Our PTSA would like to “sponsor” an after school activity for the children in our school, using a school staff who would be paid for her time. Can we do that and what responsibilities do we incur?
If this is truly a PTA activity, then at least one and preferably more PTA volunteers should be present to supervise, collect any fees being charged by participants, etc. You would also need to review your PTA’s 1023 or 1024 form to make sure that the activity is within the scope of the activities described there; if not, you will need to file an amended 1023 or 1024. The PTA could contract with the person conducting the activity using a personal service contract, but would want to be sure that the person truly is an independent contractor. If the IRS later determines that the staff member is actually an employee of the PTA, the PTA would be liable for withheld taxes, Social Security and other employer taxes, and likely would have to pay penalties as well. A better approach would be to grant the funds to the school district which could then have a supplemental contract with the staff person, who would clearly be the school district’s employee and not the PTA’s. Finally you would be wise to check with your insurance carrier to make sure the event is covered.
In short, this question illustrates why it’s important for your whole board to attend an upcoming PTA & the Law Workshop.