So You’re a Non-Profit Really? Are you Sure?

Right before and after the holidays, there are many solicitations for “tax deductible” donations to many organizations.  Some you recognize, some you don’t.  If you donate to a non-profit that does not have 501(c)(3) status, you could be jeopardizing your right to take that deduction.

A 501(c)(3) public benefit organization or corporation is an organization that has gone through the scrutiny of the IRS to determine if its purpose serves the public good.  A non-profit (501(c)(3)) that has been in existence for several years may not have filed the “Form 1023” that is now required by the IRS to obtain 501(c)(3) status. 

However, if your organization, an existing non-profit, has not filed the 990 tax return with the IRS for the past 3 years, you will lose your status, and then have to file the Form 1023 to be reactivated….And there is no guarantee that this time around, you will be granted non-profit status.

Once you receive Federal “tax exempt” status (501(c)(3)), you must then apply to the State for equivalent status.  You can create a completely new application with the state on the Form 3500 for California, or you can wait for your status to come through with the Federal Government, and then make an abbreviated application with the state (details on how to do that are not covered by this article).

After you receive the State’s approval, then you must submit an application to the California State Attorney General’s office to be entered into the Charitable Registry.  This brings us full circle. If you are a potential contributor to a non-profit, you can visit www.oag.ca.gov/charities and look at the Tools on the right side of the page for a Registry Search to see if your charity is listed.  There is also an explanation of the site on the left toward the bottom.

If as an officer of a non-profit, you assume that you are in good standing, guess again.  The majority of non-profits started out legitimately, but failed to file necessary paperwork to stay in good standing.  As the founder of a non-profit corporation, I have direct experience that will help you determine if your non-profit is in good standing, and what to do if it is not.

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

This information on this site is designed to provide a general overview with regard to the subject matter covered and may not be state specific. The authors, publisher and host are not providing legal, accounting, tax or other specific advice to your situation.

Copyright © 2012 Alvis Frantz and Associates.

What should you know about discrimination in the workplace?

The employment arena as for some time, and continues to the present, to be confusing and complex, especially when attempting to navigate the waters of discrimination in the workplace.  This is true from the perspective of both the employer who wants to know "Why can't I do that?" and the employee who wants to know "Can they do that to me?"

There are many state and federal schemes that bar employment discrimination based on specified characteristics, such as race, sex, religion, national origin, or age. There are both similarities and differences in these various schemes.  The following is a brief overview of the various avenues currently available to individuals who believe they may have been the victims of workplace discrimination, as well as a general roadmap for employers who wish to be aware of the myriad of options available to employees, applicants, and former employees.

In California, the primary state antidiscrimination statute is the Fair Employment and Housing Act (FEHA).  Under Federal law, the major players are Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act of 1967 (ADEA), the Americans with Disabilities Act of 1990 (ADA), and the Equal Pay Act of 1963 (EPA).

However, as a general proposition, to establish that an employer is liable for workplace discrimination, an individual must demonstrate that the employer is subject to the law (for example, large enough to be subject to a particular law), and that the individual was adversely affected in his or her employment as a result of discrimination based on a classification protected by the law (such as race, se, religion, or age).  The claimed discriminatory conduct on the part of the employer can be either intentional or merely have a discriminatory effect.

CALIFORNIA LAW

In California, the FEHA permits an employee, prospective employee or former employee who believes himself or herself to have been aggrieved by a violation of FEHA to file a civil action against his or her employer (once certain administrative remedies have been exhausted).  In brief, the FEHA makes it an unlawful employment practice or an employer to discriminate against any person in recruiting, hiring, training, promotion, compensation, discipline or discharge, or any other term, condition, or privilege of employment, because of that person's race, religious creed, color, national origin, ancestry, physical or mental disability, medical condition, marital status, sex, or sexual orientation.  The FEHA also prohibits discrimination in employment gainst persons over 40 years of age or against female employees because of pregnancy, childbirth, or related medical conditions.

To be covered by the FEHA, employers must regularly employ five or more persons (except for harassment claims that only require regular employment of one or more persons).

To proceed with a civil claim against an employer based on the FEHA, the individual must first file a complaint with the Department of Fair Employment and Housing (DFEH) within one year of the most recent act of discrimination, and receive from the DFEH a so-called "right-to-sue" letter.

FEDERAL LAW

Title VII prohibits an employer from failing or refusing to hire, or to discharge, or to limit, segregate, or classify an individual (or otherwise discriminate) with respect to his or her compensation, terms, conditions, or privileges of employment, because of that persons' race, color, religion, sex, or national origin. Typically, Title VII cases fall under one of two theories of liability--"disparate treatment" (employer treats employees differently because of race, color, religion, sex or national origin) or "disparate impact" (otherwise neutral employment practice impacts on a group protected by Title VII more harshly than others).

As with a claim under California FEH, prior to filing civil litigation under Title VII, the aggrieved employee or applicant must file a timely complaint with Equal Employment Opportunity Commission (EEOC) and obtain a "right-to-sue" letter.  Also, employers subject to Title VII are those with 15 or more regular employees.

The Age Discrimination in Employment Act (ADEA) protects individuals who are at least 40 years of age and provides similar protections to this class of individuals as does Title VII for the classifications enumerated in that law.  An EEOC complaint is likewise required before one may proceed with civil litigation under this Act.  However, the EEOC's procedures and enforcement tools differ from the Title VII-based complaints as compared to ADEA complaints.  Also, covered employers are those with 20 or more employees. 

The Americans with Disabilities Act (ADA) has garnered considerable press since its entry onto the scene in the early 1990's.  It remains in a state of flux with the courts continuing to struggle to interpret its various ambiguous provisions.  Indeed, cases are sometimes published on almost a daily basis interpreting this law.

In its simplest terms, the ADA prohibits discrimination against disabled persons by employers and the like.  More specifically, an employer is prohibited from discrimination on the basis of disability with regard to recruitment, job application procedures, hiring, promotion, tenure, demotion, termination, rates of pay, job assingments, seniority, leaves or absence, sick leave, fringe benefits, training, and social and recreational programs sponsored by the employer.  Further, the ADA prohibits, in some contexts, pre-employment medical examinations, and requires employers to "reasonably accommodate" disabled persons.  Employers covered by the ADA are those with 15 or more employees.

Finally, the Equal Pay Act (EPA) prohibits wage discrimination on the basis of sex.  That is, the EPA prohibits wage differentials based on sex for jobs requiring equal skill, effort, and responsibility, and are performed under similar working conditions (i.e. equal pay for equal work).  Unlike its federal counterparts, the EPA does not require that an aggrieved employee file a complaint with the EEOC before the individual may bring an EPA claim to court.  Also, the EPA essentially applies to every employer.

Authored by Rhonda Shelton Kraeber  

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

This information on this site is designed to provide a general overview with regard to the subject matter covered and may not be state specific. The authors, publisher and host are not providing legal, accounting, tax or other specific advice to your situation.

Copyright © 2011 Alvis Frantz and Associates.

Hey, That’s My Stuff!

My client wants to hire an expert consultant to make part of a product that my client is manufacturing. Both parties are very talented with respect to their particular areas of expertise, but they need each other in order to have a successful product. My client wants to make sure that he has all the rights to the finished product, and that the consultant can’t re-sell his part of the technology to someone else. The consultant feels that his contribution will revolutionize the industry that they are in, and wants money at the back end of the transaction based on the success of the product. For this, he is willing to charge a lower hourly fee up front.


How does this all get sorted out? First, I am grateful that my client came to me before having the Consultant start working. I can work through the details with my client, and document whose bringing what to the table. Another client didn’t, and now no one knows who owns what, with both parties claiming that they have full rights to the product. One issue that comes up most often is that the “concept” originator believes that there would be no product without his creativity. But there is a big difference between saying, “I have a concept for a restaurant where people can eat in their car” and actually creating a McDonalds® franchise. While everyone is friends, there are usually no issues, but when the money starts rolling in, if these matters are not sorted out in advance, disputes arise often leading to litigation.

There are several types of agreements associated with the process of creating “Intellectual Property.” There’s a Confidentiality or Non-Disclosure Agreement, a Work for Hire Agreement for high-level project managers/engineers, an Independent Contractors’ Agreement for the more common activities associated with work to be done, a Certificate of Originality, a Co-development agreement, a cross-licensing agreement a joint venture agreement and more. All of these agreements cover different aspects of the creation process, and have different remedies for a breach.

Call me for a consultation at 925-516-1617 to come see me if you are creating something that will have lasting value, whether it’s an invention, software technology, video games, artwork, music, or just an idea whose time will come. We’ll sort it out together.  http://www.alvisfrantzlaw.com/

The information above is not a substitute for seeking legal advice. Barbara Frantz, local resident for 17 years, has 34 years of legal experience, offering proven solutions for business owners to increase revenues and achieve their long range goals. Barbara is a lawyer with Alvis Frantz and Associates, your law firm providing confidence and security, because your business and your family are your highest priority in life. All Rights Reserved

Do Business Owners Need Their Own David Horowitz?

by Barbara A. Frantz

In the process of melding Amy’s law practice and mine together, we needed to get a new merchant card account. This is the account that manages credit card charges from our clients. A client comes in, pays with a credit card, it gets deposited into our Client Trust Account, and after the work is done and our client is billed, we write ourselves a check from the Client Trust Account to our General Account. At that time, the money becomes ours. In the meantime, any fees that the merchant card company charges for the credit card transaction comes out of our General Account. There are several merchant card companies that offer this service, Elavon took over for Nova and is offered through Costco.

Each bank has services associated with a business owner’s bank account. Some services are on the computer only and others are through a “swipe” processor. The experience of comparing a new company with my old one was horrific. Every company starts out with about the same rate that they advertise: 1.99% of the charge on the computer, or 1.69% if you swipe the card plus 27 cents per transaction. But then when we dug deeper, the quagmire of variable rates begins.

If a client uses a card with no spending limit, such as Master Card World or Visa Signature, the card is considered “Not Qualified”, and the charge for the transaction can be as much as 7%. If the card is qualified, that is, it is a straight credit card with no rewards attached, you will get the 1.99%, but if the card includes rewards like the Southwest Chase Visa, you will pay at least 2.96% plus 33cents per transaction. If we don’t add the security code or the address on the charge we will pay 3.8% plus 33 cents per transaction. So the average probate avoidance living trust package could cost our firm as much as $105.

Business credit cards cost more to process than personal cards. Retail stores that have many transactions can pay even more. American Express cards cost the most to process. So the credit card companies make money on both ends of the transaction. The business is charged a premium for taking credit cards with rewards, and the consumer is charged a premium interest rate for using a credit card with rewards. This is a perfect project for David Horowitz as far as I am concerned.

The information above is not a substitute for seeking legal advice. Barbara Frantz, local resident for 16 years, has 34 years of legal experience, offering proven solutions for business owners to increase revenues and achieve their long range goals. Barbara has recently joined forces with Amy Alvis to form Alvis Frantz and Associates, a Professional Law Corporation.

For more details about the services that they provide, please visit http://www.alvisfrantzlaw.com/ or call 925-516-1617. All Rights Reserved.