There have been recent changes to the definition of who can be classified as a 1099 employee.
Depending on where you pastor for your church, this could impact how your church should handle your particular situation. I recommend reviewing your state's rules, on properly classifying an individual as an employee or independent contractor. Churches and nonprofits, have been greatly impacted by the new ABC test established by California. The following are the 3 classifications that must be met:
- Operates without the control or guidance of the hiring organization.
- Performs services unrelated to the hiring company’s core business.
- Works independently in an established trade, occupation, or business that exists separately from the hiring business.
Item 1 & Item 2 are the big deal breaker for most churches and nonprofits. As a result these organization located in California will need to reclassify these individuals and also obtain workers' compensation insurance for their church or nonprofit. They will also need to pay payroll taxes and typically hire a payroll company to process checks.
