Are LifeWays Board Members Employees?
The answer depends on the legal context.
Different laws use the term "employee" for different purposes.
LifeWays employees are hired into staff positions through the organization's employment process. Board members are not hired by LifeWays. Instead, they are appointed by the Jackson and Hillsdale County Boards of Commissioners to provide governance and oversight of the organization.
Board members do not perform employee job duties, are not supervised as employees, and are not eligible for employee benefits such as health insurance, paid leave, or pension participation.
For federal tax withholding purposes, however, the Internal Revenue Service (IRS) classifies public officials serving on governmental boards as employees. Because LifeWays is a public Community Mental Health Authority, Board member compensation is processed through payroll and applicable taxes are withheld.
This federal tax classification exists for reporting and withholding purposes only and does not make Board members LifeWays employees for governance, supervision, or benefits purposes.
References:
26 U.S.C. § 3401(c)
LifeWays Board Governance Policies
Michigan Mental Health Code
Does This Conflict with the Michigan Mental Health Code?
No.
The Michigan Mental Health Code includes provisions intended to ensure independent governance and prevent conflicts of interest. As a result, Community Mental Health Authority employees generally may not serve as voting members of the Board.
Questions sometimes arise because the IRS classifies public officials serving on governmental boards as employees for federal tax withholding purposes.
These are two separate legal concepts.
Under IRS rules, Board members are considered employees solely for tax reporting and withholding purposes. For purposes of governance, conflict-of-interest requirements, and the Michigan Mental Health Code, Board members serve as public officials responsible for oversight of the organization rather than as LifeWays staff.
The IRS classification does not make Board members LifeWays employees for governance purposes and does not affect their eligibility to serve on the Board.
References:
Michigan Mental Health Code
26 U.S.C. § 3401(c)
LifeWays Board Governance Policies
At a Glance
Board Members ARE:
Public officials serving in a governance role
Considered employees for federal tax withholding purposes
Board Members ARE NOT:
LifeWays hired employees
Eligible for health insurance
Eligible for paid leave
Eligible for pension benefits
Related Information
Questions about Board member compensation are addressed in our companion resource: www.lifewaysmi.org/board-faq/board-compensation
Learn More
LifeWays remains committed to transparency and public accountability. Board policies, governance documents, meeting materials, and Freedom of Information Act (FOIA) resources are available to the public through our website.