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Employee vs. Independent Contractor: What the New Rules Mean for Your Church Staffing

Churches and nonprofits need to be aware of the revised Department of Labor guidelines for classifying workers. The "economic reality" test streamlines the process, offering clearer guidance for your church staffing decisions.

Understanding the "Economic Reality" Test

  • Control of Profit/Loss: Does the worker have the chance for independent income gains or losses?

  • Investment: Who supplies the major tools, workspace, and resources?

  • Permanence: Is the role project-based or ongoing?

  • Degree of Control: How much influence does the organization have over the worker's methods and schedule?

  • Essentiality: How vital is the work to your organization's mission?

  • Skills and Expertise: Does the worker bring specialized knowledge?

Protecting Your Mission and Church Staff

Accurate worker classification is essential for safeguarding your organization's finances and staying focused on your core purposes. Here's how it helps:

  • Responsible Stewardship: Proper classification ensures responsible use of donations and grants, aligning with your commitment to transparency and accountability.

  • Minimizing Legal Risks: Misclassification of workers can lead to costly fines, penalties, and even lawsuits. Understanding the rules helps you avoid these pitfalls.

  • Optimized Resource Allocation: When you make informed decisions about your staffing models, you can devote more resources towards program development, outreach, and directly fulfilling your mission.

  • Flexibility: Appropriately classifying workers can allow you to scale your ministry up or down based on demand and project needs without incurring the long-term commitments associated with full-time employees.

Let's Maximize Your Benefits

We can help you analyze your staffing under these revised rules. Our goal is to help you maintain compliance while using your resources to fulfill your mission best. Schedule a consultation.


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