VOTING TO VIOLATE THE LAW

QUESTION: The board knowingly hired a worker that is an illegal immigrant. He does not have a social security number so he cannot be added to our payroll. I do not want to be prosecuted or fined because we know his status.

ANSWER: Sometimes boards think they are acting in the association's best interest if they save money by hiring undocumented workers. It may save a few dollars but it creates significant risk ranging from workers' compensation issues to fines. Your board should immediately terminate his employment.

Personal Liability. Your fellow directors may not realize that they are personally at risk. Insurance will not cover any fines levied for the illegal hiring. Directors will likely be liable for the fines. The business judgment rule will not protect them from liability since knowing violations of the law are not within a director's scope of duties and a prudent person would not take such actions. If your fellow directors refuse to fire the illegal immigrant, you need to be on record in the minutes opposing the board's action. If they refuse to put it in the minutes, you need to put it in a letter to each of the directors and keep a copy for your files.

VENDOR'S WORKERS

QUESTION: I just read your recent newsletter about a board hiring an undocumented worker. We recently underwent a multi-million dollar rehab on our building and the entire work-force was Hispanic. We often wondered how many were undocumented workers. Can an HOA be liable if a contractor is using undocumented workers?

ANSWER: Fortunately, you are only responsible for employees of the association. When it comes to contractors, you need to make sure they are licensed and insured. It is the contractor’s responsibility to make sure his employees are legal.

Updated by ADAMS KESSLER 9/21/2008