Managing Employees: Personnel Practices for Nonprofits

The National Council of Nonprofits encourages all nonprofits to be familiar with the employment laws applicable to employees in its state. One important resource is the Department of Labor web site for your state where you will find information on wage and hour regulations, mandatory postings, reporting new hires, minimum wage, and links to other important information relating to the employment relationship.

Do we need an Employee Manual?

Most professional advisors to nonprofits in the area of human resources are adamant about providing employees with written guidance in the form of a human resources handbook or "employee manual." A written manual is helpful for three reasons: it provides guidelines for treating employees consistently and fairly; helps answer common questions and manages expectations and finally, a handbook describes policies and procedures and encourages employees to follow them. Many nonprofit employers ask all newly hired employees to sign to acknowledge that they have received a copy of the nonprofit’s personnel policies. Having a signed acknowledgment on file can protect the nonprofit from accusations that the employee was not aware of the nonprofit’s policies.

Resources on Employment Law for Nonprofits 

State Associations of nonprofits frequently offer workshops and webinars on topics relating to managing employees and volunteers. The National Council of Nonprofits encourages nonprofits to enlist the early assistance of professional advisors, such as a pro bono lawyer experienced in employment law, rather than trying to "go it alone" in the highly regulated area of personnel management. Employment law claims are the most common of all claims made by nonprofits under Directors and Liability ("D&O") insurance policies.

Many D&O insurance policies provide access to a hotline or legal counsel who will offer assistance to policy holders at no charge. Check with your insurance professional to determine whether your nonprofit's policy includes this service.

A good place to find state specific employment laws is Law For Change. The website is designed with nonprofits in mind.

Probono Partnership offers a comprehensive free online Employment Law Guide that contains legal references specifically applicable to nonprofits in New York State, New York City and Connecticut, and also provides helpful guidance on federal employment law requirements applicable to many nonprofits in other geographic areas.

Managing Volunteers

The law treats volunteers differently than employees. Volunteers are workers who voluntarily choose to provide services to a nonprofit, without any expectation of compensation. Volunteers are not entitled to compensation and in most states not automatically covered by workers' compensation insurance (volunteer accident insurance may be an option when volunteers are not covered by workers’ compensation). However, in many other ways, nonprofits that value volunteers and are good risk managers will treat volunteers in a manner similar to paid staff: Volunteers should be screened prior to being selected for service, oriented, trained, supervised, and evaluated, especially when they are working with vulnerable individuals or driving vehicles, and they should be treated fairly and given guidance on policies and procedures that apply to their service as volunteers to the nonprofit. Many nonprofits find that providing volunteers with a handbook is helpful.

• A great example is this excerpt from the policies and procedures of the National Wildlife Foundation.

Find out more about Volunteers and volunteer management

More resources, tips and tools on employment law topics, such as exempt vs. non-exempt employees, independent contractors, and compensation and benefits for nonprofit employees, including executive compensation policies.