also need to be wary.
• The NYCCHR FAQ asserts that, “if an unlawful discriminatory practice, including an inquiry about salary history, occurs during an in-person conversation in New York City, there will likely be jurisdiction because the impact of the unlawful discriminatory practice is felt in New York City. If an unlawful discriminatory practice occurs outside of New York City, there could be jurisdiction if the impact of the unlawful discriminatory practice is felt in New York City.”  The FAQ states that NYC residency alone is not enough to establish discriminatory impact.  What if the interview is conducted by Skype, telephone, or some manner other than in-person?  Must the employer, applicant or both be physically situated in NYC at the time of the “virtual” interview for there to be jurisdiction?  Is it possible that a court would find that an applicant residing in NYC but working outside NYC would be protected under this NYCHRL amendment if the unlawful salary inquiry were made in NYC?

NYC Joins the Salary History “Ban-dwagon”

The NYC salary history ban follows similar bans in other jurisdictions like Massachusetts, Philadelphia, Pennsylvania,[1] New Orleans, Louisiana, Puerto Rico, and mostly recently, California.

Penalties for Non-Compliance

• The New York City Commission on Human Rights is charged with enforcing the law, and can impose civil penalties ranging from $125,000 to $250,000, and  mandatory training and posting for violators.
• Complainants may sue in court alleging a violation of  New York City’s Human Rights Law, where they may get damages, attorneys’ fees, and costs.

What Employers Should Do Now

In light of these legal developments, organizations may want to:

• ensure that employment applications and other hiring materials do not ask for prior salary history;
• ensure third-party background checks will not yield prohibited information about salary history;
• inform and train hiring managers, human resources, recruiters, headhunters, and others involved in the hiring process on the new legal requirements;
• consider reviewing various resources and market-rate compensation surveys for the positions at issue together with an applicant’s qualifications, skill and value to the organization to determine appropriate compensation. (Nonprofits may already be considering such factors in determining executive compensation); and
• finally, remember to comply with recent NYC laws prohibiting credit history inquiries and pre-offer criminal background check inquiries, as applicable.

Employers can learn more about this new law at New York City’s Salary History Ban FAQs: http://www1.nyc.gov/site/cchr/media/salary-history-frequently-asked-questions.page.

For assistance with training hiring managers on the new law, employment law audits of your employment practices and policies, and legal review of your documentation and hiring practices, please contact Lisa Brauner, Head of Perlman & Perlman LLP’s Employment Law practice, at 212-889-0575, lisa@perlmanandperlman.com.

[1] The Philadelphia ban is currently being challenged in court.

The post NYC Salary History Ban Takes Effect October 31, 2017 first appeared on Perlman Sandbox.

It’s uncertain how many organizations have received these notices, but leading practitioners report that they are receiving panicked calls from nonprofit groups that have enjoyed tax exempt status for decades. In almost every case, the story is the same: the organization filed a routine application for renewal of exemption as it does every year, but instead of a routine approval, it received a letter from the City indicating the exemption is at risk. The organization is given a short period to respond or face the loss of its exemption. Most of these are nonprofits that the City has treated as tax exempt for years; nothing about them has changed. The law has not changed. The only thing that has changed is the City’s fiscal situation.

To justify its position, the Department of Finance is citing two old cases from the 1970s which interpret the grounds for exemption very narrowly. DOF conveniently ignores more recent cases which expand the definition considerably. Some of the groups that have been affected are fighting back; others imply they have a lack the resources to do so.

This has happened at previous times when the City faced financial problems. We (and many others) find this policy wrong – wrong on the law, and wrong for the City. If we take the past as a guide, advocates will eventually persuade the City that they are wrong this time, too. But it’s too risky for nonprofits to take that for granted; they should oppose the revocation of the exemption promptly and with vigor.

The post New York City Bites the Hand that Feeds It first appeared on Perlman Sandbox.