10 ways nonprofits can avoid HR troubles

At this year’s Tennessee Nonprofit Conference, Amanda McCollum, Vice President of Human Resources at Adams Keegan, presented insights for nonprofit leaders on how to navigate HR challenges and mitigate legal risks. The presentation provided a comprehensive guide to addressing common HR issues that can expose organizations to liability while fostering a positive workplace culture. The following includes key takeaways that every nonprofit should be mindful of.

1. Your liability starts with “hello”

Liability in the hiring process begins with the very first conversation. When interviewing candidates, it’s essential to ask legal and relevant questions during interviews to avoid any potential discrimination claims. Focus on job-related questions, such as work experience and salary expectations, rather than personal questions about family or religion. This certifies that hiring decisions are based on qualifications rather than protected categories such as race, gender, or marital status.

2. Background checks and social media

Background checks are a crucial step in the hiring process, but they must be done in compliance with legal guidelines. It is recommended that nonprofits use a reputable background check vendor familiar with both federal and state-specific requirements to ensure adherence to all applicable laws and avoid any potential liabilities. Employers should make sure that candidates sign proper release forms and receive copies of their Fair Credit Reporting Act (FCRA) rights. 

While looking up candidates on Google or social media may seem harmless, there are legal risks involved. If concerning information is found, a pre-adverse action letter should be sent, giving candidates an opportunity to explain any red flags.

3. Setting social media boundaries

While workers have the freedom to do what they want outside of work, nonprofit leaders should set clear guidelines for social media use, especially when it comes to company-related posts. This includes policies on using the company logo and posting workplace photos. It’s also advisable to not become too involved in employees’ personal lives through social media, as it can blur boundaries and lead to conflict.

4. Employee count matters

The number of employees within an organization dictates which employment laws apply. For example, in Tennessee, nonprofits with eight or more employees are subject to state anti-discrimination laws, compared to the federal threshold of 15 employees. Organizations should also be mindful of remote workers, certifying that they are included in the total count for compliance purposes.

5. Understanding salary regulations

Changes to salary levels are on the horizon. Under the Department of Labor’s (DOL) new overtime rule, the standard salary level increased from $35,568 to $43,888 per year on July 1, 2024, and is scheduled to rise again to $58,656 annually on January 1, 2025. Nonprofits need to be aware of these changes to avoid misclassifying employees and to ensure alignment with overtime and exempt status laws. Accurate tracking of hours for non-exempt individuals is essential. When in doubt, it is generally safer to classify employees as non-exempt, track all hours worked meticulously, and pay overtime as required.

6. Progressive discipline is key

When addressing employee performance issues, progressive discipline is key. It gives employees an opportunity to improve their behavior while providing the employer with a clear record of the issues and the steps taken to resolve them. By offering clear, written feedback and outlining specific areas for improvement, employers create a transparent process that can be critical if further steps become necessary.

When it comes to protecting your organization from fraudulent unemployment claims, the burden of proof falls on the employer, and vague justifications such as “they’re not a good fit” won’t hold up in legal situations. It is their responsibility to present specifics on the reasons for termination.

7. Drugs, alcohol, and workplace safety

Organizations need clear policies regarding substance use, particularly around alcohol and marijuana. In Tennessee, marijuana use should be treated similarly to alcohol, meaning that workers should not be under the influence while at work. Consistent drug testing based on reasonable suspicion is important, and organizations should handle situations involving substance use carefully, such as offering transportation home if an employee is impaired after a company event.

8. Remote work and tax implications

The increase of remote work has introduced new complexities for nonprofits. Organizations must consider tax and licensing implications when staff work in different states. It’s important to stay informed about varying state regulations regarding income tax, paid time off (PTO), and other employment laws to remain compliant.

9. Accountability for leadership

Bad behavior from leadership, board members, or investors should never be excused. Allowing this to occur under the pretext of "that’s just how they are" can harm organizational reputation and heighten liability. Nonprofits must hold everyone, regardless of position, accountable for their actions to maintain a positive and productive workplace.

10. Employee breaks are not optional

Employees may be entitled to specific breaks under the law, including meal breaks and lactation breaks. Failure to provide these can lead to legal challenges. Nonprofits should certify they have policies to guarantee staff receive the breaks they are legally entitled to.

By staying informed about HR laws and best practices, nonprofit leaders can help their organizations avoid legal issues and create a more positive workplace culture. Enacting proactive HR strategies is an investment in the long-term success of the organization, ensuring compliance and fostering a supportive, legally sound environment.