June 2017 Meeting: How to Structure Your HR Department

How to Structure Your HR Department

Financial managers at small nonprofits often struggle to find the right resources to perform the varied human resources (HR) functions at their organizations. Fred Ritzau, of Northpoint Human Resource Consulting, addressed the various options for meeting your human resource needs, from outsourcing to an HR team on staff. Fred has experience with all sizes of nonprofit and for-profit organizations and is currently consulting at a variety of small nonprofit organizations. Mitzi Fennel, CFO at HRIA, explained how a Professional Employer Organization (PEO) works and why you may want to consider this option at your organization.

First, Fred addressed the question: do you need a human resource function at your agency? Some of the questions that go along with that issue are as follows. What is the purpose of HR in your company?

How do you manage it? Is the way you currently manage HR working for you? And finally, do you have HR goals and strategies? A lot of HR is a function of risk management: transactional, compliance, and strategic. In small non-profits, HR usually falls under the duties of the CFO. In larger organizations, the function is separated into its own department. You can think about your staff as just an expense, but it would be better to think about staff as your most important asset.

The rule of thumb is that you need one HR manager for every 100 workers. The complexity of your organization also plays a role in the level of HR that you need. Payroll processing is a financial function, but payroll input is usually an HR function. When you first decide to have an HR Dept., it is probably best to designate a person who is already working for your agency as the HR person. You want to move the organization to be more goal oriented and metric based. There are 2 main approaches to HR management: transactional vs. strategic. In hiring staff, the transactional approach is to just get the hiring done quickly. The strategic approach is to focus on getting really good at hiring quality workers. For performance management, the transactional approach is to do annual evaluations and is more forms driven. The strategic approach is to have evaluations be goal oriented, realistic, and measurable, and feedback should be ongoing. In the area of compensation, the transactional approach is to have standard wages and give cost of living increases. The strategic approach is it provide incentives, be skill based, and have variable pay rates based on desirable work performance and outcomes.

The transactional approach to employee engagement dictates that the employee follow the rules and do what they are told. The strategic approach is to encourage employee involvement through suggestions, problem solving, and participatory decision-making. For training and development, the transactional approach is to provide task training and to protect what you know. The strategic approach is to encourage continuous learning, knowledge sharing, workplace education, mentoring, and being future oriented. Finally, in the area of HR strategy and planning, the transactional way is focus only on payroll, benefits, and control. In a strategic HR system, any plans are tied to short term and long term personnel and agency goals.

The major decision factors which help you determine what level of HR you need for your agency are the following. 1) What do you want to achieve with HR? 2) How complex is your organizations? 3) Do you have plans to grow? And 4) How many employees do you currently employ? The next issue that you will need to settle is: How do you get it done? You can just add it to the list of duties for the CFO or the COO, which is not the ideal solution. You can outsource or insource a consultant. The consultant can either work a certain number of hours per week on-site or you can hire the consultant on retainer. You can hire a broker who will also provide various add-on services or more comprehensive HR

management. And finally, you can either hire a Part Time HR Director or a Full Time Director. You can also supplement an HR Director with outside expertise.

Mitzi Fennel, CFO at HRIA, explained how a Professional Employer Organization (PEO) works and why you may want to consider this option at your organization. A PEO can provide small to medium sized agencies with basic outsourced HR resources in the areas of payroll, taxes, benefits, and worker compensation, etc. Optional services can include: finding talent, training, performance management, time tracking, expense reimbursement, etc. The PEO organization becomes the employer of record. Some of the advantages of using a PEO are: relief from the burden of employment administration, provision of human capital strategy and guidance, improved employee risk management, management of employee benefits, and assistance in improving the agency’s productivity and profitability. It basically provides a single source for HR services and benefits and legal expertise. The PEO arrangement works well with an organization that has multi-site employees. You would not need an in-house HR function and it may be an opportunity to enhance employee benefits. Mitzi did caution that the service is not cheap – it may cost from $95 to $150 per month per employee. Her experience in dealing with her PEO has been that the HR support is good, the PEO has been very responsive to feed-back, and it has been good to have 3rd party involvement in the monitoring HR. Processing payroll has been a little cumbersome. It is not for everyone, but it is one more option for managing the HR function of your agency.


May 2016 Meeting-Are You Prepared to Comply with New Proposed FLSA Overtime Regulations?

In 2015, the Department of Labor announced a proposed change to overtime regulations that will limit the number of white collar workers who will qualify for exemption from the overtime requirement.  Although the implementation of the regulations has been postponed until 2016 or 2017, businesses should begin to consider how the regulations will impact their pay practices.  We will discuss basic concepts of overtime and exemptions, with a focus on the anticipated changes.


Presenter: ANDREA E. ZOIA is an associate with the firm Morgan, Brown & Joy LLP.  Ms. Zoia represents employers in a variety of labor and employment matters.  Her litigation experience includes defending employers in a wide range of workplace claims including employment discrimination, retaliation, wrongful discharge, breach of contract, and wage and hour class actions.  Ms. Zoia is a graduate of Boston College and Northeastern University School of Law.  She is a member of the Labor and Employment Section of the Boston Bar Association.

Below, please find the link to Morgan Brown and Joy’s website with the seminar materials.

Link to the Department of Labor’s guidance on the new regulations.  Note that this has its limitations and only addresses application of federal law (and not the Massachusetts overtime requirements):



Article about the topic:

The Federal Fair Labor Standards Act (FLSA) requires that Non-Exempt employees be paid at an overtime rate for worked performed in excess of 40 hours per week.  States also have their own standards, but they must comply at a minimum with the Federal Standards.  Massachusetts standards use the FLSA provisions. The FSLA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, and professional employees (white collar employees). To qualify for the exemption, a white collar employee generally must:
1. Be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the salary basis test);
2. Be paid a minimum specified salary (the salary level test); and
3. Primarily perform executive, administrative, or professional duties, as defined in the federal regulations (the duties test).
Highly-compensated employees (HCEs) who are paid total annual compensation of a minimum specified amount and meet certain other conditions are also deemed exempt from the FLSA minimum wage and overtime pay requirements.

Job titles never determine exempt status. Receiving a particular salary, alone, does not indicate that an employee is exempt. Rather, in order for a white collar exemption to apply, an employee’s specific job duties and earnings must meet all of the applicable requirements provided in the regulations. Keep in mind that when both the FLSA and a state law apply, the employee is entitled to the most favorable provisions of each law.

In 2015, the Department of Labor announced a proposed change to overtime regulations that will limit the number of white collar workers who will qualify for exemption from the overtime requirement.  Although the implementation of the regulations has been postponed until 2016 or 2017, businesses should begin to consider how the regulations will impact their pay practices.  Andrea discussed basic concepts of overtime and exemptions, with a focus on the anticipated changes.

Andrea recommended that employers start off by assuming that all employees are non-exempt and if you have a policy that states that employees are not to work over 40 hours per week, then make it clear, and stick to it.  If nonexempt employees do work over 40, even though you have a policy, you have to pay them OT.   Under the new regulations which take effect on December 1, 2016, there are still “White Collar” exemptions from the OT provisions of the FLSA.   The three categories of “white collar” exemptions are: executive employees, administrative employees, and professional employees.  Executive employees must be paid on a salary basis and their primary duties must be managing the company or a segment of it, directing the work of at least 2 other full time employees and must have authority over those employees.    Administrative employees also must be paid on a salary or fee basis and their primary duty must be the performance of office or non-manual work related to management and must be able to exercise discretion and independent judgment in regard to matters of significance.  Professional employees must be paid on a salary or fee basis and must perform work that requires an advanced knowledge or degree in science or leaning or requires specialized skills in a recognized field of artistic or creative work.   The “duties test’ for determining if a certain employee is exempt or non-exempt will not change under the new regulations.  The change is, under the old rules, to be exempt, you had to meet the duties test, be paid a guaranteed amount (salary or fee) and make at least $455 per week or more to be EXEMPT.  Under the new regulations, you have to meets the duties test, make a guaranteed salary or fee, If you do not meet this salary level, then you are non-exempt and are subject to the Overtime provisions of the FLSA.  Adjustment to the salary limited will occur again on January 1, 2020, and then automatically every 3 years.

Andrea mentioned that determination of exemption under the “duties test” is where most of the litigation takes place.   She also highly recommended that we have all employees fill out timesheet, so there is documentation of hours worked in case litigation does occur.   Penalties for violating the FMLA are severe and the statute of limitations for violations is 3 years.

June 2015: Implementing the New MA Earned Sick Leave regulations

June 2015 Meeting:

Implementing the New MA Earned Sick Leave regulations

Saleha Walsh from Insource Services, Inc. gave a presentation about implementing the new MA Earned Sick Leave regulations.  Saleha is a seasoned human resources and general operational management professional with 20 years of experience as a troubleshooter. Insource Services Inc. offers: full department outsourcing; generally part-time and long term; “a la carte” services including recruiting; assessments; trainings; and project/Interim assignments.
Under the new Massachusetts Sick Leave law, organizations must offer the following sick leave provisions: paid sick leave where there are 11 or more FTEs; carry-over of at least 5 days required; mandatory notice requirements; and earned sick leave that runs concurrently with other leaves (FMLA, etc.).

The new law applies to any person who performs services for wages, including the following categories: full-time or part-time; seasonal; employees paid on a fee-for-service or piece work will accrue sick time based on a reasonable measure of the time employees work (for example, adjunct faculty compensated on a fee-for-service or “per-course” basis shall be deemed to work 3 hours for each “classroom hour” worked); temporary employees; and paid interns. The important dates to keep in mind for implementing this new law are: July 1, 2015 – compliance with basic provisions required by all organizations; and December 31, 2015 – Safe Harbor policy development extension date for organizations with existing paid sick leave policies. Read More

Performance Management: Am I Doing a Good Job?

September 2014: Performance Management:  Am I Doing a Good Job?

As a financial manager, how do you measure success? How does your boss measure your success? Ideally, you and your boss have sat down and established meaningful, measurable, challenging annual goals for you to achieve – however, that doesn’t always happen. HR Consultant Gordon Gottlieb facilitated a discussion on how performance evaluations get played out at different nonprofits, and how to think about setting goals for CFOs, other finance staff and for the rest of the organization. Gordon has many years of experience working as an HR consultant and currently works only with nonprofit and public entity clients.

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