Every worker is either an employee or an independent contractor. This is a critical legal distinction, with implications for benefits, taxes, and more. Nearly all workers in our congregations are employees. An employee is entitled to employer-provided benefits (as eligible) and their wages are reported on a W-2 form. The congregation, as employer, is responsible for properly classifying all workers, and will bear all penalties for misclassification.
There are three primary standards that congregations should check:
- The standards used by the Department of Labor (DOL) under the Fair Labor Standards Act (FLSA).
- The standards used by the Internal Revenue Service (IRS).
- State, and in some cases, local government standards.
The "Worker Classification" article provides additional information.