Board access to HOA employee salaries?

Hello all, I'm a committee member of a very large Washington state HOA (501(c)4 corporation status).

Driven by concerns of efficiency and transparency, several committee and Board members have asked for information regarding the salaries of HOA employees but the response has been (from HOA management and the Board majority) that HIPAA laws prohibit this.

We would like to respond with legal evidence that Board and Finance Committee members should have access to this information. Can anyone point me to such legal evidence?

To be clear, even Board members are not asking for staff names, just details of job descriptions and corresponding salaries. (That said, the staff concerned will be easily identified based on the job descriptions.) Also, there is no suggestion that the information will be shared with the general membership.

So far all I have found is the following Washington code:

64.38.045
Financial and other records—Property of association—Copies—Examination—Annual financial statement—Accounts.

(1) The association or its managing agent shall keep financial and other records sufficiently detailed to enable the association to fully declare to each owner the true statement of its financial status. All financial and other records of the association, including but not limited to checks, bank records, and invoices, in whatever form they are kept, are the property of the association. Each association managing agent shall turn over all original books and records to the association immediately upon termination of the management relationship with the association, or upon such other demand as is made by the board of directors. An association managing agent is entitled to keep copies of association records. All records which the managing agent has turned over to the association shall be made reasonably available for the examination and copying by the managing agent.
(2) All records of the association, including the names and addresses of owners and other occupants of the lots, shall be available for examination by all owners, holders of mortgages on the lots, and their respective authorized agents on reasonable advance notice during normal working hours at the offices of the association or its managing agent. The association shall not release the unlisted telephone number of any owner. The association may impose and collect a reasonable charge for copies and any reasonable costs incurred by the association in providing access to records.

Can anyone point me to any other legislation governing this issue? Thank you so much!

I presume that would not have included detail of individual salaries? I wasn't there myself.

So you're a committee member and the majority of the board doesn't want the info disclosed.

There's no statute that's going to force the board to release that info.

On the other hand, if you know how many people are doing what kind of jobs, it shouldn't be too difficult to put together a budget of what your costs ought to be.

If what you're actually spending is way out of range, then you have something to make noise about.

But IMO, "concerns of efficiency and transparency" are enough to go on. Board majority not likely to be responsive to what they see as a fishing expedition.

Our HOA has about 18 people regularly on the premises who work for our vendors. Any Owner can have access to the vendors' executed contracts per CA Civil Code.

Are any of yours, Adrienne, direct employees of your HOA? Without knowledge of individual wages and salaries, with vendor or direct employees, how does the Board vote on raises? Directors must know something!

Here, for instance, we vote annually on raises for our building engineer, lead security officer, mgr. asst., and PM. We do not vote on re aides for individual custodians, individual security officers.

Also in CA, Civil Code lists all of the documents that Owners may inspect. Is there nothing similar in WA?

Adrienne,

RCW 64.38.045 does specify all records.

However, since your Association is incorporated, WASHINGTON NONPROFIT CORPORATION ACT would also be applicable.

Keep in mind that privacy laws would also have to be complied with. Therefore, as others have said, you may be able to see the total amount paid for salaries, you will unlikely (without a court order) be shown individual salaries. If you want to see them, seek a position on the Board that would have a need.

Now, Board members should have access to all employee information.
However, they would not have access to employees of contractors. Often when there is a property manager on site, the PM is looked upon as an employee of the Association. However, they are simply a contractor and the Board would only know how much they are paying for the contract (not what the salary of the individual is).

Are you sure that the positions you are looking at are actual employees of the Association and not of a contractor?

Adrienne,

If the positions are truly for employees of the Association, the Board (or a Board) should have been the ones to write or approve the job descriptions. Any other Board may modify those same positions. They would also be the ones to approve the salary, pay the employer taxes, insurance, etc.

Hence, they should have 100% access to all records, providing that they have a good reason.

The Board should specify that they will undertake a position review of all employees.
Then demand copies of the job description and salary range for each position so they can be revised.

If the MC refuses, fire them for cause (in my opinion).
The MC works for the Board.
The Board does not work for the MC.

If it's this hard to get access to this information, I would also insist upon a full audit of Association finances due to this refusal.

Granted, I have not looked into HIPPA laws. However, my understanding was that this applied to health records, not positional descriptions and salary. You can verify this understanding by reviewing the actual law:

HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT
OF 1996

However, I also just noticed an important statement you made:

The request for the records have been blocked by the MC and a majority of the Board (see quote above).

From the discussion, I thought that the issue was that nobody on the Board was being given access.

If it's just a few that are looking into job descriptions and salaries without the support of the Board, then my entire position changes. Although Board members have a right to this information, they also need to have a purpose to have that information. For example: As Treasurer, I have access to everyone payment information. Unless an account is delinquent and the Board is deciding to escalate collection efforts, no other Board member has a need to see any payment information other then their own. If I was asked for the info, I would deny the request and recommend that they make a motion at the next board meeting to see that information. If approved by the Board, I'll allow it (I would also resign as Treasurer due to, what I believe, would be violation of privacy laws).

So, if the individual or individuals who are seeking this information are being denied access because they don't have a need (based on positional requirements or a board decision), tough luck. No Board member should be allowed to go on what may be considered a witch hunt.

However, I see no reason why positional descriptions are not provided to any member who asks. The salary range is another issue.

Very helpful, NPS, thank you. It's not what I wanted to hear, but I presume you are correct - not least from a political standpoint. It is, of course, the reason I wanted to know if there was any other, more precise, legislation governing this issue. I have some trouble understanding why, if the full Board is legally entitled to access this type of information, a minority of the Board isn't (irrespective of the opinions of the rest). I wonder if attorneys might see it a different way. But I'm not sure any of us would want to go down that route.

Regarding whether such requests can be seen as a witch hunt, TimB4, of course it depends on individual perspective. I certainly don't think that a Board minority wanting to review this information should automatically be seen in that light, without knowledge of the full circumstances. If I were Board president (I have nightmares sometimes) I would absolutely ensure that all Board members had (closed session) access to any sensitive information not exempted by privacy law, whether or not I saw any issue therein. I am a transparency extremist. Unfortunately, that is not the case in our local environment.

Thanks very much for your assistance with this question. (Of course, I will not complain if anyone comes up with an alternative argument to NpS's....)

Thanks, KerryL1. You are ABSOLUTELY RIGHT. I had assumed that the bylaws contained nothing in this respect given the issues the Directors are having, but they contain the following statement:

"(b) Inspection by Directors. Every director shall have the absolute right at any reasonable time to
inspect all books, records and documents of the Association and the physical properties owned or
controlled by the Association. The directors’ rights shall include the right to make extra copies of
documents at reasonable cost to the Association."

On this basis, I cannot imagine how such access can be denied - even if HIPAA laws were relevant to the request at hand (and they are not), I doubt this would extend to Board oversight.

It may be that I am behind the curve in the discussions and that the relevant Board members have already pointed to this bylaw and been blocked. In which case the only route is an attorney. Which would be most unfortunate. I have shared this thread with our group and will see what they say in this regard.

I can't answer your question on the Board hiring employees etc. and await info on that. I believe that only one of our current Board minority would have been on the Board when the last staff member was recruited. It is possible that the manager has been given free rein in these tasks. There is also a problem of Board Executive Committee meetings taking decisions without sending them for a vote of the full Board (which the minority would generally lose, but would at least be party to the relevant information). I don't know, but I'll find out.

On your final questions, yes, we have an in-house manager who is an employee (moved directly from BOD to manager position, non-public appointment). We have around 3,200 housing units/lots, 8 Board members plus President.

"absolute right" is crystal clear. Unfortunately, doesn't guarantee that majority will honor it.
As others said, HIPPA doesn't protect job descriptions and salaries.

Options:

1. Point to the clause and demand access.

2. Demand an opinion from the HOA lawyer.

3. Project reasonable budget from industry data without getting access, and then make noise if there's a significant difference.

4. Wait till you have a majority.

Obviously a political battle. Likely to get shot down on 1 and 2. 3 or 4 probably the way you'll have to go.