Beatrez & Company CPAs

Ohio Worker's Compensation Reporting Compliance for Churches

 

There is much confusion regarding churchs' reporting responsibilities with Ohio workers' compensation. Failure to properly address these issues can be burdensome for churches and its leaders as sanctions can be levied for failure to follow State law. The following paragraphs elaborate on workers' compensation compliance issues that churches regularly face.

General Coverage Requirements

Churches are required to pay workers' compensation premiums on all wages earned by its employees. There is an exception to this law for ministers that is explained later. Churches may also be subject to workers' compensation premiums on workers that are compensated as independent contractors. Liability for premiums for churchs' independent contractors depends on the degree of control the church has over the work of the independent contractor, whether the work that the independent contractor performs is an activity that is regularly carried on by the church, and whether the independent contractor is legitimately in the business for which he or she is contracting.

Minister Coverage Options

Ministers are statutorily exempt from Ohio workers' compensation coverage. A church may optionally elect to cover its ministers by registering the minister with the Bureau of Workers Compensation by submitting Form U-3S. Each minister must be specifically identified on Form U-3S. This means that a new Form U-3S must be completed whenever a new minister is added to the payroll.

For churches that do not elect supplemental workers' compensation coverage for its ministers, the ministers can optionally elect to cover themselves and personally pay the premiums.

Minister Wage Base for Ohio Worker's Compensation Purposes

The wages that must be reported for a minister on Ohio workers' compensation payroll reports include all housing allowances and the rental value of a parsonage that is provided. There is a sole exception where the minister is 1) living in a church-provided parsonage 2) on the church grounds and 3) the minister is required to live in the parsonage as a condition of employment for the convenience of the church. If all three of these items exist, the rental value of the parsonage and the related parsonage allowances are not included in reported minister wages.

Wages for ministers are reported under the 8868-SN worker classification. No other employees should be reported with this number.