Church Planting Tactics

intro image There are 4 types of workers that can do anything at your church: Employees Interns Volunteers Contractors There is no other, so if you're paying a stipend to anyone, you'll need to know first which of the 4 categories they fall into. Following are tests for each. If they fail the test for the that category, they are almost certainly an employee. Are They an Intern? I found a pretty strict test of whether or not your worker is an intern. According to this blog post referencing the Fair Labor Standards Act (FSLA), you only have an intern if: You are providing training, and it is for the benefit of the intern The training is on par with what they'd get through a school or college The church gets no immediate advantage from the activities of the inters, and on occasion they'll actually slow you down The interns do not displace regular employees, but work under their close observation (if they get about the same amount of supervision as your regular employees, they're not an intern) The intern is not necessarily entitled to a job at the conclusion of their internship The church and the intern both understand that the intern is not entitled to any wages during their internship (though may qualify for a stipend; more on that below) If they fail even one of these items, then you have an employee that is subject to minimum wage & overtime requirements (and not an intern). Are They a Volunteer? OK, so they failed the intern test. Can't we just call them a volunteer then? According this blog post referencing the Department of Labor, you only have a volunteer if : You have not provided compensation of any sort (such as money, room & board, etc.) They have no expectations of benefits in the future They work less than the equivalent of full-time occupation They haven't displaced a regular employee Their services are offered freely (without pressure or coercion) Their services are the kind typically associated with volunteer work If they fail even one of these items, then you have an employee that is subject to minimum wage & overtime requirements (and not a volunteer). Are They a Contractor? So they're not an intern or volunteer. Can't I just 1099 them and call them contractors? Again, there's a test by the Feds to help you determine whether they're a contractor or employee. This one's a little fuzzier; failing only 1 of the following may not necessarily kibosh the whole thing. There as many as 20 points to this test, so here are the ones I think would most commonly apply to churches. You only have a contractor if: You don't direct when, where, and how work is done They serve for a fixed duration (no ongoing relationship) They work less than full time They don't have to provide oral or written reports on the status of their work They pay for their own expenses They provide their own tools & equipment They do the same kind of work for other churches or business, too If they fail more than one of these items, then probably you have an employee that is subject to minimum wage & overtime requirements (and not a contractor). How to Pay by Stipend

Paying Church Interns by Stipend

Churches should be training grounds for ministry and leadership, but sometimes compensation gets complicated. I often get asked about paying church interns by stipend, so I decided to do some research.

Paying Church Interns by Stipend

First, we need to understand that there are 4 types of workers that can do any work at your church:

  1. Employees
  2. Interns (more below)
  3. Contractors
  4. Volunteers

There is no other, so if you’re paying a stipend to anyone, you’ll need to know first which of the 4 categories they fall into. I will be posting tests for 3 non-employees types. Following is the first test.

If they fail all the tests, your “intern” is probably actually an employee.

Are They an Intern?

I found a pretty strict test of whether or not your worker is an intern. According to this blog post referencing the Fair Labor Standards Act (FSLA), you only have an intern if:

  1. You are providing training, and it is for the benefit of the intern
  2. The training is on par with what they’d get through a school or college
  3. The church gets no immediate advantage from the activities of the interns, and on occasion they’ll actually slow you down
  4. The interns do not displace regular employees, but work under their close observation (if they get about the same amount of supervision as your regular employees, they’re not an intern)
  5. The intern is not necessarily entitled to a job at the conclusion of their internship
  6. The church and the intern both understand that the intern is not entitled to any wages during their internship (though may qualify for a stipend as a volunteer; more on that below)

If they fail even one of these items, then they cannot be classified officially as an intern. But there may still be hope: run your worker past the other upcoming tests for Contractor and Volunteer to be sure.

Don’t Cheat

So why is paying or not paying church interns by stipend a big deal? It’s too common for small businesses and even churches to take the cheater/easy way out and just cut a check to someone that has done work for them (1099 them). If you’re doing it wrong, it unfairly puts more tax burden on the worker and is in most cases illegal.

Especially in states that are pro-labor, you might get away with doing it the wrong way for the short term, but long term, it will be very costly in fees and back taxes.

But maybe they’ll qualify as a contractor. Read more…

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