Why Community Associations Need an Employee Manual
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Lawsuits Against Employers for Violations of the Fair Labor Standards Act & Other Employment Claims are on the Rise.
Some community associations have one employee, while others may have a hundred or more employees. Think about it - maybe your community employs a CAM, grounds maintenance people, a concierge, office assistants, front desk personnel, activity coordinators, beach attendants, valet, building engineers, cleaning staff - the list of people necessary to operate many community associations goes on and on. These individuals may have access to sensitive or proprietary information, such as unit owner or resident medical or health related records. When the economy is tight (like now) employment related claims and lawsuits rise dramatically - I read one article that said the number of lawsuits filed against employers for violations of the Fair Labor Standards Act (FLSA) rose by 40% each year for the past several years in a row!
- How will you protect your association from wage and hour claims?
- Do you have time cards or require employees to "clock" in or out?
- Do your employees often work during non-business hours? How do you account for that time?
- What is your association's policy on overtime or "comp" time?
- Do your employees have access to the association's office, unit owner files, keys to units or the Internet?
- Do any of your employees ever enter any of the units when the owner isn't present?
- Do your employees leave the property as part of their job (trips to home depot, bank runs, etc.)?
- What is your policy on allowing employees to perform work for individual unit owners?
- Do any of your employees have use of a unit as part of their compensation package? If so, what policies are in place in that regard? What if someone is hurt in that unit? What if there are damages to the unit? What happens if the association wants to terminate that employee?
- Does your community classify the maintenance person, landscaper, office assistant, bookkeeper or manager as an independent contractor? You may be surprised to learn that such classification may not protect you from employment related claims.
If you are a member of a Board of Directors of a community association and have answered "yes" or don't know the answer to any of these questions, an employee manual should be a priority. Unfortunately, many community associations neglect to spend the time or devote the funds to this task. A well-drafted employee manual can minimize your exposure to both employment related and third-party liability claims - but make sure to have a Labor and Employment Attorney from your state draft and/or review the manual. Since employment laws vary from state to state and change quite frequently, using a 'form' from a neighboring community or from the Internet may do more harm then good.
If an Association hires a janitorial company as an independent contractor, can the Association determine the specific hours the janitorial staff must be on site? Can this be part of the contract with the janitorial company?
RESPONSE: Generally the Association can include specific terms of service in a contract (subject to agreement by the contractor). Those issues must be addressed when entering into the contractual relationship (or the contract re-negotiated). I encourage you to allow association counsel to review the existing contract to advise the board whether it has control over the hours of service.
In a perfect world I agree with Lisa in her comment - Every community association should have a well prepared employee handbook. BUT, as someone who has insured over 75,000 community associations across the country and as someone who has litigated employent related issues in California, I believe that an employee handbook can be "a trap for the unwary." Specifically, in my experience, a good employee handbook is only as good as the association that "follows the guidelines in the handbook." If you have a handbook, and the policies are not followed, even if you have employees who are "at will employees" who absent a handbook can normally be terminated for any reason not contrary to public policy, you create a number of reasons that could give rise to a potential wrongful termination. My admonition is that if you do put into play a employee handbook, it is imperative that the employees read it, that the employees are trained and that management follows the handbook guidelines with the commensurate documentation. If you do not follow the guidelines and document as appropriate, you could be digging a hole that absent the handbook may not have existed, or would have been much harder to prove.
RESPONSE: Great comments. Of course, if you have policies in place, you must adhere to those policies. Failing to adhere to policies creates a whole host of issues. Anyone that embarks on this endeavor should really think about the actual practices - don't create procedures that impose additional burdens on yourself - that would defeat the purpose. Also - involve your insurance professional in the discussion to understand what types of claims are insured and which types of claims are not insured. A lot of times either the insurance professional or carrier has specific requirements that should be included in your employee policies.
In a perfect world I agree with Lisa in her comment - Every community association should have a well prepared employee handbook. BUT, as someone who has insured over 75,000 community associations across the country and as someone who has litigated employent related issues in California, I believe that an employee handbook can be "a trap for the unwary." Specifically, in my experience, a good employee handbook is only as good as the association that "follows the guidelines in the handbook." If you have a handbook, and the policies are not followed, even if you have employees who are "at will employees" who absent a handbook can normally be terminated for any reason not contrary to public policy, you create a number of reasons that could give rise to a potential wrongful termination. My admonition is that if you do put into play a employee handbook, it is imperative that the employees read it, that the employees are trained and that management follows the handbook guidelines with the commensurate documentation. If you do not follow the guidelines and document as appropriate, you could be digging a hole that absent the handbook may not have existed, or would have been much harder to prove.