Can Board Members be Hired to Perform Work for the Association?

The short answer to this question is usually yes.  However, I would caution an association from doing so.  Hiring board members to perform work that a board member does as his/her profession is usually okay.  For example, if the Board wants to create a website to provide information to the members and a board member works professionally as a web developer, the board might want to hire that member.  Provided there is no restriction against it in the governing documents, that is okay.  However, the board should bid the project against other vendors to ensure it is not overpaying, and the board member in question should abstain from voting on awarding the contract.

The answer gets more difficult when it the job in question is miscellaneous landscaping or handyman work.  Hiring a board member who is retired or unemployed  to perform hourly work can lead to a big headache for an association.  Most likely the board member will be uninsured which could lead to a claim against the association should he/she become injured or damage property while working for the association.  Additionally, the board member may be deemed to be an employee (as opposed to an independent contractor), which would require that the association pay payroll taxes, carry workers compensation insurance, withhold taxes from the employee, etc.  Having an employee greatly raises the complexity of running an association. Failure to properly classify a worker as an employee can lead to stiff penalties from various State and Federal agencies.

Finally, if an association does want to proceed to hire a board member to perform work, the question of who gets the work must be addressed.  Is the work just offered to a board member or are all members of the association offered the chance to apply for the position?  If it is just the board members, the association would need to ensure that such action is allowed under its governing documents.  Some documents provide that a director should not receive any benefit for serving as a member of the board.  Being given preferential treatment in the hiring process may be a benefit, and therefore a violation of such a clause.

A version of this article first appeared in the "Ask the Attorney" column (written by Nigel Mendez) in the Minnesota Community Living magazine published by CAI-MN.