As an employer, the congregation is subject to federal, state, and local employment laws. Following the law is foundational to being in right relationship with your staff and, of course, ensures that you avoid fines and other penalties.
Employee or Independent Contractor
Each individual you compensate 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. The congregation, as employer, is responsible for appropriate payroll tax withholding and remittance.
Exempt or Non-Exempt
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. Every employee needs to be classified as “exempt” or “nonexempt.” Make sure you are in compliance!
More on the Fair Labor Standards Act
Legal Requirements for Pay and Benefits Administration
There are several must-do's related to pay and benefits administration for which congregations are held legally responsible as employers.
Learn More About Legal Requirements for Pay & Benefits Administration
The Office of Church Staff Finances focuses on nationally consistent information. We advise congregations to establish a relationship with an area employment lawyer to provide counsel on state and local laws and regulations. We provide the resources below as a starting point for common personnel-related laws that differ by state. It is best to verify information through resources published by your state.
- State Payday Requirements (mandated pay frequency by state)
- PTO Payout Laws by State, from Paycor
- U.S. Department of Labor: State and Local Resources (including state minimum wage laws, labor office contact information, and labor law topics)
- Mandatory Reporters of Child Abuse and Neglect (PDF) (summary of state statutes)