Navigating Salary Policies for Contractual Staff in Disaster Zones: Legal and Ethical Dilemmas

I have recently joined a non-profit international organization that deals in animal welfare. Here, I am responsible for framing HR policies and compliances. The organization deals mainly in project-based assignments in different regions.

Queries on Salary Policies in Disaster-Affected Regions

My queries to the esteemed HR community are: In cases of natural disasters, should there be a policy on limiting the salary intake per employee for contractual staff in disaster-affected regions? Ethically, this should not be the case. However, if the work has suffered and funds are mostly based on work associated with the project, how legal/illegal is this stance?

I look forward to your response.

Regards

Dear Shruti, you have written that "The Organization deals mainly in project-based assignments in different regions." What kind of projects are these? Have you conducted a project spend analysis of the past projects? If yes, then what is the breakdown of material cost, employee cost, and other administrative costs? If the employee cost is a small part of the total cost (which generally it is), will it be possible to forego the costs arising from idle manpower (due to natural disasters)?

How many projects has your NGO handled in the last five years, and how many times has the manpower remained idle due to natural disasters? What is the percentage of total project hours against total idle man-hours (due to disasters)?

By the way, do you employ any capital equipment in your projects? Considering natural disasters, will it not remain idle? Where would you allocate this cost?

If you are stringent about calculating costs arising from idle capacity, then in the normal course, there is some cost involved due to idle manpower or machines. What is the percentage of idle hours against total project hours? Do you maintain records?

I recommend studying past projects and then formulating a policy.

Regarding Contract Workers and Natural Disasters

Regarding your question about stopping remuneration for contract workers as soon as a natural disaster strikes, you can certainly do so. Contract workers are engaged precisely for easy removal. However, there is a flip side to the "hire and fire" formula. When a natural disaster occurs and you dismiss the contract workers, will it be easy to re-employ them? What if they find another job? What if work is affected due to the unavailability of contract workers? Please create an account head to record these costs as well.

Policy Development Suggestions

While developing policies, my humble suggestion is to create a policy that measures employee efficiency. Costs are incurred due to the poor efficiency of the staff as well. Reducing costs of this nature should be your primary challenge. Curtailing manpower costs when a natural disaster strikes should be secondary or even tertiary.

My comments may sound critical. However, the objective is to enlighten you and not to be negative. Please do not take them personally.

Thanks,

Dinesh V Divekar

In the first instance, you are in a non-profit organization, and the flow of funds is uniform. Unless you are receiving the funds, the question of taking every action/function is a question in itself. Here, "you" means the organization. Thus, the policies solely lie with the fundraisers or the projects in hand to be executed or the expected projects. As mentioned by Shri Dinesh V Divekar, it is a matter of facts and not the policies that can be framed. Do not take it to heart; just do the work as it comes. Also, please verify for yourself whether all statutory rules are being adhered to.

Best of luck.

It appears you are confronted with the number of contract workers and the cost of their salary. Natural disasters may be recurring or non-recurring and depend on geographical conditions. When we procure capital goods, their cost can be recovered provided they are put to use properly. If we fail to use them, they become antique pieces. Do you have any policy to treat such goods? Human resources can be managed but cannot be treated as goods.

Have you ever seen or studied the life of a contract laborer?

For a monthly payment of Rs. 15,000 + ration + living accommodation, thousands of ITI-trained, skilled workers come in masses to South India to work in sugar factories, granite polishing industry, and road and rail projects. They live in makeshift huts and do not have personal lives. This is the plight of the contract workforce. At times, if anything happens, the contractor will not reveal or report to the Labour Department, causing the dependents to lose their earning link.

Therefore, for goodness' sake, do not try to frame a policy to reduce the salary of contract workers. Instead, consider reallocating or rotating by shifting the excess staff to other projects within your jurisdiction.

Regards,
SPKR

Thank you for responding to my thread. To further clarify, my organization is involved in Animal Welfare at the international level. All other statutory compliances are intact.

New Operations in Srinagar

This is the first time our people are based in Srinagar this year. As you all may be aware, this time the place has been hit by floods. Our projects are well-funded, so salary issues hardly arise.

Impact of Natural Disasters on Targets

However, my main question (which does not refer to decreasing salaries for staff) is: If our targets have not been achieved due to a natural disaster (in this case, the floods) in terms of sterilizing street dogs, are there any laws that could adversely affect us if we do not pay our employees due to this?

I further request the community to keep humanitarian causes aside. I need opinions in case of such a business scenario for future reference purposes.

Current Measures Taken

For common knowledge, this time around, we have not only paid the staff salaries but have given an entire month off so that these people can rebuild their lives until we resume our project next month.

Regards,

As a matter of fact, you are going to pay as per the contract that exists or the pay is for the project. In case a particular project could not be completed on time, if insurance covers natural disasters as the main cause, there will be no harm provided the terms and conditions are met. Otherwise, this may not have a severe effect; yet, the time will be extended to finish the project within the project cost, or the enhanced cost is approved by the competent authority after consultation, as the case may be.

In your case, when you are paying the employees and the costs you bear certainly have an impact on the project you have taken. If the project cannot be completed due to a natural disaster, the project may be extended to a further date. Your means and interactions with the employees are most important in completing the project. Both completing the project and keeping the employees intact are different things. If you fail to pay the employees, that is an issue that needs to be addressed. The contract with the employees is different from the project you are undertaking; never mix up both things in a single note.