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Eligibility for employer contribution


GrammieMame

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Re: Non-electing church plan. The church is hiring someone to do repairs on the church. They want to make him an employee because of liability and workman's comp issues, but they don't want to give him an employer contribution if he is still there a year from hire. The only contribution the church makes is an employer contribution of 12% of pay once an employee has been there for a year. No salary deferral or match.

If he is still there after a year, can they exclude him from the employer contribution?

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Re: Non-electing church plan. The church is hiring someone to do repairs on the church. They want to make him an employee because of liability and workman's comp issues, but they don't want to give him an employer contribution if he is still there a year from hire. The only contribution the church makes is an employer contribution of 12% of pay once an employee has been there for a year. No salary deferral or match.

If he is still there after a year, can they exclude him from the employer contribution?

So how would they distinguish the person being hired to do repairs from the other people they hire? Amend the plan to exclude people employed to perform just the kind of repairs that they are hiring this person for?

I suppose they could engage the person to perform services as an independent contractor. I hear that there are for-profit companies that do that sort of thing.

Always check with your actuary first!

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How can the time for the repairs be so open? Didn't you get an estimate of the cost? This should include a time of completion.

I also do not understand why liability or WC would be issues. If he is an employee you will have to cover him which might or might not increase your premiums. If he is an IC then he would provide his own coverage which you can and should make a condition of contracting for his services.

However, it seems if he is an employee and that even if he is there after one year, it would not be for very long. Considering all things, it seems very uncharitable (or unChristian, if a Christian church) to be so uptight about such a small issue, but gloss over the liability and WC. I would think that time would be better spent in planning the repairs and monitoring the rate of work to ensure that the repairs are done within one year.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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