John,
Typically members of the Board of Directors for HOA's are not compensated for their time or work. However,
IF, and only IF, your Association is incorporated under West Virginia's Non-Profit Corporation Act, then per
Ā§31E-8-812. Compensation of directors the board of directors may fix the compensation of directors
unless the articles of incorporation or bylaws say something else.
You need to read all of your Governing Documents (Articles of Incorporation, Declaration of Covenants, Conditions and Restrictions (CC&Rs) and the Bylaws) to determine if there is something about compensation or specifies what powers the Board may have.
Assessments are covered under
West Virginia law, Ā§36B-3-115. Assessments for common expenses or if your a condominium,
CHAPTER 36A. CONDOMINIUMS AND UNIT PROPERTY ARTICLE 7. ASSESSMENTS, TAXATION AND LIENS. both specify that the assessments are to be levied equally. I would also suspect that your CC&Rs also specify how annual assessments are to be levied (typically uniformly). Therefore, the Board may not waive the assessments of the Board members. Even if you could, it's best that their is a record of all lots properly paying assessments so a future board doesn't have any confusion and start collection for unpaid assessments.
If, after checking all of the governing documents, the Board decides to compensate the Board of Directors you will need to issue a check as a salary to the each director. Either a 1099-misc or a W-2 will need to be issued and filed with the IRS for each director at the end of the year. If the IRS determines that the paid Directors are employees, then the Association will also have to pay Social Security Taxes, Medicare taxes and, depending on the new health care bill, provide medical benefits. Don't forget the employers share of Federal and State taxes. These taxes typically need to paid in a timely fashion. Therefore, you may need to hire an payroll firm to set all of this up for you. As a paid Director, insurance rates may go up and it's possibility the the protection a volunteer has under the law may be nullified if they are paid to do the work. The Association's budget will need to be adjusted to pay these additional fees and Assessments will also need to be increased to cover those expenses.
Here is a link to the
the IRS website page: Independent Contractor (Self-Employed) or Employee? I would also suspect that once the membership discovers these issues and the fact that they did not have an opportunity to vote on the issue, the Board may be going through a recall election and possibly face legal challenges. If those legal challenges are successful, the individual Board members would have to pay back the compensation they received in addition to legal fees.
Therefore, I would strongly recommend that the Board runs all of this through an attorney prior to adopting any such policy.
As a side note, if your Board was successful in establishing compensation for the Directors, a future Board could easily decide to increase that compensation, causing the need for even higher assessments.
Personal Opinion, I wouldn't open that can of worms.
I would also be very surprised if there isn't something about compensation for members of the Board within your governing documents. As I said, make sure you read all your governing documents.
Tim