Compensation and Payroll: Financial Matters
The Office of Church Staff Finances, a division of Ministries and Faith Development, offers compensation and staffing-related financial information to congregational leaders, clergy and staff.
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Materials from Past Webinars
Ministerial Compensation: Unraveling the Complexities for Lay Leaders
Led by Rev. Richard Nugent, Director, Church Staff Finances and Jan Gartner, UUA Compensation and Staffing Practices Manager
Are you a lay leader with responsibility for ministerial compensation or payroll? We'll help you make sense of ministers' dual tax status (including the enigmatic "in lieu of FICA"), housing allowance rules, withholding options, and more. We'll also talk about good practices for ministerial benefits and contracts.
Strategies for Setting Staff Salaries
Led by Jan Gartner, UUA Compensation and Staffing Practices Manager
Jan explains the UUA Salary Recommendations and related resources, with suggestions and strategies for applying the guidelines sensibly and justly in one’s congregational context.
Fair Labor Standards Act
Led by Jan Gartner, UUA Compensation and Staffing Practices Manager, and Rev. Richard Nugent, Director, Church Staff Finances
Jan and Richard explain the Fair Labor Standards Act, including classifications, exemptions, and recordkeeping. Although the salary threshold change planned for December 2016 did not go through, the general information still applies.
Webinar slides, recording, and Q&A can be found in the Fair Labor Standards Act section under “Topics of Special Interest,” below.
Topics of Special Interest
Fair Labor Standards Act
The Fair Labor Standards Act (FLSA) is a federal law that protects employees by establishing standards for a minimum wage, overtime, recordkeeping, and youth employment. Our resources can help you make sure you are in compliance.
Important! A new salary level threshold for white-collar exempt status was to have gone into effect on December 1, 2016. This change was halted by a federal judge on November 22, but the injunction may be appealed. We will keep you updated. Recordkeeping and job duties provisions of the FLSA remain in place, regardless.
- FLSA Flyer (PDF): Please post and share widely.
- FLSA FAQ (PDF): Contains details of the law, including exemptions and recordkeeping requirements.
- FLSA Compliance Guide (PDF): Walks you through a process of assessing compliance and making necessary adjustments.
- Webinar: Watch the recording of a Fair Labor Standards Act webinar presented by Rev. Richard Nugent and Jan Gartner in October 2016. Once you’ve viewed the recording, or if you participated in one of the webinars, you can review the slides (Word). Questions asked in all four of our FLSA webinars are answered in this Q&A.
Employee or Independent Contractor?
Congregations need to determine whether the individuals they compensate are employees or independent contractors. Most workers in our congregations are employees. An employee is entitled to benefits (as eligible) and their wages are reported on a W-2 form. The congregation, as employer, is responsible for appropriate payroll tax withholding and remittance.
Independent contractor status is appropriate for those who provide services through a business (e.g., custodial services, lawn care, piano tuning) and professionals who support worship or consult on a one-time or occasional basis with no other leadership role in the congregation (e.g., itinerant musician, supply preacher, workshop presenter). Independent contractors are not entitled to benefits, receive a 1099 form (if the congregation pays them more than $600 in the calendar year), and pay self-employment taxes.
The resources below will help you make the appropriate determination. Unless you can make a clear case for independent contractor status, based on IRS common law rules, you should consider each of your workers an employee.
- See our Employee or Independent Contractor FAQ sheet (Word) for special guidance on clergy, with some information applicable to other staff.
- This Independent Contractor or Employee? page from the IRS describes the behavioral, financial, and relationship factors that help you make the proper determination.
- This Myths about Misclassification page from the Department of Labor addresses misunderstandings that frequently result in the misclassification of employees as independent contractors.
- Ministerial Compensation 101
- Ministerial Tax Status
- Housing Allowances
- Housing Allowance Calculation Form
- Ministerial Compensation Calculator 2017
- W2 Instructions 2016 Tax Year (PDF)