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Red flag?

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Red flag?

In the nonprofit sector, has anyone dealt with potential labor or compliance issues related to funding sources? After layoffs, some grant funded employees are being assigned duties that traditionally fall under unrestricted-funded positions, yet their pay remains at the grant funded level. This raises concerns about whether the organization is staying within the scope of grant compliance and possibly violating labor standards.

There have been attempts to clarify roles and funding restrictions, but leadership seems to dismiss HR involvement and even suggest they can bypass those processes. From a compliance standpoint, this seems risky both in terms of labor law and grant obligations. Has anyone seen guidance or precedent on how situations like this are viewed legally?

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  1. Dr. Patty Gross

    I'm not sure what your role is in this situation. Are you in a leadership role and looking for how others have resolved this issue, or are you an internal worker looking at it and concerned for what the future holds there? Grant compliance specialists are who can help with this problem. Typically, if you are in leadership, this is the job of your grant writers and people who evaluate the programs. Non-profits will usually have a board position for compliance or "governance" where this falls. Unless you involve HR directly in the grant writing and compliance process, they will be of no help. Your best thing would be to hire a compliance consultant who can evaluate the programs, budgets, and grants, and put everything together to see where the company could be out of compliance. You may have someone on your board who knows of a specific person or benefactor who could do this without costing you an arm and a leg.

    If you are in inside IC employee, your concern is warranted, but hopefully your leadership is working though this with the right set of people. Unless you have the skills to do any of the compliance tasks, I would step back and hope or pray (if that is your tradition) that the right people are on the job.

  2. Anonymous

    What is it that you think might be out of compliance? If those employees are paid fully by the grant funds and those funds have restrictions on how they can be spent (like most public money can’t be spent on lobbying or fundraising) then yes, that could be an issue. But if the grant agreement is just that the organization will provide certain deliverables, then who does them doesn’t matter as long as you are within the approved budget for staff salaries.

    It sounds like you are trying to use “compliance” as an argument for people being paid more? I don’t quite understand how that’s a grant issue.

  3. Lisa McCartney

    Are you in HR? We had several people that had different roles in my last position. One woman had 4 different roles (totaling 40 hrs). So depending on your HRIS, you can code the departments differently. So for example: Susie works 30 hours within the grant funds but then 10 hours within general funds. You could code it that 3/4 of her salary comes from the grant and the other quarter from general funds. It might take payroll and human resources to put their heads together, but can be done.

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