PACs Can Solicit Campaign Contributions from Employees
But businesses in Indiana must ensure political contributions are voluntaryBy Doug Mentes, Esq. | Last updated on January 27, 2023
Use these links to jump to different sections:
- Which Employees May Be Solicited?
- What Are the Contribution Limitations on SSF Solicitation?
- Indiana State Law on Campaign Finance
Which Employees May Be Solicited?An SSF or connected organization may solicit only a restrictive class of persons associated with the connected organization. The restrictive class of a corporation consists of:
- the corporation’s executive and administrative personnel
- the stockholders with voting rights
- Professional employees represented by a labor union
- Lawyers, consultants and other personnel employed by firms retained by the corporation and who are not employees of the corporation
- Members of the board of directors who are not also executive and administrative personnel and who receive no compensation
- Salaried foremen and others who supervise hourly employees
- Former or retired personnel
What Are the Contribution Limitations on SSF Solicitation?A corporation or its SSF may solicit its restrictive class at any time. For the expanded class of employees, the business may solicit twice per calendar year. The public may never be solicited by the business for contributions to its PAC. Employers that solicit contributions from employees for its corporate PAC must ensure the employee feels their contributions are being made voluntarily. Under federal law, contributions may not be secured by the use or threat of physical force, job discrimination or financial reprisal. Employees who believe an employer has violated the law can file a complaint with the Federal Election Commission (FEC), which enforces federal election law and can levy civil penalties. Certain notices are required on all solicitations, oral or written, and are undertaken by the SSF. Each time the SSF or the connected business solicits individuals for contributions to a political campaign, those individuals must be informed of the SSF’s political purpose. It’s not sufficient for the notice to merely say that a contribution to the SSF is voluntary; the notice must inform the employee of their right to refuse to contribute without reprisal from their employer. If an SSF or connected organization suggests potential contributors give a specified amount, the solicitation must also say this is only a suggested amount, it is not enforceable, and it will not disadvantage the employee if they refuse to give.
Indiana State Law on Campaign FinanceThe rules on SSFs apply to federal elections but the state of Indiana also has its own campaign and voter intimidation laws that regulate political party solicitation for state election activities (be it senate, congress, or other public office. Indiana law forbids employers from exhibiting political messages that inform employees their employer’s business will close, that the employee’s pay might decrease, or in any way is intended to influence the employee’s vote. Also, Indiana law generally prohibits all forms of voter intimidation, and a violation of either is a class 6 felony. Before your business begins soliciting contributions from employees to its connected PAC, sit down with an experienced Indiana corporate law attorney to ensure no violations of federal or state law. For more information about this area, read our securities and corporate finance law overview.
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