When the 2023 State Fiscal Year Budget was adopted, the legislation included a new amendment to the General Municipal Law (GML) and Volunteer Firefighter Benefits Law (VFBL) to allow for the payment of training stipends. Chapter 55 of the Laws of 2023 accomplished two things:
1) Amend the GML to provide for the payment of a “training stipend”, defined as a “payment of a nominal fee to a volunteer firefighter of a stipend for the completion of certain firefighter training, as identified and published by the office of fire prevention and control.”
2) Amend the VFBL to stipulate the receipt of a training stipend would not be considered remuneration, and therefore allow a volunteer who receives this training stiped to still be covered by VFBL. In essence, this preserves the individual’s status as a volunteer firefighter rather than an employee.
The exiting LOSAP legislation (GML Article 11-A) does not specifically address the topic of remuneration received by a volunteer firefighter relative to the eligibility to participate in a LOSAP. It would appear that Article 11-A simply relies on the fact that a volunteer firefighter is a bona fide volunteer as provided in the other applicable statutes. Therefore, it wasn’t necessary to amend the LOSAP law for this new training stipend.
However, the Internal Revenue Code (IRC) does broach this topic, and stipulates that only bona fide volunteers can participate in a LOSAP. The IRC Section 457(e)(11)(B)(i) states: “An individual shall be treated as a bona fide volunteer for purposes of subparagraph (A)(ii) if the only compensation received by such individual for performing qualified services is in the form of — (I) reimbursement for (or a reasonable allowance for) reasonable expenses incurred in the performance of such services, or (II) reasonable benefits (including length of service awards), and nominal fees for such services, customarily paid by eligible employers in connection with the performance of such services by volunteers.”
There is no specific definition in this section of the IRC that further defines a nominal fee (i.e., the dollar value that would be considered nominal). The Department of Labor has opined that any fee/compensation would be considered nominal as long as the fee does not exceed 20% of what would otherwise be paid to a full-time equivalent firefighter. It would appear that the New York State training stipends will be significantly less than 20% of the salary of a paid/career firefighter.
The new training stipend legislation was drafted to purposefully refer to the stipend as a nominal fee, which aligns perfectly with the definition of a bona fide volunteer in the IRC.
Therefore, unless additional guidance or ruling is issued by the State or the Internal Revenue Service, it appears clear that a volunteer receiving a training stipend would also be eligible to receive points for attending the training and continue to participate in the LOSAP.
This article is not intended to provide legal advice, and we suggest reviewing it with your local attorney for additional guidance.
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