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        Fundraising for a separate segregated fund (SSF)
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      Payroll deduction

Payroll deduction A corporation or labor organization’s payroll deduction system can be used to collect contributions to its own SSF and any affiliated SSF. A connected organization collecting contributions to an SSF through a payroll deduction system will be a collecting agent. Solicitations via payroll deduction may only be directed to members of the SSF’s restricted class and all requisite notices must be included.
 Learn more about the basic rules for SSF fundraising
 Written authorization required In a payroll deduction plan, an employee authorizes the periodic deduction of SSF contributions from his or her paycheck. A written authorization for the deductions must be obtained before making the deductions, as described further in the section "No reverse checkoff." The SSF is advised to retain a copy of the written authorization for three years from the date of the report disclosing the employee’s last deduction. Other evidence of authorization, such as records of the transmittal of funds from employers or collecting agents in the form of spreadsheets, wire transfer records or other written electronic records will satisfy the recordkeeping requirement for payroll deduction authorization. The employee may revoke the authorization at any time. Electronic signatures Electronic signatures may be used by employees to authorize the deduction of contributions from their pay, and the connected organization or the SSF may confirm the employees' request via email subject to the following conditions: An employee must be able to use the electronic signature or a written signature to revoke or modify the amount of the authorization at any time; andA record of the electronic signature, including verification that the signature came from a particular employee, must be maintained in a retrievable form available to the Commission in the event of an audit or investigation. No reverse checkoff When collecting SSF contributions, a connected organization may not use a reverse checkoff plan—that is, a collection system whereby the contributions are automatically deducted from an individual’s paycheck without his or her prior approval. Such a system results in an involuntary contribution, even if the individual can subsequently request a refund of the amount deducted.
 Combined dues and solicitation payments Under a payroll deduction or checkoff plan, an individual may simultaneously authorize deductions of membership dues or fees and SSF contributions.
 Learn more about soliciting contributions using dues statements
 Labor organization SSFs The SSF of a labor organization representing a corporation’s employees may use the corporation’s payroll deduction system if the corporation uses such a system to collect SSF contributions for the corporation’s SSF. Upon written request by a labor organization, a corporation and its subsidiaries must provide the labor organization with the same method used by the corporation for soliciting and collecting contributions for its own SSF or for a trade association’s SSF.
 Learn more about making corporate collection methods available to labor organizations
 Trade association SSFs A trade association may use payroll deduction to collect contributions from the association’s own executive and administrative personnel. The SSF of a trade association may use a member corporation's payroll deduction system, so long as the corporation has given its prior approval for solicitations by that trade association.
 
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      SSF: Payroll deduction example
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          Who may be solicited for an SSF contributionNotices required on SSF solicitationsCollecting and forwarding contributions: Collecting agentsRecording fundraising for an SSF From the FEC Record Policy statement on payroll deduction recordkeeping
 Need help? Get help from the FEC by phone or email
 Legal citations Regulations 11 CFR 102.6(b)(1)(ii)-(iv) and (c)Collecting agent 11 CFR 114.2(f)(4)(i)Not facilitation 11 CFR 114.5(a)(1)Voluntary contributions 11 CFR 114.5(k)(1)Availability of method of labor organization 11 CFR 114.8(e)(4)Payroll deduction by corporate members of trade association
 Advisory opinions AO 2003-06, 1997-25, 1996-42 and 1991-19Transfer of payroll deduction authority AO 2001-04Use of electronic signatures via website system for PAC contributions by payroll deduction AO 2000-15Payroll deduction by trade association's affiliated member AO 2000-11Misplaced payroll-deducted contributions AO 1999-31Application of one-third rule to prizes and premiums used in connection with payroll deduction AO 1999-06Annuity allotment program permitting union member retirees to make contributions to SSF AO 1999-03Use of digital signatures by restricted class to authorize payroll deductions
 Federal Register notices Statement of Policy, recordkeeping requirements for payroll deduction authorizations, 71 Fed. Reg. 38513 (July 7, 2006)


This information is not intended to replace the law or to change its meaning, nor does this information create or confer any rights for or on any person or bind the Federal Election Commission or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (52 U.S.C. 30101 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions and applicable court decisions.


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