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I am a member of a non-profit club. The club includes a swimming pool, club house and restrooms.

If a member volunteers to clean the club house and bathrooms in exchange for free or reduced membership dues is that member an employee of the club? Does the club need to issue w2's and pay payroll taxes.

  • I think it follows mostly along the rules of a collective, so yes and no, everyone who is a member is also an owner, but they might have different terms, read their charter. – GµårÐïåñ Oct 4 '17 at 19:38
  • I think they would be more likely treat you as a contractor and issue 1099-misc's – Nosrac Oct 4 '17 at 19:56
  • I'm neither a lawyer nor an accountant, but it seems like volunteer work to me. Especially if you put it explicitly in the rules - "Membership requires an $X donation or Y hours of volunteering" – Kevin Oct 4 '17 at 19:59
  • I imagine the question is whether the member gets anything tangible for his/her membership. It sounds like the answer to that question is yes? How much are the dues that they're potentially being rebated? $100s? $1000s? (per year) – Joe Oct 4 '17 at 20:17
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    We could use a janitorial service, but there is always a list of people who want the job. The job is 15 minutes here an there and bit longer for complete scrub downs. The cleaning needs to take place through out the day (mostly on weekends). So it helps if the cleaner is hanging out anyway and probably cheaper. – Mark M Oct 4 '17 at 21:02
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In today's world, there is a fine line between an employee and a contractor. If a person was hired as a contractor, but had the same pay periods as an employee, used the same equipment as an employee, having the hours worked to be dictated by the employer, being told what to do, etc., then the IRS could find good reason to classify that contractor as an employee for tax purposes. Generally, if you're unsure, then classify that individual as an employee. You could also file a Form SS-8 to get clarification from the IRS.

In your situation, it sounds like you are or will be telling this individual exactly how to perform the job, when to perform the job, and to use the equipment provided by the club. The IRS could make a very clear argument that this person is an employee and not a contractor. Even though you are not paying that individual cash money, you are essentially bartering with that person. As a result, the IRS Wants Its Cut.

I would recommend you calling a labor attorney for advice.

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You'd have to pass this by an attorney to be sure but consider making a new class of membership. Normal members pay full price and do no cleaning. This type of member cleans as needed but gets a cheaper membership.

I've been in fitness clubs where cleaning was required. Mostly about cleaning machines after use.

Note that what you probably can't do is what would make the most sense: credit hours cleaning against the membership. You might need to actually have two kinds of members: cleaners and normal. When there, cleaners would have to do the work. Sometimes that would be easy, as there might be ten cleaners there at once. Other times there might only be one. They could probably talk with each other to schedule, but it's unlikely that you could schedule them.

Another way of looking at this is that you have members who are expected to clean and members who pay extra for the privilege of not cleaning. Then, it's not you paying the cleaners or charging them less. It's you charging non-cleaners more. Most importantly, it's not a job; it's a condition of membership.

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