Friday, May 18, 2012
The 11th Circuit Court observed that the attorneys representing the Christian school did not adequately raise and brief whether the ministerial exemption could apply to deprive the court of jurisdiction over the dispute. The ministerial exclusion states that a civil court does not have jurisdiction to decide disputes arising between ministers and their churches. The ministerial exemption was affirmed in January 2012 in the Hosanna Tabor Evangelical Luther Church and School v. EEOC. This case involved a teacher fired from a Christian school, arguably violating the Americans with Disabilities Act. The US Supreme Court unanimously found that the ministerial exemption applied and the court had no jurisdiction over that dispute.
Along the same lines, I recently had a conversation with the Human Resource Director at a mega-church who had extensive HR experience in industry but was new to the religious organization world. She was questioning my advice that the ministerial exemption might apply to a situation. She said that she had checked with all her HR contacts through SHRM and none of them had ever heard about the ministerial exemption. She was questioning my credibility since my advice contradicted all her credible sources. After our conversation, I was able to point her to several credible resources that talked about the ministerial exemption. She learned something new, though she already had years of experience. Now she is better equipped to handle this issue as it applies in her church.
Without commenting the merits (or lack thereof) of 11th Circuit case or the HR director's SHRM resources, I want to point out that churches, schools and other religious organizations do themselves a great disservice by engaging attorneys and other professionals that do not have extensive experience representing religious organizations. The truth of the matter is that some laws do not apply to some religious organizations. Further complicating the matter, some laws apply only to certain employees of certain religious organizations. These nuances are often missed by attorneys and other professionals who do not have adequate experience practicing with religious organizations.
Religious organizations should ask questions of the attorneys and other professionals they are considering to engage. Even if the attorney has extensive knowledge and experience in labor law, the church should pass unless that attorney has extensive knowledge and experience with labor law as it applies in a religious organization. Otherwise, the religious organization may have made a costly mistake.
This issue is really the same song, second verse of the ministers and ownership of sermons. If the sermon or lesson plan is created as part of the job duties, the employer owns it. If the employer wants to transfer ownership to the employee via a written contract, then the employee must pay at least fair market value for the intellectual property or it could cost the employer it's tax exempt status.
Friday, April 27, 2012
Friday, March 23, 2012
This controversy arises out of the social media world where few laws clearly delineate the rules of the employment relationship. It should remind nonprofit employers that they should proceed with caution if they intend to monitor an employee's social media. If your nonprofit secures password, you should check with you attorney.
Monday, February 20, 2012
Citibank claims that miles earned by using their credit cards is different and not taxable. The bank considers airline miles like a discount or rebate and pricing discounts are clearly not taxable. The discount in price or rebate is simply a reduction in the price paid by the consumer.
IRS is processing Citibank's filing and trying to come up with a straight forward answer. Unfortunately, a straight forward answer is not associated with the IRS.
Thursday, February 9, 2012
If a minister claimed expenses on more than one home in reliance on the Tax Court decision, the minister should amend their return to remove those expenses.
Friday, January 27, 2012
The lesson for charities is to require that all restricted gifts be documented with a written gift agreement. Further, if the charity later changes its mind about the restrictions, it should return the gift.
Tuesday, January 24, 2012
Friday, January 20, 2012
Tuesday, January 17, 2012
For the Form 1099s that are due on February 28, 2012, the failure to timely file Form 1099s penalty is doubling from $50 per Form 1099 to $100 per Form 1099. If you do not have all the information needed to complete a Form 1099 (such as the Social Security number), you can still file it incomplete by February 28. As long as you secure the missing information and file the amended Form 1099 before August 1, 2012, then no penalties will apply.
By the way, if you file the Form 1099 within 30 days after February 28, the $100 penalty is reduced to $30. If you file Form 1099 more than 30 days after February 28 but before August 1, 2012, the penalty is reduced to $60 per Form 1099.
The IRS is projecting to collect big bucks from these penalties over the next few years. You should be checking and double checking that you are issuing a Form 1099 to all businesses providing services to you that is not incorporated and you paid them at least $600 during 2011. This would include sole proprietorships, partnerships and LLCs. You can verify the business information via Form W-9.
If background checks are conducted, the EEOC recommends that employers take into consideration the nature and gravity of the offense, the time that has passed since the conviction and/or completion of the sentence, and the nature of the job sought in order to be sure that the exclusion is important for the particular position.
Wednesday, January 4, 2012
In December 2011, the National Labor Relations Board ruled that musicians engaged by the Lancaster Symphony Orchestra and the Plano Symphony Orchestra are employees. In both cases, the Board reversed lower rulings holding that musicians were independent contractors. While musicians were free to decline performing in any program, the symphonies selected the music, dictated the dress, set performance and rehearsal times. In sum, the symphonies exercise sufficient control over the details of the musicians' performance to make them employees. See http://www.foxnews.com/politics/2011/12/30/labor-board-rules-local-symphony-musicians-can-join-union/.
Recently, the American Guild of Organists published a salary survey of organists performing in religious institutions. At the bottom of the salary survey, the Guild observed that according to IRS guidelines the majority of organists working for religious institutions were properly classified as employees. See http://www.agohq.org/profession/salary.htm.
These two decisions reaffirm our position that most musicians engaged by churches are employees, even if they are engaged for only one program.