Staffing Risks and HOA Liability: Do We Need HR Support?
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Staffing Risks and Association Liability: Do We Need HR Support?
“We follow state guidelines when it comes to recruiting and onboarding. What else do we need to know?”
While every homeowners association or high-rise has unique needs and requirements, dedicated human resources (HR) support is critical. This is particularly the case for associations with more than one staff member. In fact, without adequate HR support from your association management company, you may be putting your board (and association) at risk of costly liability.
According to the National Labor Relations Act, “The term ‘employer’ includes any person acting as an agent of an employer, directly or indirectly."1 That includes community associations and high-rises. Above all, that means that your association is under the same laws and mandates that every business (both large and small) must follow. HR laws are complex and changing. While you may think that your HOA board is following every regulation to a T, you may miss an important step or unwittingly violate an employer law.
In order to avoid employer liability, your board should consider handing these responsibilities over to a professional community management company with a dedicated HR department. Your management company should have an HR department with professionals who can attract, train and retain the best talent for the community. The HR team should also play a hands-on role in resolving personnel issues and serve as a valuable resource when questions arise in the community.
“Managing the various tasks that it takes to staff your community requires specialized knowledge in both HR and community management,” said Laurie Preston, HR director for FirstService Residential. “When your board isn’t well versed in HR law, you may be putting your association at risk.”
The Risky Business of Hiring HOA or High-Rise Staff
The risk of liability often comes down to employee relations issues during the hiring process. For example, you might inadvertently ask personal questions during an interview such as, “Do you have children?” or “Are you married?” simply because you are interested in getting to know the applicant on a friendly basis. What you may not realize is that it’s illegal to ask those kinds of questions.
An experienced community management company has a network of knowledgeable and experienced recruiters and HR professionals who not only know how to handle interview questions, but also how to find the right individual for the job. Additionally, a management company’s HR department should have a deep and thorough understanding of the association management industry and the types of individuals that thrive in community association jobs. Going one step further, they should understand the unique needs of your association so that they can find the right fit for the position you need.
Your association management company’s HR department should:
• Meet with board members and visit communities in order to place new hires in the right locations.
• Work with community managers to ensure that communities are appropriately staffed.
• Hold training sessions on interviewing, hiring and utilizing recruiting databases.
• Transfer and onboard associates from acquired communities.
Relying on your management company for recruiting, interviewing and onboarding does not mean the board doesn’t have a say in those who join the staff. Many HR directors hold a meet and greet with board members and potential associates to get to know one another and see if they are a good fit for the community. This is not an interview, since there are legal implications involved. Ultimately, the community management company is the recruiter and employer, taking the heat off of the association themselves. While the board’s input is key in the decision-making process, your management company needs to make the hiring decision since they take on all of the legal risks involved.
HR Support Goes Beyond Recruitment
Your management company’s dedicated HR department should provide guidance and support beyond just recruiting new team members. The team should be composed of HR generalists, benefits specialists, recruiters and trainers. Once you have a new team member on board, they should feel fully supported and have the professional training and assistance they need to excel in their role. That’s why it’s key to have HR support beyond a third-party agency. As mentioned, when you entrust an HOA management company with HR and staffing, they hold all legal liability. As a result, you and your fellow board members cannot intervene directly with an employee on any HR-related matters. “If one of your board members has an issue with an employee, it’s best to bring it to the attention of the community manager,” said Preston. If you attempt to handle the issue yourself or with the help of your fellow board members, you run the risk of facing fines and penalties, litigation expenses, higher insurance rates, back pay or settlements.
It’s important to note that many community management companies do not have in-house recruiters or HR specialists. Additionally, some management companies that do have HR associates may only have individuals tasked with certain jobs like payroll and hiring. This tactic leaves your association particularly vulnerable because your HOA is technically the employer in these situations and is responsible if the management company mishandles an employee issue. Your association must be covered in all kinds of HR scenarios (beyond recruitment) in order to avoid costly litigation.
Lastly, aside from the legal ramifications, you also run the risk of losing valuable staff members if they do not feel supported or do not receive proper training in their role. A robust and dedicated HR department will not only hire competent and talented individuals, but they will be invested in their growth and development for years to come. To learn more about the value of associate and community manager support, read our article, Is Your Association Manager Equipped for Success? 3 Questions to Ask.
What Kind of HR Support Does Your Association Need?
Whether you are reviewing your current management company’s HR abilities or are looking to hire a management company with a dedicated HR department, you’ll want to ensure they meet your association’s needs. Start by asking them the following questions:
• Do you have in-house recruiters?
• Will you or the HOA be the staff’s employer?
• What HR responsibilities will your company handle?
• What kind of training will you provide to the association’s employees?
• How do you recruit and evaluate potential employees?
• Who will be the liaison between our board and the staff?
• Who will be the point person to speak to staff about HR matters?
• How will you transition existing employees to your company? Do you provide on-site orientation, and are board members able to attend?
Of course, you will want to ask your management company additional questions before hiring them to help you with your HR needs. No matter what, working with an experienced community management company that has a network of HR specialists and corporate recruiters is crucial. By taking on the role of employer, your board opens itself up to potential liability and other issues.