comments on paying bonuses

Started by LaskaS • 18 replies • 357 views

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LaskaS (Texas)
Posts: 1,025

Posted:

hi,

I have a question.

here is the hypothetical.
A long time employee falls off a ladder and is seriously injured.

The association is fully insured.

the employee will no longer be able to work as a result of his injuries.
(i'm not sure how workmans comp or insurance works for injured employees)

A board member who was acting as property manager(and directly responsible for ensuring employees aren't working in unsafe conditions) made a motion to continue to pay the former employee 30% of his salary while he recovers. ( believe he was receiving workmans comp by this point)

At the end of the year, a full 8 months after this employee was injured and therefore was no longer an employee, this board member property manager made a motion and most of the board agreed to pay the former employee a 1000 bonus.

I would like to know if this is an appropriate use of association funds. The bonus was not based on work performance, he hadn't worked for us in 10 months. In my opinion, it was the board member and board trying to show goodwill in hopes that we wouldn't be sued.

Also, the bonus motion was made at a "working meeting" which was not noticed and no owners were invited.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Since this is completely hypothetical (of course it is)...

... it may or may not be appropriate use of funds (*), but it will be a moot point since I would expect the board to be kicked to the curb by the membership as soon as word gets around and they can organize a special meeting.

(* I say no. That's what workers comp, liability, and disability insurance are for.)

On the other hand, this hypothetical bonus was only $1000, boards can make bigger mistakes than that in areas of legitimate expenses, and taking legal action will cost everybody a whole lot more.

Pick your (hypothetical) battles.

LetA (Nevada)
Posts: 2,679

Posted:

You say this hypothetical employee is no longer employed? Did they quit, fired or file for FMLA?
What does your governing documents say about paying employees that file WC claims?

LaskaS (Texas)
Posts: 1,025

Posted:

thanks cathy and let

I agree it's not worth any litigation ,,

what i'm concerned about is the repeated actions taken by the board based on their "opinions" and not taking into consideration the actual documents or what they actually are legally authorized to do.

Petition for special meeting is in process.

I was asking this question more for my own knowledge.

I mean someone could make an argument that the board decided it was in the best interest of the association to pay a bonus to the former employee in hopes that it would prevent a lawsuit.

Basically, i'm realizing, an attorney can make an argument for anything. and rogue boards will use the attorney's response to a question to support the actions. Even when the attorney's opinion absolutely doesn't say that the action is absolutely authorized.

The board is authorized to do many things. So often, the board starts to think they can do anything as long as they state that "in their opinion" it was a good idea.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Laska

Like it or not THEY not YOU were elected to make such decisions

MarkM19 (Texas)
Posts: 1,459

Posted:

Laska,
If they pay the bonus (bonuses are paid to employees not ex-employees) they have no insurance that he will not still turn around and sue. If an injury lawyer gets a hold of him and starts talking $ signs your HOA will be the last thing he will care about.

I guess if you get a written statement releasing the HOA from any responsibility it may hold up in court, they will pay to fight it and that means everyone except the lawyers lose.

LaskaS (Texas)
Posts: 1,025

Posted:

subsequent to the bonus,, he filed suit.

Thats why I felt it is not using reasonable business judgement .

They were using common funds for an ex employee and they already were continueing to pay 30% of his salary. as a gesture of goodwill.

So John is your answer, this is completely appropriate and owners have no standing to question the board on this?

BillD16 (Texas)
Posts: 971

Posted:

Quote:

Posted By LaskaS on 08/02/2022 3:05 PM
subsequent to the bonus,, he filed suit.

Oh. Any reason you couldn't have mentioned this in your original post?

Reading between the lines, it sounds like there may have been a number of discussions between Board and the injured party and perhaps their legal representation?

I don't see how a Board taking steps to avoid getting sued is a bad thing. IANAL, but I don't think it's illegal to work out a "settlement" between the parties, especially if it makes good business sense. The only foolish thing would be doing it without sufficient documentation.

BillD

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

KerryL1 (California)
Posts: 14,550

Posted:

Over the years, Laska has "forgotten" important details until later in her posts. She also insists on asking legal questions over & over and now demands that JohnC give her a reply based on whether he thinks the owners have "legal standing."

LaskaS (Texas)
Posts: 1,025

Posted:

kerry, i didn't insist on anything.

please stop mischaracterizing my response.

LaskaS (Texas)
Posts: 1,025

Posted:

apparently i must not have explained correctly.

I was asking whether anyone knew if it was a proper use of association funds to pay a bonus to a former employee.

The bonus was paid last year. There was no agreement or discussion with the injured former employee.

He filed suit sometime this year. the bonus was last year .

LaskaS (Texas)
Posts: 1,025

Posted:

i ask questions regarding interpretation of hoa documents and hoa statute becuase a lot of people on here have lots of experience.

I've never asked for legal advice. I'm asking for advice from people have expereience with the concepts i'm asking about.

by the way.. one doesn't have to be a lawyer to correctly interpet a legal document.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

What am I supposed to be seeing wrong here exactly? Can you tell us that? Everything seems pretty normal to me. Companies give bonuses once a year. Every company I have worked for has given a bonus. They just may adjust it to what they feel is appropriate level of work. Not all bonuses are equal.

Plus they had an accident. Last I checked the TV I am watching I've seen atleast 3 "injury lawyer" commercials in last 30 minutes. Now a days one has an accident they lawyer up. That does not mean anyone's fault. Just means you paid a lawyer to help negotiate a settlement.

Funny this board has only been in place for what 2 - 3 months now? Still sore you missed the bus of being on it? Because you would be on the board now dealing with someone like you...

Former HOA President

CathyA3 (Ohio)
Posts: 6,299

Posted:

The thing about "business judgement" is that it's just that: a judgement call. Reasonable people can disagree, but that doesn't make any of them wrong - and if you're not on the board, you should assume that you're missing a good chunk of the facts that went into the decision. If paying $1000 will avert further legal wrangling, that sounds like money well spent to me.

See Lamplight Village HOA settlement for a cautionary tale on what can happen if the board stubbornly insists that they're right.

PatJ1 (North Carolina)
Posts: 568

Posted:

If the HOA has employees and is fully insured, I will assume they have Worker's Compensation insurance. Worker's Compensation insurance determines the degree of the injury and provides benefits directly to the employee.

Additional payments from the employer, the HOA, could reduce the payments the employee receives from WC.

Many times an injured employee will engage an attorney to insure they are getting the most from the WC insurance. It does not mean they have filed a lawsuit against the HOA. In most cases, as far as I am aware, by providing WC, the employer is protected against lawsuits against them for injuries.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Yeah, I usually stay out of these things. When the details finally shake out, the actual story differs from the original post in significant ways, enough to make me suspect that an OP is fishing for the answer they want.

Being a board member is hard enough without people manufacturing controversy out of thin air, and I don't like to enable behavior that makes their jobs worse.

LaskaS (Texas)
Posts: 1,025

Posted:

mellissa,

wow,, your comment almost got to me. I almost said something really rude . However, i realized everyone else here already knows exactly who you are.

LaskaS (Texas)
Posts: 1,025

Posted:

cathy,

this event happened last year. it's over, i am not trying to stir up anything. I'm trying to get other peoples opinions and insight . The current board , in my opinoin, continues to take actions that many owners, including myself, have questioned whether they had authority to do so. . Whether i disagreed with it or not, I wasn't on the board.

Not being on the board doesn't mean that an owner doesn't have a right to speak up or ask questions when something that is not black and white occurs. I don't like a lot of things the board has done.. However, i don't have any standing because I know that it is within their authority to do those things. I never post about those things.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Yep people know who I am. Someone who doesn't go fishing for opinions to support my own. I tell it as it is like it or not.

It sends shivers in my spine to think of how if you had been elected to your board the posts you would make... I know for one your shoes would fit you differently...

Former HOA President

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