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What are the legal implications when hiring an association member

Started by EmilV • 11 replies • 1722 views

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EmilV
Posts: 5
Posted:
Our association has been using same member, for many years, for maintaining the entry area of the Homeowners Association. Thie entry area is quite steep and about 1.75 acres. Are there any legal issues if this member would injure himself during the maintenance work? This person is not a contractor. Are there any other issues when hiring a member to do the maintenance for a long time.,
NpS
Posts: 4,187
Posted:
Quote:
Posted By EmilV on 04/10/2015 5:40 PM
Our association has been using same member, for many years, for maintaining the entry area of the Homeowners Association. Thie entry area is quite steep and about 1.75 acres. Are there any legal issues if this member would injure himself during the maintenance work? This person is not a contractor. Are there any other issues when hiring a member to do the maintenance for a long time.,


Paid? Do you issue W-2s or 1099s? Who owns the equipment he uses? What insurance coverage do you have? Worker's Comp? Personal Injury?
Sikubali jukumu. Read all posts at your own risk.
JonD1
Posts: 2,310
Posted:
Quote:
Posted By EmilV on 04/10/2015 5:40 PM
Our association has been using same member, for many years, for maintaining the entry area of the Homeowners Association. Thie entry area is quite steep and about 1.75 acres. Are there any legal issues if this member would injure himself during the maintenance work? This person is not a contractor. Are there any other issues when hiring a member to do the maintenance for a long time.,

Emil

Much would depend on the status of this person.
Are they an employee of the HOA?
Is there insurance in place by either the HOA or individual?
Are they paid on the books?

Just what are your concerns?
Are you on the board?
As far as legal issues what do you question?

The HOA can hire whomever they like as long as there is proper insurance coverage in place and payment is being handled in an acceptable manner.

EmilV
Posts: 5
Posted:
I have just been elected president of the association. No there is no insurance to cover any worker, but there is an insurance that covers possible accidents around the water retention ponds we have. This is a small and fairly new association. I am not sure if we issue any W2 form. He is not an employee. He is hired as a volunteer and I believe the association covers some of the time, equipment ware, and fuel.
NpS
Posts: 4,187
Posted:
Quote:
Posted By EmilV on 04/10/2015 8:04 PM
I have just been elected president of the association. No there is no insurance to cover any worker, but there is an insurance that covers possible accidents around the water retention ponds we have. This is a small and fairly new association. I am not sure if we issue any W2 form. He is not an employee. He is hired as a volunteer and I believe the association covers some of the time, equipment ware, and fuel.


If he is compensated in any way (including fee reduction), he is either an employee or a contractor under IRS rules. Many criteria. Biggest are whether he supplies his own tools and whether he is supervised. If he has an accident, you could wind up with a worker's comp claim - so worth having a discussion with your insurance provider.
Sikubali jukumu. Read all posts at your own risk.
EmilV
Posts: 5
Posted:
Thank you for the response.
KellyM3
Posts: 2,233
Posted:
Quote:
Posted By EmilV on 04/10/2015 8:04 PM
I have just been elected president of the association. No there is no insurance to cover any worker, but there is an insurance that covers possible accidents around the water retention ponds we have. This is a small and fairly new association. I am not sure if we issue any W2 form. He is not an employee. He is hired as a volunteer and I believe the association covers some of the time, equipment ware, and fuel.

Paying for a volunteer's time makes this person a contractor if not an employee. That said, your HOA should pick up a worker's comp policy to cover him just in case because you'll be responsible if he hurts himself on your job and cannot bring in income. You can also demand they pay workers' comp but it's unlikely he'd do so.
KellyM3
Posts: 2,233
Posted:
Oh....and liability insurance coverage is not the same as insurance policies that cover workers performing hired tasks on your property.
KerryL1
Posts: 14,519
Posted:
Just so this is clear; if he's getting paid, he is NOT a "volunteer."

What size is your HOA?
BruceF1
Posts: 2,516
Posted:
Quote:
Posted By KellyM3 on 04/10/2015 9:17 PM
Paying for a volunteer's time makes this person a contractor if not an employee. That said, your HOA should pick up a worker's comp policy to cover him just in case because you'll be responsible if he hurts himself on your job and cannot bring in income.

Having a worker's comp policy for the individual will set off alarm bells with the IRS that the individual is legally an employee and not a contractor. Contractors are considered self-employed and must carry their own insurance. The premiums for this insurance are reported as a business expense on schedule C.

For employees you must issue a W-2, withhold income, FICA, and Medicare taxes, and make periodic payroll taxes to the IRS (and sometimes, the state). A contractor is responsible for his/her own taxes and you issue a 1099-MISC.
EmilV
Posts: 5
Posted:
About 40 lots, but only about 30 have houses have been built and are occupied.
EmilV
Posts: 5
Posted:
Sorry. There are 40 lots. About 30 lots have been developed and have houses on them.

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