In this Issue:
- Maine’s Recreational Marijuana Law: What Nonprofit Employers Need to Know
- Should Charities Be Allowed to Campaign For Electoral Candidates?
- Upcoming Event: Tax-Exempt Organizations: Fundamentals and Beyond
- E-Bulletin Information
Maine’s Recreational Marijuana Law: What Nonprofit Employers Need to Know
Maine’s new recreational marijuana law is now in effect, although retail sales will not be permitted until February 2018. The law was passed by voters in the November 2016 election, then tweaked by the Maine Legislature in January. In general, the law allows adults (21 and over) to possess up to 2.5 ounces of marijuana and to use it in private settings.
What does the new law mean for Maine’s nonprofit employers? I’ve already received an inquiry from one client, and I’m sure many others are curious. Indeed, there are some particular issues that require careful consideration, as the law impacts employers’ hiring, misconduct, workplace safety and substance testing policies.
The law includes a little-noticed provision that prohibits any Maine employer (nonprofit or otherwise) from discriminating against an age-21-or-over employee or prospective employee for using marijuana outside of the employer’s property. However, an employer may prohibit employees from using, possessing, or being under the influence of marijuana at work. That said, some employers are concerned because, unlike with alcohol, there is no objective test available to determine when one is under the influence of marijuana. In any event, the Maine Legislature delayed the effective date of these employment-related provisions until February 1, 2018, giving employers additional time to amend their policies and practices.
Most, if not all, employee handbooks contain prohibitions against the use of illegal drugs, in the workplace, and many go even further by prohibiting illegal drug use outside of the workplace. Furthermore, many employers require drug testing for all or certain employees. Thus, most handbooks and policies will require changes to comply with the new law, even though possessing and using marijuana remains a federal crime. Furthermore, conversations with employees about any policy changes are always a prudent step, as there remain many misconceptions about the new law. See here for an overview of Maine’s substance abuse testing laws.
Should Charities Be Allowed to Campaign for Electoral Candidates?
Federal law strictly prohibits any campaigning for or against federal, state or local candidates for elected office. It’s a big no-no, one of the key things I tell any client who is launching a 501(c)(3) organization. Rarely have I heard any objection to this warning, as most people involved in charities appreciate this bright line prohibition against campaigning. (Note: We’re talking about campaigning, not lobbying. Charities do enjoy leeway to engage in lobbying activities up to a certain level, but that’s a subject for another day.)
The absolute prohibition against campaigning might be compromised if the President and Republicans in Congress have their way. In early February, the President announced, in his grandiloquent fashion, that he will “totally destroy” the provision of § 501(c)(3) that prohibits campaign activities (known as the “Johnson Amendment”). That same day, Congressional Republicans introduced the Free Speech Fairness Act.
For many years certain churches (in particular right-leaning Christian Evangelical churches, but also a few left-leaning churches) have chafed at the absolute ban on campaigning. Pastors and other religious leaders have decried the ban as a curb on their free speech rights, and many have openly defied the law by endorsing a candidate at election time. Because of budgetary constraints and political pressures, the Internal Revenue Service has not strictly enforced the ban for quite some time. Many churches and socially conservative organizations have sought to repeal the ban for a long time, and they finally have a sympathetic ear in the current President.
Now is a good time to take a look under the hood and see what the Free Speech Fairness Act would accomplish. On the whole, the bill (H.R. 781 in the House and S. 264 in the Senate) as currently written would weaken but certainly not destroy the 501(c)(3) prohibition against campaigning. The bill adds a new subsection to § 501(c)(3) that maintains the general prohibition against campaign activities but allows an exception for any campaign statement that is both “made in the ordinary course of the organization’s regular and customary activities in carrying out its exempt purpose” and “results in the organization incurring not more than de minimis incremental expenses.”
While churches are really the only organizations that have targeted the ban, weakening it will politicize the entire charitable sector. Politicians at all levels will actively seek the endorsement of all kinds of § 501(c)(3) organizations, not just churches. The requirement that any endorsement be made “in the ordinary course” of an organization’s activities would be virtually impossible to enforce, and the distinction between nonpartisan 501(c)(3) charities and partisan 501(c)(4) social welfare organizations would begin to break down. Although leaders of some organizations might relish the opportunity to speak freely for or against candidates, they should be careful what they wish for.
Then there’s the campaign finance issue. Many have expressed fears that allowing 501(c)(3) organizations to campaign for and endorse or oppose candidates will create yet another avenue for the wealthy to influence our political system. Although the requirement that any expenses on campaigning be de minimis (i.e., so minor as to merit disregard) appears to be a safeguard against this possibility, it could very well prove to be a slippery slope for many organizations and for IRS enforcement.
For all of these reasons, most organizations representing the nonprofit sector as a whole have come out strongly against this bill, including the Maine Association of Nonprofits, the Independent Sector and the National Council on Nonprofits. At press time it was not clear if any of Maine’s four Congressional delegation members had taken a public position on the issue, so if you or your organization feel strongly about this issue, now would be a good time to reach out to them.
Upcoming Event: Tax-Exempt Organizations: Fundamentals and Beyond
Date: March 28, 8:30 am – 4:45 pm
Location: Hilton Garden Inn, Freeport
Sponsor: Maine State Bar Association
Spend the morning learning about the fundamentals of tax-exempt organizations. Or come for the afternoon sessions where we dig deeper into the more complex issues. Or go for a double header. This course will provide comprehensive information covering governance best practices, insurance issues, political activities, ethics, and more. An experienced team of attorneys (including Rob Levin) will show you how to handle the challenges and opportunities that arise in every tax exempt organization.
I send the Maine Nonprofit Law E-Bulletin 3 or 4 times per year to provide updates and analysis on legal and policy matters respecting Maine nonprofit organizations. I do my best to keep the messages brief, timely, and useful to nonprofit staff, board members, volunteers, advisors, and donors. At the same time, no one may rely on these E-Bulletins as legal advice, and I encourage you to consult a qualified attorney for advice on any particular situation.
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