HR Legal Insider

HR Issues for Non-Profits

Written by Goosmann Law Team | Apr 4, 2019 3:05:44 PM

Many human resource professionals must be aware of how their initiatives and decisions will affect the company’s bottom line. Will this training avoid potential litigation, thus saving us money? Will this new hiring form help us reduce employer turnover and thus save money on training? However, human resource professionals working for non-profits must ask slightly different questions. While many areas of HR overlap for-profit and non-profits, HR professionals working for a non-profit need to be aware of the differences.

How then, should an HR manager of a non-profit operate differently? In addition to some significant legal differences, the goals of every decision made by an HR manager need to be tailored to the organization’s mission. Job descriptions, training materials, and procedure manuals need to do more than simply describe the specifics of the job or policy. How will this new policy further the mission of our organization? How will this new hiring policy attract people committed to our goals? Hiring policies and training materials need to illustrate the organization’s mission and show the employee how he or she fits into that mission, or how the new policy or procedure furthers that mission.

In addition to the different goals, non-profit HR professionals must navigate the difficulties of unpaid staff and high employee turnover.  Whether the person is an unpaid intern or a minimum wage staffer, it often falls to the organization’s HR to train these people and avoid burnout. Keeping these people happy and avoiding turnover helps maximize the limited resources of an organization. The hiring process can help avoid turnover, by ensuring new hires are not simply looking for a job but rather are truly concerned with furthering the mission of the organization. Regarding retention, monetary compensation can obviously be effective in keeping employees around, but smaller gestures can also be effective. Cards, small gifts, or even a heart-felt thank you can work wonders toward making these individuals feel like a valued part of the organization.

While gifts can help make an individual feel valued, gifts to unpaid individuals must be small enough so as to not be considered compensation. Organizations must ensure the individuals it classifies as “unpaid” are actually unpaid. Some organizations pay their interns or volunteers a “stipend,” that the organization considers too insignificant to count the person as an employee. However, the Department of Labor can disagree, and consider these stipends to be employee compensation and thus bringing all the additional regulatory burdens brought about by that classification. Non-monetary gifts (e.g. Thanksgiving turkey) will not normally be considered compensation, while gifts with a monetary value (e.g. gift certificates) can sometimes be considered compensation.

Another payroll issue for nonprofit HR professionals are the varying withholding rules. Non-profits can be exempt from withholding either federal or state unemployment taxes, depending on in which state the organization sits. However, nonprofits must still make normal withholdings for federal income tax, Medicare, and the other withholdings made by other employers. Many non-profits engage the services of a payroll specialist to ensure compliance with varying rules.

HR professionals in non-profits must deal with all the standard HR issues, in addition to some concerns unique to the non-profit realm. Please contact a Goosmann attorney today in Sioux City, Sioux Falls, or Omaha today with any questions regarding HR issues in non-profits!