New Jersey Lawyers Blog

Published on: March 2, 2017

Tax Exemptions for Non-Profit Businesses

volunteer-1326758__340-300x236 A nonprofit organization (“Nonprofit”) is an entity which puts its surplus revenue back into the entity, dedicating those funds to further the goals of the organization, as opposed to paying profits to owners or shareholders. Oftentimes Nonprofits are formed for a public welfare cause or interest or to advocate a certain ideological agenda. By way of example the American Red Cross, Make-a-Wish Foundation, and Greenpeace are all Nonprofits. While charitable organizations make up a large percentage of Nonprofits, there are many types of Nonprofits which serve selective groups or communities and which are not necessarily “charity” groups. For instance, credit unions and certain industrial or business associations can be Nonprofits as well.

The IRS provides for tax exemptions for many Nonprofits. For example, a Nonprofit may seek a federal income tax exemption if it is a corporation organized and operated exclusively for religious, charitable, scientific, public safety, literary or education purposes. Hospitals, schools, and credit counseling organizations are often tax-exempt Nonprofits as well. Some other examples of organizations which may obtain tax exemption include labor groups, business leagues, political groups, social clubs, mutual insurance companies, and agricultural organizations.

The application process to become tax-exempt as a Nonprofit can be complicated and onerous. First, the organization needs to be formed, meaning that the formal requirements for forming a business – such as incorporating that business with the State, creating By-Laws, Articles of Incorporation, and/or Operating Agreements, applying for a Federal Employer Identification Number (“EIN” or “FEIN”) with the IRS, etc. – must be completed. In New Jersey, generally the Nonprofit must also register with the New Jersey Charities Registration Section.

Published on: February 28, 2017

New Case on Teacher Arbitration from New Jersey Supreme Court

by Maurice W. McLaughlin

chalk-1551571__340-300x229 In the case of Bound Brook Board of Education v. Ciripompa, the Supreme Court reviewed the extreme deference which courts are required to give arbitrator’s decisions. However, the Supreme Court explained that this deference to the arbitrator is not unlimited.

In the Bound Brook case, two tenure charges were filed against a teacher. The teacher, who had tenure, had allegedly been engaging in pervasive misuse of his employer-issued computer and inappropriate conduct toward female coworkers, allegedly often in the presence of or involving students. After an investigation, the Board determined that the teacher should be fired and tenure charges were filed against the teacher.

The first count of the tenure charges was “conduct unbecoming.” The second count was not labeled, but contained allegations of inappropriate conduct and harassing behavior toward coworkers, some of a sexual nature, and occasionally involving students. Like the local board of education, the New Jersey Commissioner of Education likewise found dismissal warranted and submitted the charges for review by an arbitrator pursuant to the TEACHNJ Act.

Published on: February 23, 2017

Estate Planning for Digital Accounts

by Jennifer C. Meusel

When you think about estate planning, most people think about their physical possessions, their real estate and their financial assets, but in this day and age, you also need to consider your digital assets. You may have as much as 20 years of active digital presence. This can include documents, photos, and on-line accounts such as Facebook, Google, back-up services, Linked In, Twitter, Snapchat, etc. Such digital accounts generally have no expiration date.

It is important to consider what will happen when you die to your accounts and the data contained them. It is important to consider what will happen if you do nothing, and decide if that is what you want to happen. It is an often overlooked part of estate planning.

Many online accounts allow you plan during life for what will happen to the account upon death. However, this is all very new and some of the most popular online accounts do not provide a way to plan for what will happen to the account upon the account owner’s death. For any accounts which do not allow you to plan, it is desirable to establish a plan now with a trusted loved one.

Published on: February 21, 2017

Recent Decision by New Jersey’s Appellate Division Clarifies Requirements for Rice Notice to Employee Whose Employment May be Terminated

by Maurice W. McLaughlin

student-2052868__340-300x198 Our employment attorneys represent New Jersey public sector employees in disputes with their governmental employers. One area in which we frequently see disputes is the failure to give a “Rice Notice” to employees whose employment may be affected by an action by their governmental employers.

New Jersey employees, including non-tenured employees, have the right to advanced notice whenever a governing body, such as a town council or a board of education, is going to discuss the employee’s employment. This notice is called a “Rice Notice” after the case of Rice vs. Union County Regional Board of Education, which upheld the right. Normally, under New Jersey’s Open Public Meetings Act, personnel actions must be discussed in closed session unless all the affected employees request in writing that the discussion be held in the open during the public session of the meeting. The Rice Notice gives the employee the notice they need to actually exercise that right.

In the recent case of Kean Federation of Teachers vs. Morell, the Appellate Division of the Superior Court of New Jersey had the opportunity to take a fresh look at the requirements for a Rice Notice. In that case the Court was faced with a situation where the Board of Trustees of Kean University delegated the task of evaluating recommendations by the University President for the retention or dismissal of faculty members. The subcommittee evaluated the University President’s recommendations and made its own recommendations to the Full Board. The full Board of Trustees then voted on those recommendations without discussion. The Board argued that because it did not actually discuss any employment matters, but just voted without discussion,a Rice Notice was not necessary.

Published on: January 25, 2017

Educational Emergency Certificates and their Effect on Tenure

by Robert Chewning, Esq.

school-93200__340-300x200 In New Jersey, certifications are generally required for all professional staff members in public schools and other institutions regulated by the New Jersey Department of Education. There are various types of certificates based on the type of employment you are seeking (i.e., teachers, principals, school psychologist, etc).

Emergency certificates are issued to a limited amount of personnel within the educational services category including school social workers, school counselors, and associate library media Specialists. For a full list of positions where emergency certificates may be issued, please visit New Jersey’s Department of Education website.

The regulation governing emergency certifications is N.J.A.C. §6A:9B-5.12, which sets forth when, by whom, and for what reasons emergency certificates may be issued. Emergency certificates may be issued at any point in the school year but, regardless of when they are issued, they expire on July 31^st of each year. They serve an important purpose by allowing a board of education to apply for an emergency certificate for a candidate if that particular board of education is unable to locate a candidate with a provisional or standard certificate to fill the position.

Published on: January 25, 2017

Appealing Civil Service Disqualification for Medical or Psychological Reasons

by Maurice W. McLaughlin

Our firm’s employment lawyers handle a significant number of New Jersey civil service issues. One of the most vexing is removal from a list of eligibles because of medical or psychological disqualification.

Hiring for the vast majority of civil service jobs is determined by merit based on competitive examinations. One thing that may disqualify an applicant is disqualification because of an alleged psychological or medical condition which would render the candidate unable to effectively perform the requirements of the job she is applying for.

Generally the disqualification will not happen until after the examination is complete, the results are tabulated, and a list of eligibles is generated. Prior to an offer of employment being made the employer cannot require the applicant to submit to a medical or psychological examination. After the offer of employment is made, however, the applicant may be required to submit to a medical or psychological examination as a condition of employment, provided that all other applicants to whom offers are extended are required to undergo an evaluation as well. If the results indicate the applicant cannot perform the essential duties of her job because of a psychological or medical condition, the employer can request that the Civil Service Commission remove her name from the list.

Published on: January 23, 2017

Anti-Nepotism Policies in New Jersey Public School Hiring

by Maurice W. McLaughlin

old-books-436498__340-300x200 A problem our employment attorneys frequently encounter is complaints of nepotism in the hiring and promotion of public school teachers. While the hiring of relatives is not per se illegal in New Jersey public schools, there are significant restrictions on it.

The New Jersey Legislature and the New Jersey Department of Education have passed restrictions limiting nepotism based on the Legislature’s spending power. At the local level, restrictions on nepotism are a requirement for the receipt of state aid. Thus, while nepotism is not “illegal,” anti-nepotism policies are required for the receipt of state aid. Since almost all New Jersey local public schools receive state aid, the restrictions on nepotism are virtually universal. The New Jersey Department of Education’s regulations apply to school districts, charter schools and county vocational school districts. These board of education (or trustees for charter schools) must adopt anti-nepotism policies as a condition for receiving state aid.

The policies adopted under these rules restrict employment practices concerning “relatives” and “immediate family members” of board members and chief administrators. In general, their relatives cannot be employed by the same school district or charter school. Likewise, a chief school administrator may not recommend her own relatives or those of a member of the board of education.

Published on: January 19, 2017

Attorneys Fees in New Jersey Civil Service Appeals

by Maurice W. McLaughlin

council-of-state-535721__340-1-300x103 The financial burden of a civil service appeal discourages many employees from filing. However, a successful employee may be able to recover the attorneys fees she spent on the appeal. Our attorneys handle civil service appeals for all of New Jersey’s Public Employees, such as police officers, teachers, firefighters, and administrative persons. Because we are concerned about the impact on our clients’ pocketbooks, we are always looking to see if we can shift the financial burden to the public employer.

This is important to the individual employee, of course, but also to the public at large. America is a democracy, and one of the key points to any form of a democracy is access to the government. Since the judiciary is one of the coequal branches of government, access to the court house is an important right. Shifting the costs of litigation to the employer after an employee’s successful appeal is one way to keep the doors to justice open to less well-off employees.

This principal was applied recently by in the case of In re Anthony Hearn, heard by the Appellate Division of the Superior Court of New Jersey. Anthony Hearn was a certified public accountant in the New Jersey Office of Compliance Investigations. He was an “unclassified” employee of the State of New Jersey. Hearn was demoted for allegedly violating certain provisions of the State’s anti-discrimination policy.

Published on: January 18, 2017

Business Partnerships: Taxes and Other Considerations

by Pauline M.K. Young

A partnership is an unincorporated association of two or more people who act as co-owners of a business for profit. Under New Jersey business law, a partnership may be created even when there is no written partnership agreement between the parties (this is known as “defacto partnership.” However, just like any other business venture, a partnership is required to register their business with the State of New Jersey Secretary of State and obtain an employer identification number for tax purposes.

While a partnership agreement under New Jersey partnership law is not necessary, in the event that there is no partnership agreement, the default rules for partnerships will govern a partnership. Every partnership which has either income or loss from sources within the State of New Jersey, or in which any partner resides in New Jersey must file tax forms with the State of New Jersey. Beginning on January 1, 2015, the New Jersey Division of Taxation discontinued the use of tax Form PART-100 (which was previously used to report the gross income tax filing fee and the corporation business tax) and created two new partnership tax forms (Forms NJ-1065 and NJ-CBT-1065.)

For tax purposes, each partner received profits and losses just as though it were personal income, but set forth on a Schedule K-1. (This is different from a corporation which is separately and additionally subjected to taxes on the business’s earnings.) A partnership with more than 2 owners must pay a filing fee per owner. The fee is currently $150 per partner. The fee is applicable to any owner notwithstanding the fact that the owner may only be a partner for part of the year.

Published on: January 16, 2017

Estate and Elder Care Planning after Being Diagnosed with Dementia

by Jennifer C. Meusel

Frequently, when you or a family member are first diagnosed with dementia, you still have the capa testament-1183175__340-300x200 city and are legally “competent” to make your own estate planning decisions. The four documents discussed here will assist a person with dementia and their loved ones as the disease progresses and they no longer have the mental capacity under the law to execute these documents and are no longer able to make decisions for themselves. If a person has not already made these planning decisions and executed the necessary documents, they must act immediately while they still have the mental (and legal) capacity to do so.

In order to be legally capable to sign estate planning documents a person must have “testamentary capacity” – they must be able to understand the import and consequences of what they are signing. They must understand the mechanisms being put in place and the who they are appointing to make decisions for them. Even if a person only has periods of lucidity it does not mean they automatically lack the required mental capacity. That can be complicated, as they need to review and execute the documents during a period of lucidity. Sometimes meetings with their attorney will need to be rescheduled to accomplish this goal.

The most important documents for a person who has been diagnosed with dementia are the Durable Power of Attorney, the Living Will, the Health Care Proxy and the Last Will and Testament.