Top HR Questions Ministries Are Asking
Managing human resources in a faith-based nonprofit is rarely simple. A team of executive pastors, church administrators, and HR staff deal with a unique mix of compliance rules, spiritual mission, and tight budgets. Our ministry HR experts recently tackled the most common and complex questions—from managing staff paperwork to navigating tricky tax issues:
Critical Compliance: I-9s, Rehires, and Volunteering
Getting employment paperwork right is non-negotiable for church administrators. We clarified several high-risk areas:
Handling Missing I-9s: If you discover a long-term employee is missing a Form I-9, you must complete the current version of the form immediately, using the original start date but never backdating your current signature. Attach a brief explanation to the form.
Rehires: For returning staff, best practice is often to complete a fresh I-9 and you must always have them fill out a new W-4 (Withholding Certificate), as personal financial situations and claims (like exempt status) change annually.
Staff Volunteering: This is a crucial distinction for religious nonprofits: Employees cannot volunteer to do any work that is part of their paid job duties. For example, a youth ministry administrator cannot volunteer in the youth classroom. The volunteer role must be completely separate from their employment duties to comply with wage and hour laws.
When Generosity Becomes Taxable Compensation
Many generous ministries accidentally create taxable compensation for staff without realizing it. The IRS rule is clear: Everything an employee receives is taxable unless the IRS specifically says it is not. Intention does not matter; taxability does.
Common Taxable Perks: Be cautious on benefits that must be reported as income unless structured under a formal plan. These often include: select staff childcare or tuition discounts, church-paid camp fees, and all auto allowances.
Mileage Reimbursement: Reimbursement must be for business-related travel only, and policies must clearly define the employee's regular work location to exclude the daily commute.
The Solution: Consult a tax accountant familiar with the church HR dynamic to ensure these benefits are compliant and your staff isn't hit with an unexpected tax bill.
Navigating Personnel and Culture
Beyond compliance, ministry leaders must handle cultural and legal complexities:
Independent Contractors (1099s): The ministry has no behavioral control over a 1099 contractor. You cannot require them to adhere to your staff lifestyle agreement, as this severely risks misclassification. Any expectations must be tied to the work product, not personal behavior.
Hiring and Exiting: While there are pros to hiring from within your congregation (i.e., culture fit, shared mission, etc.), formal, objective vetting is critical. When dealing with a poor fit, follow the "hire slow, fire fast" philosophy. Termination should never be a surprise; it must follow a documented improvement plan where the employee had specific, constructive feedback.
For executive pastors and HR professionals seeking definitive, actionable answers on these issues, this webinar is your essential guide. Watch the complete recording to get all the details, including how to handle difficult campus guest boundaries and implement effective, low-cost employee recognition programs.