Classification of Workers – Employees

Workers are considered employees if they have many of the following characteristics: continuous standard hours of employment, work full-time or part-time, are subject to dismissal, can quit anytime without penalty, receive business expense reimbursements, are required to follow the organization’s work instructions, receive on-the-job training and receive routine payments of regular amounts.

When a person is paid as a regular employee, the employer automatically withholds and pays all the necessary employee income taxes as required by the IRS. These taxes include: federal income tax, state income tax, FICA (social security and medicare taxes). In addition, the employer will pay all the necessary employer taxes, which includes FICA (social security and medicare). However, churches are exempt from FUTA (federal unemployment) and SUI (sate unemployment insurance) taxes. Your payroll processor will manage all of these calculations and transactions.

Full Time:

  • Some churches classify employees who work 30 hours or more per week as full-time and eligible for the full-time benefits.
  • Part-Time:

  • Some churches classify employees who work less than 30 hours per week as part-time. Benefits are limited but include the retirement plan as follows: part-time employees who work more than 1,000 hours are eligible to participate in the 403(b) plan six months from date of hire. Employees are fully vested after six calendar years of employment.
  • Please note: we recommend hiring part-time employees for 25 hours per week instead of 30 hours per week. The government generally mandates that employers must provide comparable health insurance coverage to all employees who work over 25 hours per week.

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