Reader: I am a day-care teacher for a nonprofit that serves limited-income families.
Every two weeks, we receive our pay by paper check and can cash the checks only at the bank used by the nonprofit. However, there is not always enough money in the nonprofit's account to cover all the checks. Those who delay getting to the bank may have to wait up to an additional week to receive their pay.
I still live at home and will soon be leaving to pursue a master's degree, but other staff rely on their check for rent and food. I believe the nonprofit exploits some workers who come from outside the United States and are surprised when they learn that other companies pay their employees regularly. What can we do about this?
Karla: Nonprofit organizations that depend on external funding sources often contend with unpredictable income fluctuations, according to Paula Brantner, senior adviser at the nonprofit Workplace Fairness. Annual grants and end-of-year surges in charitable donations have to be made to stretch through the lean seasons.
But whatever the reasons, floating paychecks is unacceptable from multiple angles.
To start, federal employment law requires wage payment on a regular schedule; most state labor agencies have rules about what constitutes a regular payday. And “you have to actually pay [employees], not hand them a worthless piece of paper,” says Declan Leonard of business law firm Berenzweig Leonard.
From the banking angle, it’s illegal to knowingly issue bad checks. And it appears your employer requires workers to take their checks to its own bank because it is aware the account may have insufficient funds and, if so, the bank will decline to pay, protecting your employer from overdrafts and penalty fees.
Finally, your nonprofit employer’s board of directors has a fiduciary duty to ensure the organization is managing funds properly and not committing labor violations. Many boards have a whistleblower policy to protect workers who report such issues, says Brantner.
Local workers’ rights centers can provide guidance and help employees take action, such as filing a complaint with the state labor agency, reporting bad checks to law enforcement or notifying the governing board. And a soon-to-be-departing colleague may be just the person to help organize and encourage vulnerable co-workers to seek out that guidance.
Of course, ratting out your employer may mean disrupting the valuable services you provide. But consider that even in the for-profit sector, child-care workers in the United States are famously underpaid for their crucial labor — with a median salary of $21,170 a year, according to 2016 figures from the Bureau of Labor Statistics — and many rely on public assistance to help support their own families. Turning them away empty-handed on payday is a service to no one.
Thanks also to Michelle Austin Crook, chief financial officer, Bank of Botetourt.