The 4th Commandment

Okay, so what does keeping the Sabbath have to do with insurance? Well, it�s not so much �the Sabbath,� per se, but taking a sabbatical. Many not-for-profit organizations (NFP�s) offer periodic sabbaticals to their employees, in order to help them refresh and renew their commitments. Unfortunately, such practices may be unlawful under the little-known legal principle of �personal inurement.�

In law, �compensation based on skill, effort and time expended, remunerated by salary or fee, does not constitute personal inurement.� So the challenge is in determining the monetary value of a sabbatical. Common sense [ed: quite the oxymoron, no?] would seem to equate a sabbatical to �unpaid leave;� the only real �value� is that one is assured of having a job to come back to. So what is the value of that certainty, and how would it apply to, say, a minister taking a year off to �find himself?�

Peter Marathas, a benefits attorney, warns that �(n)onprofit employers have to be sensitive about setting compensation. And when they're considering all parts of compensation, they shouldn't ignore sabbaticals." In other words, if the sabbatical has a value, then it has to be included with the rest of said minister�s benefits package. This hasn�t, apparently, been a big deal until recently, when the Infernal Revenue Service (at the urging of Congress) decided to start �cracking down� on NFP�s which offered such benefits as part of their employees� compensation arrangements.

There are some pretty hefty fines that can be levied against folks who run afoul of these reg�s: starting with a 25% individual tax penalty. And the fines go up from there. And the NFP itself can face substantial whacks, as well: such as a $10,000 penalty on each of their trustees. Ouch!

We tend to think of benefits in terms of health and life insurance, flex plans and vacation days. We�ve discussed transportation reimbursement, of course, as an unusual type of benefit. But I�ve never really thought about sabbaticals as such, and this is a heck of an intro, to boot.