fresh arts fundamental hr/employment policies for organizations 2014
TRANSCRIPT
ABOUT FRESH ARTSONLINE SERVICES
• The Culture Guide
Online event calendar
• The Houston Artist Registry
A warehouse of local artists and creatives
• Houston Artist Field Guide
A wealth of resources for artists and arts administrators
PHYSICAL PROGRAMMING
• Community Supported Art
A subscription for local art
• Workshops & Professional Development- Offered to assist arts administrators and artists
• Exhibitions - We work exclusively with local emerging artists
• Cultured Cocktails
Raises funds for local arts projects
• Winter Holiday Art Market
An annual holiday art market involving over 60 local artists (Last year we sold over $153,000 of local art!)
• M-Lab - Marketing incubator for small to mid-sized nonprofit organizations
ABOUT OUR GUEST experts TONIGHT:
Bob Lawson is currently the Director of Administration and Education at Theatre
Under The Stars (TUTS). He has held this position since December 2000. In this
capacity he oversees many areas of TUTS’ business including Administration,
Human Resources, Operations, and Education. From February 1997 to November
2000 he was employed as the Director, Volunteer Services at AIDS Foundation
Houston, Inc. (AFH). In this capacity he the management of 365 individuals serving
on 10 direct and indirect client service volunteer teams. Prior to his employment at
AFH he spent 18 years with the E.I. DuPont de Nemours Company in positions of
increasing responsibility managing employees and suppliers. Bob became known as
an expert in problem resolution, negotiations, motivation, and financial
management. Bob has an extensive background in quality process management
including Steven Covey’s “Practical Leadership”. He was one of the recipients of
DuPont’s “Excellence Through People” award in 1992. Bob is a cum laude graduate
of Niagara University with a BS degree in Business Logistics.
Elaine C. Becraft is Counsel, Labor & Employment (Americas) for LyondellBasell, one
of the world’s largest plastics, chemicals and refining companies with annual
revenues of $44 billion.* LyondellBasell, a member of the S&P 500, manufactures
products at 56 sites in 18 countries. In her current role, Becraft advises her internal
business clients on all aspects of labor and employment law. She joined the
company in December 2011. Before joining LyondellBasell, Becraft was in private
practice in Seattle, Washington and Houston, Texas. Becraft is a graduate of Seattle
University School of Law and received a Bachelor of Arts degree in International
Affairs and German Studies from Northern Arizona University.
Fundamental HR &
Employment Policies for
Organizations
Bob Lawson
Director of Administration & Education
Theatre Under the Stars
Elaine C. Becraft
Counsel, Labor & Employment
LyondellBasell
DISCLAIMERS
This workshop content should not be
considered legal advice or legal
opinion. You should review
applicable law in your jurisdiction
and consult experienced counsel for
legal advice.
The Big Ideas: HR Essentials
• Human Resource Management
• Compensation and Benefits
• Recruitment and Selection
• Performance Management
• Employee Development
• Employment Law Basics
HR Priorities:
• Strategic: how to best realize your org’s mission
• Administrative: compliance, reporting, and records
• Operational: day-to-day employee relations
The BIG ideas. What we will cover:
What else we will cover
• 1099/W2 distinctions
• Benefit options
• Performance Reviews
• HR reps for small shops
• New Hire concerns
• Interns
• Employment taxes and withholding
• Outsourcing your HR Function
Staff without a formal HR background
The use of unpaid staff (volunteers)
Limited resources/budget
Lack of affordable training for staff
High turnover
Staff burnout
Managing office administration
Board of Directors support
Idealist.org describes the unique challenges of Human
Resources (HR) in a nonprofit setting: Support for these
needs can be hard to find, and difficult to navigate.
They include:
The nonprofit human resources function deals with
volunteers, staffs high-risk programs, and can be subject to
intense scrutiny.
These major
challenges can
be
categorized as:
o Economic
o Structural
o Legal
o Cultural
THE “ Absolute Musts " OF ANY EMPLOYEE HANDBOOK
(From April 2014 ADP HR Newsletter)• At-will employment
• Anti-harassment & nondiscrimination
• Immigration Law compliance
• Employment classifications (full-time, part-time, exempt, non-exempt, etc.)
• Leave of absence and time off benefits (holidays, vacation, sick, etc., as well as policies about unused vacation)
• Attendance and time-keeping
• Paydays
• Meals and break periods (if regulated by state law; not necessary in Texas)
• Safety and health (if regulated by state law; not necessary in Texas)
YOUR EMPLOYEE
HANDBOOK
Other handbook inclusions to consider:
Employee conduct
Company history, practices, and culture
Use of company equipment (including no expectation of privacy when using company email, etc.)
Emergency Closings
Social Media
Sample policies to consider:
• Whistle-blower:
Sample language will be
emailed to you
• Internal conflict of interest:
Sample language will be
emailed to you
• Nondiscrimination
• Others?
YOUR EMPLOYEE
HANDBOOK
BASIC BEST PRACTICES FOR INTERVIEWING/HIRING
OVERVIEW : Basic legal concerns: Elaine
Practical concerns: Bob
PREPPING FOR A NEW POSITION – Develop Job Description
• Determine your staffing needs first; create the job descriptions second
• Avoid the common pitfall of crafting job responsibilities on the basis of existing personnel strengths, rather than organizational needs
• Determine the benefits package for the role; are your expectations for salary, etc. realistic and competitive in the market?
• Analyze the current staff to ensure you need to go outside the organization to meet your needs
• Could an internal resource be developed to meet needs?
• Does bringing in an external candidate prevent a strong current employee from experiencing professional development?
RECRUITMENT AND SELECTION
• Screen all applications received
against pre-determined criteria
i.e.:
Do we require a degree?
Second language?
Prior experience using
specific skills?
PREPPING FOR A NEW POSITION – Develop Your Selection
Process
• Post jobs in a variety of places (idealist.org, local arts schools, Linked In,
etc.)
• Use standard method to acknowledge receipt of applications and resumes
(i.e. have one person in charge of emailing each applicant to acknowledge
receipt)
• Reviewing Applications Checklist:
o Completeness
o Availability
o Employment eligibility
o Desired pay/position match
o Employment history
o Reasons for leaving previous employer
o Pay history
o Education
o References
o Signatures
RECRUITMENT AND SELECTION
HIRING PROCESS
• Compare and rank applicants
• If large pool of potential candidates emerges, conduct phone
interviews first
• Invite candidates to interview (Do we have one round of
interviews with internal staff and invite the finalists back to
interview with select board members?)
• Interview process:
o While interviewing, review your limitations as an interviewer: you
cannot ask questions regarding an applicant’s race, national origin/citizenship, disability, sex/gender, military service, criminal background, family history, religion, marital status, age (or date of birth).
o Create a list of interview questions and be consistent in asking them
of all applicants.
o Do’s & Don’ts (emailed to you)
RECRUITMENT AND SELECTION
HIRING PROCESS
• Extend an offer (provide offer letter)
• Include special conditions (Example: Hiring as
temporary employee for 3 months and then, make
full time or full-time vs. 6 months; is the offer
contingent on successfully passing a background
check?)
• Conduct reference and background checks
• Confirm offer and send new hire paperwork
• Send rejection letters (Can be good form to personally
call anyone you interviewed in person)
RECRUITMENT AND SELECTION
Employee ClassificationOVERVIEW : Basic legal concerns: Elaine
Practical concerns: Bob
BASIC DISTINCTIONS BETWEEN 1099 CONTRACTOR VS W2
EMPLOYEE:
Why does it matter?
–Worker classification affects how
you pay your employee’s federal
income tax, social security and
Medicare taxes, and which tax
forms you need to file on their
behalf. Classification affects their
eligibility for social security and
Medicare benefits, employer
provided benefits and their tax
responsibilities.
Employee Classification
HOW TO KNOW THE DIFFERENCE:
• BEHAVIORAL CONTROL
– Instructions: you might be an employee if
you’re told
> How, when, or where to do the work?
> What tools or equipment to use?
> What assistants to hire to help with the work?
> Where to purchase supplies and services?
– Training: you might be an employee if you
need training to do a job a way specified by
the company
Employee Classification
HOW TO KNOW THE DIFFERENCE:
• FINANCIAL CONTROL
– Expenses (If you aren’t typically reimbursed for expenses)
– Opportunity for profit or loss (If you can realize a profit or incur a loss, you’re likely a contractor)
– Compensation timing: If the nonprofit controls the frequency of compensation, as opposed to the worker sending an invoice after services are performed, you’re likely an employee
Employee Classification
HOW TO KNOW THE DIFFERENCE:
• RELATIONSHIP OF THE PARTIES
– Employee benefits (If you receive benefits,
you may be an employee. However, the
reverse cannot be assumed)
– Are duties of X integral to operations of
nonprofit?
– Written contracts to define
Employee Classification
RESOURCES:
• http://www.irs.gov/pub/irs-pdf/p1779.pdf
• http://www.nonprofitrisk.org/library/enews/2009/e
news042909.htm
EXAMPLE: Independent contractors (dance
teachers)
Employee Classification
OTHER CLASSIFICATION CONCERNS:• Do not classify people with similar duties differently
• Contractors should not get organization business cards or be
listed in staff directory
• Email addresses for contractors should have disclaimer in
footer
• Always issue IRS Form 1099s to contractors/consultants and
W-2s to employees.
• Adopt and standardize language in a written agreement that is
used with all contractors/consultants, spelling out that, “[Name
of Contractor] reserves the right to control the manner in which
services are performed and the scheduling of performance.”
Employee ClassificationBASIC DISTINCTIONS BETWEEN
EXEMPT/NONEXEMPT
Why does it matter?
• Exempt employees are exempt from minimum wage and overtime premium pay protections of the Fair Labor Standards Act (FLSA). As such, you are not required to pay them extra for overtime.
• Nonexempt employees must generally be paid for overtime –at time and one half their regular rate of pay – for each hour, or fraction thereof, in excess of 40 hours in a workweek. (Minimum wage laws apply.)
Exemptions from the overtime requirements of the FLSA are just that— exceptions to the rule. They are very narrowly construed, and as the employer, you will always bear the burden of proving that you have correctly classified an employee as exempt.
Employee Classification
BASIC DISTINCTIONS BETWEEN
EXEMPT/NONEXEMPT
Why does it matter?
• The FLSA recognizes seven major categories
of exempt workers:
o Executive employees
o Administrative employees
o Learned professional employees
o Creative professional employees
o Computer employees
o Highly compensated employees
o Outside sales employees
Employee ClassificationBASIC DISTINCTIONS BETWEEN EXEMPT/NONEXEMPT
Why does it matter?
• EXEMPT TEST: Might be exempt if the employee is paid at least $455/week on a salary or fee basis, AND:
– Executive: Primary duty is management of the organization or department. Regularly directs the work of two or more other employees; AND Has authority to hire or fire other employees, OR the employee’s suggestions as to hiring, firing, promotion or other change of status of other employees are given particular weight.
– Administrative: Primary duty is the performance of office work directly related to the management or general business operations of the employer or the employer’s customers. Primary duty includes the exercise of discretion and independent judgment in matters of significance. Regularly exercises discretionary powers and independent judgment in performing the job.
– Creative professional: Primary duty is the performance of work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.
– http://www.nibmimages.com/nibm/Audit-TestYourCompliance.pdf
Employee ClassificationBASIC DISTINCTIONS BETWEEN EXEMPT/NONEXEMPT
Why does it matter?
• Determining whether or not a position is exempt requires a detailed analysis, you should seek legal assistance in conducting this analysis.
• So you have a nonexempt employee, now what?
– Timecards? (ADP Template included in resources)
– Overtime calculation http://bit.ly/overtimecalculation
Employee ClassificationINTERNS
How to avoid abusing them: (Bob)Temporary full-time employees?
According to The Department of Labor, the following six legal criteria must be applied when making a determination if an internship is required to be paid:
• The internship, even though it includes actual operation of the facilities of the employer, is similar to training, which would be given, in an educational environment.
• The internship experience is for the benefit of the intern.
• The intern does not displace regular employees, but works under close supervision of existing staff.
• The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.
• The intern is not necessarily entitled to a job at the conclusion of the internship.
• The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
Employee Classification
INTERNS
Are interns considered employees and does it
matter? • A temporary intern DOES count as an employee, UNLESS:
– 1.) the person is interning as a part of a "school sponsored"
program;
OR
– 2.) the intern works for less than 20 weeks (about 4 months) out
of the year with the organization.
• (NOTE: the Texas Workforce Commission counts toward the 20
weeks full- and part-time work performed in any day.)
It matters towards employee totals for certain reporting!
Employee Benefits &
CompensationOVERVIEW
To consider: Legal requirements + Employee retention
TYPES OF BENEFITS
» Compensation
» Health insurance (dental, vision, etc.)
» Unemployment compensation
» Worker’s Comp
» Life insurance
» Investment Plans
» Flex time
Employee Benefits &
CompensationCOMPENSATION• Minimum wage in Texas: $7.25/hour
• Issues of competitiveness?
• Restrictions about timing of pay (must pay regular basis, set out in
writing, final pay within 5 days if you fire)
For perspective: From the 2008-2009 United Way of Houston Wage & Benefit Survey
For orgs with budget under $350K» Executive Director compensation (Median $48,000 / Mean $51,111)
» Program Director compensation (Median $29,000 / Mean $30,467)
» Marketing Director compensation (Median $43,000 / Mean $43,000)*
For orgs with budget between $350-599K » Executive Director compensation (Median $60,000 / Mean $62,288)
» Program Director compensation (Median $40,000 / Mean $38,041)
» Marketing Director compensation (Median $26,500 / Mean $28,500)*
* The Marketing Director pay rate
discrepancy (the Marketing Director at
slightly larger org making less) is due to
small number of respondents.
For a national
perspective: 2013
Nonprofit Times Wage &
Benefit Survey:
http://www.thenonprofitti
mes.com/wp-
content/uploads/2013/02/
1359731596_2-1-
13_SalaryBenefits.pdf
Employee Benefits &
CompensationHEALTH INSURANCE
• You must be consistent in offering benefits. If you offer benefits to
one full-time employee, you must offer benefits to ALL full-time
employees.
• ACA (Affordable Care Act or Obamacare) as it pertains to nonprofits:
http://www.councilofnonprofits.org/resources/resources-
topic/affordable-care-act-faqs
– There is NO requirement on employers to provide health
insurance -- but there is a penalty (that is only applicable to
employers with 50 or more full-time employees) under the ACA’s
employer “shared responsibility” provisions effective starting in
2015 if the employer does not provide a minimum level of
insurance coverage to their full-time employees
– Look-back provision (documenting how many hrs a week
average over 3 month or a year-- depending on company size
Employee Benefits &
CompensationHEALTH INSURANCE
• SHOP (Small Business Health Options Program)
Marketplace
– Insurance solutions specifically for small employers
– In Texas, must be handled through agent, broker, or insurance
company
– Starting in 2014, small employers can claim the Small Business
Health Care Tax Credit only for coverage purchased through the
SHOP Marketplace.
– Basic eligibility: business address or primary workplace, at least
one common-law employee on payroll (not including sole proprietor
or spouse), and less than 50 full-time or FTE
employees.http://marketplace.cms.gov/getofficialresources/publicati
ons-and-articles/who-can-use-shop.pdf
– Premium Estimate Tool: https://www.healthcare.gov/find-premium-
estimates/
Employee Benefits &
CompensationHEALTH INSURANCE
• Small Business Healthcare Tax Credit
http://www.councilofnonprofits.org/small-employer-credit
– Eligibility: pay at least 50% of healthcare costs, Less than
25 FTE employees, must be able to calculate average
salaries (The credit is decreased as you approach an
average salary of $50K.)
– Nonprofits are eligible, but must file Form 990-T
Employee Benefits &
CompensationUNEMPLOYMENT COMPENSATION
The Texas Unemployment Compensation Act (TUCA) requires liable Texas
employers - including sole proprietorships, partnerships and corporations, and
other entities registered with the Secretary of State - to pay unemployment
insurance tax. Employers become liable if they: Are a 501(c)(3) nonprofit
organization (excluding churches and religious organizations) and have at least
four employees for part of a day or more each week for 20 weeks.
• In Texas, the maximum amount of taxable wages per employee, per
calendar year is set by statute and is currently $9,000.
• Entry level unemployment tax rate is 2.7%
• Texas Workforce Commission policies on unemployment taxes:
http://www.twc.state.tx.us/ui/tax/unemployment-tax-program-overview.html
• Reimbursement method:
http://www.guidestar.org/rxa/news/articles/2005/alternatives-to-
unemployment-taxes-for-501c3.aspx
Employee Benefits &
CompensationWORKER’S COMPENSATION
Optional in Texas
• However, company must notify all employees of decision
to NOT offer worker’s comp at time of hire
• Notice of NOT providing coverage must be posted
prominently:
http://www.tdi.texas.gov/pubs/factsheets/noncoveremp.p
df
• Must report non-coverage to Texas Department of
Insurance via DWC Form-005
RESOURCES:
http://www.tdi.texas.gov/wc/employer/index.html#aboutw
c
Employee Benefits &
CompensationBASIC REQUIRED STEPS FOR NEW HIRES
http://www.twc.state.tx.us/news/efte/new_hire_paperwork.html
• Attorney General in Texas:
https://portal.cs.oag.state.tx.us/wps/portal/EmployerHome
– Federal & state law require employers to report new hires/rehires
within 20 calendar days from date employee starts earning wages
• I-9 report (confirms that employee is eligible to work in the US)
• W-4 Form
• Notice of worker’s compensation coverage (or confirmation that
there is no coverage)
• Written consent for background checks
BASIC REQUIRED STEPS FOR NEW HIRES – CONT’D
Notice of Coverage Options (Affordable Care Act)
What: Under the Affordable Care Act (ACA), employers must provide a Notice of Coverage Options (“Notice”) to all new hires.
Who: All employers subject to the Fair Labor Standards Act (which encompasses almost all employers) must provide the Notice, regardless of whether the employer offers health coverage.
What it must contain: (The Notice must be provided in writing and may be hand delivered, sent by first-class mail, or sent electronically as long as the U.S. Department of Labor's electronic disclosure safe harbor rules are met.)
– Information about the services provided by the Marketplace;
– How to contact the Marketplace;
– Information about the employer, including any employer-sponsored health coverage available;
– The potential impact on the employee if he or she purchases coverage through the Marketplace (including that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code; that he or she may lose any employer contribution toward health benefits offered by the employer; and that all or a portion of such contribution may be excludable from income for Federal income tax purposes); and
– Information the employee will need to gather in order to apply for coverage through the Marketplace.
See details: 29 CFR 2520.104b-1(c), Disclosures through Electronic Media.
Employee Benefits &
CompensationBASIC OPTIONAL (BUT RECOMMENDED) STEPS FOR NEW HIRES• Acknowledgment of receipt of employment handbook
• Agreements regarding pay, wage deductions, benefits, schedule, work location, and so on (with employment-at-will disclaimers)-- this can be handled in the offer letter
– Employment at Will Disclaimer: I understand that this agreement concerning my compensation and benefits does not modify the at will employment relationship between myself and ABC Company; does not constitute a commitment by ABC Company to employ me for any particular length of time; does not commit me to remain with ABC Company for any particular length of time; and does not restrict either ABC Company or myself from ending the employment relationship at any time for any reason, with or without notice.
• Consent for drug testing
• Consent for video surveillance
Employee Benefits &
CompensationOTHER NECESSARY STEPS WHEN HIRING
• Enter employee into payroll system
• Enroll employee in any benefits
• Issue equipment or supplies necessary for job
(consider using aproperty return security deposit
agreement to minimize the risk of damage or non-
return of property, like laptop, etc.)
Operations ConcernsEMPLOYEE TAXES
• How to know which payroll taxes apply:
http://www.bizfilings.com/toolkit/sbg/tax-info/payroll-
taxes/determining-payroll-taxes-for-employees.aspx
• Typically: Federal Income Tax Withholding + FICA (Social
Security + Medicare)
• Payroll Tax Calculator (ADP): http://www.adp.com/tools-and-
resources/calculators-and-tools/payroll-calculators.aspx
• IRS Withholding Calculator http://www.irs.gov/Individuals/IRS-
Withholding-Calculator
Operations ConcernsPAYROLL TOOLS
• RESOURCE: ADP http://www.adp.com/~/media/PDF/Payroll%20Packages.ashx
– Basic (Essential) Plan:
• Semi-monthly for 2 employees $58+/pay period or
4 employees $64/pay period
• Monthly for 1 $69
• RESOURCE: Tobin & Associates
Operations ConcernsREVIEWS: YOU NEED TO DO THEM
REGULARLY
• Employee reviews (timing + actually have them +
documentation needed)
• Employee review of director by board
• 360 review of director
Operations ConcernsDO YOU HAVE A HUMAN RESOURCES REP ON THE
BOARD?
• HR advocate on board of directors for smaller nonprofits
(i.e. to provide an additional outlet for reporting HR
problems)
• Division of Board / Staff HR responsibilities:
http://hrcouncil.ca/docs/Table_HR_Resp.pdf
• Board’s involvement in HR:
http://www.blueavocado.org/content/nonprofit-boards-
role-hr
• Board Planning toolkit: http://hrcouncil.ca/hr-
toolkit/planning-board-role.cfm
OUTSOURCING YOUR
HR
• The advantages and timing
of outsourcing, rather than
handling HR in house
Operations Concerns
Common employment law
mistakes• Misclassifying employees as independent
contractors.
• Misclassifying non-exempt employees as exempt.
• Not complying with state wage payment laws.
These rules include providing new employees with
written notice of their rate of pay and regular pay
date; prohibiting deductions from wages unless for
the employee's benefit and authorized in writing;
requiring written contracts for commissioned
salespersons; and providing terminated employees
with written notice of their last day of work, their
last day of benefits, and their right to apply for
unemployment benefits.
Common employment law
mistakes• Not having an employee handbook.
• Not documenting employee job performance.
• Not training supervisors regarding EEO laws.
• Not providing reasonable accommodations for disabled employees.
• Not obtaining releases from terminated employees where appropriate.
• Not protecting confidential business information.
• Not consulting a qualified employment law attorney.
Directly from: http://warshawskylawfirm.com/lawyer/2010/12/04/Employment-Law/Ten-Common-Employment-Law-Mistakes-Made-By-Businesses._bl1518.htm
http://www.employmentlawgroup.com/wp-content/uploads/Employers_Common_Mistakes_Encouraging_Employees_Seek_Legal_Advise.pdf
Resources• Jody Blazek: HR Handbook
• TX Workforce Commission (handbook samples-- policies)
• “Especially for Texas Employers” - TWC webpage:
http://www.twc.state.tx.us/news/efte/tocmain2.html
• ACA as it pertains to nonprofits:
http://www.councilofnonprofits.org/resources/resources-
topic/affordable-care-act-faqs
http://commongoodvt.org/nonprofit-101/human-resources/
IN YOUR INBOX TOMORROW This PowerPoint
Example docs and resources
Info about upcoming workshops includingDevelopment Finance and Operation Basics
for the Jack-of-All Arts Administrator
(Gift Acceptance, Disclosure Rules & Basic Financial
Reporting)
Wednesday, June 4, from 4-6 p.m.@ Fresh Arts
Meet Your Media
With Joel Luks, Molly Glentzer, Bill Davenport
Tuesday, July 8, 6-8 p.m. @ Diverseworks Artspace
Link to a post-workshop survey