texas society cpa tarrant nonprofit presentation 62612

7/31/2019 Texas Society Cpa Tarrant Nonprofit Presentation 62612

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TEXAS SOCIETY OF CERTIFIED

PUBLIC ACCOUNTANTS

FORT WORTH CHAPTER

NON-PROFIT STUDY GROUP

P R E S E N T E D B Y

R U S S E L L D . C A W Y E R

J U N E 2 6 , 2 0 1 2

Common Employment Law Issuesfor Non-Profit Organizations


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Topics

Use of Volunteers by Non-Profits

Unpaid Internships

Proper Classification of IndependentContractors

Proper Classification of Employees

Non-Profit Use of Employee Handbooks


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Consequences of Improper Classification of

Employees as Independent Contractors

Overtime claims

Claims for unpaid employment taxes (i.e., FICA,FUTA, unemployment)

Claims for benefits available only to employees Contractors dont participate in employer-

sponsored health, retirement or pension plans


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Employee/Independent Contractor Tests

JudicialTest/EconomicRealities Test

TexasWorkforceCommissionTexas

IRS Test

BehavioralControl

FinancialControl

Type ofRelationship


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Economic Reality Test

the degree of control exercised by the allegedemployer

the extent of the relative investments of the work and

the alleged employer the degree to which the worker's opportunity for

profit or loss is determined by the alleged employer

the skill and initiative required in performing the job

the permanency of the relationship


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Voluntary Classification Settlement Program

IRS program allows employers to reclassify independentcontractors as employees

Collect unpaid payroll taxes for employees improperlyclassified as independent contractors

Employers self-report and pay past federal payroll taxes

Participating employers avoid federal penalties and

interest Program does not prohibit others from pursing claims

against self-reporting company


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VCSP Frequently Asked Questions

IRS says it will not share information about VCSPapplicants with state or federal DOL

Employers that apply for, but are not accepted into

VCSP, will not be automatically subjected to an audit Participation in VCSP is not an admission of liability

or wrongdoing

Class action Plaintiff lawyers are not bound by these

representations from the IRS


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Use of Volunteers


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Non-Profit Use of Volunteers

DOL W&H recognizes that a person may volunteer time to non-profit organizations

Persons will not be considered an employee for FLSA purposes ifthe individual volunteers freely, and without contemplation orreceipt of compensation

Volunteers usually serve on a part-time basis and do not displacepaid workers or perform work that would otherwise be performedby employees

Volunteer is An individual who performs hours of service for apublic agency for civic, charitable, or humanitarian reasons, withoutpromise, expectation or receipt of compensation for services

rendered[.] volunteer has been interpreted as containing two requirements:

(1) a civic, charitable, or humanitarian reason (underlyingmotivation for wanting to obtain the position); and (2) the absenceof an expectation of, or actual compensation for services rendered


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Practice Tips for Using Volunteers

Have volunteers sign acknowledgments stating that:

They are volunteering of their own volition without coercion orduress;

That they are doing so for their own civic, charitable, religious

or humanitarian reasons; and

That they have no expectation of receiving any pay orremuneration for their volunteer service

Do not refer to volunteers as employees in written or

oral communications

Keep volunteer service to part-time commitments


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Unpaid Internships


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Unpaid Internship Test

Is the training similar to what would be given in a vocationalschool or academic educational instruction?

Is the training for the benefit of the trainees or students?

Do the trainees or students work under their close observation

of regular employees without displacing them? Does the employer derive no immediate advantage from the

activities of the trainees or students, and on occasion are theemployers operations actually impeded?

Are the trainees or students not necessarily entitled to a job at

the conclusion of the training period? Do the employer and the trainees or students understand that

the trainees or students are not entitled to wages for the timespent in training?


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Non-Profit & Employee Handbook

Often too small for coverage under mostdiscrimination laws

Grant programs and other funders often expect these

kinds of policies Give employees notice of expectation


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Must-Have Policies

At-Will Disclaimer

ADR Policy/Risk Avoidance

FLSA Safe Harbor

Neutral Absence Control Policy

texas society cpa tarrant nonprofit presentation 62612

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