Church HR Compliance: Don't Make These 5 Mistakes with Volunteers and Staff
Sep 24, 2025Any church that is developing needs to be able to manage its personnel and volunteers well. Churches with 900 to 2,500 members have to deal with complicated human resources (HR) compliance issues that might cause expensive legal problems if they aren't handled correctly. To keep your ministry safe, create a good work atmosphere, and stay within the law, you need to know what frequent HR mistakes are and how to avoid them. This document lists five major HR compliance problems that churches make with their staff and volunteers and gives you useful advice on how to prevent them. It fits with the Tier 2: THE FOUNDATION PLUS PLAN, which gives churches in this stage of expansion the help they need.
Putting Employees and Volunteers in the Wrong Categories: The Hidden Compliance Trap
One of the most common and expensive mistakes is putting workers in the wrong category. Employees, freelancers, and volunteers all have different legal rights and responsibilities.
Why It Matters:
When people are misclassified, they may break rules about wages, taxes, and workers' compensation. The IRS and the Department of Labor check nonprofits for this all the time.
How to Stay Away:
To accurately classify workers, use the IRS 20-factor test and the Department of Labor's rules. Make it clear that volunteer roles are unpaid and make sure they don't undertake work that is the same as what paid staff do. Keep track of decisions on how to classify documents and revisit roles from time to time if ministries change. For example, a church had to pay back taxes and fines because they wrongly classified a youth minister as a contractor when they were really an employee.
Not Doing Thorough Background Checks: Don't Take Chances with Safety
Safety is very important, especially when staff and volunteers work with people who are weak.
Why It Matters:
Not screening people makes it more likely that they will steal, abuse, or do other bad things. It also makes your church more likely to be sued.
How to Stay Away:
Make sure that all jobs that involve kids, teens, or money have the same background check policy. Check criminal records, the sex offender register, and references. Make sure that checks are done on a regular basis and that the results are kept private. For instance, a church avoided possible harm by finding out about a volunteer's past crimes during screening.
Ignoring Wage and Hour Laws: Avoiding Expensive Mistakes on Payroll
Churches have to follow federal and state rules about minimum pay, overtime, breaks, and keeping records.
Why It Matters:
If you break the rules, you could have to pay back wages, fines, or even be sued. There are limits to what you can do as a volunteer.
How to Stay Away From:
Stay up to date on the wage laws that apply to your state and the federal government. Keep proper records of payroll and timesheets. Check the work duties of employees who are designated as exempt to make sure they match the requirements. For example, a church had to pay fines for not paying part-time workers who worked more than 40 hours a week.
Ignoring Written HR Policies and Agreements: The Basis of Fairness
Written rules and agreements make things clear and keep the church safe.
Why It Matters:
When policies aren't clear, things don't go as planned, morale goes down, and the chance of legal problems goes up.
How to Stay Away:
Make detailed employee handbooks that address things like behavior, discipline, time off, and benefits. Use volunteer agreements that spell out what each person will do, what their duties are, and how they should act. Update your policies often to keep up with changes in the law and the demands of the ministry. For example, a disagreement between two employees was settled peacefully because there were clear rules for how to handle discipline.
Ignoring Protections Against Harassment and Discrimination: Building a Ministry That Is Respectful
Churches have to make sure that people don't harass or discriminate against each other.
Why It Matters:
Not dealing with these problems can lead to lawsuits and hurt the culture of the ministry.
How to Stay Away From:
Make it clear that you have a zero-tolerance policy for harassment and discrimination. Make sure all staff and volunteers go through required training. Set up ways for people to report things in secret and make sure that investigations are comprehensive. For instance, a church was able to keep more personnel after starting regular training on how to stop harassment.
How the Foundation Plus Plan Helps Your Church Follow HR Rules
The FOUNDATION PLUS PLAN gives churches personalized legal help, such as:
- Writing HR policies and reviewing them legally.
- Advice on how to properly classify things and follow the rules.
- Vendor suggestions and rules for background checks.
- Training materials for HR subjects including preventing harassment.
- Consulting often to change policy when laws change.
Conclusion
Taking the initiative to follow HR rules makes the ministry stronger and healthier. By not making five typical HR blunders, you may keep your church safe from legal problems and create a ministry culture that encourages staff, volunteers, and mission success. Working with the FOUNDATION PLUS PLAN gives your church the expert help it needs to confidently follow HR rules.
Links Inside
Links to Other Sites
- IRS Guide on Worker Classification
- U.S. Department of Labor - Wage and Hour Division
- EEOC - Harassment and Discrimination
Notice: This blog article is only for informational reasons and should not be used as legal advice. Talk to a lawyer who is licensed to provide you guidance that is specific to your church.
