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Volunteer Tax Deductions

Are expenses incurred for volunteer work deductible? Consider if a person is planning a church mission trip to El Salvador to help build houses, and the church will not cover the airfare. The volunteer may deduct his or her properly documented travel expenses and possibly other expenses as well. Similarly, if a person serves as a volunteer board member, his or her unreimbursed travel expenses to attend meetings and other functions may be deductible. Here are some guidelines to consider before you write off your charitable expenses.

Accommodating Religious Practices at Work: Patterson v. Walgreens

To what extent may an employee’s religious practices be legally protected in the workplace?  When former Walgreens employee Darrell Patterson refused to violate his Saturday Sabbath observance for a mandatory training, Walgreens fired him.  Patterson sued in federal court, lost at the trial and appellate levels, and is now seeking relief from the United States Supreme Court. Within the employment discrimination context, this religious liberty case raises critical legal issues for employers about (a) how much “reasonable accommodation” is required for employees’ religious practices and (b) what amounts an “undue hardship” for employers, in both concrete and theoretical terms.

Anti-Harassment Training Resource – Telios Teaches

2018 may have been the year of #MeToo, but sexual and other harassment is a perennial issue for churches, other ministries, and employers. Wagenmaker & Oberly is pleased to recommend Telios Teaches as an excellent resource for these critical areas. 

Unemployment Tax Victory, And the Government's Role in Defining Religion

What is religious enough for the government to recognize a ministry’s tax exemption? Within the unemployment tax context, Illinois and other state laws exempt churches and “church-controlled” nonprofits “operated primarily for religious purposes.” If they meet either definition, then they are not “employers” for unemployment purposes and therefore need not participate in the state unemployment system. But how does the government determine whether the “primarily” religious element is met?

Court Rejects Illinois Unemployment Tax on Religious Ministry

An Illinois court ruled recently that the state can’t tax a religious ministry to underprivileged children. The Illinois Department of Employment Security had attempted to assess unemployment compensation taxes to By the Hand Club For Kids, a ministry of The Moody Church, reversing the Department’s previous determinations that By the Hand was nontaxable since its creation in 2001.

Sixth Circuit: Volunteers are not Entitled to a Minimum Wage

When is a volunteer an "employee"? The question is a complicated one, but the Sixth Circuit recently rejected the Department of Labor's attempt to require a church-owned enterprise to pay all volunteers a minimum wage. A church run by controversial televangelist Ernest Angley owns a for-profit restaurant buffet. Angley would recruit church members to serve as volunteers for the restaurant. The Department of Labor sued alleging that the workers were "employees," arguing 1) that there was no such thing as a "volunteer" for a for-profit entity, and that 2) the workers were coerced by their pastor and thus were not truly volunteers. The District Court agreed. Facing a judgment of $388k, the restaurant closed during the litigation.

Taking a Strange Turn on Employee Transit Benefits

Transit benefits can be a great employer-provided perk to employees, whether provided for mass transit or parking, and whether paid directly to transit and parking companies or to employees.  As a result of recent federal legislation known as the Tax Cuts and Jobs Act (“Act”), however, employers may no longer deduct such transportation fringe benefits as their own deductible business expenses.  Moreover, nonprofit employers that provide this employer-provided perk must report and pay tax on the value provided as taxable “unrelated business income.”  On the other hand, employees may still contribute their own earned wages through a pre-tax salary reduction program.  Confusing?  Here are the key legal details and related employment adjustments that may be warranted in light of the Act’s passage, for both taxable and tax-exempt employers.

Nonprofits and Interns: The More Things Change, the More They Stay the Same

The U.S. Department of Labor recently issued update Fact Sheet #71, clarifying that the key test for whether unpaid interns are owed overtime and minimum wage under the Federal Labor Standards Act is the “primary beneficiary” determination – i.e., whether the worker or the business benefits more.  By its own terms, Fact Sheet #71 continues to apply only to for-profit businesses, albeit with a nod to nonprofit volunteers.  In addition, it seems assumed that all internships are, or at least should be, carried out on a voluntary, non-compensated basis.  How might a nonprofit think about an arrangement involving a paid intern?

Leadership Response to Sexual Harassment Complaints: A Step-by-Step Guide to Minimizing Your Risk of Liability

With all the attention that sexual harassment is getting in the media, you may be looking to shore up your organization’s policies and procedures. Not sure where to start? This blog post provides a step-by-step overview of common steps in leadership responses to sexual harassment complaints. That being said, every situation is different, many are tricky, and you may want to check with your counsel.

FLSA Developments: Overtime Pay Rule Invalidated by Court, While Trump Administration Takes Up Salary Threshold Question Anew

A federal trial court recently made permanent its hold on the new overtime rule promulgated by the U.S. Department of Labor, which would have dramatically increased the salary threshold for the “white-collar” employee exemption.  Meanwhile, the U.S. Department of Labor has issued a “Request for Information,” seeking public comments about the salary threshold, with intriguing questions.  What does this mean for employers?  Nothing immediately, but all should stay tuned for further developments and continue their attentiveness to applicable overtime requirements.

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