FAQ: Human Resource Policy
Although it may seem ridiculously obvious, "good management really is good risk management." Organizations that are aware of current employment law and have incorporated it into their personnel policies, and who have board members and managers who are informed, are in the best position to avoid lawsuits, or at least to be in a strongly defensible position if sued. The following are some basic guidelines to help you avoid lawsuits in the employment-related area:
Keep your employee handbook updated and in compliance with current law
In our review of hundreds of nonprofits' employee handbooks, we have seen policies incorporated into the handbooks that are patently illegal. For example, policies requiring two years of service before offering pregnancy leave, or those requiring employees to work as volunteers instead of receiving pay for overtime work are simply illegal and will be indefensible in case of a lawsuit. It is important to be aware of changes in the law and to make sure that managers and all staff are made aware of the changes.
Clearly and promptly document each employment action
Each time you meet with an employee on a performance matter, make sure that you document it promptly and have the employee sign it to acknowledge that he or she has seen the document. The employee may disagree with your assessment and may indicate so on the document; however, you should attempt to have the employee acknowledge receipt and review of the document. Keep one copy in the personnel file. During meetings with employees on performance matters, it is also a good idea to have two people from the nonprofit, in addition to the employee, present.
Make "at will" the standard of employment
Georgia is an "at will" state. If your employee handbook or other document specifies a term of employment or provides that employees will be terminated only "for cause," you have created an additional hurdle for yourself that is not required by law. Many nonprofit managers resist imposing the "at will" language, because they believe that they must then become less supportive of employees. To the contrary, the "at will" language does not require employers to fire without cause, it simply may make it easier to avoid a lawsuit once it is determined that an employee is not performing adequately and must be terminated. (Imposing the "at will" standard on present employees may require additional considerations, and, before doing so, you may want to consult an employment professional.)
Ban the word "permanent" from your employee handbook
Using the words "permanent employee" in a handbook can be construed as providing all employees lifetime employment. If that is not your plan, get rid of the word "permanent."
Do not include termination as one of the actions covered by any grievance policy
To many nonprofits, this recommendation sounds odd. Isn't that often what the grievance policy is for, as an appeals board in case of termination? If you allow a termination to be brought to the grievance committee, you have effectively destroyed your ability to terminate "at will." With the ability to grieve a termination, you may be setting up your organization to be able to terminate only "for cause." Again, this does not mean that your organization should not give ample opportunity to help poorly performing employees improve. It means only that you have reserved the right to determine when termination is appropriate and have not waived that right in favor of some third party's determination of what is proper "cause."
Follow your employee handbook to the letter!
This guideline may be the most important of all. If your policies provide for written notice before termination, if you promise to provide a second chance, if you have agreed to provide a written response in 30 days, etc., make sure you do just that. You may be taking a completely justified personnel action; however, if you do not follow your own policies, this will be used against you in a court of law.
Conduct candid, thorough annual reviews
The emphasis on this is "candid." If your managers are unable to be truthful with employees about poor performance and areas which need improvement, you are asking to be placed in a very difficult position if you need to terminate an employee whose performance is unacceptable. If an employee alleges discrimination or harassment when he or she is terminated following a consistent record of acceptable performance reviews, the allegation simply looks much more substantial. Be honest - not overly generous.
Make a prompt, thorough investigation of allegations of harassment or discrimination
Nonprofit managers are being asked to do more with less, and there is never enough time to accomplish it all. However, if you do not take allegations of harassment and discrimination seriously and conduct prompt, thorough investigations, you put your organization and its mission to the community at risk. Instances of harassment and discrimination are taken seriously by the courts, and allegations of such should be taken seriously by nonprofits.
Seek legal advice before taking an employment action
Even though Georgia is an "at-will" state and termination technically can occur without "cause," courts frequently expect some showing of cause for the termination. Consequently, it is advisable to obtain legal counsel prior to taking any personnel action of this nature.
Copyright CompassPoint Nonprofit Services. Made possible by the California Management Assistance Partnership.
What federal and state labor laws should a nonprofit post?
The U.S. Department of Labor (DOL) provides information on posting employment notices in the workplace. DOL provides electronic copies of all required posters.
Posting requirements vary by statute; that is, not all employers are covered by each of DOL's statutes and, therefore, may not be required to post a specific notice. For example, some small businesses may not be covered by the Family and Medical Leave Act and would not be subject to this act's posting requirements.
What should be included in an affirmative action plan?
The U.S. Department of Labor’s Office of Federal Contract Compliance Programs explicates that Affirmative Action Programs (AAP) are for businesses with fewer than 150 employees and that the AAP should be "customized to reflect an employer's organizational structure, policies, practices, programs and data."
Sample AAP includes sections such as:
- Job group analysis
- Placement goals
- Identification of problem areas
- Internal audit and reporting systems
"An affirmative action plan is a document that, depending upon the size of your company, is normally 80 to 120 pages long," according to the Society for Human Resource Management. An AAP "describes a company's programs, policies and procedures designed to assure that all individuals have equal opportunities in all employment decisions and practices."
In preparing your written AAPs, you should obtain and become familiar with the following regulations, which are available at the Department of Labor:
- 60-1 Obligations of Contractors and Subcontractors and 60-2 Affirmative Action Programs (The Regulations for Executive Order 11246 AAPs)
- 60-20 Sex Discrimination Guidelines
- 60-50 Guidelines on Discrimination Because of Religious or National Origin
- 60-250 Affirmative Action Obligations for Disabled Veterans and Veterans of the Vietnam Era
- 60-741 Affirmative Action Obligations for Individuals with Disabilities
What employee records should we keep on file?
Employee records typically include a personnel file and payroll records.
Each employee's personnel file should contain the following as applicable: a job description, job application, offer of employment, IRS Form W-4, acknowledgement of receipt of employee handbook signed by the employee, periodic performance evaluations, sign-up forms for employee benefits, complaints from customers and co-workers, awards or citations for excellent performance, warnings and disciplinary actions, and notes on employee attendance and tardiness.
Employers should keep information on an employee's medical history strictly confidential and, along with any INS Form I-9 documents, separate from the employee's personnel file.
Additionally, it is good practice to have a policy that requires staff and volunteers to provide copies of their driver's licenses and insurance cards if they use personal vehicles to travel to volunteer sites or to and from work. The reason is twofold: First, the coverage for a vehicle involved in an accident always responds first; your agency's non-owned vehicle coverage pays excess over the coverage the employee has purchased. Second, you don't want to be in the position of having to explain why you authorized someone with a suspended license, for example, to drive on behalf of your organization if that person is involved in an accident. Such a situation could be embarrassing and could lead your organization to negligence-related litigation.
Reprinted from the Nonprofit Risk Management Center
Are there sample policies for employees who have civic responsibilities?
Yes. National Council of Nonprofit Associations (NCNA) believes in the civic responsibility of its employees and encourages this by allowing employees time off to serve required duty as jurors and as nonpartisan election-day poll workers, when appropriate and approved.
For time served on jury duty, NCNA will pay employees the difference between his or her salary and any amount paid by the government, unless prohibited by law, up to a maximum of 10 days. If an employee is required to serve more than 10 days of jury duty, NCNA will provide the employee with unpaid leave. Employees must provide NCNA a copy of proof of service, as verified by the courts in which they serve.
Election-day Poll Workers
NCNA will pay employees the difference between his or her salary and any amount paid by the government or any other source, unless prohibited by law, for serving as an election-day worker at the polls on official election days (not to exceed two elections in one given calendar year). While performing their official nonpartisan duties at the polls, election-day workers may not engage in political activity or campaign for or against any candidate or ballot measure.
NCNA requires that employees provide proof of service for their time at the polls. Employees interested in using this benefit must have written approval from the executive director 30 days before the election. The executive director will assure that the employee's absence will not seriously interfere with the organization's operations.
From the National Council of Nonprofit Associations' (NCNA) Employee Handbook
Where can I find sample whistle-blower policies?
One of the outcomes of the recent financial scandals in the corporate world is recognition of the value of whistle-blowers in exposing fraud, corruption and other wrongdoing within organizations. Congress responded to these recent scandals by enacting robust whistle-blower provisions in the Sarbanes-Oxley Act of 2002. While Sarbanes-Oxley does not apply to nonprofit organizations, measures can be implemented by nonprofits to improve their operations and illustrate their accountability.
Create a policy prohibiting retaliation
Adopt a policy affirming your organization's commitment to maintaining a workplace where employees and contractors fell free to raise questions and concerns about the agency's activities. Make it clear that the agency will not tolerate reprisals against employees for raising such concerns.
Train managers and supervisors
Educate managers and supervisors about the ramifications of retaliating against whistle-blowers and about procedures for handling employee concerns. Inform employees of the avenues available for such communication, and encourage them to raise concerns when appropriate.
Establish an employee concerns program
Internal whistle-blowing can benefit an organization by alerting management to alleged violations in a timely manner, thereby providing an opportunity to take corrective actions and prevent more damage. When establishing an effective means of resolving employee concerns, include a procedure for prompt investigation. And have the person or department designated to handle such matters report directly to senior management. This structure minimizes the opportunity for managers whose conduct is being challenged to suppress a concern, strengthens the credibility of the program and increases the likelihood that employees will raise concerns internally.
While the reported issue is being investigated, periodically update the concerned employee on the status of the investigation. If the employee suspects his or her concern is not being taken seriously, he or she may go directly to law enforcement officers or a regulatory agency before the nonprofit organization has had an opportunity to take corrective actions.
Once the investigation is complete, document the findings in a written report. Give careful attention to its wording, as the report may become subject to subpoena from a regulatory agency. If an employee's concern is substantiated, take prompt corrective actions. In addition, if the investigation uncovers regulatory violations or serious misconduct, inform the board of directors of the findings, and consult directors regarding the organization's response.
Establish procedures for anonymous reporting
Your board of director's audit committee can establish procedures for the anonymous submission of employee concerns regarding questionable accounting or auditing matters.
Take disciplinary action against those who engage in retaliation Make it clear to all employees (through training and the employee handbook) that harassment or discrimination of a whistle-blowing employee will be cause for disciplinary action.
Document performance issues
If an employer must defend a retaliation claim in a civil or criminal context, it will need strong evidence to demonstrate that it would have taken the same unfavorable personnel action against an employee in the absence of the plaintiff's whistle-blowing. To ensure that such evidence is available, require managers to thoroughly document performance issues on a routine basis.
By following these guidelines, nonprofits will more likely be informed of internal fraud and reduce potential employee claims of retaliation for whistle-blowing activities.
Sample Whistle-blower Policy
"ABC Nonprofits" Ethics and Conduct Code (code) requires directors, officers and employees to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. As employees and representatives of ABC Nonprofit, we must practice honesty and integrity in fulfilling our responsibilities and comply with all applicable laws and regulations.
It is the responsibility of all directors, officers and employees to comply with the Code and to report violations in accordance with this Whistle-blower Policy.
No director, officer or employee who in good faith reports a violation of the Code shall suffer harassment, retaliation or adverse employment consequence. An employee who retaliates against someone who has reported a violation in good faith is subject to discipline up to and including termination of employment. This Whistle-blower Policy is intended to encourage and enable employees and others to raise serious concerns within the Organization prior to seeking resolution outside the Organization.
The code addresses the Organization’s open door policy and suggests that employees share their questions, concerns, suggestions or complaints with someone who can address them properly. In most cases, and employee’s supervisor is in the best position to address an area of concern. However, if you are not comfortable speaking with your supervisor or you are not satisfied with your supervisor’s response, you are encouraged to speak with someone in the Human Resources Department or anyone in management whom you are comfortable in approaching. Supervisors and managers are required to report suspected violations of the Code of Conduct to the Organization’s Compliance Officer, who has specific and exclusive responsibility to investigate all reported violations. For suspected fraud, or when you are not satisfied or are uncomfortable with the following Organization’s open door policy, individuals should contact the Organization’s Compliance Officer directly.
Operations Manager as Compliance Officer
"ABC Nonprofit’s" Operations manager will serve as Compliance Officer with regard to the Whistle-blower Policy stated herein. The Compliance Officer is responsible for investigating and resolving all reported complaints and allegations concerning violations of the Code and, at his discretion, shall advise the Executive Director and/or the audit committee. The Compliance Officer has direct access to the audit committee of the board of directors and is required to report to the audit committee at least annually on compliance activity.
Accounting and Auditing Matters
The audit committee of the board of directors shall address all reported concerns or complaints regarding corporate accounting practices, internal controls or auditing. The Compliance Officer shall immediately notify the audit committee of any such complaint and work with the committee until the matter is resolved.
Acting in Good Faith
Anyone filing a complaint concerning a violation or suspected violation of the Code must be acting in good faith and have reasonable grounds for believing the information disclosed indicates a violation of the Code. Any allegations that prove not to be substantiated and which prove to have been made maliciously or knowingly to be false will be viewed as a serious disciplinary offense.
Violations or suspected violations may be submitted on a confidential basis by the complainant or may be submitted anonymously. Reports of violations or suspected violations will be kept confidential to the extent possible, consistent with the need to conduct an adequate investigation.
Handling of Reported Violations
The Compliance Officer will notify the sender and acknowledge receipt of the reported violation or suspected violation within five business days. All reports will be promptly investigated and appropriate corrective action will be taken if warranted by the investigation.
From the American Society of Association Executives