Associations often have on-site or resident staff working on the property. Should the staff be an employee of the association, or an employee of the association’s management company?
Reasons why it could be beneficial for staff to be employed by the association:
- If the association changes management companies, the staff stays with the association rather than being taken by the management company
- The association could be protected from liability by workers’ compensation laws if the staff is injured on the job
- The association’s liability for taxes and other true costs may be reduced
Reasons why it could be beneficial for the staff to be employed by the management company:
- The management company may be able to offer benefits that the association cannot, such as health insurance
- It may be easier for the management company to process payroll, taxes, and other employment-related costs
- The association might be protected from liability in a wrongful termination lawsuit or other litigation relating to employment
As in all matters affecting community associations, it is essential to examine the governing documents as well as any contracts or insurance policies that may apply to the situation. It is important to balance the pros and cons and make a decision that best fits your community.
For advice in specific situations, you should contact your association’s counsel. If you have any questions we can answer, please feel free to leave a comment or contact us directly. We look forward to continuing this conversation with you in our future posts!