Law Meets Gospel

The federal district court for the Western District of Wisconsin recently held that the Tax Code's housing allowance violates the First Amendment's Establishment Clause. The decision in Gaylor v. Mnuchin, (W.D. Wis., Oct. 6, 2017), deals with 26 U.S.C. § 107(2). It does not affect the exemption from taxed income based on the value of a church-owned home, traditionally referred to as a parsonage, which is found in 26 U.S.C. § 107(1). Josh explains how the housing-allowance exemption works, why the court concluded it is unconstitutional, and what ministers and religious organizations should look for as the case progresses. For more, see this earlier post collecting coverage of the decision. Subscribe to the Law Meets Gospel Podcast

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If history is any indication, every worshiping community's life ends sometime. If that happens under the U.S. Tax Code, there are limits on how assets must be distributed. Musical instruments, books, and furnishings can't just be given to the donors who funded them. Fair prices must be received. And any assets left at the end of the legal entity's existence must be transferred to another charitable entity, like another house of worship, a denominational entity, relief agencies, or social service providers.

What should you do if a leader of your religious organization is accused of sexual abuse? Assess the facts. Contact and coordinate with law enforcement. Contact denominational leaders. Disclose the facts to the congregation and invite other victims to report. Offer counseling to victims. Call your insurer. Prepare for negative responses and turbulent times. And remember that you're not alone.

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If your religious organization has a website, it should have at least a basic privacy statement informing users what information you collect on the site, who has access to it, what you do with it, and how you protect it. Resources

• Does Your Church or Ministry Website Have a Privacy Policy?

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Religious organizations should be respectful when posting photos, videos, and audio from public events they host. Although nonprofits are exempt from the Child Online Privacy Protection Act (COPPA), they should adhere to its requirements for children under thirteen to respect children's privacy and avoid possible regulatory implications. Before posting, it's best to obtain permission from adults and parents, which can be done by announcing that photos will be used for promotional materials and inviting those with concerns to speak with a representative or obtaining the permission on registration or permission slips. To protect privacy further, you can post only to online pages that are protected, for example a password-protected page on your organization's site or an invitation-only Facebook page. It's also a good idea to avoid including names in captions and file names to decrease the likelihood that someone can find the image. Resources

• Church Website Ideas: "Does Your Website Content Violate Child Privacy Laws?"
• Central Texas Conference of the United Methodist Church: "Tips for Properly Posting Photos"
• United Methodist Church Communications: "Privacy and Permissions"
• ELCA resource: "Social Media and congregations"

• 1737 Child Online Privacy Protection Act

• 1726 How to Avoid Copyright Infringement

  1725 Copyright for Religious Creators

  1724 Copyright Overview for Religious Organizations

  1723 Intellectual Property Overview for Religious Organizations

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Religious organizations and other nonprofits are not subject to the rules under the Child Online Privacy Protection Act (COPPA), but COPPA's rules provide a good example of how to deal with information collected from children under 13. It requires verifiable parent consent, online privacy statements, and options for parents to control how providers use their children's information. Since it sets the standard in the United States for protecting children online, Josh encourages religious organizations to follow its rules even when they aren't required to do so. Resources

• FTC Frequently Asked Questions about the Child Online Privacy Protection Act (COPPA)
• FTC video: "Protecting Children's Privacy Under COPPA"
• United Methodist Church Communications: "Privacy and Permissions"
• ELCA resource: "Social Media and congregations"
• Wikipedia: "Children's Online Privacy Protection Act"

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A federal court declared Obama-era overtime rules invalid just in time for Labor Day. On August 31 the U.S. District Court for the Eastern District of Texas issued an order explaining that rules implemented under the Fair Labor Standards Act (FLSA) during the last months of the Obama administration overreached the Labor Department's ability to interpret FLSA. The decision can be found here: Nev. v U.S. Dep't of Labor, No. 4.16-cv-00731-ALM, (E.D. Tex. Aug. 31, 2017) (Memo. Op. and Order). The same court issued a preliminary injunction in November 2016 that prevented the rule from going into effect on December 1, 2016, as the Obama administration planned. The district court's final judgment likely means the rule that more than doubled the previous minimum salary requirements to exempt employees from minimum-wage and overtime requirements is permanently defeated. Josh explains how the decision affects religious organizations. For more about overtime requirements, check out these:

• The basics of overtime rules—with Shelley M. Jackson and Pastor John Hickey (January 3, 2017)
• Which employees are covered by overtime rules?—with Shelley M. Jacksonand Pastor John Hickey (January 10, 2017)
• Does the FLSA apply to our church?—with Shelley M. Jackson and Pastor John Hickey (January 17, 2017)
• 1734 Stop using comp time with nonexempt employees (Aug. 22, 2017)

• E.D. Tex.: Obama FLSA rule changes invalid; salary increase for exempt employees struck down (Sept. 4, 2017)

• ChurchLaw&Tax infographic: "FLSA Classification Decision Tree for Churches and Other Religious Organizations"

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How do you know whether a representative has the authority to enter into an agreement on behalf of an organization? In short, the governing documents and resolutions of the board of directors can authorize a representative. But many organizations are not careful with following these formalities. Josh discusses what can go wrong when they don't, using the case discussed in this post as an example. Related

• N.Y. Sup. Ct.: $1 million religious arbitration award vacated due to lack of authority of synagogue officer who signed arbitration agreement

• Matter of Young Israel of Eltingville, Inc. v Oorah, Inc., (N.Y. Sup. Ct.., June 30, 2017)
• 1729 Conflicts of Interest overview

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Does your organization use compensatory time instead of paying employees overtime? Stop! Many mistakenly believe that nonprofits are allowed to give employees time off to make up for earned overtime. But this isn't true. If an employee is subject to the Fair Labor Standards Act (FLSA), that employee must be paid time and a half for any time worked over forty hours in a seven-day work week. While some church employees may not be subject to FLSA, for those employees who do, it's important to comply and pay overtime. For exempt employees and employees who are not subject to FLSA, these questions are likely decided by state law. See the notes below for resources on determining which employees are subject to FLSA and how to deal with comp time with exempt employees. For more about overtime requirements, check out these episodes:

• The basics of overtime rules—with Shelley M. Jackson and Pastor John Hickey (January 3, 2017)
• Which employees are covered by overtime rules?—with Shelley M. Jackson and Pastor John Hickey (January 10, 2017)
• Does the FLSA apply to our church?—with Shelley M. Jackson and Pastor John Hickey (January 17, 2017)

For more reading material, check these out:

• Stop using comp time in place of overtime!
• Here's a helpful blog post going into more details about FLSA and compensatory time: http://www.wagehourinsights.com/2015/07/can-employers-offer-compensatory-time-to-exempt-employees-wage-hour-faq/

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The conclusion of Josh's discussion with Dave Roland, the Director of Litigation and cofounder of the Freedom Center of Missouri about the recent U.S. Supreme Court decision Trinity Lutheran Church v. Comer. Dave and Josh talk about the possible practical implications of the decision, including what we might expect in future litigation. [caption id="" align="alignnone" width="150"] Dave Roland, Executive Director and cofounder of the Freedom Center of Missouri[/caption] See also

• Supreme Court Remands School Aid Cases For Reconsideration In Light of Trinity Lutheran Decision
• Trinity Lutheran Church, Inc. v. Comer, No. 15-577 (U.S. June 26, 2017)
• Coverage of Trinity Lutheran Church decision
• 1719 Background on Trinity Lutheran v. Comer
• 1720 Trinity Lutheran oral argument
• 1721 What is a Blaine Amendment?
• 1722 The Freedom Center of Missouri
• 1730 Trinity Lutheran Church v. Comer decision
• 1731 Trinity Lutheran Church v. Comer dissent
• 1733 Cases remanded after Trinity Lutheran

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