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Today’s Labor Updates, September 7, 2017

Taking and Making Hurricane-Related Donations: Options, Considerations, and Other Ways for Employers and Employees to Help Now.

Ogletree Deakins – Aimee E. Dreiss , Timothy G. Verrall and Eric D. Penkert .

USA September 5 2017

Before Hurricane Harvey unleashed its devastation on Texas and Louisiana, Federal Emergency Management Agency (FEMA) Administrator Brock Long said, “People need to be the help before the help arrives.” With Hurricane Irma now threatening Florida and the East Coast, the need for hurricane-related relief doesn’t stop with Harvey.

If your company has employees who were impacted by Harvey—or who are affected by Irma in the coming days—you may be thinking about how you and your non-impacted employees can “be the help before the help” for those impacted employees. Insurance and FEMA monies take time, and not all losses will be covered. You may have employees who want to donate to their colleagues and are asking the company to coordinate their efforts. Even if you don’t have employees impacted by Harvey, Irma, or other disasters, you may be thinking about what your company could do if something like this does happen to your employees.

Disaster-Relief Donations

A simple and direct option for employers to provide aid to impacted employees is to pay qualified disaster relief payments (QDRPs). In general, the Internal Revenue Service (IRS) is highly suspect of gifts from employers to employees. In the wake of the September 11 terror attacks, QDRPs were created to provide a clear income tax exclusion for employer-funded relief payments to victims affected by federally-declared natural disasters and other catastrophes. This means that an employer can quickly provide cash payments to affected employees to help them deal with the immediate aftermath of a disaster while also sparing the employee from being taxed on those payments. Importantly, these relief payments are generally deductible business expenses for employers. However, with all good things come some bad, and as with most situations involving the IRS, there are important requirements and conditions that employers must consider before providing relief payments to employees.

What if an employer wants to supplement its own relief efforts by facilitating donations from employees unaffected by a disaster? Unfortunately, this is where things get more complicated. There are a number of options available, but they may not offer the kind of quick solution disaster relief often requires.

  • Establish a charitable 501(c)(3) employee relief fund. An employer can establish a 501(c)(3) nonprofit corporation to receive and disburse donated funds to affected employees. This approach yields the best tax results to all parties involved (e.g., tax deductibility for donors, no tax liability for the recipients, and no tax liability for the employer) and offers complete control over distribution of aid—subject, as always, to IRS requirements. This approach does require the creation of a corporate entity along with the attendant formalities and also requires an application to the IRS to secure tax-exempt status for the entity. Aside from the initial time commitment to establish a new charitable organization, this approach presupposes an ongoing charitable mission. In other words, an employer probably wouldn’t want to establish a new 501(c)(3) entity solely to provide relief for a single disaster situation.
  • Establish a donor-advised fund with an existing charity. An employer can set up a fund under the umbrella of an existing charitable foundation and achieve the same tax advantages as would be available with a new 501(c)(3) entity. Under this approach, donations could be made by the employer, employees, or the general public to the new fund, and the existing charity would then be responsible for distributing those funds, with significant input from the employer, subject to applicable IRS regulations.
  • Crowdfunding. As crowdfunding has become a more accepted way of fundraising for startups, charitable activities, and other similar ventures, many employers have naturally considered its uses for providing disaster relief on an expedited basis. This approach might involve establishment of a new bank account to receive donations or might involve the use of a third-party online funding aggregator. Although this approach does have the benefit of relative simplicity and speed—very desirable characteristics when disaster relief needs are urgent—in the final analysis, it may not be quite as simple or cost-effective as other alternatives. This approach does not yield the favorable tax benefits to donor employees mentioned above, and it may present some tax-related complexities for the employer that organizes the funding campaign, unless the relief payments qualify as QDRPs. Moreover, third-party aggregators tend to impose fairly substantial administrative fees for their services, and they do not assume responsibility for actually disbursing funds.

Low-Cost Ways to Help Affected Employees

Maybe your company was heavily impacted by Harvey and you are not in the financial position to make donations to employees and/or are without the administrative resources to set up a donation platform. There are no-cost and low-cost ways you can also help your impacted employees right now:

  • Allow loans and hardship distributions from your 401(k) plan to Harvey victims and members of their families under streamlined loan procedures and liberalized hardship distribution rules recently announced by the IRS.
  • Consider providing no-interest or low-interest loans to employees. Keep in mind that such loans must be properly documented and will result in some additional taxable income to the employee.
  • Consider implementing a paid time off (PTO) leave-sharing program. Although it would require some additional administrative time for an employer, this approach doesn’t require any additional out-of-pocket money for employers, and special IRS rules allow employees to donate PTO tax-free in the case of a major disaster.

The need for quick action in disaster situations understandably often prompts a “Ready! Fire! Aim!” response, but hasty actions can have unexpected consequences for both employers and employees. The good news is that there are viable options available to concerned employers, both to facilitate donations from employees, to fund relief payments, and to provide other help to affected employees through existing benefit plans and programs.

 

Release of Plans to Reform French Labor Law Makes Waves

Littler Mendelson PCGuillaume Desmoulin

USA September 5 2017

French President Emmanuel Macron’s boldest mission, reforming France’s nearly untouchable labor laws, received mixed reviews as his plans went public late last week. The changes would promote negotiation at a company level and without unions, add a voice for small businesses, and create easier ways to hire and fire employees.

The measures meant to foster growth, reduce the nation’s stubbornly high unemployment, and revolutionize the way the French work will get a hearing in the streets, with two protests planned for September.

Restructuring France’s complex labor laws, which authorities say have proved a hindrance to investors and employers, is part of a larger program by Macron to stimulate France’s slow-moving economy. The introduction of this extremely politically-sensitive plan comes just as the new 39-year-old president’s popularity is sinking. But the promise to make the French labor market more flexible was at the core of his election campaign.

The key components of the reform are:

  • Extension of the scope of collective bargaining at the company level: employers with fewer than 20 employees will be able to negotiate directly with employees via a referendum. Previously, employers were bound by industry-level agreements.
  • Merger of the various staff representative bodies: a single institution called Social and Economic Committee will replace the current staff delegates, works council, and health and safety committee. Under some circumstances, the Social and Economic Committee could also include unions.
  • Economic layoff: If an employer has international operations, it may provide an economic justification for laying off employees at the French location only except in cases of fraud.
  • Easing of dismissal rules: Employers would have the ability to correct and modify the reason for layoffs, even after sending the dismissal letter. In addition, procedural irregularity will no longer affect the validity of the layoff.
  • Collective mutual terminations: employers will be able to set up collective mutual termination plans via collective agreement approved by the French Employment administration.
  • Statute of limitations for claims against termination: any legal action to contest the termination of an employment contract must be filed within 12 months of the notification date.
  • Damages floor and cap set for unfair dismissal: For unjust dismissal cases, the new changes set a mandatory compensatory damages scale with a minimum and a maximum amount that can be awarded.

President Macron intends to act quickly in the coming months, using presidential decrees to quickly implement these labor law reforms. Although Parliament must then ratify the labor law reform bills, the decrees will have already taken effect.

 

Summary of NLRB Decisions for Week of August 21 – 25, 2017

The Summary of NLRB Decisions is provided for informational purposes only and is not intended to substitute for the opinions of the NLRB.  Inquiries should be directed to the Office of the Executive Secretary at 202‑273‑1940.

Summarized Board Decisions

Glass Fabricators, Inc. and Glass and Metal Solutions, Inc., alter egos  (08-CA-174567; 365 NLRB No. 125)  Lakewood, OH, August 23, 2017.

The Board (Members Pearce and McFerran; Chairman Miscimarra, dissenting) denied Respondent Glass and Metal Solution, Inc.’s (GMS) Motion for Summary Judgment seeking to dismiss the complaint against itself on the basis that it is not an alter ego of Respondent Glass Fabricators, Inc. (GFI), finding that GMS failed to establish that there are no genuine issues of material fact warranting a hearing and that it is entitled to judgment as a matter of law.  The majority found that the General Counsel asserted his position that a genuine issue of material fact exists sufficiently to comply with Section 102.24(b) of the Board’s Rules and Regulations, based on the pleadings, the marital relationship between the owners of GMS and GFI, and the General Counsel’s assertion that he would present evidence to show that the Respondents have “substantially identical” ownership, management, business purpose, operations, equipment, customers, supervision, or centralized control of labor relations.

Dissenting, Chairman Miscimarra would have issued a notice to show cause why GMS’s motion should not be granted.  Consistent with his concurring positions in L’Hoist North America of Tennessee, Inc., 362 NLRB No. 110 (2015) and Trinity Technology Group, Inc., 364 NLRB No. 133 (2016), Chairman Miscimarra would have found the General Counsel’s opposition insufficient because, in response to GMS’s motion and accompanying affidavit, it provided only conclusory assertions and made no reasonable effort to identify what genuine issues of material fact, if any, warrant a hearing.  Specifically, Chairman Miscimarra noted that, other than relying on the marital relationship between the owners of GMS and GFI, which he views as far from a determinative fact in establishing alter ego status, the General Counsel failed to identify any contention or particular facts supporting his alter ego theory.

Charge filed by International Union of Painters & Allied Trades District Council 6.  Chairman Miscimarra and Members Pearce and McFerran participated.

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Unpublished Board Decisions in Representation and Unfair Labor Practice Cases

R Cases

Better Choice Foundation, d/b/a Mary D. Coghill School  (15-RC-197643)  New Orleans, LA, August 22, 2017.  The Board (Members Pearce and McFerran; Chairman Miscimarra, dissenting) denied review of the Regional Director’s Decision and Direction of Election, which found that the Employer did not constitute a political subdivision exempt from Board jurisdiction.  Dissenting, Chairman Miscimarra would have granted review and dismissed the petition based on his belief that the Board should decline to assert jurisdiction over charter schools generally and in this case.  Petitioner – United Teachers of New Orleans, Local 527, LFT, AFT.  Chairman Miscimarra and Members Pearce and McFerran participated.

C Cases

Pacific Coast Supply, LLC d/b/a Anderson Lumber  (20-CA-189966)  North Highlands, CA, August 22, 2017.  No exceptions having been filed to the July 6, 2017 decision of Administrative Law Judge Jeffrey D. Wedekind’s finding that the Respondent had not engaged in certain unfair labor practices, the Board adopted the judge’s findings and conclusions, and dismissed the complaint.  Charge filed by Chauffeurs, Teamsters and Helpers, Local 150, International Brotherhood of Teamsters.

Mat-Su Regional Medical Center  (19-CA-180385)  Palmer, AK, August 22, 2017.  No exceptions having been filed to the July 7, 2017 decision of Administrative Law Judge Gerald M. Etchingham’s finding that the Respondent had not engaged in certain unfair labor practices, the Board adopted the judge’s findings and conclusions, and dismissed the complaint.  Charges filed by an individual.

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Appellate Court Decisions

No Appellate Court Decisions involving Board Decisions to report.

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Administrative Law Judge Decisions

No Administrative Law Judge Decisions Issued.

 

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