Moving toward Decent Work: How changing employment standards are impacting the nonprofit sector

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Thirteen percent of Canadians are employed in the charitable sector but, as Michael Grogan, vice president, programs & operations for the Calgary Chamber of Voluntary Organizations says, “It’s easy for us to lose sight of the fact that nonprofit employers are in fact employers. This happens in subtle and overt ways as we focus on our mission, our funding or capacity constraints. And sometimes this means we bump up against employment standards. Every nonprofit would say that staff and volunteers are our greatest asset in getting our work done — but sometimes our treatment of them is lacking.”

With significantly updated employment standards legislation coming into effect in Alberta and being discussed in Ontario, we thought it was time to look at the changes being made and to find out how nonprofits themselves are addressing the needs of this greatest asset, their employees.

It’s the law

“Most nonprofits are in a people business and that makes or breaks the success of what we do,” says Bill Sinclair, executive director, St. Stephen's Community House.

Many of those people are drawn to the nonprofit world because they want to serve others. “However, this is often done at cost to self,” says Grogan. “This becomes problematic because as employers we need to follow the rules set out for everyone.”

In fact, governments set employment standards that all Canadian employers — nonprofit, for-profit or public — must meet or exceed, dealing with such issues as minimum wage, overtime pay, maternity/parental leave, vacation pay, statutory holidays and terminations.

NOTE: Specific legislative requirements vary between provinces and territories--current standards for each province can be found here.

In 2015, Ontario’s Minister of Labour initiated the largest review of that province’s labour laws in decades. This spring, the taskforce released its final report as Bill 148, which was introduced on June 1 as the Fair Workplaces, Better Jobs Act, 2017.The bill put forward 173 recommendations about strengthening workplace safety, collective bargaining and wage fairness for part-time, casual, temporary, seasonal and contract employees. This bill is currently undergoing public consultations.

Similarly, it had been almost thirty years since Alberta’s Employment Standards Code and Labour Relations Code was significantly updated. Following a review of existing laws using input from business, industry, organized labour, nonprofits and the general public, proposed changes to the Employment Standards Code and Labour Relations Code were introduced as Bill 17: The Fair and Family-friendly Workplaces Act, which passed on June 5, received Royal Assent on June 7 and comes into effect on January 1, 2018.

Beyond the law

While employers are required by law to meet or exceed employment standards, Jane Garthson, president of the Garthson Leadership Centre, thinks there is an ethical argument to be made as well. “As a sector, we should embrace this, not treat it as some awful thing we have to do. Offering a living wage, for instance, means that employees can have proper food and the ability to buy goods and services, and this strengthens the community. People working in the nonprofit sector shouldn’t have to depend on food banks while working.”

These ideas are part of a growing global movement which offers another lens for looking at employment standards, what has been called “decent work.” The term, developed by the International Labour Organization, has been defined as “opportunities for women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity.”

The Ontario Nonprofit Network (ONN) has developed a Decent Work project, looking at the nonprofit sector and beyond, sharing promising practices and defining supports needed for organizations to engage in decent work. They note the importance of decent work in enabling mission, saying, “These choices also have a significant impact on our sector’s ability to deliver on its community benefits objectives. If our employment conditions effectively support people’s commitment to their work, and create opportunities for their development and growth, the capacity of our organizations to achieve their desired impacts will only be strengthened.”

The Mowat Centre’s 2016 Change Work report, which was published in partnership with the ONN and Toronto Neighbourhood Centres, supports this idea, noting that not only will this approach benefit workers by creating stable and secure employment, but “it will make nonprofit organizations as a whole more resilient, healthy and effective."

Further, many voices are calling for the nonprofit sector to play a pivotal role in the thinking about decent work generally. Garthson says, “If a charity exists with a mission to create a better world, this is a way to create that better world.” The Decent Work project echoes this sentiment. “The nonprofit sector can be a major catalyst for a conversation about decent work and what it could mean for Canada, Ontario, our communities and the sector itself.”

We just don’t have the money

Not surprisingly, the biggest concern about employment standards is the bottom line. The Mowat Centre observes, “The challenge — decent work costs money. The reality is that investments in people, processes, and technology cost money — and NFPs are operating in a resource-scarce environment. There is mounting pressure to keep overhead costs low.”

Monina Febria, ONN’s Decent Work project lead, says, “From what we hear from partners in our network, while many people are supportive of minimum wage increase, they are asking where the money will come from. Nonprofits are often operating in a resource-scarce environment and while organizations face growing administrative requirements for financial and outcome reporting, budget restrictions are becoming more rigid.”

These choices that arise out of employment standard legislation can be particularly challenging for the 80% of Canadian nonprofits with fewer than five staff, just as it is for small businesses. Grogan notes, “If someone goes on compassionate care leave in a four-person organization, it is harder to cover that leave than it would be in a large organization.”

Similarly, Denise Lloyd, chief engagement officer, Engaged HR, says, “Often small nonprofits rely on grants and may not have solid, sustainable funding. This means they struggle to meet living wage requirements.”

Increases to minimum wage levels and changes to overtime pay levels have a huge impact on Calgary’s Women in Need Society, which is funded primarily by sales from their thrift store, and has approximately 90 staff in addition to volunteers in its retail store, head office and program team. Janet Wannop of WINS human resources says, “Anything involving cash impacts us — and these changes hurt.”

Lloyd notes that “99% of the time nonprofit employers want to do better than standard. The one big exception is how to deal with overtime: they are often happy to provide lieu time, but just don’t have the budget to pay time and a half.”

Further, Lloyd says, “For nonprofits it can become a question of who do we put first: the people we serve or the people who work for us?”

Can we keep making do?

For Sinclair, the question goes deeper. He says, “Most charities try to do more with less but there are limits – if we are going to meet objectives of our mission and not just pay lip service to it, we have to have skilled people and consistent people. When it comes to childcare, for instance, happy caring childcare workers make the difference between good and bad childcare. Because our people are great, our services are great.”

The challenge, as The Mowat Centre acknowledges, is also a cultural one. “There exists an altruistic management style in the sector that champions a selfless desire to prioritize community service over personal benefit, which can lead to employees being encouraged to forgo salary increases, professional development, and stable employment. Pressure to make personal sacrifices can come from the culture of work and/or from employees and executive leaders themselves. Passion as a motivation can lead to an over-emphasis on dedicating resource allocation to delivery over needs of employees.”

Lloyd says, “People who work in nonprofit are not motivated by money, but by making a difference, having impact, using their skills. Money can fall by wayside – often at a detriment.”

For Garthson, this is a retention issue. She observes that the cost of meeting or surpassing employment standards is likely less than the high cost of replacing and retraining staff. Grogan agrees, suggesting that paying staff less is not a sustainable model, especially in a climate of increasing professionalization where other sectors also offer opportunities for doing good.

Lloyd puts it bluntly: “It’s about Maslow’s Hierarchy of Needs. If an employee can’t afford to live on their wages, you can forget about offering ping-pong tables and other extras. You have to meet that livable standard.”

How do we get from here to there?

The sector is slowly changing, says Grogan. “We are starting to see workers as employees, not just servants to the mission.” At the same time, Lloyd cautions that there is more to be done: “Too often organizations simply make things work on a shoestring, but this can take advantage of the beautiful human nature of a giving group of people.”

Grogan adds, “Nonprofits need to recognize that employment standards are a minimum benchmark. If we value our employees and want to treat them well, we can add leaves, time, or flexibility to compensate for the differential in the wage gap.”

Garthson challenges leaders to think about funding priorities. “We wouldn’t say that we don’t need to pay the rent or to ask the hydro company to give us electricity pro bono, but too often we think we can ask our employees to give their services for less, and we look the other way. As leaders we have to care enough to find money for wages and benefits.”

Change can be made gradually. The St. Stephen’s House board recognized a need to increase spending on professional development of staff. Sinclair says, “It has been a multiyear goal and it has surprised me how long it has taken but we are committed to getting to that target.” He adds, “We may not have the funds today but we set a strategic direction that we will have enough funds so that we can offer competitive wages, benefits that help families be happy and healthy, and retirement planning. These are not frills but essential.”

Garthson argues against a scarcity mentality, suggesting she believes major funders would respond well to nonprofits that make the case for a living wage for their staff, explaining what is needed and how it will affect service.

Garthson also sees this as an opportunity to review the entire pay grid, rather than simply to raise the wages for the lowest-paid staff.

The ONN has developed a wide variety of tools that help nonprofits in all provinces and territories move toward decent work. These include:

  • Decent Work Charter – This document can be used by nonprofit boards, management and staff to reflect on how their nonprofit is structured, what decent work looks like in their own context and why it is important to them.
  • Decent Work Checklist – This document allows leaders to examine the areas of employment standards which are strengths for their organization and where they have room to improve.
  • Promising Practices – These are collected stories of how different nonprofits are implementing a decent work lens to their human resources.

Other tools are in progress. CCVO has established a working group of human resources professionals that will look at the impact and implementation of employment standard changes and will share their findings with broader sector.

Finally, it is important to remember that this is, in many ways, an ethical issue. Wannop says, “When we allocate our revenues, our programs and our operations are number one priority but our employees are 1A. As an organization, you want to make sure you are able to put your hand over your heart and say we treat employees with respect, fairly and with dignity, just as we do our clients and customers. Of course our mission counts but our staff are not expendable at all.”

Susan Fish is a writer/editor at Storywell, a company that helps individuals and organizations tell their story well. She has written for the nonprofit sector for almost two decades and loves a good story.

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