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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 116713
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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The residents of The Heartlands Senior Living Facility at

Customer Question

The residents of The Heartlands Senior Living Facility at Ellicott City, MD have been organized into an association for the past 28 years. There is a no tipping policy here and each resident is asked to donate $12 per month (Gratuity Fund) to be distributed to the hourly employees who serve us at the end of the year. Since the by-laws of the association don;t address the handling of these funds, I felt that I needed to include these provisions in the by-laws or to establish by-laws for the Gratuity Fund Committee. Am I correct in doing this?
Submitted: 1 year ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

If there is such a fund, then there should be some guideline on the distribution of those funds. If the bylaws do not include such a gratuity fund and it is voluntary, there does not need to be a bylaw, but it would be prudent to have one to avoid arguments.

A typical bylaw for this would say something to the effect that, "The association board may at the sole discretion of the board have a Gratuity Fund, which shall be administered by the Gratuity Fund Committee, appointed by the Association Bord of Directors. Contributions to the Gratuity Fund shall be completely voluntary. The fund shall be distributed in its entirety by December 31 each year to the staff of the Facility in equal shares (or however you want to distribute it)."