OCTOBER 1ST DEADLINE FAST APPROACHING IF YOUR CHARITY CONDUCTS RAFFLES

The California Attorney General’s Office is reaching out, trying to educate consumers and tax-exempt organizations on some of the new, and not-so-new, rules related to raffles.  Most readers are aware that California charities and other private nonprofit organizations may conduct raffles to raise money for beneficial or charitable purposes.  This is a special exemption to the general California constitutional prohibition against lotteries.  This special exemption, however, requires, among other things, that at least 90 percent of the gross receipts from the raffle go directly to the beneficial or charitable purposes of the organization.

The question I am asked most often is:  “How can this be?  We do 50/50 raffles all the time!”  In a 50/50 raffle, charities typically pay out half of the proceeds collected as the prize, and then keep half of the proceeds for their beneficial or charitable purpose.  Therefore the answer to the question is:  50/50 raffles are illegal, because they violate the 90% rule.  (See Penal Code § 320.5(a)(4)(A).)  In other words, 90% of the funds collected are not retained for the beneficial or charitable purposes of the organization.

The first step before any charity may conduct a raffle, however, is to register with the Attorney General's Registry of Charitable Trusts prior to conducting the raffle.  The form to register can be found on the Attorney General’s website, form CT-NRP-1.  The charity is also required to file an aggregate financial disclosure report for all raffles held during the reporting year, form CT-NRP-2.  This form must be used by all charitable organizations, regardless of the number of raffles held during the reporting period, and there is no fee for filing the report. 

Importantly, the charitable organization must keep precise records; reports containing estimates of proceeds or expenses will be rejected. Organizations that conduct raffles as part of a larger fundraising event must maintain a record of the raffle proceeds and expenses separate and apart from all other monies raised at the event, and report only raffle proceeds and expenses on their annual Form CT-NRP-2.

This single aggregate report for all raffles (Form CT-NRP-2) is due on or before October 1st.

Questions?  Comment, or send me an email, and let’s discuss. 

 

Nothing in this blog is intended to create an attorney-client relationship.  This article is intended to provide a general overview of the current status of the law for informational purposes only, and is not intended to constitute, or serve as a substitute for, a professional legal consultation.  Laws change every day; please consult an attorney regarding the current status of the law, and how the law affects your specific circumstances. Thank you.

 

Form Over Substance Results in Money Out of Employer’s Pocket

A recent decision by the Ninth Circuit caught my eye.  In a decision published last Tuesday in Ketchikan Drywall Services, Inc. v. Immigration and Customs Enforcement (2013 WL 3988679 (C.A.9)), the construction-industry employer was fined $173,250.00 for several violations of section 274A(b) of the Immigration and Nationality Act (8 U.S.C. § 1324a(b)), for failing to properly complete employee I-9 forms.

Specifically, the Court ruled the employer’s failure to fill out parts of an I-9 form was a violation, even though documentation containing the information required on the form was attached to the form. The employer argued "it fully complied with its statutory obligations by copying and retaining its employees’ verification documents together with partially completed I-9 Forms, because the documents showed the employees’ eligibility for work and the forms had been signed." (2013 WL 3988679, *3.) The Ninth Circuit disagreed, holding as follows:

[C]ompliance requires that the relevant information from the documents be transcribed onto the I-9 Form, regardless of whether copies of the documents are retained. 8 C.F.R. § 274a.2(b)(3) explains that, while copying of documents is not required, it is permitted; it also goes on to explain that the copying and retention of the copy or electronic image does not relieve the employer from the requirement to fully complete section 2 of the Form I-9. ...

[Ketchikan Drywall Services] argues that it is senseless to require employer and employees to waste the time necessary to transcribe information onto I-9 Forms when that information is already available on an attached copy of the relevant document. But requiring that the parties take the time to copy information onto the I-9 Form helps to ensure that they actually review the verification documents closely enough to ascertain that they are facially valid and authorize the individual to work in the United States. The I-9 Form also provides concrete evidence that such review took place. Further, aggregation of all of the relevant information onto one form allows for easier review of that information by ICE. It is neither arbitrary nor capricious to require that employers actually complete their I-9 Forms.

(2013 WL 3988679, *3-4 (internal quotation marks, brackets, and ellipses omitted).)

A seeming triumph of form over substance to me, but then again, I'm not the person wearing the robe on the bench hearing all of the evidence.  Regardless, this is a cautionary tale to all you employers out there:  make sure all of the i’s are dotted and t’s crossed on your federal employment verification forms, or you may pay the price.

Questions?  Concerns about how pending legislation or litigation may impact your business?  Comment, or send me an email, and let’s discuss. 

Nothing in this blog is intended to create an attorney-client relationship.  This article is intended to provide a general overview of the current status of the law for informational purposes only, and is not intended to constitute, or serve as a substitute for, a professional legal consultation.  Laws change every day; please consult an attorney regarding the current status of the law, and how the law affects your specific circumstances. Thank you.

New ADA Law Affects Commercial Leases

Effective July 1, 2013, a new lease disclosure requirement codified at California Civil Code Section 1938 affects owners and lessors of commercial property.  Section 1938, part of the legislation designed to limit unwarranted lawsuits brought under the Americans with Disabilities Act (ADA), provides as follows:  A commercial property owner or lessor shall state on every lease form or rental agreement executed on or after July 1, 2013 whether the property being leased or rented has undergone inspection by a Certified Access Specialist (CASp), and, if so, whether the property has or has not been determined to meet all applicable construction-related accessibility standards pursuant to Section 55.53.

Although this new requirement seems straight-forward enough on the surface, it has raised questions about how an owner and lessor should proceed with respect to satisfying the requirement, including the potential consequences of having or not having a CASp inspection performed.  While there are no definitive answers to these questions, and probably won't be until the new legislation has been tested in the courts, some issues have been clarified by the California Commission on Disability Access ("CCDA") in the wake of this new law. 

Is your property covered by this new law?  California Civil Code Section 1938 specifically addresses "commercial" properties, which under Civil Code Section 1995.020 is defined as all properties other than for residential purposes.  The  CCDA has confirmed the provision is not applicable to residential leases.

Is the law retroactive?  The law applies to all leases or rental agreements of commercial properties executed on or after July 1, 2013. 

What if my lease was signed before the July 1, 2013 deadline, but there is a post-July 1, 2013 amendment or modification?  The CCDA has advised a lease that is entered into before July 1, 2013 but is amended or renewed on or after July 1, 2013 falls within the provisions and requirements of Civil Code Section 1938; therefore, any lease amendment or renewal must state whether or not a CASp inspection has been performed.

 

Questions?  Concerns about what to do in response to this new law?  Comment, or send me an e-mail.  I’m here to help! 

Nothing in this blog is intended to create an attorney-client relationship.  This article is intended to provide a general overview of the current status of the law for informational purposes only, and is not intended to constitute, or serve as a substitute for, a professional legal consultation.  Laws change every day; please consult an attorney regarding the current status of the law, and how the law affects your specific circumstances. Thank you.

 

Working from home? Maybe not for much longer.

It has been interesting to me watching all of the news reports recently regarding large, tech employers like Google and Best Buy, who are changing their policies relative to employees working from home.  The slant of the stories has been, not surprisingly, how inconvenienced the employees will be, implying some evil capitalist motive to their employers.

Here's the reality.  Both of these companies started their work-at-home programs with established criteria to judge the programs' efficacy.  We've not heard a single word about whether employees met those objectives.

But even more significantly, no one is talking about the cost and risk to employers who have employees working unmonitored at home.  Across the country, the presumption for tax purposes is that employees are non-exempt employees; in other words, that employees are what most of us commonly refer to as "hourly" employees, subject to wage and hour laws, minimum wage requirements, and statutorily required breaks and meal periods, among other things.

In California, for example, if an employee during a working day doesn't take his/her two 15-minute breaks and lunch break, then he/she can then turn around and file a claim with the Department of Labor for all of that time as overtime, which also then carries substantial penalties to the employer.  The onus is on the employer to ensure these employees take these breaks.  I have sat in DOL meetings and hearings with employers where the best we can try to do is mitigate these burdensome penalties, because unfortunately, despite repeated documentation in the personnel file and manual that the employee was advised to take his/her breaks, unless the employer takes active steps to force the breaks and keeps impeccable documentation, the employee's time records of time allegedly actually worked (which not surprisingly often do not match their time cards) trump all other evidence.

How does an employer document breaks effectively when the employee is at home?  The obvious answer is they cannot.

 

Also, California is one of only four states in the US that require employees to be paid overtime for working more than 8 hours in a single day, regardless of how many hours are worked in a work-week.  How does an employer effectively monitor that time if the employee is at home, and ensure the employer is not unwittingly carrying an untapped liability risk?  The answer to this question involves substantial staff time just to monitor staff's compliance with wage and hour laws, like collecting reports of computer usage, hours spent online and logged into the company's database, etc.  All of these issues create an HR nightmare for the employer. 

The solution?  Bring everybody back into the office, where the employer can service the edicts of the nanny-state and ensure employees are taking their statutorily required breaks, lunch periods, and not working over eight hours in one day. 

If employees want more freedom in the workplace, then employees need to talk to their state legislators about the overly-regulated morass that has been created, and return personal responsibility to the workplace.  This would allow working families flexibility in their daily schedules, for example, the possibility of working four-10's; all options that are now essentially off the table, but would support stronger families and greater creativity and flexibility in the workplace and support a more vibrant economy.

 

If you are in favor of greater flexibility in the workplace, then while you're on one of those statutorily required breaks, drop an email or letter to your Assembly or Senate representative.  The people of this great State have the power to get things done.  Harness it.

Nothing in this blog is intended to create an attorney-client relationship.  This article is intended to provide a general overview of the current status of the law for informational purposes only, and is not intended to constitute, or serve as a substitute for, a professional legal consultation.  Laws change every day; please consult an attorney regarding the current status of the law, and how the law affects your specific circumstances. Thank you.