Are Your Good Intentions and Exceptional Work Ethic Putting Your Organization At Risk?
by Teresa Geremia-Chart, MNA Education Director

If you are unsure about the correct answers to any of the following statements, read on. Employment standards are different for nonprofits than for for-profits I can award comp time to my employees I can ask a non-exempt employee to stay for a fundraising event and not pay time and a half My non-exempt employees are so categorized because they are paid hourly At the end of the year I can discard my employees’ vacation time and start the accrual process over again I can’t be sued by someone who no longer works for my organization We can hire an independent contractor as our Executive Director Montana is an at-will employment state Salaried employees do not receive overtime pay I can give a volunteer a modest gift of cash as a “thank you” for their time

Teresa Geremia-Chart

The work culture of nonprofits is typically one of caring, hard work, flexibility, and trust among staff – very good qualities. Most of us are attracted to the nonprofit sector because of our passion for positive change and our drive to make a difference. We tend to come from a kind of “roll-up-your-sleeves, cast off formalities and get down to business” stock. We often accept long and irregular work hours and lower salaries than we might find in other sector jobs, and we often work for organizations with small budgets and limited resources.

This attitude, albeit honorable, is sometimes cause for lax or less-than-professional employment standards and practices. In fact 70% of nonprofits operate in violation of one or more wage and hour laws. Most violations are unintentional, caused by a lack of knowledge or understanding from an overworked chief executive, wearing many hats, fulfilling many obligations.

So it’s not uncommon for a busy Executive Director to ask a loyal staff member to stay late to help finish a project. It’s not even uncommon for that organization to offer comp time instead of overtime pay. An employee may not object because he/she doesn’t know that comp time isn’t allowed or more likely, because that individual cares about meeting the urgent need and is willing to “volunteer.” The employee may fully intend to reduce his/her hours the next day, “I’ll just come in late tomorrow,” but demands from a busy organization often prevent that from happening.

Imagine an Executive Director’s surprise when he/she is sued by a faithful employee for back wages because their exempt status was misclassified or overtime wages were not paid; or imagine a board of directors that is being investigated because they hired their ED not as a staff person, but as an independent contractor (IC), which is not legal under Montana’s IC laws.

The number one source of lawsuits filed against nonprofits is employment practices violations. In an effort to create a caring, flexible work environment, and sometimes because of excessive work demands, we sometimes don't take time to learn about and implement important employment policies and practices.  This unfortunately puts us, our volunteer board members, and our organization at great risk. Understanding wage and hour laws and policies, and implementing sound personnel policies and practices are critical to avoiding a lawsuit. The questions above are a just a handful of the employment misconceptions I hear from nonprofits around the state.

If you see yourself in any of them, make it a point to join us for a webinar series: “Avoiding Lawsuits and Unfair Employment Practices What You Don’t Know Can Hurt You” - part of MNA's Principles and Practices Implementation Training Series, Human Resources. You will learn practical answers to the most common questions we hear from nonprofits throughout the state, and you will hear about the most common lawsuits brought against employers for violation of wage and hour regulations.