Are your paying your consumer as an employee or a contractor?

 

The center has some odd jobs around the place — lawn mowing, cleaning, maybe web development or support of the Facebook page. Some centers pay consumers as peer support mentors. Is it okay to hire a consumer to do this? And if so, would the consumer be an employee or a contractor?

First let’s consider the issue of paying consumers to work for the center. Is this allowable? Yes, either as a contractor or as an employee. It is  required that more than half of our staff have disabilities — but if this is a part time person you don’t get to say you now have more than 50% employees with disabilities by adding part time people in as full time. You need to use the full time equivalent as you figure this.

Secondly, you need to pay the individual the going rate for the job they are doing. You may need to ask around or get bids regarding that. You definitely DO NOT want to arrange sub-minimum wages or even sub-par wages for any of your employees.

The next question is, is this an employee? If so, you need to follow the organization’s hiring practices as well as what the law requires. Usually this means that the position is in the budget and organizational chart, that there is a job description, that the organization opened the job up to interested applicants, that the person received new staff orientation, and that they completed an application, a W2 and any other documents staff sign (like receipt of policies or the code of ethics). And that the center withholds taxes and matches social security. If they are your employee your probably also provide their tools, materials, and require a certain schedule. They may be eligible for vacation, leave or other benefits depending on your policy. You will also need to evaluate their performance — even if they are part time — at least once a year.

Is the individual a contractor? Contractors usually set their own hours and use their own tools and equipment. Usually they are also covered by their own insurance rather than yours. Again, the contract should be in the budget under contract services, and there should be some sort of written documentation of the amount to be paid by the project or the hour. This can be fairly informal — hand written, signing acceptance of a proposal, email, etc. Then there should be a vendor file for the contract, and it should include a W9 and the proposal, along with any payment documentation.

One or the other of these would apply to anyone doing work for your center, unless they are an unpaid volunteer (a topic for another day). All personnel paid through the grant will fall into one or the other of these categories, which should be consistent and clear. If they are an employee you can’t suddenly decide that this month you will contract with them instead.

As to whether these types of job are allowable — it is permissible to use federal funds for these kinds of activities, yes, but it must be included in the approved budget. If you need to go outside the approved budget for contract services, that is not allowed without a budget revision. If you are making the individuals employees but they are temporary or part time, that is unusual but allowed; but your board should know about it in advance. Do you have unspent money in your personnel budget? Typically hiring for other positions is allowed as long as it is in keeping with the organization’s policies — typically board approval for a new organizational chart and job description — and justification that the position advances the purpose of the grant.