Avoid Inadvertent Violations Resulting from Employee Actions
As elections are approaching, employers might want to
review their policies concerning employee contributions to
candidates and political committees. An employer who doesn’t
have such a policy might want to adopt one. In either case, the
policy should be fully implemented and communicated to
employees.
The New Jersey Campaign Contributions and
Expenditures Reporting Act and the regulations promulgated
pursuant to that Act are designed to protect the public interest by
preventing corruption in elections. They seek to avoid even the
appearance of corruption in order to preserve the public’s faith in
the state’s democratic processes.
The law provides for limits on the amounts that an
individual or corporation can contribute to political campaigns for
non-gubernatorial candidates and committees: $2600 per
election to a candidate committee; $7200 per election to a
political committee; $7200 per year to a continuing political
committee; $25,000 per year to a legislative leadership
committee; $25,000 per year to a state political party committee;
$37,000 per year to a county political party committee; and
$7200 per year to a municipal political party committee. The
amount which may be given to a gubernatorial candidate varies
according the to a consumer price index established by the New
Jersey Election Law Enforcement Commission.
Please note that these amounts are for nonpublic
contractors entities which hold or seek public contracts are
subject to special restrictions. These restrictions are beyond the
scope of this piece and will be the subject of a future article.
As citizens, employees are free to make whatever political
contributions they like in accordance with the law. As a general
rule, employers need not, and should not, concern themselves
with the amounts given or the identity of the recipients.
However, employee contributions may cause an inadvertent
violation of the laws by employers in two ways.
First, employers should be sure not to reimburse
employees for political contributions, either as donations or
business expenses. Such reimbursements are considered
contributions by the employer and could put the company over
the limit. Additionally, contributions in-kind count towards the
limits. If an employee uses the employer’s resources to work for
a candidate (such as preparing, copying and sending a
fundraising mailing or letter of support for a candidate), the value
of those resources is considered a contribution by the employer.
Similarly, employers cannot pay employees any kind of
supplement or bonus with the understanding that all or part of it
is for political contributions.
Companies that violate the restrictions, even
inadvertently, are subject to substantial financial penalties.
To avoid these problems, management should implement
a political activity compliance policy. Employees must
understand that they cannot make contributions on behalf of the
company, cannot use company resources for political activity
and cannot seek or approve reimbursement for political
contribution expenses. At the same time, when implementing
the policy, employers should clarify that employees have the
right to make their own contributions to whatever candidate or
committee they choose, without involving or informing the
employer.
DISCLAIMER This article is for general information only and is
not intended to provide legal advice or to address specific legal
problems. This article does not create an attorneyclient
relationship. For legal advice concerning political contributions
and all other legal matters, consult an attorney.
NEW JERSEY CAMPAIGN FINANCE LAW
Avoid Inadvertent Violations Resulting from Employee Actions
As elections are approaching, employers might want to
review their policies concerning employee contributions to
candidates and political committees. An employer who doesn’t
have such a policy might want to adopt one. In either case, the
policy should be fully implemented and communicated to
employees.
The New Jersey Campaign Contributions and
Expenditures Reporting Act and the regulations promulgated
pursuant to that Act are designed to protect the public interest by
preventing corruption in elections. They seek to avoid even the
appearance of corruption in order to preserve the public’s faith in
the state’s democratic processes.
The law provides for limits on the amounts that an
individual or corporation can contribute to political campaigns for
non-gubernatorial candidates and committees: $2600 per
election to a candidate committee; $7200 per election to a
political committee; $7200 per year to a continuing political
committee; $25,000 per year to a legislative leadership
committee; $25,000 per year to a state political party committee;
$37,000 per year to a county political party committee; and
$7200 per year to a municipal political party committee. The
amount which may be given to a gubernatorial candidate varies
according the to a consumer price index established by the New
Jersey Election Law Enforcement Commission.
Please note that these amounts are for nonpublic
contractors entities which hold or seek public contracts are
subject to special restrictions. These restrictions are beyond the
scope of this piece and will be the subject of a future article.
As citizens, employees are free to make whatever political
contributions they like in accordance with the law. As a general
rule, employers need not, and should not, concern themselves
with the amounts given or the identity of the recipients.
However, employee contributions may cause an inadvertent
violation of the laws by employers in two ways.
First, employers should be sure not to reimburse
employees for political contributions, either as donations or
business expenses. Such reimbursements are considered
contributions by the employer and could put the company over
the limit. Additionally, contributions in-kind count towards the
limits. If an employee uses the employer’s resources to work for
a candidate (such as preparing, copying and sending a
fundraising mailing or letter of support for a candidate), the value
of those resources is considered a contribution by the employer.
Similarly, employers cannot pay employees any kind of
supplement or bonus with the understanding that all or part of it
is for political contributions.
Companies that violate the restrictions, even
inadvertently, are subject to substantial financial penalties.
To avoid these problems, management should implement
a political activity compliance policy. Employees must
understand that they cannot make contributions on behalf of the
company, cannot use company resources for political activity
and cannot seek or approve reimbursement for political
contribution expenses. At the same time, when implementing
the policy, employers should clarify that employees have the
right to make their own contributions to whatever candidate or
committee they choose, without involving or informing the
employer.
DISCLAIMER This article is for general information only and is
not intended to provide legal advice or to address specific legal
problems. This article does not create an attorneyclient
relationship. For legal advice concerning political contributions
and all other legal matters, consult an attorney.