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1) Introduces Employees to the Organization’s Culture, Mission, and Values

2) Communicates to Employees What is Expected of Them

3) Educates Employees About What They Can Expect From Management and Leadership

4) Helps Ensure Key Church Policies are Clearly and Consistently Communicated

5) Showcases the Benefits the Organization Offers

6) Ensures Compliance with Federal and State Laws

7) Helps Defend Against Employee Claims

8) Lets Employees Know Where to Turn for Help

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IRS Clarifies Individual Health Plan Premium Reimbursements

The IRS recently issued a notice that provides transitional relief to churches who provide reimbursements for their employees to purchase individual health insurance.
Prior to this latest guidance, any reimbursed premiums and other medical reimbursement arrangements would be included as taxable income in 2014. As with all things IRS-related, the rules surrounding health care reform can get a little complicated. The Internal Revenue Service has now issued new guidance that provides ACA relief which is highlighted below. Churches will need to conduct a review as and stop any individual premium reimbursements by June 30, 2015.

·         Employers can reimburse premiums pre-tax through June 30, 2015.
·         By June 30, 2015, employers must stop paying for or reimbursing individual health insurance unless they have just one employee. After that date, ACA penalties will be incurred.
·         If employers have only one employee, they can continue reimbursing healthcare premiums on a pre-tax basis.
·         Employers who have more than one employee and are not in a bona fide group plan, but want to continue to help pay insurance costs, need to change the way this is done after June 30, 2015, to avoid penalties. The way to do this is to increase salaries to cover the health care premiums without stipulating the salary increase for that use.
·         Employers should consider amending their 2014 payroll reports and W-2s to treat the premiums as non-taxable. 

Source:

Clergy Financial Resources

http://www.clergytaxnet.com

Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations.

Some, but not all, documents used for the I-9 will need to be reverified upon expiration. Specifically, employees with temporary work authorizations will need to have their eligibility to work in the United States reverified.

Employees with temporary work authorizations must indicate their employment authorization expiration date under Section 1 of the I-9 form, and employers will need to reverify employment eligibility on or before that expiration date by completing either Section 3 of the I-9 form or by completing a new I-9 form. If the employment authorization expiration date provided by your employee in Section 1 does not match the document expiration date recorded by you under List A or List C in Section 2, the earlier date should be used to determine when reverification is necessary.

If this process is not completed by the expiration date, the employee must not continue to work and should be put on leave of absence or terminated, in accordance with company policy. We recommend letting employees know at least 90 days ahead of time that they will need to provide documentation for reverification.

Some documents will not need reverification upon expiration. Employers should not reverify:
• U.S. citizens
• Lawful permanent residents (LPRs) who presented a Permanent Resident Card (Form I-551) for Section 2
• List B documents (e.g. driver’s license)

Note that you are not required to update Form I-9 when an employee changes his or her name (e.g. when getting married or divorced) and Form I-9 regulations do not require that an employee present you with documentation to show that the employee has changed his or her name. Nonetheless, USCIS recommends that you maintain correct information on Form I-9 and note any name changes in Section 3. Additionally, it is a best practice to require the employee to show documentation that they have legally changed their name and made the change with the Social Security Administration prior to making any name changes in your HR or Payroll systems. The safest way to do this is to ask the employee to present his or her new Social Security Card. This proactively avoids the potential for social security “no match” letters.

Federal contractors who are subject to the FAR E-Verify clause and who choose to verify existing employees by updating existing Forms I-9 must follow special rules pertaining to when they are required to complete new Forms I-9. Under this option, a new Form I-9 must be completed when an employee changes his or her name.

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Article Courtesy of HR Support Center.

Legal Disclaimer: The HR Support Center is not engaged in the practice of law. This response should not be relied upon or construed as legal advice, and does not create an attorney-client relationship. If you have legal questions concerning your situation or the information you have obtained, you should consult with a licensed attorney. The Company can in no way be held liable for any actions taken as a result of this correspondence.

According to the Department of Homeland Security, I-9 forms are only required for employees, not unpaid interns. When taking on an unpaid intern, however, we urge churches to take extra care. The US Department of Labor has clear guidelines as to what makes an unpaid intern, and if all conditions are not met, the intern must be considered an employee and paid at least minimum wage plus overtime as well as complete an I-9 form.

The conditions that must be met to properly classify a worker as an unpaid intern are as follows:
1. The training the intern receives is similar to what one learns in a vocational school or academic institution;
2. The training is for the benefit of the intern;
3. The intern does not displace regular employees, rather the intern works under their close supervision;
4. The employer derives no immediate advantage from the work of the intern and on occasion business operations may actually be impeded;
5. The intern is not promised a job at the end of the training; and
6. The employer and intern both understand the intern is not entitled to wages for the training period.

So long as all of these conditions are met, there is no need to complete the I-9 form for the unpaid intern.

Enroll in the Church HR Support Center for more great HR resources.

Article Courtesy of HR Support Center.

Legal Disclaimer: The HR Support Center is not engaged in the practice of law. This response should not be relied upon or construed as legal advice, and does not create an attorney-client relationship. If you have legal questions concerning your situation or the information you have obtained, you should consult with a licensed attorney. The Company can in no way be held liable for any actions taken as a result of this correspondence.

Question: A month ago, we placed one of our employees on a performance action plan regarding the quality of his work and his low productivity levels after five previous verbal warnings in the last year. His performance has not improved since that plan was put into place. Is there anything more I need to do prior to letting this employee go for failure to meet the demands of the job?

Answer: It sounds as though you have done a good job of discussing this employee’s job performance with him. If you have documented the verbal warnings in his employee file (which we always recommend), you have at least six documented discussions with him on this matter. While there is no magic number of warnings to make a termination risk free, if your records of these events are complete, a reasonable person would likely understand the business reason behind terminating this employee by looking at his file. Ideally, your discussions with the employee and the resulting documentation will also have indicated the potential consequences, including termination, of failure to improve or failure to follow the terms outlined in the performance action plan.

Should the company ever be challenged on the termination decision, an employer’s best defense is typically its written documentation regarding the employee’s inadequate performance. Documenting unsatisfactory performance in a way that a reasonable person could view the documentation and understand that the termination was motivated by a legitimate business reason (lack of productivity) rather than an illegal reason (such as his race, age, religion, etc.) is an important step.

Once the company is comfortable with the supporting documentation in the employee’s file regarding the reason for separation, we recommend scheduling and conducting a termination meeting with the employee. In the meeting, we recommend that the employee’s manager explain to the employee that he is being terminated and the reason for his termination. In addition, we recommend that another member of the management team or a Human Resource representative attend the meeting to document the discussion.

It is important to understand the rules regarding the timing of the final paycheck before you hold the termination meeting as the laws vary by state. For example, Colorado employers who terminate an employee must pay wages immediately at the time of termination, while Texas employers must pay the wages of a discharged employee within six days of termination and Kansas employers must just pay wages by the next scheduled payday.

Enroll in the Church HR Support Center for more great HR resources.

Article Courtesy of HR Support Center.

Legal Disclaimer: The HR Support Center is not engaged in the practice of law. This response should not be relied upon or construed as legal advice, and does not create an attorney-client relationship. If you have legal questions concerning your situation or the information you have obtained, you should consult with a licensed attorney. The Company can in no way be held liable for any actions taken as a result of this correspondence.

The Internal Revenue Service has announced the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for ministry, business, charitable, medical or moving purposes.

The ministry/business rate is increasing from the 2014 rate, while the medical and moving mileage rates are decreasing from last year. The charitable rate is remaining the same.

Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

57.5 cents per mile for business/ministry miles driven
23 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

Source:

Internal Revenue Service
www.irs.gov

Clergy Financial Resources
http://www.clergytaxnet.com

Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations

Our staff comes in close contact with elderly clients in our business. Can we require our employees to get seasonal flu shots in order to protect the health of our clients?

Generally speaking, if employees do not have employment or union contracts that alter the nature of their at-will employment, employers with a business reason to do so may mandate flu shots. In some industries, requiring flu shots may make the most sense. This is particularly true when employees work with sick people or have very close contact with vulnerable populations. However, other employers may want to consider whether they may be able to achieve similar rates of absenteeism while maintaining employee morale by encouraging, rather than requiring, employees to get the vaccination. It’s also worth noting that the flu vaccine will not completely eliminate the flu, even if every employee gets a shot.

That being said, if an employee objects based on a reason relating to his or her protected class status, you will need to look into accommodations for that employee. For example, if an employee has a disability that prevents her from having vaccinations, or an employee has a religious objection to vaccinations, there must be an exception to the rule. While vaccine allergies and side effects are rare, such medical and health exceptions must be considered.

The law has generally been on the employer’s side in these cases, but there has been recent litigation on this issue. Additionally, employees may react negatively to mandated flu shots and employers should consider the potential impact on morale prior to implementing the policy. To avoid potential litigation and morale issues, we recommend that employers explain the reason behind the flu shot requirement, set a deadline by which employees must receive a flu shot, and create a procedure for employees to bring up any objections. Employers should also communicate that they will pay for the vaccination.

Any employee objections should be analyzed on a case-by-case basis. An approach in one scenario may not be best for another scenario. Depending on the objection, the job duties, and your business practices, it may be appropriate to have the employee wear a face mask or reassign duties so the employee does not come in contact with the vulnerable population if the vaccination is refused. Each objection and accommodation should be documented thoroughly to ensure that any action isn’t seen as discriminatory or construed as retaliation.

Enroll in the Church HR Support Center for more great HR resources.

Article Courtesy of HR Support Center.

Legal Disclaimer: The HR Support Center is not engaged in the practice of law. This response should not be relied upon or construed as legal advice, and does not create an attorney-client relationship. If you have legal questions concerning your situation or the information you have obtained, you should consult with a licensed attorney. The Company can in no way be held liable for any actions taken as a result of this correspondence.

Today, the Seventh Circuit Court of Appeals reversed a 2013 ruling by U.S. District Judge Barbara Crabb that identified the housing allowance benefit for clergy(IRS Code §107(2)) unconstitutional.

The original lawsuit, filed by the Freedom From Religion Foundation argued that the parsonage allowance exclusion violates the separation of church and state and the constitutional guarantee of equal protection.

In the November 22, 2013, ruling Judge Crabb stated that the parsonage allowance exemption “provides a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise.”

Today, Seventh Circuit Court of Appeal reversed Judge Crabb’s 2013 ruling due to the fact that the Freedom From Religion Foundation lacked standing.

In their ruling, the Seventh Circuit Court of Appeals stated:

We conclude that the plaintiffs lack standing to challenge 107(2). We therefore do not reach the issue of the constitutionality of the parsonage exemption. The judgement of the district courts is vacated and the case remanded with instructions to dismiss the complaint for want of jurisdiction.

The Freedom From Religion Foundation felt they had standing due to the fact that they theoretically were harmed because they couldn’t claim the housing allowance benefit. The Seventh Circuit Court of Appeal ruled that being theoretically harmed did not give them standing for the lawsuit. In order to have standing, they would have to file their tax returns and be denied the housing allowance benefit by the IRS. This approach will most likely be the next step for the Freedom From Religion Foundation’s legal battle against the housing allowance exclusion.

Source:

Clergy Financial Resources

http://www.clergytaxnet.com

Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations.

Clergy are allowed an income tax deduction for charitable contributions made during a tax year to qualifying organizations. Cash contributions must be substantiated by cancelled checks or receipts from the donee organization showing the organization’s name, date and amount of the donation or other reliable information. Gifts of property must be substantiated by similar receipts that also describe the property and its location.

Each charitable donation of $250 or more requires additional substantiation. The taxpayer must substantiate the donation by receiving a “contemporaneous” written acknowledgement of the donation from the donee organization that includes:

• The amount of cash, or a description of any property, other than cash, donated.

• A statement by the donee organization as to whether the donee organization provided any goods or services in consideration for any cash or property donated.

• A description and good faith estimate of the value of any goods or services provided by the donee organization for the donation.

During IRS examinations, agents are looking closely at the documentation supporting charitable contributions of both cash and property. Considering the unrelenting focus on charitable donations documentation by the IRS and the willingness of the courts to side with the IRS—even when taxpayers show no “sinister” intent—taxpayers need to be particularly aware of their responsibility to support and document the donation. No one should assume that donee charitable organizations know all the requirements and properly prepare their written acknowledgements, regardless of their size and reputation. Failure to obtain a proper “contemporaneous” written acknowledgement is fatal to sustaining the tax deduction.

Source:
Clergy Financial Resources

http://www.clergytaxnet.com

Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations.

In advance of the new calendar year coming up, the Internal Revenue Service has announced several changes to tax laws starting in January 2015. Here are a few of the highlights that are common for clergy.

Standard Deduction
- Single $6,300 (up from $6,200 in 2014)
- Married Filing Jointly $12,600 (up from$12,400 in 2014)
- Head of Household $9,250 (up from $9,100 in 2014)

Personal Exemption $4,000 (up from $3,900 in 2014)

FSA Plans – Maximum Salary Reduction $2,550 (up from $2,500 in 2014)

These changes are for the 2015 calendar year. They will show up on the tax return you prepare in early 2016.

Source:
Clergy Financial Resources

http://www.clergytaxnet.com

Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations.