Board member work as employee?

Started by DavidB35 • 11 replies • 2080 views

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DavidB35 (Texas)
Posts: 19

Posted:

We are having great difficulty finding a good routine maintenance person.
Not talking about electrician/plumbing level of work but someone to pick up trash, clean the pool area bathrooms, paint sections of fence...not terribly hard work but work that must be kept up with.
Currently a Board member has been picking up trash and cleaning the bathrooms for about a month. He has also done some maintenance, ie scraping, sanding and painting of a architectural structure of about 6 foot wide and 20 foot long. Nice job.
If our Board approves, can he be paid for future work? He has done more than the people we have hired in the past! Could we hire him temporarily at a 'going rate'? Or agreed upon rate? He has done the picking up/cleaning for several months in the past when we were in the process of firing the management company/getting new one without any compensation also. TheI dont want to abuse his doing what nobody else will do.
The work ethic of hired people in the past has been dismal to say the least! With such bad luck in past maintenance/clean-up persons in the past I am afraid it might be some time before we can find a trusworthy one.
Of course this would be with rest of Board approval.
Thank you.

MichaelO4 (Montana)
Posts: 40

Posted:

David,

Several issues come to mind. First, if the Board "hires" and pays someone who is on the Board, a "conflict of interest" issue may arise (i.e., "the fix was in.") Should other owners be given an opportunity to apply for the job?

Then there are issues with your HOA becoming an "employer", with all sorts of legal and tax implications.

And there may be liability issues as well. Does this person become a "contractor"? What are the local rules regarding bonding, insurance, business license,
etc.?

I'd recommending a discussion with your HOA attorney and your HOA insurance agent.

BrianB (California)
Posts: 2,820

Posted:

post a body of work sheet (bid sheet, job description, request for quote, whatever you want to call it), ask for bids. speak nicely with the guy who has been doing it, and ask him to bid.

If no one bids except him, hire him.

if others bid, go with the BEST (not necessarily the cheapest) bid. If they don't work out, fire them, and go down the bid list until you find someone who does quality work at the price agreed upon.

In other words, yes, you can do it, just do it right, so you don't seem to be favoring anyone, playing loose with the rules, etc..

AnnH5 (Florida)
Posts: 304

Posted:

I think it is a huge conflict of interest to hire Board members. It may not be illegal, but it does represent a conflict of interest and it is the duty of Board members to abstain from situations where there is a conflict of interest.

Even then, say you were to hire your Board member to do the handyman work. He is now your employee. Do you have worker's comp insurance for him? Will there be any tax implications? Will you need any extra liability insurance for your new employee? How would you resolve any issues if there is a conflict with the Board member who is also an employee?

It just sounds like a can of worms. Plus, if he is volunteering his time and doing well and enjoys it, why can't he just continue volunteering?

KellyM3 (North Carolina)
Posts: 2,239

Posted:

If no suitable company is found......

1. The board member resigns immediately
2. The board confirms he's carrying the required insurance coverages
3. The board ensures the person is hired as a contractor and NOT an HOA employee
4. The contract has an expiration date at which point new bids are solicited again.
5. The contract allow for a a "right of corrective action" so that either party is given a chance to correct problems before the contract can be broken.

It's a strange setup but the conflict of interest would cease when the board member resigned and removed himself from deliberations regarding his own account. It's up to the remaining board members to be ethically in handling this business matter and sharing of board business in regards to bids, etc.

I'd not recommend this course of action but if it's the only path, you must consider it seriously. To assume a person enjoys volunteering and thus should be handed the job runs a high risk of ruining the volunteer's spirit to give to the community. What he does is subsidize a board that's possibly unwilling to hire a key service.

AnnH5 (Florida)
Posts: 304

Posted:

Perhaps the run of bad luck with previous maintenance workers has not been bad luck but bad choices? When you obtain bids for the work, do you choose the most lowball offer or perhaps not seek bids in a manner that will bring you more reputable, established contractors? Just a thought but sometimes when Boards cheap out, they don't always end up with a good deal.

DavidB35 (Texas)
Posts: 19

Posted:

Thanks for views.
The past maintenance men have come from our formermanagement company -horrible 'non workers' would be a better name !
The member that is doing the work- nothing like electrical, climbing on ladders, plumbing is done. Just picking up trash every other day, sanded/cleaned/panted a large intricate wooden structure (no ladder needed).
No,, he does not 'enjoy' putting in so many hours just for the fun of it. He is doing this because the other Bod work and he doesn't. The owners are apathetic in general and do not want to do more than complain. The grounds look better than they have in years just from general cleanup. Sidewslks, pool area, large decorative structures... not buildings.
I never knew how people don't want to work anymore...actually hide then want to get paid for nothing.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By KellyM3 on 10/14/2013 2:10 PM
The board ensures the person is hired as a contractor and NOT an HOA employee

Not as simple as all that.

As far as the IRS is concerned, unless he hires himself out to do similar work for others (as a handyman, for example) but only works for the HOA, he is an employee.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Try a professional place like House Doctors or Handyman. It's best to go with a licensed, insured, and outside contractor. The professional chains have good set ups to fit the HOA's needs. Plus they come in uniform and are identifiable. A good option to look into than hiring from inside the community.

I went through that situation with a "repair" man who happened to be the ex president/board member. It was a nightmare as he was a con artist in addition. It was additionally hard because many people still trusted or liked him as him being a former board member that many would ask for him specifically to do the jobs. Half of them knew the truth about him being a scumbag and the others didn't. Being politically correct was a HUGE strain. Especially once those who didn't believe realized the truth. They wanted his head on a platter.

It's best to have an established policy. Ours was: 3 bids per job and the contractor had to be licensed and insured. It could be a board or HOA member. They just had to submit bids to do the work to be considered. We also held a "Volunteer" day for those small projects around the place that needed done. That picked up the small jobs that members could be involved in.

Former HOA President

AnnH5 (Florida)
Posts: 304

Posted:

Quote:

Posted By DavidB35 on 10/14/2013 10:06 PM
Thanks for views.
The past maintenance men have come from our formermanagement company -horrible 'non workers' would be a better name !
The member that is doing the work- nothing like electrical, climbing on ladders, plumbing is done. Just picking up trash every other day, sanded/cleaned/panted a large intricate wooden structure (no ladder needed).
No,, he does not 'enjoy' putting in so many hours just for the fun of it. He is doing this because the other Bod work and he doesn't. The owners are apathetic in general and do not want to do more than complain. The grounds look better than they have in years just from general cleanup. Sidewslks, pool area, large decorative structures... not buildings.
I never knew how people don't want to work anymore...actually hide then want to get paid for nothing.

So it sounds like maybe your Board needs to look around and some bids if the management company is not able to find the right people? I think a mistake Boards get into is when the expectation is that the Board members will take on work that customarily would be provided by a vendor. It would be one thing for a Board member to volunteer to do if for the sake of desiring to volunteer. Since this is not the case, the Board needs to find and hire licensed, bonded, reputable businesses.

As far as the owners being apathetic, maybe they are or maybe they have different expectations. Have seen this play out- Board wants homeowners to volunteer to do work to save money, homeowners feel they are paying their assessments so that this work will be done by licensed and bonded contractors. Depends on the size of the community but in my community, we have smaller projects that could be done by a few homeowners, would save the entire community maybe 50 cents to a dollar per home (for example). Most working people do not see the value in that (time is valuable). After I work all day, do I want to go out and do more work so that everyone else in the neighborhood can save 50 cents or a dollar?

I have also witnessed the end result of volunteers doing work when they were not qualified to do the work, even smaller tasks. The end results are not aesthetically pleasing, we are stuck with it, and we each saved just a few dollars for the sum total of these volunteered tasks. Well, we didn't actually save since the volunteers always go over budget. We could have just hired some great contractors to do the work and had better results. So I take it back, even having volunteers might not be saving money.

JonD1
Posts: 2,350

Posted:

To hire this Board member as an employee or as a contractor is not the same as sending a rocket off to Mars. Not as complicaed or daunting as some make it sound

If you go through most MCs they will ADD some amount to the bill to get their cut. Each hour their guy works they make money for doing nothing.

Workers comp. coverage would be covered by the savings he would give the property in the work he performed versus hiring an outside contractor with no ties to the property.

If he does good work at a price fair to both parties why would you not find a way to make this work. Conflict of interest??? I don't see how that plays into this at all. Everyone knows who he is and his position on the Board. He is providing "light" property maintenance that adds to the appearacne of the entire property.

Or you could hire someone and pay them double who has no interest in wha he property looks like.

Years ago we used an MC provided worker. We were charged $36 per hour.
I suggested we hire our own man. We pay him just over 1/2 that amount. The amount fo work done has increased. Our cost has dropped. And at his hourly rate we can have him put in more hours for LESS money.

I had folks tell me all reasons why we could not. Now afer more than 10 yearsw it works fine.

Find a way................

CarolR11 (Colorado)
Posts: 2,563

Posted:

I don't think this is a conflict of interest either, Jon. It seems to me the only time there could be a conflict of interest is if the Board discussed an agenda item about a project where, if approved, this director would potentially increase his handyman paycheck. If such a case did occur, the director should recuse himself.

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