Reporting Financial Crime as a Matter of Stewardship

Reporting financial crime in your church is a matter of stewardship, yet many church leaders report not doing so, or even knowing how.

Reporting financial crime is a matter of stewardship, yet nearly 70 percent of churches that have experienced fraud chose not to report it to the police, according to a 2021 survey of more than 700 church leaders.

Included in This Series

The spring 2021 study on financial misconduct surveyed 706 church leaders.

About one-third of leaders said financial misconduct had taken place in their churches. Among those churches that experienced fraud, only a third filed a report with law enforcement.

In my own experience, the vast majority of churches that know or believe financial misconduct occurred are reluctant to contact law enforcement.

These leaders told me they would rather handle the matter internally. Church Law & Tax’s nationwide survey confirms this.

Additionally, nearly half of the respondents said their church boards have not discussed how they would respond to suspected fraud.

Why leaders do not report financial crimes

In the survey, leaders most frequently gave these explanations as to why they did not contact authorities:

  • We were able to recover the money without having to take legal action (27.7 percent).
  • We wanted to work on restoration with the individual(s) (26.5 percent).
  • We did not want to make it public to protect the church’s reputation (20.5 percent).
  • The church chose to forgive rather than report to the authorities (19.3 percent).
  • We did not want to make it public to protect the individual(s) (16.9 percent).
  • Legal action would go against the church’s ministry philosophy (7.2 percent).

(Note: Respondents were asked to check all that apply.)

When I speak with church leaders, their hesitations for contacting law enforcement often arise because the suspected embezzler is almost always a trusted member or employee, and church leaders are reluctant to accuse such a person without irrefutable evidence of guilt.

Seldom does such evidence exist. The pastor may confront the person about the suspicion, but the individual will often deny any wrongdoing—even if guilty. This only increases the frustration of church officials who do not know how to proceed.

Thinking of not reporting a financial crime?

Caution 1: The fraud is often far greater than the church realizes. A failure to report a financial crime may hide the true depth and extent of the crime committed. CPA Vonna Laue’s experience certainly affirms this. “Each time I have been brought into a ministry’s financial fraud situation, the amount of loss grew as more information was uncovered,” said Laue, a Church Law & Tax senior editorial advisor who advised this nationwide survey project. “It was always more than the perpetrator indicated and sometimes even they were surprised by the total.”

Caution 2: It does not matter whether the embezzler intended to pay back the embezzled funds someday. This intent in no way justifies or excuses the crime. The crime is complete when the funds are converted to one’s own use—whether or not there was an intent to pay them back.

Of course, an offender’s repayment may make it less likely that a prosecutor will prosecute the case. And even if the embezzler is prosecuted, this evidence may lessen the punishment. But the courts have consistently ruled that an actual return of embezzled property does not purge the offense of its criminal nature or absolve the embezzler from punishment for his or her wrongdoing. Also, note that church officials seldom know if all embezzled funds are being returned. They are relying almost entirely on the word of the thief.

Caution 3: Whether a church opts to notify law enforcement or not, there are tax law obligations with the Internal Revenue Service (IRS) that must be fulfilled.

Responding to suspected cases of fraud

Church leaders often learn of suspected financial misconduct because discrepancies or irregularities arise or someone submits a tip.

Top Six Red Flags

The survey indentified these signs that someone might be committing fraud:

1. Excessive control or unwillingness to have others cover his/her job duties

2. Repeated lying/deception

3. Family problems

4. Living beyond his/her means

5. Other moral or spiritual failures.

6. High levels of debt (e.g., credit card, student loans)

Along with these red flags, consider the following scenarios that point to the possibility that fraud might be taking place:

  • Giving is always higher when the person who usually does the counting is on vacation or ill during a weekend service.
  • A church bookkeeper lives a higher standard of living than is realistic given her or her income.
  • Church offerings have remained constant, or increased slightly, despite that attendance has steadily increased.
  • A church official with sole signature authority on the church checking account has purchased a number of expensive items from unknown companies without any documentation to prove what was purchased and why.

Safeguarding Your Church’s Finances—a multi-session video course for pastors, board members, staff, and volunteers on the basics of fraud prevention. LEARN MORE!

When unusual activity gets detected, or a tip is received, church leaders should take these steps in response:

1. Carefully gather information before reporting a financial crime

When evidence of actual or suspected financial misconduct surfaces, the pastor and/or church leaders should gather as much information as possible. Compile all documents and records that point to the possible irregularities and inconsistencies. The church should contact its attorney. It also should strongly consider hiring a qualified CPA firm or Certified Fraud Examiner (CFE) to conduct a more thorough investigation.

Note. Some churches have used CFEs to detect embezzlement and estimate the amount of loss. But note that CFEs are not required to be CPAs, and many have far less familiarity with accounting records than a CPA. The ideal professional would be a CPA who is also a CFE. For more information on CFEs, and to find one nearby, go to the website of the Association of Certified Fraud Examiners.

A deeper investigation offers the best way to quickly determine if the irregularities and inconsistencies are a product of human error or misconduct, and the amounts of money lost. If the cause is error, then the church can address the problem while avoiding making any erroneous and harmful accusations. If the cause is misconduct, then the church knows it must take appropriate next steps in whether to report a financial crime.

2. Sit down with the suspected perpetrator

If sufficient information points to a suspected perpetrator, at least two church leaders, and possibly the church’s attorney and the CPA or CFE (if one is hired) should meet with the person. Provide some general descriptions about the irregularities or inconsistencies that have arisen and ask the person what they can tell you about them. Take careful notes, including any questions or comments the person makes.

If the person confesses and asks how things will be handled, explain the criminal nature of the offense. Also explain the legal requirements to contact the IRS (see more below).

Caution. Always keep in mind that embezzlement is a criminal offense. Depending on the amount of funds or property taken, it may be a felony that can result in a sentence in the state penitentiary.

If the person confesses, evaluate with the church’s attorney the possible ways the person can possibly repay the stolen funds—but know that such a step does not absolve the person of his or her crime, nor does it eliminate potential consequences with the IRS. Also know upfront that such agreements by embezzlers to repay funds often are not honored.

3. Contact authorities

If there is a confession, or if the evidence clearly indicates the person stole church funds, church leaders must consider turning the matter over to the police or local prosecutor and the IRS. These are very difficult decisions, since doing them may result in the prosecution, penalization, and possible incarceration of a member of the congregation.

Note. Embezzlers never report their illegally obtained “income” on their tax returns. Nor do they suspect that failure to do so may subject them to criminal tax evasion charges. In fact, in some cases. it is actually more likely that the IRS will prosecute the embezzler for tax evasion than the local prosecutor will prosecute for the crime of embezzlement. Along with contacting local authorities, your church also should contact the IRS regarding the matter.

Before you “forgive and forget”

In some cases, a person confesses to the misconduct. Often, this is to prevent the church from turning the case over to the police or the IRS. Perpetrators believe they will receive “better treatment” from their own church than from the government. In many cases, they are correct.

Lead Your Church With Confidence—Become a Church Law & Tax Member Today.

It often is astonishing how quickly church members will rally in support of the embezzler once he or she confesses—no matter how much money was stolen from the church. This is especially true when the perpetrator used the stolen funds for a “noble” purpose, such as medical bills for a sick child.

Many church members demand forgiveness for the perpeator. The idea of turning the perpetrator over to the authorities is both shocking and repulsive. But is it this simple? Should church leaders join in the outpouring of sympathy? If the embezzler confesses, should church leaders leave it at that?

These are questions that each church will have to answer for itself, depending on the circumstances of each case.

Before forgiving the embezzler and dropping the matter, though, church leaders should consider the following.

Embezzlement is a crime breaches a sacred trust

The church should insist, at a minimum, that the embezzler must:

  • disclose how much money was embezzled,
  • make full restitution by paying back all embezzled funds within a specified period of time, and
  • immediately and permanently be removed from any position within the church involving access to church funds.

Closely scrutinize and question the amount of funds the embezzler claims to have taken. Remember, you are relying on the word of an admitted thief. That is why it is important to involve the church’s attorney, as well as a CPA or CFE, when suspicions first arise.

The embezzler must return the stolen money within a specific time or sign a promissory note agreeing to pay back the funds within a specific time.

Caution. An attorney should be consulted before the church has any discussions about an agreement with the embezzler about paying back stolen funds.

The church faces tax consequences for not reporting financial crime to IRS

The church needs to tell the embezzler that the stolen money is taxable income. Therefore, failure to agree to either of the above alternatives will force the church to issue him or her a 1099 (or a corrected W-2 if the embezzler is an employee) reporting the embezzled funds as taxable income.

If funds were embezzled in prior years, then the employee will need to file amended tax returns for each of those years to report the illegal income since embezzlement occurs in the year the funds are misappropriated.

Failure to report taxable income will subject the church to a potential penalty (up to $10,000) for aiding and abetting in the substantial understatement of taxable income under section 6701 of the tax code.

Note. If an employer is able to determine the actual amount of embezzled funds as well as the perpetrator’s identity, the full amount may be added to the employee’s W-2, or it can be reported on a Form 1099 as miscellaneous income. But remember, do not use this option unless you are certain that you know the amount that was stolen as well as the thief’s identity.

If the full amount of the embezzlement is not known with certainty, then church leaders have the option of filing a Form 3949-A (“Information Referral”) with the IRS. Form 3949-A is a form that allows employers to report suspected illegal activity, including embezzlement, to the IRS. The IRS will launch an investigation based on the information provided on the Form 3949-A. If the employee in fact has embezzled funds and not reported them as taxable income, the IRS may assess criminal sanctions for failure to report taxable income.

Caution. If the embezzler agrees to pay back the stolen money and does so, does this convert the embezzled funds into a loan, thereby relieving the employee and the church of any obligation to report the funds as taxable income in the year the embezzlement occurred? The answer is no.

Most people who embezzle funds insist that they intended to pay the money back and were simply “borrowing” the funds temporarily. An intent to pay back embezzled funds is not a defense to the crime of embezzlement.

The courts are not persuaded by the claims of embezzlers that they intended to fully pay back the funds they misappropriated. The crime is complete when the embezzler misappropriates the church’s funds to his or her own personal use.

There is yet another problem with attempting to recharacterize embezzled funds as a loan. If the church enters into a loan agreement with the embezzler, this may require congregational approval. Many church bylaws require congregational authorization of any indebtedness, and this would include any attempt to reclassify embezzled funds as a loan. Of course, this would have the collateral consequence of apprising the congregation of what has happened.

Reporting financial crime may be a matter of fiduciary responsibility and good stewardship

Viewing the offender with mercy does not mean forgiving the debt and ignoring the crime. Churches are public charities that exist to serve religious purposes.

Donors give money in support of those purposes.

Forgiving and ignoring embezzlement may not serve those purposes.

The church should care about other churches

As Church Law & Tax’s findings also reveal, the average tenure of embezzlers tended to be less than 10 years, and oftentimes measured less than 5 years.

Letting an offender off the hook and sending them on their way exposes other churches to the same behavior. No record of the offender’s activities will be available—and that means even a church that follows healthy screening and selection steps (including criminal background checks) will be unable to detect this person’s past offenses.

As Laue, the CPA who advised the survey project, also notes: “We have a responsibility to protect Kingdom resources, whether they are ours or someone else’s, and we can’t do that if we don’t take the necessary steps to make others aware of the fraudulent activity.”

The bottom line: Churches should report financial misconduct as an act of stewardship for the global church.

Case Study: A Repeat Embezzler. A church administrator embezzled over $350,000 from his church. He wrote unauthorized checks to himself and others from the church’s accounts, and used the church’s credit card on over 300 occasions to purchase personal items. Police officers were called and he made a full confession.

The church secured a $1 million civil judgment against him. He was prosecuted and convicted on four felony counts including forgery and theft, and he was sentenced to 32 years in prison based on “aggravated circumstances” (the large amount of money that had been stolen, the care and planning that went into the crimes and their concealment, the fact that a great number of checks were stolen and unauthorized credit card charges made, and breach of trust).

Several years earlier, the administrator embezzled a large amount from a prior church employer. However, that church chose not to initiate criminal charges, believing that he had learned his lesson.

This case study is taken from the “Embezzlement” section of the Legal Library.

Answers to other key questions about reporting financial crimes

Find detailed answers to the following questions about embezzlement in the Legal Library:

  • How does embezzlement occur?
  • How does a pastor handle someone who confesses to embezzlement during a confidential counseling session?
  • Can a church require a suspected embezzler to take a polygraph test?
  • How can a church avoid making false accusations?
  • How should a church discuss embezzlement with the congregation?

And as both the study and my own experience show, a most-troubling aspect of financial misconduct in churches is the unfortunate reality that many pastors and other leaders choose to handle fraud or suspected fraud internally—meaning they avoid involving a CPA or CFE, the IRS, and law enforcement. But the failure to report can be problematic for the reasons I have detailed in this article.

For the sake of practicing good financial stewardship, it is my hope and prayer that churches will carefully consider the advice I offer in this article. Most importantly, my hope is that churches will seek do all they can to prevent financial misconduct from happening in the first place through implementing a system of sound internal control.

Attorney Matthew J. Branaugh, content editor for Church Law & Tax, contributed to this article.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Loved and Trusted: What Shocks Us Most About Fraud Perpetrators

A closer look at the men and women who steal from churches—and the red flags leaders should watch for.

Church Law & Tax’s nationwide survey of congregations and the financial misconduct they experience paints four portraits of the types of individuals who most commonly steal from their churches.

What’s most shocking?

The positions of trust the men and women who commit these crimes carry.

The study revealed that common perpetrators included middle-aged men who served as treasurers or board members, sometimes for upwards of 10 years; men and women in their 30s and 40s who worked in their roles as administrators and treasurers for less than 5 years; and male pastors in their 40s.

And then there’s the group of perpetrators that may be the most surprising of all: men and women, typically 60 or older, who held their positions for 20 years or more. The crimes committed by these individuals “were disproportionately expensive” compared with other offenders, according to Arbor Research Group, the firm Church Law & Tax commissioned to survey church leaders nationwide.

“Just as fraud can happen in any sized church, fraudsters can be any age, any gender, and perform any function in the church,” said Rollie Dimos, a Certified Fraud Examiner (CFE) who reviewed the survey results ahead of publication and provided comment. “That’s why it is so important to put financial processes in place to actually protect our church team members from being tempted to steal God’s money. Internal controls are like guardrails that help keep people honest and accountable.”

Portraits of the perpetrators

The national survey fielded responses from 706 leaders and revealed nearly 30 percent served in churches that had experienced some form of financial misconduct. Nearly half said the crimes occurred within the past 10 years (see “Every Church Is at Risk for Fraud. Here’s Why”).

Those who suffered from some form of fraud answered questions exploring the acts committed and the people responsible for them. Through those responses, Arbor was able to classify the four classes of perpetrators, shedding more light on the common traits they possess.

Class 1

Arbor characterized this group as “middle-aged, non-pastoral male leaders with some experience in their roles.” These men frequently served as treasurers, board members, or in non-pastoral leadership roles.

Class 2

This group constituted “older, experienced men or women in leadership,” Arbor noted. They often served in their roles—which varied—for 20 years or more. A quarter of these cases resulted in losses of $250,000 or more, while half caused losses ranging anywhere from $10,000 to $250,000.

“The worst-case scenario for a church is to have fraud committed by long-tenured leaders in the church,” said Nathan Salsbery, a CFE and a partner and executive vice president for nonprofit CPA firm CapinCrouse who also previewed the survey results. “And if those leaders had unmonitored access to the cash coming in, the cash going out, and the accounting records, the financial losses can be staggering.”

Class 3

This class featured the highest number of perpetrators, Arbor said. It, too, was evenly represented by men and women, but their ages ranged from 30 to 49 and their average tenures were 5 years or less. Among these individuals, about one-third worked as administrators, while 20 percent served as treasurers. Overall, 20 percent were unpaid volunteers.

Class 4

This group was comprised entirely of male pastors “typically 40 to 49 years of age and in their role 1 to 5 years,” Arbor noted. The thought of a pastor betraying his congregation in this way exacts significant tangible and intangible damage, Salsbery noted. “Lack of healthy accountability for senior leadership is one of the most significant risks to a church,” he said.

Red flags to monitor

The top “red flag” identified among the fraud cases disclosed in the survey—representing 32 percent—was “excessive control or unwillingness to have others cover his/her job duties,” according to the results. In fact, 47 percent of the cases weren’t discovered until another person performed the perpetrator’s duties for one reason or another.

The second-highest red flag was “repeated lying or deception,” followed by “family problems,” “living beyond his/her means,” and “other moral or spiritual failures.”

Lower on the list were “medical issues in family,” “expressed lack of job satisfaction,” and “loss of spouse’s job.”

When asked about red flags, a sizable portion of respondents selected “Other.” Asked to clarify, the bulk of the respondents said there either were no red flags, the person wasn’t caught and the fraud was later detected, or the red flags weren’t exhibited within the church and only learned of later.

In his comments about red flags, Dimos noted the “fraud triangle”—the illustration often used to describe financial misconduct. It forms a triangle with these three points: pressure (or incentive), rationalization, and opportunity.

“As church leaders, we can’t control what financial pressure someone may experience, like a family medical issue, nor can we stop people from rationalizing that it is okay to steal from the church,” he said. “But church leaders can create processes that prevent someone from having the opportunity to abuse funds.”

Red flags are consistent in other sectors

Interestingly, Church Law & Tax’s survey results closely tracked with the 2020 Report to the Nations by the Association of Certified Fraud Examiners (ACFE), Salsbery said. In particular, with greater positions of authority and tenure came greater degrees of losses for the organizations, he added.

The ACFE report showed the median losses for employee-caused fraud measured $21,000, then jumped to $95,000 for managers and supervisors, and $250,000 for executive-level positions.

“This correlation of higher fraud losses for long-tenured, experienced leaders makes sense. Given their influential leadership roles, they usually have more access to the assets of the church and have had that access for a long time,” Salsbery said. “The first two questions I ask ministries when I conduct [fraud investigations] is: (1) How long was the person in the role? and (2) What access did they have to bank accounts, other assets, and financial activities of the church during that time?”

Given the frequency and consistency of the red flags, whether in secular settings or church settings, leaders are actually positioned well to help protect their churches, noted Vonna Laue, a CPA and senior editorial advisor for Church Law & Tax who co-led the survey project.

“The red flags have not changed over the years in any study you review, and they are the same across entities from churches to Fortune 500 companies,” Laue said.

Leaders need “an awareness of the red flags,” she added, and give careful consideration when those serving in financial roles exhibit “at-risk behaviors.”

NEW! Safeguarding Your Church’s Finances—a multi-session video course for pastors, board members, staff, and volunteers on the basics of fraud prevention. LEARN MORE!

Matthew Branaugh is an attorney, and the content editor for Christianity Today's Church Law & Tax.

Video Series

Religious Land Use & The Church: A Virtual Roundtable

A virtual roundtable of attorneys discusses an often overlooked religious land use law.

The Religious Land Use and Institutionalized Persons Act (RLUIPA) was passed unanimously in 2000 by the US Congress and signed into law by President Bill Clinton. But nearly 25 years later, many church leaders remain unaware of how this law can help them avoid—or at least navigate—challenges posed by governments, agencies, and associations regarding the purchase or use of property for worship and other religious purposes.

Not yet a member? View the series introduction and one case study for free.

This virtual roundtable, featuring attorneys Midgett Parker, John Mauck, Noel Sterrett, and Eric Treene, explores why every church should understand the ins and outs of this valuable law, even if your congregation has yet to experience any obstacles from local government or zoning officials or neighborhood associations. It is conveniently set up in five segments for church leaders to watch either individually or as a board, committee, or leadership team.

In addition, Matthew Branaugh, an attorney and editor for Church Law & Tax, shares two video case studies regarding how RLUIPA helped two pastors successfully overcome obstacles presented by their local officials.

To get the most out of the roundtable, we suggest you download this PDF. It will help guide you through the video series and offer helpful notes and highlights for future reference.

Segment 1: Roundtable Introduction

Segment 2: The History of RLUIPA

Segment 3: Key Provisions of RLUIPA

Segment 4: RLUIPA Resources

Segment 5: How RLUIPA May Help Your Church in the Future

Case Study 1: Christian Fellowship Centers

Case Study 2: City Walk Urban Mission

17 Changes Relevant to Churches in Newest Robert’s Rules of Order

Leaders should note these changes before their next official church business meeting.

Does your church use Robert’s Rules of Order Newly Revised as its parliamentary authority, either by a specific reference in the church bylaws or by common usage? If so, it is important for you to be familiar with the key provisions in the new and revised 12th edition of Robert’s Rules of Order Newly Revised to ensure that your board and membership meetings are being conducted consistently with your parliamentary authority.

In late 2020, the new and fully revised 12th edition of Robert’s Rules of Order Newly Revised was released. It replaces all earlier editions, including the most recent 11th edition that was published in 2010.

The preface to the new edition explains the need for a revision as follows:

This Twelfth Edition of Robert’s Rules of Order Newly Revised clarifies, modifies, and expands upon the rules in previous editions, as situations occurring in assemblies point to a need for more fully developed rules to go by in particular cases.

This new edition contains more than 89 substantive changes in parliamentary procedure. It is important for church leaders to be aware of this development since most church bylaws identify Robert’s Rules of Order Newly Revised as the official parliamentary authority in the conduct of membership meetings. The preface to the 12th edition of Robert’s Rules of Order Newly Revised states:

This Twelfth Edition supersedes all previous editions and is intended automatically to become the parliamentary authority in organizations whose bylaws prescribe “Robert’s Rules of Order,” “Robert’s Rules of Order Revised,” “Robert’s Rules of Order Newly Revised,” or “the current edition of” any of these titles, or the like, without specifying a particular edition. If the bylaws specifically identify one of the 11 previous editions of the work as parliamentary authority, the bylaws should be amended to prescribe “the current edition of Robert’s Rules of Order Newly Revised.”

As a result, any church that has identified Robert’s Rules of Order or Robert’s Rules of Order Newly Revised in its governing document will be bound by the rules contained in the 12th edition of Robert’s Rules of Order Newly Revised. It is for this reason that church leaders should be familiar with the new text. This article will explain the 17 most important changes that are relevant to church meetings and practice.

Example. A church’s bylaws state that “the parliamentary authority for all church business meetings shall be Robert’s Rules of Order Newly Revised (7th edition 1970). The church must use this edition as it’s parliamentary authority. The church should amend its bylaws to define its parliamentary authority as “the current edition” of Robert’s Rules of Order or Robert’s Rules of Order Newly Revised.

Example. A church’s bylaws state that “the parliamentary authority for all church business meetings shall be Robert’s Rules of Order Newly Revised.” The preface to the 12th edition of Robert’s Rules of Order Newly Revised states that the 12th edition “is intended automatically to become the parliamentary authority in organizations whose bylaws prescribe ‘Robert’s Rules of Order,’ ‘Robert’s Rules of Order Revised,’ ‘Robert’s Rules of Order Newly Revised,’ or ‘the current edition of’ any of these titles . . . without specifying a particular edition.”

Note. Each example that follows assumes that a church has adopted the current edition of Roberts Rules of Order Newly Revised as its parliamentary authority.

1. Rearranges the rules that apply to the motion to Lay on the Table

One of the most misunderstood motions in parliamentary law is the motion to Lay on the Table. It is common during the consideration of a motion for someone to blurt out “Table” or “Table it,” as a way to kill any further discussion of a pending motion. But there is no such motion in Robert’s Rules of Order Newly Revised and so it is an improper motion. Here are the key points to note, as set forth in section 17 of the 12th edition :

  • Section 17.2 states that “in ordinary assemblies, the motion to Lay on the Table is not in order if the evident intent is to kill or avoid dealing with a measure.”
  • The motion to Lay on the Table does not kill consideration of a motion, but rather enables the assembly to lay the pending question aside temporarily when something else of immediate urgency has arisen or when something else needs to be addressed before consideration of the pending question is resolved, with the understanding that consideration of the pending motion is resumed by vote of the majority.
  • Robert’s Rules of Order Newly Revised does recognize a motion to Postpone Indefinitely which is designed to allow members to permanently kill a pending motion.

Example. During debate on a motion during a church business meeting, a member shouts “I move that we table the motion” with the intent to kill any further discussion of the pending motion. The chair should inform the member that there is no motion to table in Roberts Rules of Order, but that if his intent is to kill further consideration of the motion, the way to do so is by a motion to Postpone Indefinitely. Such a motion requires a second, is debatable, is not amendable, cannot interrupt a pending motion, and requires a majority vote to pass.

Example. A church convenes its annual business meeting at 10 a.m. on a Saturday morning in the sanctuary. The meeting takes longer than expected. At 1 p.m., the members are engaged in consideration of an important motion. Several members are concerned that the meeting may last for at least a few more hours. A member moves to Lay on the Table the pending motion so that members can break for lunch. Following a one-hour lunch break, the meeting resumes, and a motion is offered to take the motion from the table. Such a motion requires a majority vote.

2. Rules pertaining to the office of vice-president

Section 47:23-31 of the 12th edition consolidates and clarifies the rules pertaining to the office of vice-president. In prior editions of Robert’s Rules of Order Newly Revised, these rules were scattered throughout the text. Here are the main provisions:

  • In the absence of the president, or when for any reason the president vacates the chair, the vice-president serves in his or her stead.
  • When a vice-president is presiding over a meeting, he or she is addressed as “Mr. President” or Madam President,” unless confusion might result, for example, when the president is also on the platform. In which case, the form “Mr. Vice President” or “Madam Vice President” may be used.
  • If the bylaws provide that the president shall appoint all committees, this power does not transfer to a vice-president occupying the chair, even when the president is absent.
  • The president and vice-president may have occasion to make reports in connection with their duties prescribed in the bylaws. If the president has prepared a report but cannot attend a meeting at which it is to be presented, the vice-president should present it. But the vice-president cannot modify the president’s report, or substitute a different one for it, simply because the president is absent.
  • In the case of the president’s resignation, death, or removal, the vice-president automatically becomes president for the remainder of the term, unless the bylaws expressly provided otherwise for filling a vacancy in the office of president.
  • Although in many cases the outgoing vice-president will be the logical nominee for president for the next term, the church has the freedom to make its own choice and to elect the most promising candidate at that time, unless stated otherwise in the bylaws.

3. Executive session

An executive session in general parliamentary usage has come to mean any meeting of a deliberative assembly, or a portion of a meeting, at which the proceedings are secret. As a general rule, anything that occurs in executive session may not be divulged to nonmembers (except any entitled to attend). However, section 9:26-27 of the 12th edition provides the following clarification:

[A]ction taken, as distinct from that which was said in debate, may be divulged to the extent—and only to the extent—necessary to carry it out. . . . If an assembly wishes to further lift the secrecy of action taken in an executive session, it may adopt a motion to do so, which is a motion to Amend Something Previously Adopted.

4. Electronic voting

Section 45:42 of the 12th edition clarifies that the use of electronic devices, such as voting keypads, can fulfill a requirement that voting be by ballot:

[The use of such devices to conduct voting] may be directed by a special rule of order or convention standing rule. . . . Members must be able to indicate their choices without revealing how they have voted. If the devices are to be used for an election, provision must be made to allow voters to cast write-in votes. If the devices are to be used to conduct voting on several questions or several independent offices simultaneously, then they must be programmed to allow the number of votes cast for purposes of computing the majority to be tallied independently for each question or office.

5. Making board minutes available to others

Robert’s Rules of Order Newly Revised has long provided that a record of a board’s proceedings is kept by the secretary, and only members of the board have the right to examine the minute book kept by the secretary unless the board orders otherwise. The board can order that any specified persons, including, for example, all members of the assembly, be permitted to view or be furnished copies of board minutes.

Section 49:19 of the 12th edition further provides:

Whether or not board minutes are protected by the secrecy of an executive session, the assembly of the society can adopt a motion granting such permission, or can order that the board’s minutes be produced and read at a meeting of the assembly, by a two-thirds vote, the vote of the majority of the entire membership of the assembly, or a majority vote if previous notice has been given.

Example. During the annual business meeting of a church, a motion is offered to require the minutes of the board of deacons to be read at each annual business meeting of the church. The motion receives a vote of 60 percent. While not entirely clear, section 49:19 seems to require a two-thirds vote for the board minutes to be read at a meeting of the assembly, and as a result the motion is lost.

Example. Same facts as the previous example except that valid notice of the meeting was provided to the membership pursuant to the church bylaws. Section 49:19 specifies that the church can by majority vote grant the motion if previous notice has been given.

Tip. A church not wanting a broad distribution of board minutes has the option of amending the church bylaws to restrict distribution of board minutes solely to members of the board.

6. Terms of office

Section 56:27 of the 12th edition contains the following helpful clarification regarding terms of office:

When the bylaws specify the number of years in a term of office, it is understood that the actual term may be more or less than a whole number of calendar years, owing to permissible variation in the dates on which successive elections are scheduled.

Section 57:27 illustrates this clarification with the following example:

Example. The bylaws provide that the annual meeting for the election of officers shall take place “in October or November,” that their terms of office shall begin “at the close of the annual meeting,” and that they shall serve for a term of “one-year and until their successors are elected.” If the annual meeting is held on October 20 of one year and on November 1 of the next, the officers elected at the second meeting take office immediately upon the adjournment of that meeting—and the previous officers remain in office until that time—even though this represents a term of office longer than one calendar year.

7. A bylaw revision must be prepared by a committee authorized to draft it

Section 57:5 of the 12th edition specifies that “consideration of a revision of the bylaws is in order only when prepared by a committee that has been properly authorized to draft it, either by the membership or by an executive board that has the power to refer such matters to a committee.”

This provision, and many others described in this article, illustrate a fundamental flaw that has plagued the last several editions of Robert’s Rules of Order Newly Revised. Henry Robert’s purpose in compiling his original Robert’s Rules of Order in 1876 is described in the preface as follows:

There appears to be much needed a work on parliamentary law . . . adapted, in its details, to the use of ordinary societies. Such a work should give, not only the methods of organizing and conducting the meetings, the duties of the officers and the names of the ordinary motions, but in addition, should state in a systematic manner, in reference to each motion, its object and effect; whether it can be amended or debated; if debatable, the extent to which it opens the main question to debate; the circumstances under which it can be made, and what other motions can be made while it is pending.

That is, Robert’s Rules of Order was written to provide a body of rules to assist organizations in conducting meetings with order, decorum, consistency, and efficiency. The original work was devoted entirely to an explanation of these rules. Its table of contents included two parts: rules of order and conduct of business.

But subsequent editions of Robert’s Rules of Order and Robert’s Rules of Order Newly Revised have introduced several new subjects pertaining to matters of church governance and administration rather than “rules of order.” These include the following:

  • The selection and duties of the vice-president, secretary, and treasurer; honorary officers; appointed officers; and filling vacancies.
  • The content and form of minutes of board and member meetings.
  • The selection, authority, and removal of board members; ex officio board members; the appointment of committees; and the conduct of business in boards and committees.
  • Church bylaws almost always define a quorum for both board and membership meetings, a quorum being the minimum number of members present in order for business to be transacted. If a church’s bylaws fail to designate a quorum, then the state nonprofit corporation law under which the church is incorporated will define a quorum. It is almost inconceivable that Robert’s Rules of Order Newly Revised will ever be the authority that defines a quorum in meetings of a church’s board or members.
  • The content and composition of bylaws; drafting of bylaws; appointment of a bylaws committee; articles to be included in bylaws (Article I: Name, Article II: Object, Article III: Members, Article IV: Officers, Article V: Meetings, Article VI: Board of Directors, Article VII: Committees, Article VIII: Parliamentary Authority, Article IX: Amendments); a sample set of bylaws; principles of interpretation; amendment of bylaws; giving members notice of bylaw amendments; and when bylaw amendments take effect.
  • The discipline and punishment of members; removal of officers for dereliction of duties; investigations; trials; rights of the accused; and fair procedures.

These subjects address matters of church governance and administration that are addressed in a church’s bylaws or, in some cases, in the nonprofit corporation law under which a church is incorporated. They have nothing to do with parliamentary procedure and therefore their inclusion in Robert’s Rules of Order Newly Revised not only is inappropriate, but it creates needless confusion due to the inevitable conflicts that will arise between a church’s bylaws and its parliamentary authority.

Note the following two rules of construction:

Rule 1. A church’s bylaws always take precedence over conflicting provisions in Robert’s Rules of Order Newly Revised, since bylaws are a higher legal authority and are superseded only by a church’s charter (articles of incorporation) and, in some cases, by a church’s constitution and denominational rules.

Rule 2. Any provision in Robert’s Rules of Order Newly Revised that does not pertain to parliamentary procedure exceeds the scope and purpose of Robert’s Rules and is superseded by conflicting provisions in a church’s charter, constitution, or bylaws.

These rules are illustrated by the following examples.

Example. A church’s bylaws specify that the quorum for annual membership meetings is 20 percent of all members. State nonprofit corporation law under which the church is incorporated specifies that a quorum is 10 percent of members. Robert’s Rules of Order Newly Revised specifies that the quorum in church meetings “consists of those who attend.” This is a perfect example of the impropriety of Robert’s Rules of Order Newly Revised addressing issues of governance. The definition of a quorum in Robert’s Rules of Order Newly Revised is irrelevant. The operative quorum is the 20 percent specified in the church’s bylaws.

Example. Section 56 in the 12th edition of Robert’s Rules of Order Newly Revised states that the sequence of articles in an organization’s bylaws should be as follows: Article I: Name, Article II: Object, Article III: Members, Article IV: Officers, Article V: Meetings, Article VI: Board of Directors, Article VII: Committees, Article VIII: Parliamentary Authority, Article IX: Amendments. A church’s bylaws include several articles not referenced in Robert’s Rules of Order Newly Revised. Does this mean that the bylaws need to be amended to delete the additional articles in order to correspond to Robert’s Rules of Order Newly Revised? Of course not. Remember, the bylaws control over conflicting provisions in Robert’s Rules of Order Newly Revised, and this is especially true for those provisions in Robert’s Rules of Order Newly Revised having nothing to do with parliamentary procedure.

Why does a manual on parliamentary procedure address the discipline and removal of officers? Not only does this make no sense when this topic is covered under both corporation law (both nonprofit and for-profit) and an entity’s bylaws or articles of incorporation, but it will lead to needless confusion as to the controlling rule (articles, bylaws, nonprofit corporation law, or parliamentary authority).

How should church leaders determine the governing document when there is a conflict in the various sources of authority? Consider the previous example of a church that is trying to determine the quorum requirement for its annual business meeting. Its bylaws specify 20 percent, the applicable nonprofit corporation statute says 10 percent, and Robert’s Rules of Order Newly Revised says “those who attend.” It is easy to see how these conflicts can lead to needless confusion and uncertainty.

Some may challenge the legality of a meeting based on noncompliance with one or more of these sources of authority. Table 1 provides church leaders with a tool for determining the ranking of various sources of authority in “congregational” churches (those that function independently of a religious hierarchy). Start at the top, and go down the list until you find the highest authority to address a particular question.

This process will guide you to the controlling authority. In the church quorum example, the highest ranked authority would be the church’s bylaws, meaning that the applicable quorum is 20 percent of all members. So, a meeting at which 12 percent of members attend would not satisfy the quorum requirement even though it would satisfy the quorum definition under the state nonprofit corporation law and Robert’s Rules.

Caution. According to Table 1, the revised section in Robert’s Rules of Order Newly Revised pertaining to the discipline of officers would have no relevance or application to the discipline of officers in a church that is incorporated under the Model Nonprofit Corporation Act or whose charter, constitution, or bylaws address the discipline of officers, making conflicting provisions in Robert’s Rules of Order Newly Revised inapplicable and irrelevant.

8. Appendix containing sample rules for electronic meetings

The 12th edition includes a 15-page Appendix that provides rules to follow when conducting electronic meetings. Separate rules, and sample bylaw amendments, are provided for the following categories:

A. Full-featured internet meeting services that integrate audio, video, text, and voting capabilities.

B. Telephone meetings, with internet services for conducting secret votes and sharing documents.

C. A speakerphone in the meeting room to allow members who are not physically present to participate by telephone.

D. Telephone meetings without internet support and without any central meeting room.

To illustrate, the following sample bylaw amendment is provided for category “A”:

Meetings held electronically. Except as otherwise provided in these bylaws, meetings of the Board shall be conducted through use of Internet meeting services designated by the President that support anonymous voting and support visible displays identifying those participating, identifying those seeking recognition to speak, showing (or permitting the retrieval of) the text of pending motions, and showing the results of votes. These electronic meetings of the Board shall be subject to all rules adopted by the Board, or by the Society, to govern them, which may include any reasonable limitations on, and requirements for, Board members’ participation. Any such rules adopted by the Board shall supersede any conflicting roles in the parliamentary authority, but may not otherwise conflict with or alter any rules or decision of the Society. An anonymous vote conducted through the designated Internet meeting service shall be deemed a ballot vote, fulfilling any requirement in the bylaws or rules that a vote be conducted by ballot.

Note. This proposed bylaw provision is inadequate in some respects and should not be relied upon without the advice of legal counsel. Further, it is superseded by any provisions in a church’s bylaws or applicable nonprofit corporation law pertaining to electronic voting.

The 12th edition includes sample rules that can be adopted to assist with the conduct of electronic meetings. These rules, for category “A” scenarios, include the following subjects:

  • Login information
  • Login time
  • Signing in and out
  • Quorum calls
  • Technical requirements and malfunctions
  • Forced disconnections
  • Assignment of the floor
  • Interrupting a member
  • Motions submitted in writing
  • Display of motions
  • Voting
  • Video display

9. Excluding nonmembers from a meeting without going into executive session

“Executive session” refers to a meeting, or part of a meeting, of a board or other deliberative assembly that is conducted in secret with only members and invited guests being present.

Section 9:25 of the 12th edition contains a new provision allowing a board to exclude nonmembers from a meeting without going into executive session. It states:

[I]n the case of a board or committee meeting being held in executive session, all persons—whether or not they are members of the organization–who are not members of the board or committee (and who are not otherwise specifically invited or entitled to attend) are excluded from the meeting. When it is desired to similarly restrict attendance at a particular meeting without imposing (or to remove a previously imposed restriction on attendance), this may also be done by majority vote.

Example. A church board is discussing the discipline of a member during a scheduled meeting of the board. Two church members (who are not board members) show up and request permission to attend. The board can exclude these two members from attending either by transitioning into executive session or by voting to exclude them (majority vote). Executive session is appropriate if confidential matters will be discussed. The second option is appropriate if there is no confidential information to protect.

Example. A church member begins attending board meetings insisting that it is his right to do so. The board can exclude this member from attending either by transitioning into executive session, or by voting to exclude him (majority vote). Executive session is appropriate if confidential matters will be discussed. The second option is appropriate if there is no confidential information to protect.

10. Ratification of actions taken without a valid meeting

Ratification means the formal approval of a previously unauthorized act. For example, a church board votes to sell a home that was donated to the church. The church’s bylaws state that only the members in a membership meeting have the authority to sell church property. While the sale was unauthorized, it can be ratified by the membership in a church business meeting.

Section 10:54 in the 12th edition adds the following new information regarding ratification:

The motion to ratify (also called approve or confirm) . . . is used to confirm or make valid an action already taken that cannot become valid until approved by the assembly. Cases where the procedure of ratification is applicable include . . . action taken by officers, committees, delegates, subordinate bodies, or staff in excess of their instructions or authority including action to carry out decisions made without a valid meeting, such as by approval obtained separately from all board members or at an electronic meeting of a body for which such meetings are not authorized.

Example. A church conducted its annual business meeting by means of a virtual internet connection. Church leaders later discovered that its bylaws did not authorize electronic meetings. The unauthorized actions taken at this meeting can be ratified in a subsequent business meeting of the members.

11. Changing one’s ballot

Section 45 of the previous 11th edition of Robert’s Rules of Order Newly Revised specified that a member has a right to change his vote “up to the time the result is announced; after that, you can make the change only by the unanimous consent of the assembly requested and granted, without debate, immediately following the chair’s announcement of the results of the vote.”

Section 45:8 of the new 12th edition modifies this language as follows:

Except when the vote has been taken by ballot (or some other method that provides secrecy), a member has a right to change his vote up to the time the vote is announced but afterward can make the change only by the unanimous consent of the assembly requested and granted, without debate, immediately following the chair’s announcement of the results of the vote.

According to this language, the right of a member to change a vote does not apply when the vote is taken by ballot or some other method providing secrecy.

Example. A church conducts an election for two officers by ballot, during its annual business meeting. Following the chair’s announcement of the vote, a member rises and requests permission to change her vote. The chair should rule that this request is out of order since under the newly revised 12th edition of Robert’s Rules of Order Newly Revised the right of a member to change a vote does not apply when the vote is taken by ballot or some other method providing secrecy.

12. Secrecy of ballot votes

Section 45 of the previous 11th edition of Robert’s Rules of Order Newly Revised specified:

When a vote is to be taken, or has been taken, by ballot, whether or not the bylaws require that form of voting, no motion is in order that would force the disclosure of a member’s vote our views on the matter.

Section 45 of the new 12th edition modifies this language as follows:

When the bylaws require a vote to be taken by ballot, this requirement cannot be suspended—even by unanimous vote—so as to take the vote by a non-secret method.

Example. During a church business meeting, the election of a pastor is on the agenda. The church board presents one candidate for consideration. The chair, in an effort to expedite business, asks for unanimous approval to vote by a show of hands even though the church’s bylaws require voting by ballot. According to the new 12th edition of Robert’s Rules of Order Newly Revised, the bylaw requirement for voting by ballot cannot be disregarded even by unanimous vote.

13. “Secret ballots”

Section 45:18 of the new 12th edition clarifies that voting by ballot is synonymous with voting by secret ballot. This was never clarified in previous editions of Robert’s Rules.

14. Balloting by mail

Section 45 of the previous 11th edition of Robert’s Rules of Order Newly Revised specified that elections by ballot can be conducted by mail if the bylaws so provide. However, “unless repeated balloting by mail is feasible in cases where no candidate attains a majority, the bylaws should authorize the use of some form of preferential voting or should provide that a plurality shout aloud.”

The new 12th edition adds that the bylaws should provide for a method of election if there is a tie.

15. Ex officio officers

Section 45 of the previous 11th edition of Robert’s Rules of Order Newly Revised specified that an ex officio board member who is “under the authority” of the organization in the sense that he or she is a member, employee, or elected or appointed officer, is treated the same as any other director. An ex officio member has both the benefits and obligations of being a director.

However, an ex officio director who is not under the authority of the organization “should not be counted in determining the number required for a quorum or whether a quorum is present at a meeting.” Further, “whenever an ex officio board member is also ex officio an officer of the board, he of course has the obligation to serve as a regular working member.”

Section 49:8 of the 12th edition provides the following clarification:

If the ex officio member is not under the authority of the society, he has all the privileges of board membership, including the right to make motions and to vote, but none of the obligations. . . . The latter class of ex officio board members, who [have] no obligation to participate, [are] not counted in determining the number required for a quorum or whether a quorum is present at the meeting. Whenever an ex officio board member is also ex officio an officer of the board, he of course has the obligation to serve as a regular working member and is therefore counted in the quorum.

Example. A church classifies a former board member who had served on the board for 30 years as an ex officio member of the board. While this director may vote and make motions, he or she is not required to participate in any board meetings and in fact rarely does so. Since this ex officio member has no obligation to participate in board meetings, he or she is not counted in determining the number required for a quorum or whether a quorum is present at a meeting.

Example. A church designates an ex officio member as an ex officio officer. The new 12th edition of Robert’s Rules of Order Newly Revised provides that “whenever an ex officio board member is also ex officio an officer of the board, he of course has the obligation to serve as a regular working member and is therefore counted in the quorum.”

16. Correct procedure for “receiving” a report

Previous editions of Robert’s Rules of Order Newly Revised specified that reports of officers, boards, and committees were “received” when read: “When the assembly hears the report thus read or orally rendered, it receives the report.”

In other words, the person reading the report presents it, while the listeners receive it. As a result, it is incorrect parliamentary practice for a motion to be made at a board or membership meeting to “receive” a report after it is presented, since the act of presenting it constitutes reception by the hearers.

Section 51:28 of the new 12th edition goes a step further and states that a motion to receive a report is out of order:

A common error is to move that a report “received” after it has been read—apparently on the supposition that such a motion is necessary in order for the report to be taken under consideration or to be recorded as having been made. In fact, this motion is meaningless and therefore not in order, since the report has already been received.

Example. During a church business meeting, the secretary presents her report and a motion is made to “receive” the report. The chair should rule this motion out of order since the presentation of the report constitutes its receipt. The new 12th edition states: “[T]his motion is meaningless and therefore not in order, since the report has already been received.”

The 12 edition states that motions to adopt or accept the report of an officer or committee are synonymous, and signify that the entire report becomes “the act or statement of the assembly.” Such motions are common in church board and membership meetings.

To illustrate, it is common for motions to be made and passed to accept a treasurer’s report or the minutes of the previous meeting. It is important to understand, however, that such motions have the effect of “the assembly’s endorsing every word of the report, including the indicated facts and reasoning, as its own statement.”

This may not be a problem in some, or even most, cases. For example, a board may want to formally adopt the minutes of each meeting, since they reflect the actions of the board itself. But there can be situations in which it would be more appropriate for a board or assembly to merely receive a report (by having it presented), and then referring it to the secretary of the board.

In some organizations, the treasurer’s reports to the board of directors are not accepted or adopted (so long as they contain no specific recommendations for action).

Instead, the chairperson requests the secretary to file these reports without action. At the end of the fiscal year, the board adopts a motion to accept the report of the CPA firm that audits the organization’s books.

This has the effect of relieving the treasurer of any personal culpability for his or her reports (excepting fraudulent or illegal activity). It also may minimize the board’s culpability that might otherwise exist if it adopted or accepted each report of its treasurer. The organization itself, at its annual business meeting, also adopts or accepts by motion the CPA’s audit report.

The 12th edition states:

[N]o action of acceptance by the assembly is required, or proper, on a financial report of the treasurer unless it is a sufficient importance, as an annual report, to be referred to auditors. In the latter case it is the auditors’ report which the assembly accepts. The treasurer’s financial report should therefore be prepared long enough in advance for the audit to be completed before the report is made at the meeting of the society.

Some reports of officers or committees contain one or more recommendations for action. In such cases, it is appropriate and necessary for a motion to adopt the recommendation. Usually, such a motion is made by the person presenting the report. But again, many reports made by officers and committees to a board or assembly are for informational purposes and contain no recommendations or motions. There is no need for a motion to accept or adopt such a report, since it is for informational purposes only and contains no recommended action.

The appropriate response by the chairperson to the reading of such reports is to refer them to the secretary for filing with the minutes, without any formal motion. In this regard, Robert’s Rules of Order Newly Revised states: “Apart from filing such a report . . . no action on it is necessary and usually none should be taken.”

Example. At a regularly scheduled meeting of a church board, a committee member reads a report that contains no proposed actions. It would be appropriate for the chairperson to thank the committee and request that the report be placed on file, and then move to the next item of business. A motion to accept or adopt the report is not necessary, since it is informational.

17. Notice of proposed bylaw amendments

The 12th edition states:

Where assemblies meet regularly only once a year, instead of requiring amendments to be submitted at the previous annual meeting, the bylaws should provide for both notice and copies of the proposed amendments to be sent to the member delegates . . . a specified minimum number of days in advance (emphasis added).

The previous 11th Edition of Robert’s Rules stated that “the bylaws should provide for both notice and copies of the proposed amendment to be sent to the member delegates,” but did not recommend that the bylaws be amended to include such a provision.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Recommended Reading

Religious Freedom and the Church

From government mandates to public accommodation laws to employment issues, churches must understand what is and isn’t constitutionally protected.

The First Amendment to the United States Constitution says, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” This language has been foundational to the religious liberty that millions of people have enjoyed in this country for nearly 250 years.

Courts have interpreted the First Amendment through countless decisions since the First Amendment’s adoption, dramatically affecting the protections it affords to both people and houses of worship alike. The US Congress and state legislatures have adopted laws further shaping its scope and reach. Understanding how these numerous developments work is vitally important to pastors and church leaders–and this Church Law & Tax Recommended Reading page is designed to help build that understanding.

Advantage Member Exclusive

Getting Your Church Employment Questions Answered

On-Demand Webinar: Addressing some of the most challenging and confusing issues churches face as employers.

Loading the player...

Editor’s Note. This video is part of the Advantage Membership. Learn more on how to become an Advantage Member or upgrade your membership.

Churches today face an unprecedented number of employment-related issues, thanks to evolving state and federal laws and court decisions. Church leaders understandably wrestle with numerous questions as result, whether about the ministerial exception, discrimination laws, FLSA—and more.

Attorney and CPA Frank Sommerville, a Church Law & Tax Senior Editorial Advisor, recently published an article series covering ministerial exception, job descriptions, employee handbooks, and internships for Now, in this one-hour webinar for Church Law & Tax, Sommerville provides his more than 30 years of legal and accounting expertise just for Advantage Members and their employment-related questions.

This exclusive webinar will help you and your pastors, executive pastors, HR directors, business administrators, and board members address any uncertainties, concerns, and ambiguities you face with employment matters.

For more information on this topic, check out Sommerville’s series covering four key employee issues unique to churches.

Frank Sommerville is a both a CPA and attorney, and a longtime Editorial Advisor for Church Law & Tax.
Related Topics:

Recommended Reading

Church Employment Issues That Lead to Litigation

Notable court decisions about common employment disputes.

Employment law contains many issues unique to churches. To help church leaders navigate this thorny and sometimes difficult area of law, attorney and CPA Frank Sommerville created a special series covering four key angles. Along with offering many best practices, Sommerville’s series aims to help churches gain and maintain compliance with labor and tax laws.

To dig a bit deeper, this Recommended Reading page highlights significant Legal Developments. In them, I analyze key court decisions with implications for churches as employers. Use these real-life examples to prevent potential problems—or to navigate if one should arise.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Part 3 of 6

Internships: Blessings or Blind Spots?

Here’s how churches can avoid tripping up on important legal, tax, and risk management issues with interns.

This series of articles on church employment aims to help give clarity, offer best practices, and encourage tax and labor law compliance in several key areas of church employment:

Part 1 Applying the Ministerial Exception to Church Employees

Part 2 Developing Strong Job Descriptions for Employees and Volunteers

Part 3 Internships: Blessings or Blind Spots?

Part 4 The Importance of a Legally Sound Employee Handbook

Part 5 Title VII and Church Employment Practies

Part 6 The Remote Worker and the FLSA

Many churches believe that part of their mission is to train the next generation of ministers and lay leaders. While Bible schools and seminaries provide information and knowledge, most individuals need hands-on experience to apply what they have learned.

In a tradition that goes back to Joshua serving and learning from Moses, churches open their doors to qualified individuals seeking hands-on experience. Churches frequently use the term “intern” to describe these workers.

Interns benefit from the work experience, résumé enhancement, career exploration, networking opportunities, and, sometimes, the potential for a job offer from the church. Unfortunately, the term “intern” does not have a statutory definition, so each church defines the term to suit its purposes. While the meaning of “intern” varies among churches, churches often believe that using the term allows them to escape all employment rules.

Note. For purposes of this article, the term “intern” means temporary workers serving the church as part of either formal or informal training to prepare for future service to a local church.

In addition to frequently failing to apply employment laws to interns, churches frequently fail to recognize the risks associated with interns. This article guides churches regarding the regulatory and risk environments for their internship programs, assisting them in constructing legally compliant internship programs, and avoiding common risks.

Applying employment laws to interns

The Fair Labor Standards Act (FLSA) imposes minimum wage and overtime requirements on qualifying employers and employees. While attorneys and law professors debate its application to churches, my experience is that most churches qualify as employers under the FLSA.

If a church does not qualify as an employer under the FLSA, individual employees at a church can still be covered by the FLSA. If FLSA does not cover either the church or the employee, then many state employment laws impose similar minimum wage and overtime rules on the relationship between the church and its employees. In any event, the church must consider the employment laws that apply to its relationships with interns.

Note. The definition of an employer for FLSA is beyond the scope of this article. For an overview of the FLSA’s application to churches, see chapter 5 in Elaine Sommerville’s Church Compensation, Second Edition: From Strategic Plan to Compliance.

Also, see the FLSA page from the US Department of Labor (DOL). Consult an employment lawyer or a human resources professional before making decisions about the application of the FLSA to interns and other employees.

Volunteer versus employee

No employment law applies to volunteers. Many churches consider their internship programs to be “volunteer” programs without genuinely understanding the term “volunteer.” As a result, some interns qualify as “volunteers” while many interns fail the volunteer test.

In this context, the volunteer test means the individual receives no compensation, expenses, or benefits from the church and volunteers his or her services solely for humanitarian or religious purposes.

The ban on compensation includes noncash compensation, such as housing, food allowances, and so on. If the church provides compensation (cash, scholarships, stipends, or noncash expenses, such as housing or gas), the worker does not qualify as a volunteer, and employment laws likely apply to that relationship.

FLSA and interns

Before reviewing the application of employment laws to interns, it is necessary to remember that no employment laws apply to workers classified under the ministerial exception. Therefore, it is essential, as with any other worker, to first evaluate the application of the ministerial exception to the intern position. If an intern receives compensation but qualifies for the ministerial exception, then the FLSA or state law equivalent does not apply to that intern.

Every intern that receives compensation and is not subject to the ministerial exception is likely an employee under either the FLSA or applicable state law despite common misconceptions held by many churches.

The DOL has applied the FLSA to some interns since its inception in 1938, resulting in a US Supreme Court decision in 1947 (Walling v. Portland Terminal Co., 330 U.S. 148). The definition of an intern has evolved since then, especially as applied to interns in for-profit settings. Still, there are implications for churches and other nonprofits.

Consider, specifically, the DOL’s Fact Sheet #71, Internship Programs Under The Fair Labor Standards Act. It states that the DOL will apply a “primary beneficiary” analysis to determine the application of the FLSA to unpaid interns. It then lists seven factors that the DOL will consider:

The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa (emphasis added).

The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.

The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.

The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.

The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.

The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.

The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job after the internship.

The DOL Fact Sheet then states in a footnote: “Unpaid internships for public sector and nonprofit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible.” Therefore, if interns receive no compensation, they may work at the church as volunteers. The FLSA will not apply even if the above DOL criteria are not fully implemented into the program.

Once the church provides any compensation (cash or noncash, actual or implied), the FLSA likely applies to the position, regardless of whether or not the compensation triggers tax consequences. Unless the ministerial exception applies, it is unlikely interns can be classified as “exempt” employees because they are typically paid less than the minimum salary requirement of $684 per week. So, the church must pay minimum wage and overtime to compensated interns.

Note. Twenty-nine states have set a higher minimum wage than the federal minimum wage. Also, California measures overtime on a daily basis.

The FLSA allows a lower minimum wage for certain qualified newly hired employees under the age of 20. This lower minimum wage applies only to the first 90 days of employment to allow for training. This lower minimum wage has many additional requirements, including that the younger worker cannot replace a regular worker. Unless the church specifically designed its internship program to meet the requirements of the lower minimum wage with the assistance of an employment attorney, this lower minimum wage will not apply to interns.

Calculating intern pay when the FLSA applies

Since interns are generally nonexempt, churches must require interns to keep timesheets because they need to prove interns are paid at least minimum wage.

Churches may pay a flat weekly amount (salary) as long as the timesheets show that the weekly amount meets or exceeds minimum wage, and that any overtime is paid if earned. Under the salary model, the salary cannot be reduced if the intern works less than 40 hours, and the church must pay overtime for all hours over 40.

Consider, for example, that an intern receives $400 per week. If the intern works 40 hours that week, the intern received at least the federal minimum wage.

But if the intern worked 60 hours, the intern has not received minimum wage ($6.15 per hour instead of $7.25 per hour). In that case, the church must increase the weekly amount to $435 (60 times $7.25). Now the church must add overtime compensation.

Two potential methods exist:

Method 1: 20 hours x $10.875 (1.5 x $7.25 x 20 hours) = $217.60. Under Method 1, the intern receives $435 + $217.60 = $652.60.

Method 2 (only applies if the salary model applies): 20 hours x $3.625 (.5 x $7.25) = $72.50. Under Method 2, the intern receives $435 + $72.50 = $507.50.

The DOL more thoroughly explains this calculation in Fact Sheet #82, Fluctuating Workweek Method of Computing Overtime Under the Fair Labor Standards Act (FLSA)/“Bonus Rule” Final Rule.

State labor laws

No discussion on interns is complete without considering state labor laws. Forty-five states have minimum wage laws. (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee do not have state minimum wage laws as of August of 2021.)

If a church believes that the FLSA does not apply to it, that church still must comply with state labor laws. If its internship program meets the state definition of a training program and the intern qualifies for a lower minimum wage because they are less than 20 years of age, the church may pay qualifying interns a reduced minimum wage.

As noted above, many states have modified or eliminated this lower minimum wage program. Churches should confirm all the state and local minimum wage requirements before implementing an internship program at this lower minimum wage. The church should also work with a local employment attorney to design the internship program to meet the local, state, and federal requirements.

Further, all states have enacted a version of a payday law to protect employees from employers who may not always pay them what they are owed.

Additional Reading: Attorney Richard Hammar analyzes notable court decisions about common employment disputes.

These payday laws govern how frequently employees must be paid. For example, some churches only pay the intern at the end of the internship to encourage them to complete the internship term. But such practices violate state payday laws.

The mandatory maximum payday frequency ranges from one week to one month. 

Here is a chart of maximum payday frequency maintained by the DOL.

Caution. There are penalties for violating payday laws, and the penalties can be stiff. For example, the Texas Payday Law imposes a $1,000 penalty for each violation.

Example. An internship lasts eight weeks. In Texas, since the intern is nonexempt, the payday law requires payment semimonthly. If the church paid a lump sum at the end of eight weeks, it would be subject to a penalty for each failure to pay the intern semimonthly during the eight weeks. Since only the last payday was timely, the church could owe up to a $1,000 penalty for each of three prior paydays.

Payday laws also prevent employers from deducting unauthorized amounts from an employee’s pay. Churches cannot deduct any amount other than payroll taxes from an employee’s pay without their specific written permission.

Payday law penalties apply if the church deducts anything other than payroll taxes from an intern’s paycheck without the intern’s written authorization, even if the church maintains a separate policy that requires the deduction from workers’ pay for amounts owed to the church.

Compensable Time Calculations

Churches must compensate non-volunteer and nonministerial exception interns for all time worked and on standby as defined by the FLSA because they are nonexempt. As mentioned earlier, all non-volunteer and nonministerial exception interns must maintain timesheets and provide them to the church.

The FLSA allows the employer to select the minimum time increment to measure time worked and/or on standby. Time can be measured in increments of a tenth of an hour (6 minutes) up to a maximum of a one-quarter hour (or 15 minutes).

Time worked and/or on standby

If interns subject to minimum wage laws show up early and sit at their desks, they begin accruing time paid for work when they sat at their desks. It does not matter if they were working or not. The same rule applies at lunchtime (see below) and if they linger after their shift ended.

If the church does not want to pay interns who report early or stay late, it should provide a breakroom for interns to use and not owe them pay for that time.

What about the compensation rules for off-duty calls, emails, and texts? In determining whether time spent responding to such communications is compensable, the factors that courts have considered include:

  • the average number of calls, texts, or emails the employee responds to during the off-duty period;
  • the required response time: in other words, how quickly the employee must respond and the amount of time spent responding;
  • whether an employee is subject to discipline for missing or being late to a call-back;
  • the extent to which an employee can engage in other activities while on-call; and
  • the nature of the employee’s occupation (in some jobs, it is the nature of the job to be paid to be available to respond immediately to a situation).

Some states require employers to pay a minimum amount of time for each off-duty call, email, or text where the person responded during off-duty time.


Business travel during a typical workday is compensable. Travel on weekends is compensable if during the typical weekday work hours.


All training related to the employer is compensable.

Breaks, lunch, retreats, and camps

Breaks less than 20 minutes are compensable. Lunches of 30 minutes or more are not compensable. If the intern is on-duty 24 hours straight, then mealtimes and sleep are compensable.

Note. Some states have mandatory breaks and lunchtimes that must be compensated.

Employers who require interns to remain on the employer’s premises and to respond to calls and interruptions during an intern’s meal periods and sleep time are required, in most circumstances, to pay the interns for their meal periods and sleep time.

Retreats and camps present challenges to compensating interns. Frequently, the intern is required to be on duty 24 hours a day during the retreat or camp. Under the usual FLSA rules, the intern must be paid for 24 hours a day.

However, a church can avoid paying for on-duty sleep periods only if it has an express or implied agreement to exclude such periods from work time, the church has furnished adequate sleeping facilities, and the intern’s workday is 24 hours or longer.

Caution. Under no circumstances may a church avoid paying for on-duty sleep time if the intern has not had the opportunity to receive five or more hours of uninterrupted sleep. Finally, under no circumstances can a church exclude more than 8 hours of on-duty sleep time per 24-hour shift when computing an intern’s overtime pay. Some states have additional rules for camp workers that may apply to interns as well.

Tax Issues

If the intern receives compensation in any form, it is taxable unless a specific Internal Revenue Code section excludes the item from taxation.

The Internal Revenue Code, Section 119, excludes from taxation employer-provided meals and housing if (1) the employee must live in the housing and accept the meals as a condition of employment, (2) the housing or meals are located on the business premises of the employer, and (3) the meals that are provided must be required for the convenience of the employer.

A church cannot exclude the value of meals or housing from the intern’s taxable income unless it meets Section 119 requirements.

Example. A church rented an off-campus apartment for two interns during its program. Since the apartment rent does not qualify for exclusion under Section 119, the apartment cost must be split two ways and included in both interns’ taxable income.

Business expenses that are paid or reimbursed under a qualifying accountable expense reimbursement plan are excluded from taxable income. Intern meals and lodging cannot be reimbursed under a qualifying accountable business expense plan unless the expense would also be allowed for other church employees. For example, if an intern rented an apartment, the reimbursement of the cost of the apartment is added to the intern’s taxable compensation. On the other hand, if an intern conducted a Bible study with several students and bought pizza for them, then the pizza cost can be reimbursed tax free.

If an intern has received a ministerial credential (ordained, licensed, or commissioned) from a church, and the intern performs ministerial duties, a church may designate part of the intern’s compensation as a housing allowance under Section 107 of the tax code.

Note. If an intern qualifies as a minister for federal tax purposes, the church is also prohibited from withholding payroll taxes from that intern.

Craft job descriptions for all interns

Churches should have written job descriptions for interns. These written instructions help guide the church and the intern regarding expectations.

If the internship is for ministerial students, the church should draft a job description to qualify for the ministerial exception. If the internship involves nonministerial students, the church should consider structuring the program as a volunteer program to avoid employment compliance issues.

Again, though, even unpaid interns should have a job description detailing his or her responsibilities.

A Plan for Minimizing Risk

Unfortunately, the rigorous hiring and training processes utilized for other church employees are not always applied to interns. Yet, the church must proactively protect vulnerable youth and children from harm, and such protective measures with screening and selection should not be ignored for internship programs. In fact, interns can represent a significant risk to the church.

Protecting vulnerable populations requires a church committed to proper screening, selection, and supervision of pastors, ministry leaders, and volunteers—not just interns.

Learn more about how to do this with attorney and senior editor Richard Hammar’s 14-step plan for minimizing the risk of child and youth abuse in churches.

Churches should also utilize the other youth and child resources at Church Law & Tax to minimize this risk. Misconduct by a single intern in one summer can cost the church millions of dollars, cause the loss of members, and injure individuals that will carry serious emotional scars for life.

On the flipside, an internship provides an excellent opportunity to train the next generation about safely ministering in the real world and understanding the importance of protecting vulnerable populations.

Screening candidates, following up on references, and consistently enforcing policies and procedures can help mitigate risks.

Churches must screen interns with the same careful vetting process they use for potential employees. If the intern will work in the youth or children’s ministries, he or she should go through the same process used for any youth or children’s workers.

Churches are hampered in using background checks because most interns are young and have little or no criminal history due to their ages, or such records are sealed as juvenile offenses. Reference checks and personal interviews will become the church’s primary screening tools.

For interns who will work in youth or children’s ministries, churches ideally should request references from youth-serving institutions where the prospective interns previously served. As attorney Richard Hammar, the senior editor for Church Law & Tax, notes, “The key question to ask is whether the institution is aware of any information indicating that the applicant poses a risk of harm to minors or is in any other respect not suitable for youth or children’s ministry.”

Churches also should request the names and contact information for the prospective intern’s current pastor, as well as his or her former pastors. If candidates do not list their former pastors as references, the church should still contact those pastors.

If a reference or former pastor refuses to respond to requests for a conversation about the candidate, the candidate should be rejected.

The church should include both men and women as reference interviewers to add their perspectives and impressions about the candidates.

Enforce policies and rules

In addition to the screening process, churches need policies and processes to protect vulnerable populations from interns who engage in risky behavior.

All church safety policies should be applied to interns. Since this is likely one of the intern’s first professional ministry experiences, the church must educate the interns about the church’s policies.

Note. All interns must complete the church’s sexual misconduct awareness training before interacting with church members.

The church should actively take steps to make sure the rules are followed. Interns must understand that any violation will end the intern’s participation in the program.

Policies and rules regarding relationships and contact with children and youth should be strictly enforced. The church should prohibit interns from becoming involved romantically with any youth during their term at the church.

As a risk management tool, interns working with youth should be at least five years older than those in their ministry group. The church’s policy should prohibit interns from engaging in any one-on-one visits with children or teens that are not held in public areas on the church’s premises.

Additionally, phone calls, texting, and emails with children and youth should not be allowed unless another adult (such as the child’s parent or youth pastor) is included in the communication.

Nearly all interns will use their personal cellphones to conduct church business during their internship. But cellphones present a frequent tool for grooming children and youth for harm.

Due to the risks arising from cellphone use, the church should notify intern applicants that the church may want to check their cellphones for inappropriate interactions with children and youth during their internships. Further, the intern could be told that the church requires its interns to submit their cellphones for surprise inspections by the church’s information technology (IT) department. (The church would keep all data from the phone unrelated to church business confidential.) The applicant should sign a written consent to the search as a condition of admission into the internship. If the applicant objects, the church may want to decline to invite that applicant.

Some churches require interns to submit a weekly written report of their interactions with their ministry groups outside of formal church events. The interns also should affirm weekly, in writing, that they have followed all policies and procedures required by the church.

Note. Not only should the interns be familiar with these rules, but parents and youth must also be familiar with these rules. No matter whether the church is addressing volunteers, employees, or interns, it is vital that the church educate parents, teens, and children about these rules and the grooming tactics predators use to gain the trust of victims and their families. Parents and youth must understand the importance of the rules in protecting everyone’s safety.

Additionally, the church should provide an easy way for parents and youth to easily report rule violations to church leaders.

Training future leaders

Internship programs provide valuable avenues for training the next generation of ministers and Christian leaders. However, as beneficial as these programs can be, incorrectly administered programs can also create substantial unforeseen liabilities.

The goal is to create internship programs that are either exempt from all employment laws or comply with all the employment and tax laws. It’s also essential that rules and policies are enforced that mitigate the risks noted above.

With careful planning, an internship program can provide meaningful assistance to training the next generation of ministers and future church leaders. It also provides the church with an excellent avenue of ministry.

Thanks to CPA Elaine Sommerville for her useful comments and edits to this article.

Return to series home page.

Churches should also utilize the other youth and child resources at Church Law & Tax to minimize this risk. Misconduct by a single intern in one summer can cost the church millions of dollars, cause the loss of members, and injure individuals that will carry serious emotional scars for life.

On the flipside, an internship provides an excellent opportunity to train the next generation about safely ministering in the real world and understanding the importance of protecting vulnerable populations.

Screening candidates, following up on references, and consistently enforcing policies and procedures can help mitigate risks.

Screen all candidates.

Churches must screen interns with the same careful vetting process they use for potential employees. If the intern will work in the youth or children’s ministries, he or she should go through the same process used for any youth or children’s workers.

Churches are hampered in using background checks because most interns are young and have little or no criminal history due to their ages, or such records are sealed as juvenile offenses. Reference checks and personal interviews will become the church’s primary screening tools.

For interns who will work in youth or children’s ministries, churches ideally should request references from youth-serving institutions where the prospective interns previously served. As attorney Richard Hammar, the senior editor for Church Law & Tax, notes, “The key question to ask is whether the institution is aware of any information indicating that the applicant poses a risk of harm to minors or is in any other respect not suitable for youth or children’s ministry.”

Churches also should request the names and contact information for the prospective intern’s current pastor, as well as his or her former pastors. If candidates do not list their former pastors as references, the church should still contact those pastors.

If a reference or former pastor refuses to respond to requests for a conversation about the candidate, the candidate should be rejected.

The church should include both men and women as reference interviewers to add their perspectives and impressions about the candidates.

Enforce policies and rules

In addition to the screening process, churches need policies and processes to protect vulnerable populations from interns who engage in risky behavior.

All church safety policies should be applied to interns. Since this is likely one of the intern’s first professional ministry experiences, the church must educate the interns about the church’s policies.

The church should actively take steps to make sure the rules are followed. Interns must understand that any violation will end the intern’s participation in the program.

Policies and rules regarding relationships and contact with children and youth should be strictly enforced. The church should prohibit interns from becoming involved romantically with any youth during their term at the church.

As a risk management tool, interns working with youth should be at least five years older than those in their ministry group. The church’s policy should prohibit interns from engaging in any one-on-one visits with children or teens that are not held in public areas on the church’s premises.

Additionally, phone calls, texting, and emails with children and youth should not be allowed unless another adult (such as the child’s parent or youth pastor) is included in the communication.

Nearly all interns will use their personal cellphones to conduct church business during their internship. But cellphones present a frequent tool for grooming children and youth for harm.

Due to the risks arising from cellphone use, the church should notify intern applicants that the church may want to check their cellphones for inappropriate interactions with children and youth during their internships. Further, the intern could be told that the church requires its interns to submit their cellphones for surprise inspections by the church’s information technology (IT) department. (The church would keep all data from the phone unrelated to church business confidential.) The applicant should sign a written consent to the search as a condition of admission into the internship. If the applicant objects, the church may want to decline to invite that applicant.

Some churches require interns to submit a weekly written report of their interactions with their ministry groups outside of formal church events. The interns also should affirm weekly, in writing, that they have followed all policies and procedures required by the church.

Training future leaders

Internship programs provide valuable avenues for training the next generation of ministers and Christian leaders. However, as beneficial as these programs can be, incorrectly administered programs can also create substantial unforeseen liabilities.

The goal is to create internship programs that are either exempt from all employment laws or comply with all the employment and tax laws. It’s also essential that rules and policies are enforced that mitigate the risks noted above.

With careful planning, an internship program can provide meaningful assistance to training the next generation of ministers and future church leaders. It also provides the church with an excellent avenue of ministry.

The author thanks CPA Elaine Sommerville for her useful comments and edits to this article.

Return to series home page.

Frank Sommerville is a both a CPA and attorney, and a longtime Editorial Advisor for Church Law & Tax.

Part 4 of 6

The Importance of a Legally Sound Employee Handbook

A handbook not only protects the church and its staff—it also helps create a healthy relationship between employer and employee.

Employee handbooks, sometimes called employee manuals or employee policies, often represent the Achilles’ heel of church legal compliance.

Employee lawsuits frequently appear near the top of all types of lawsuits against churches. Employee handbooks may assist in avoiding these lawsuits, but this critical documentation is often neglected or copied from secular sources that neglect the unique nature of churches and other religious organizations.

In the employment arena, an employee handbook (handbook) plays the same role in employee relations as the Bible does to a Christian’s everyday life.

Just as the Bible includes rules for relationships and how we should conduct our lives, a handbook includes the rules, policies, and procedures governing and establishing expectations for the relationship between the church and its employees.

A carefully created handbook should include the church’s history, culture, core values, and mission. It should guide the church and its employees’ lives together and address employer and employee expectations arising from the relationship.

This article—the fourth in my series on church employment—is intended to guide churches and ministries to create and maintain this vital ministry and risk-management tool.

Common excuses for not having an employee handbook

Over the last 30 years of offering legal guidance to churches, I have heard lots of excuses for not having a handbook. Many small churches believe they are too small to need one. Other churches claim they lack the time, talent, and money to create and maintain a handbook. Some churches believe that a handbook frustrates and hinders the spiritual side of their work environments.

Then there are church leaders who dislike the restrictions that come with using a handbook. Many leaders believe the church is best served by making ad hoc decisions on an employee-by-employee basis, despite the fact that the resulting inconsistent employment decisions inevitably lead to adverse legal and nonlegal consequences.

When closely examining these excuses from church leaders, all of them fail. And that failure likely results in legal liability. While most employment laws require a minimum number of employees, and thus do not apply to many churches, some employment laws apply to churches with just two or more employees. The legal vulnerability is real.

Mishandling employment-related matters may lead to disruption among the ranks of employees or, worse, charges of unlawful employment actions–even if unintended. That’s why church leaders must make a concerted effort to create a well-drafted handbook.

While doing so requires effort, it will save church leaders time managing their staffs, reducing conflicts and legal liabilities. More important, the handbook can enhance the faith, trust, and community within the church.

While larger churches require professional assistance, the fundamental expertise needed to create and maintain a handbook is readily available from numerous reliable sources, including articles like this one on

Advantages of a handbook

Here are six key advantages to implementing a well-drafted handbook.

Provides organizational structure

In Part 2 of this article series, I discussed the importance of using job descriptions as the set of instructions that give structure for people to accomplish their respective roles in a church. Good structure doesn’t stop there, though. Every organization also needs policies and procedures that guide those leaders and employees.

A church may adopt dozens of individual policies and procedures, so wise church leaders will want those policies and procedures to be coordinated and consistent with each other. The church will also want assurances that it has addressed all the employment-related topics in its policies and procedures. Therefore, it makes sense to address all the employment-related policies and procedures in a single document, with references or hyperlinks to the detailed policies and procedures.

The church must also manage the handbook’s length to avoid making it too long to be useful. If the handbook exceeds 50 pages, many employees will not read it.

Assures compliance with employment laws

Church leaders must adopt policies and procedures to protect the church, to define the relationship between the church and its employees, and to comply with applicable laws. The handbook provides an important tool to accomplish these goals.

The governing body should approve and require continual maintenance of the handbook. The personnel committee, for example, should review the handbook annually to ensure that it complies with currently applicable laws. Governing bodies and personnel committees then must hold church leaders accountable for following and enforcing the policies and procedures referenced in the handbook.

Welcomes new employees to the church

Download PDF

The handbook introduces a new employee to the culture and work environment created by the church.

Nearly everyone experiences anxiety when reporting to a new job. The handbook should make new employees feel welcome. It should also answer most new employee’s questions about practices and benefits.

The handbook should describe the church’s culture and explain the relationship between the employee and the church, including the church’s expectations. The new employee’s compliance with these expectations helps assimilate him or her into the church team and reduces conflict. The handbook helps the new employee more quickly become a productive team member.

Assists with communication

The handbook should help prevent miscommunication between church leaders and church employees.

For example, listing the church’s rules of conduct and the employment benefits it offers provides a basis for a common understanding between church leaders and staff.

Handbooks, however, are of little use if they are not read or understood by employees. Churches want to encourage new employees to ask questions early in the relationship. If an employee does not understand a part of the employee handbook, the church needs to know as soon as possible.

So, churches should require new employees to read the handbook within the first few weeks of employment, and signal they understand it by signing a statement to that effect. When the church later disciplines an employee for violating a provision in the handbook, the typical employee excuse is, “I did not understand.” This signed document refutes that notion and supports the church’s disciplinary action.

Church leaders should refer employees to the handbook for common employment-related questions. While no handbook will answer all questions, it should reduce the time leaders spend responding to employee questions.

Avoids unreasonable employee demands

One crucial benefit of a handbook is to maintain consistency and to avoid situations where an employee might make unreasonable requests based on difficult or emotionally charged circumstances.

Consider, for example, the employee who sought a raise because his son was starting college and the employee had no resources for college. Or consider a pastor who requested his church to continue his compensation for as long as he or his spouse live because he had failed to participate in the church retirement plan.

By addressing these and similar issues in the handbook, the church establishes objective rules and expectations that help protect the church and its decision-makers from the unreasonable demands of employees, including pastors.

Helps protect the church from litigation

Most employment laws authorize employees to sue the employer for violations of those laws. In addition, some churches must comply with dozens of federal, state, and local employment laws and ordinances.

While church leaders rarely have the time to learn about all the employment laws and ordinances that apply to their church, the handbook can include instructions on how the church complies with employment laws and ordinances. If the church follows its handbook, the opportunity for employees to sue the church is reduced.

A handbook is a legal document, although usually not enforceable as a contract (see “Recommended disclaimers” below).

To ensure it is properly constructed and remains current, it should be regularly reviewed by an attorney or human resources (HR) professional, ideally one locally based who specializes in church employment law.

Decide on the tone

The tone of the handbook should reflect the culture of the church.

If the church culture is formal, the handbook should reflect formal language. If the church culture is informal, the handbook should use a conversational style.

Some churches include photos and illustrations to break up page after page of text. Some handbooks are made more engaging by including hypotheticals and examples. Sometimes churches use anecdotes to illustrate the text and make it more understandable.

Tip. If the “why” behind the policy is explained, employees will more readily adhere to the policy.

Most handbooks for churches start with a letter from the pastor that welcomes employees to the church. This letter helps set the tone for the handbook and introduces employees to the church’s culture, mission, and values. In addition, many handbooks include a history of the church, vision statement, mission statement, and core values statement.

What goes into an employee handbook?

Churches should review the following topics to determine whether they apply to them.

Statement of faith

One of the most critical parts of a handbook is the church’s statement of faith. As a religious organization, churches have the freedom to practice their faith in many of their employment decisions. The statement of faith demonstrates to employees and outside authorities alike that these are sincerely held religious beliefs.

The statement of faith should not be a lengthy treatise. Instead, it should reflect the church’s fundamental beliefs, especially as those beliefs relate to the current culture. Typically, the statement of faith is one to two pages long.

I recommend that churches require job applicants to agree to the statement of faith before applying for a job. I do not recommend copying another church’s statement of faith unless the source church is part of the same denomination or faith group. The statement of faith must reflect the local church’s beliefs as practiced by that church.

Code of conduct

The handbook should include a code of conduct that applies to all employees, including pastors.

Violations of the code of conduct should cause a disciplinary action against the employee. Some states allow the church to apply the code of conduct based on the employee’s conduct both at work and away from work.

The code of conduct should reflect the church’s values, along with the actions expected of its employees. The code should be practical and expressed in terms of right and wrong behaviors. This code should include the church’s expectations of honesty and integrity while condemning dishonest and unlawful behaviors. It should reflect the church’s doctrine and practices as applied in the current culture. I suggest supplying Scripture references where applicable.

Recommended disclaimers

The handbook should include the following disclaimers.

First, it should state that all employees serve at the pleasure of the church and that the church follows the employment “at will” doctrine (except in Montana). The employment “at will” doctrine means either the employer or employee can terminate the relationship at any time, with or without a reason, as long as the reason does not violate an employment statute.

Second, the handbook should state that it does not create a contract between the church and the employee. The existence of an employment contract alters or eliminates the employment “at will” doctrine. Without this disclaimer, some courts have ruled that the handbook eliminated the “at will“ doctrine and enforced the handbook as a contract.

Third, it should notify employees that the handbook can be changed at any time without notice, although employees still should be informed of changes in a timely manner.

Finally, it should make it clear that employment is not for any specific length of time.

Topics based on federal statutes

Most churches must adhere to federal employment statutes. The best way to assure compliance with these statutes is to adopt policies and procedures that reflect how the church complies with those statutes. Therefore, the church should consider whether its handbook should address each of the topics arising from the federal employment statutes below as they apply to the church. While I have attempted to list all federal employment statutes applicable to churches, the list may not be comprehensive.

Note. While most churches are subject to federal employment statutes, all states also have employment statutes. Usually they mirror the federal statute and apply to employers that would otherwise be exempt from the federal statute. If a conflict between the statutes arises, the most-employee-favorable statute will apply. Additional information on state statutes is given below in the “Topics based on state and local statutes and ordinances” section.

Churches also should note the applicability (or not) of statutes based on the ministerial exception for ministerial positions.

As explained in Part 1 of this series, the ministerial exception doctrine requires that no federal or state employment statute applies to positions involved in the practice of the religion. The handbook should include an extensive discussion about the ministerial exception and its application to employment laws. For help in understanding and correctly applying the ministerial exception, see Part 1.

Title VII, Civil Rights Act of 1964

This statute applies to churches engaged in interstate commerce with 15 or more employees during 20 or more weeks during a calendar year. In addition, Title VII prohibits employers from refusing to hire, discharge, or otherwise discriminate against any individual about compensation, terms, conditions, or privileges of employment based on race, skin color, religion, gender, ancestry, or national origin.

Note. In June 2020, the Supreme Court expanded the definition of prohibited gender discrimination to include sexual orientation, sexual perception, and gender identity. While the Court’s decision excluded its application to religious employers, the church should be prepared to address its position on these categories with assistance from an attorney.

The church should not fail or refuse to hire, discharge, or discriminate against any individual within any protected class unless a religious exception applies (see “Exception” below). The church cannot limit, segregate, or classify its employees or applicants for employment that would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect their status because the employee is in a protected class.

This statute applies to all terms of employment, including recruiting, hiring, placement, promotion, termination, layoff, recall, transfer, leaves of absence, compensation, and training.

Exception. As mentioned briefly above, churches may discriminate based on religion for positions involved in the practice of the religion.

If an adverse employment decision involves a mix of religious reasons and other protected class characteristics, the church may still be liable for discriminating against the other protected class or classes.

The handbook should include a statement that the church follows Title VII to the extent it applies to employment positions at the church.

Still, the handbook should not include religion in the list of classes protected by Title VII. Instead, the handbook should state the church bases employment decisions on religion when allowed by law and it reserves all rights available under Title VII.

Americans with Disabilities Act (ADA)

This statute applies to churches engaged in interstate commerce with 15 or more employees.

The church may not discriminate against disabled individuals as defined by the ADA. A person has a disability if he or she has a physical or mental impairment that substantially limits a major life activity.

The ADA also protects individuals who have a record of a substantially limiting impairment and people who are regarded as having a substantially limiting impairment. A substantial impairment significantly limits or restricts a major life activity such as hearing, seeing, speaking, breathing, performing manual tasks, walking, caring for oneself, learning, or working.

The handbook should state that the church complies with the ADA if it has 15 or more employees.

Caution. The church must evaluate applicants for positions based on their ability to perform the job’s core functions, with or without accommodation. Those core functions should be described in the job description.

The church should reasonably accommodate qualified individuals with known disabilities unless, by doing so, the church experiences undue hardship. These concepts should be included in the handbook to ensure they are top of mind for the church’s decision-makers.

Pregnancy Discrimination Act (PDA)

This statute also only applies to churches with 15 or more employees.

The PDA forbids discrimination based on pregnancy with any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, such as leave and health insurance, and any other term or condition of employment. In addition, this statute applies even if the individual became pregnant while violating the church’s code of conduct by engaging in sex outside of marriage.

The PDA also prevents discrimination against nursing mothers. The employer must provide a private room, other than a restroom, for expressing milk. It also must provide unpaid breaks to allow nursing mothers time away from their workstations to express their milk for up to one year after giving birth. Some states give nursing mothers additional rights and mandatory accommodations.

The handbook can honor individuals protected by the PDA and state that the church complies with the PDA if it has 15 or more employees.


Title VII applies to harassment based on the Title VII protected classes. Harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted).

Churches must protect employees from harassment by members, vendors, volunteers, and other employees. The handbook should include:

  • A definition of harassment. Harassment can include “sexual harassment,” including unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature. Many courts have expanded harassment to include bullying.
  • The process for reporting the harassment. The church should include multiple places and ways to report harassment. Some female employees are reluctant to report sexual harassment to a male. The available places to report harassment should include at least one female. Also, the church cannot have a subordinate receiving harassment reports against a higher-level employee. If the harassment report is against a church leader, the handbook should include a way to report to a governance board member or the church’s outside law firm.
  • The process for investigating the harassment. Remember that subordinates cannot investigate claims of harassment against persons above them in the organizational chart. The church’s HR director frequently investigates claims against nonleadership employees. The investigation should be completed and reported to the complaining employee within ten days after receipt of the claim.
  • The penalties for harassment. The handbook should state the penalty can include termination or probation. It should also bar retaliatory actions against those who file a report, but it should allow disciplinary actions against those who file a false report or file one in bad faith.

Occupational Safety and Health Act (OSHA)

Employee safety needs to be addressed in the handbook. Churches must report to OSHA all work-related deaths, in-patient hospitalizations, amputations, and eye losses. If the death occurs within 30 days of the work-related incident, the church must report the death within 8 hours of learning of it.

For any in-patient hospitalization, amputation, or eye loss that occurs within 24 hours of a work-related incident, the church must report the event to OSHA within 24 hours of learning of it.

The handbook should state that the church takes employee safety seriously and complies with the employee safety requirements and OSHA rules that apply to the church.

Note. OSHA does not apply to a church’s religious employees. Also, while much of OSHA’s detailed recordkeeping does not apply to a church, all other provisions may apply to church-operated schools, daycare centers, and other administrative personnel of the church.

Fair Labor Standards Act (FLSA)

FLSA applies to most churches because it covers enterprises that engage in interstate commerce. Thus, even if the church conducts no activities or business outside its home state, the FLSA also applies to individual positions involved in interstate commerce. For example, if an administrative assistant regularly orders office supplies over the internet, the position is likely covered by the FLSA even if the church is not a covered enterprise.

Note. Forty-five states have a similar statute that applies even if the FLSA does not apply. Sometimes the state version of the FLSA is more employee-favorable than the FLSA. If the FLSA does not apply, then the state law equivalent will apply. I recommend that all churches follow the FLSA and state minimum wage and overtime laws because employees expect it, and noncompliance can be costly.

FLSA requires employers to pay minimum wage and overtime to nonexempt workers. Therefore, the handbook should address these issues:

  • Worker classifications. A brief description of the different FLSA classifications: ministerial exception, exempt, and nonexempt. Many churches wrongfully classify certain workers as exempt. Churches may have numerous different and self-made definitions of various employee categories. The handbook should be tailored to meet the church’s employment model, but the church should be cautious of creating employee categories that cannot be managed lawfully and efficiently.The US Department of Labor (DOL) provides a safe harbor for the misclassification of exempt and nonexempt employees. If the handbook allows employees to appeal their misclassifications to the church’s senior leaders and those leaders carefully review the classification, then the DOL will usually grant leniency if an employee is ultimately deemed to have been misclassified by the church. (For help classifying employees according to the FLSA, see chapter 5 in Elaine Sommerville’s Church Compensation, Second Edition: From Strategic Plan to Compliance.)
  • Church workweek. Federal overtime is based on the employee working over 40 hours during a workweek. The handbook should include the church’s definition of “workweek” for the FLSA. A workweek is 7 days. The church may select any day as the start of the workweek. The handbook should tell nonexempt employees overtime applies when the nonexempt employee works over 40 hours. The payment of paid time off (holidays, vacations, personal days, and sick leave) does not create overtime.

Note: California generally measures overtime based on working more than 8 hours within a 24-hour period instead of the workweek. All other states use the federal workweek definition.

  • Definition of work time. The handbook should define when a nonexempt employee is “on the clock.” In today’s 24 hours a day/7 days a week world, the church cannot expect nonexempt employees to be available 24/7 without paying them 24/7, and being on call counts as compensable time. (If the church requires church attendance, the church must pay the employees for church attendance.)
  • Timekeeping. Since the FLSA requires nonexempt employees to keep timesheets, the handbook should include instructions on using the church’s timesheet system.
  • Authorizing overtime. The handbook should tell employees which managers and executive leaders may authorize overtime. However, the handbook cannot prohibit the church from paying overtime, even if the overtime was not authorized. If an employee repeatedly works unauthorized overtime, the church may discipline the employee for violating the church’s policy requiring advance approval.
  • Compensatory time off. The handbook cannot authorize compensatory time off to avoid paying overtime to nonexempt employees. Since a workweek measures overtime payments, the church may not avoid paying overtime by allowing an employee paid time off outside the same workweek as the overtime was worked.
  • Volunteer time for the church. The handbook should inform employees that they may not volunteer to serve the church in a similar role as their work role. The DOL believes that nonprofit employers might pressure employees to work without compensation (i.e., in a volunteer capacity) to avoid paying overtime.

Equal Pay Act

The Equal Pay Act, included in the FLSA, applies to every employer subject to the FLSA. It requires that equally situated employees must be paid equally.

The handbook should state that the church complies with this statute, and the church should establish a compensation protocol that honors the Equal Pay Act.

Immigration Laws

Churches are subject to the immigration statutes that require the church only to hire citizens and those authorized to work in the United States.

Churches must secure a Form I-9 (Employment Eligibility Verification) from each new employee. The church must maintain a physical copy of each Form I-9.

The handbook should notify employees that the church follows federal immigration laws, and those employees with day-to-day involvement with authorizations to work should understand the requirements.

Tax Laws

Churches must collect payroll taxes from nonministerial employees. Each employee must provide a Form W-4. The best practice is to require this form annually from employees.

Note. As authorized by the Internal Revenue Code, a few churches have opted out of withholding FICA and Medicare from their employees on religious grounds. Those churches that filed Form 8274 in a timely manner should not withhold FICA and Medicare taxes from their employees. They should tell employees that employees still will owe self-employment taxes on their church compensation.

Ministerial employees may provide a Form W-4, but they must specify the dollar amount they want to be withheld for federal and state income tax purposes. However, the church is prohibited from withholding FICA and Medicare taxes from ministerial employees.

The handbook may contain a general statement of the church’s withholding requirements to appropriately manage employee expectations.

Genetic Information Nondiscrimination Act of 2008 (GINA)

GINA applies to all churches with 15 or more employees. This statute prohibits employers from using genetic information in making employment decisions. The handbook should state the church complies with GINA, and often this compliance initiative is included near or within the policies applicable to Title VII.

Fair Credit Reporting Act (FCRA)

FCRA governs when and if the church may conduct criminal or financial background checks.

The church may conduct background checks only with the applicant or employee’s written consent. The DOL has claimed that background checks have been used to enable unlawful discrimination under Title VII. Therefore, I recommend that churches not conduct the background check until a conditional offer of employment has been made.

The handbook should state which positions, generally, the church may conduct a background check for, when the checks will occur, who will have access to the background check results, how the results will get stored, and when—if ever—the results of the background checks are destroyed. For positions working with children or youth, the background checks should be repeated as often as the church’s insurance carrier requires (typically every three years). For financial positions, the credit report should be repeated every three to five years, or when the church suspects malfeasance.

Family and Medical Leave Act (FMLA)

FMLA applies to churches with 50 or more employees during 20 or more weeks during a calendar year. Like other federal employment statutes, the employee count includes all entities under the church’s control. For example, if the church also operates a school in a separate corporation and the church elects a majority of the school’s board, then the school’s employees are added to the church’s employees to determine whether the FMLA applies.

Except for certain hierarchical churches, denominational bodies do not include local churches in their employee counts because they do not maintain legal control over them.

In addition, the church must offer unpaid leave due to certain medical conditions to qualifying employees.

For situations in which the FMLA applies, the handbook should describe who is qualified for FMLA leave; when it may be taken; how the leave should be coordinated with other types of leave; the documentation required for the leave; the minimum leave time increment available; the availability of fringe benefits during the leave; the notifications required for coming back to work; and the reentry process for when the employee returns to work.

The handbook should also address the different FMLA leave required when the leave involves a military member of the family. The FMLA policy, appropriately crafted, will serve as a tremendous tool for those administering leave that the FMLA covers.

Worker Adjustment and Retraining Notification Act (WARN)

If a church has 100 or more full-time employees, or has 100 or more full-time and part-time employees working 4,000 or more hours per week, WARN requires the church to notify the state employment agency in advance if it plans to lay off or reduce hours for a significant portion of its workforce. The employee count includes all entities under the church’s control.

If applicable, information about WARN should be included in the handbook.

Uniformed Services Employment and Reemployment Rights Act (USERRA)

USERRA requires employers of all sizes to provide a five-year, unpaid leave of absence to individuals called into service with the United States military.

The church must reinstate covered employees to the same or similar position before their military service. The church must compensate and provide benefits as if they had never left employment. Upon returning, they may have the same tenure, compensation, and benefits as those employees who remain continuously employed with the church.

The handbook should include references to USERRA and provide the processes to allow the church to comply with this statute.

Topics from state and local statutes and ordinances

No handbook is complete without addressing state statutes and local ordinances applicable to employment. Also, if a church has employees working in states other than the church’s home state, the church will need to address each state’s statutes and each local government’s ordinances in the handbook. This topic becomes very important for multisite churches that cross state boundaries. Therefore, while I cannot address all the topics and variables among the 50 states, I will list frequent topics addressed in state statutes and local ordinances.

Note. Since this list is not exhaustive, church leaders should familiarize themselves with their state statutes and local ordinances. Any pertinent statutes or ordinances should then be addressed in the handbook. When in doubt, consult a local attorney or HR professional with expertise in state employment law and local ordinances.

Additional classifications protected from discrimination

Many states have adopted a version of Title VII that adds to the federal list of protected classes of individuals. Your church will need to determine whether these additional protected classes apply to them or if an exclusion is available to religious employers. For example, some state laws protect from discrimination because of marital status, sexual orientation, sexual perception, and gender identity.

Payday laws

All states have payday laws, with significant fines and penalties for violations. These laws govern when and how an employer must pay an employee. They apply to all churches and govern various issues, including pay frequency, payment of wages upon separation of service, and withholding authorizations.

While withholding payroll taxes does not require employee authorization, almost every other deduction from an employee’s pay must be voluntary and authorized in writing by the employee.

Employment of minors

Every state regulates the employment of individuals under the age of 18. Therefore, the handbook should either prohibit the employment of individuals under 18 or allow employment authorized by the state statute.


All states allow garnishment of wages by certain classes of creditors with a court or administrative agency order. The handbook should state the church complies with garnishment court orders.

Required time off

Some states require certain types of paid time off, such as paid sick leave; the payment of accrued vacation and sick leave upon separation from employment; and authorized time off to fulfill civic duties, such as jury service and voting—and the time off may be paid or unpaid, depending on state law or the church’s written policy.

The handbook should reflect state law and the church’s business decisions applicable to compensation for required time off.

Mandatory breaks and lunches

Some states require paid and/or unpaid breaks during a workday. All states require an uncompensated lunch or meal break if the employee works a minimum number of consecutive hours.

The handbook should, at a minimum, reflect state law, and the policies may also capture a church philosophy relating to employee health and quality of the employee’s work experience.

State unemployment benefits

Most states do not require that churches participate in the state unemployment benefit plan. However, some churches choose to participate so that former employees will have access to unemployment benefits.

The handbook should inform employees of the church’s decision regarding unemployment. This communication helps establish employee expectations should their employment end with the church.

Further, the policy can serve as additional evidence supporting an exemption if the church must defend against a future claim for unemployment benefits.

Workers’ compensation

Forty-six states require employers to carry workers’ compensation insurance. I recommend that every church purchase workers’ compensation insurance, even if the state does not require it.

The handbook should inform the employees about the church’s decision regarding workers’ compensation insurance and the reporting processes for employee injuries and illnesses.

Topics for policies

The handbook should include, summarize, or reference church policies applicable to employees. The policy topics below may not be required by a statute, but instead, they reflect the church’s management decisions related to their employees. The decision to include, summarize, or exclude a policy should be made in consultation with the church’s lawyer or HR professional. In some cases, those policies may be simply hyperlinked or briefly summarized while letting the employee know where and how to obtain a more detailed copy.

Here are some suggested topics to cover:

Temporary workers

If the church employs workers on a temporary or time-limited basis, this policy should describe their benefits during their employment. Offer letters for a temporary employee then may be tailored to dovetail with the policy to establish employee expectations.

Remote work

The handbook should include the church’s policy on allowing certain employees to work remotely, including the terms and conditions of remote work. A separate “remote work commitment” form may be included so the policy expectations are manageable.

Nepotism and fraternization

The handbook should include the church’s nepotism and fraternization policy. The policy should define how the policy applies to family members.

For example, the nepotism policy might state that it only applies to immediate family members. If the church allows family members to be simultaneously employed by the church, the handbook should detail the hiring and supervision requirements for those family members. For instance, the policy should address whether immediate family members can work in the same department or ministry.

Since romantic relationships frequently occur in the workplace, the church should address this topic. Romantic relations can sometimes develop into unlawful harassment. The policy should also explain the protocol to follow if coworkers become romantically involved so that the risk of harassment is minimized.


The handbook should describe the church’s compensation policies, including descriptions of the church’s compensation philosophy, the church’s compensation decision-makers, and its review processes.

Available fringe benefits

This policy should define the available fringe benefits offered by the church and the classes of employees eligible for the benefits. (Often, churches offer fringe benefits to specific groups or “classes” of employees.)

Churches should pay close attention to the different statutory requirements for each fringe benefit. The employee benefit statutes often contain specific definitions that may not fit neatly within the church’s definitions of who should be eligible for benefits.

Caution. An employee benefits attorney should review the church’s classification system to confirm compliance with employment and tax laws.

Policy statements regarding fringe benefits should include a disclaimer that the nature and extent of benefits may change at any time, with or without notice to the employee.

The handbook should express the employer’s discretion to discontinue any benefit. The benefits summary should be a general overview and should allow for flexibility.

Some fringe benefits will reference a separate document or policy. The specific plan documents generally control over the handbook. Often “See HR for details” is an appropriate way to manage expectations and any conflicts between a plan and a policy. The HR department should always have a current list of benefits or plans.

Note. Typical fringe benefits that require separate policies or documents include health benefits, retirement benefits, life insurance, disability benefits, a cafeteria or flex benefit plan, dependent care assistance, educational assistance, tuition discounts, continuing education, mass transit passes, and a legal benefit plan.

The handbook should note that churches are exempt from COBRA continuation rights for health insurance, so that employees become informed about this limitation. However, some states have similar laws that do not exclude churches. Also, some health insurance companies voluntarily offer continuation rights. In any event, the church needs to inform its employees regarding health insurance continuation rights.

Vacation, paid time off, and holidays

A policy should list types of paid time off and other forms of leave. Besides the law-mandated leaves, most churches provide paid holiday pay, vacation, sick leave, bereavement leave, and jury service leave. Due to potential violations of deferred compensation rules, the church should not allow employees to carry unused paid leave to subsequent years.

If the church offers a sabbatical leave, this policy should outline the eligibility and logistical issues. In addition, many churches have a separate sabbatical leave policy that contains more details about this leave.

This policy should describe the circumstances when the church might dock an employee’s pay, such as when the employee reports to work late. In addition, the church should check its docking policy against federal and state laws, such as the FLSA, especially for employees who are classified as exempt from overtime requirements.

The handbook should include a discussion of absenteeism and job abandonment.

Outside employment

This policy should address whether employees may engage in employment outside of the church and any conditions associated with outside employment.

Computer, laptop, tablet, and cellphone

If the church provides computers, laptops, tablets, and/or cellphones to its employees, the policy should describe the terms and conditions associated with appropriate uses or refer to the policy.

Internet usage

Every church requires employees to utilize the internet in performing their job duties. Therefore, this policy should describe the terms and conditions associated with internet usage, even if the employee brings their own device or cellphone to the office.

Social media

Most churches have a social media presence, and most employees also have a personal social media presence. Since social media presents the church to a worldwide audience, everything posted on social media by employees will represent the church. Therefore, the handbook should include the church’s social media policy or reference to it.

Media inquiries

If the church appears in the media, reporters will frequently contact church employees for comments or additional information. This policy prevents unauthorized employees from communicating with any media representatives. The handbook should inform employees about this policy and instruct them to refer the media inquiries to the authorized spokesperson.

Dress code and appearance

Some churches include a dress code in their handbooks. The policy should reflect the church’s culture. For example, the church may want to dictate business attire in a traditional culture, while an informal culture may require business casual attire. In addition, the policy may allow employees to dress appropriately for the job duties.

Some churches base their dress code on sincerely held religious beliefs. If the religious beliefs dictate a different dress code for men than women (or vice versa), the handbook should detail religious reasons for the church’s dress code. For example, some churches require women to wear dresses and skirts because they believe the Bible requires women to wear dresses and skirts.

Caution. If the church has adopted a dress code policy, it must pay close attention to whether the policy unlawfully discriminates against the protected classes covered under Title VII. For example, a policy prohibiting the wearing of shorts or tank tops should apply to both genders.

Workplace safety, violence prevention, and weapons

The church should have a workplace safety policy that includes its safety protocols. The handbook should provide a means for employees to report if they believe an employee, volunteer, or member threatens workplace violence or exhibits a violent temper.

If the church restricts employees from possessing weapons on campus, the handbook should tell the employees the restrictions. Some states’ laws restrict possession of handguns or weapons if the church has a school or daycare on site. The church’s policy should be tailored to comply with any such restrictions.

The church should adopt a security plan to guide employees if an emergency occurs, such as a fire, flood, medical emergency, or unauthorized intruders. The handbook should reference the plan and tell employees how to access it.


The church should adopt a safe practices policy regarding hazardous chemical usage or power equipment, such as mowers. It will indicate the OSHA requirements applicable to the church. The handbook should alert the employees to the existence of such a policy and how to access it.

Infectious Diseases

Churches should adopt an infectious disease policy that informs employees regarding the requirements to maintain a safe workplace. The policy should prohibit employees from reporting to work sick, or if they have been exposed to an infectious disease. The handbook should summarize and reference the policy.

Child abuse

Churches that maintain children’s or youth programs or daycares should adopt a child abuse reporting policy that addresses state law. Child abuse reporting laws vary from state to state, so any policy should be tailored to meet the applicable legal requirements.

Vehicle operations and cellphone use

The church should address the requirements to operate church vehicles on church business. For example, most vehicle insurance policies require that all drivers be screened for valid licenses and citation history. If the church operates buses, the church should mandate that bus drivers possess a commercial driver’s license.

Employees required to drive a vehicle to conduct church business must understand the hazards and possible legal issues related to using a cellphone while driving. The church might be held liable if the employee uses a cellphone while driving on behalf of the church and causes an accident. Therefore, the church should prohibit cellphone use without a hands-free device while driving on church business, and such a prohibition should be stated in the handbook.

Alcohol and tobacco

If the church restricts employees from using alcohol and/or tobacco, a policy should explain the restrictions.

Drug testing

If the church implements a drug-testing policy that complies with state requirements, the policy should detail when the church may test for illegal substances and the process followed if the presence of drugs is detected.

Intellectual property

Every church needs an intellectual property policy that informs employees about the work for hire doctrine. It should explain how the church applies this doctrine to intellectual property created by employees within the scope of their duties and responsibilities and/or through use of the church’s assets.

Business expense reimbursements and church-issued credit cards

If the church reimburses employees for business expenses incurred by the employee, the handbook should include the policy or refer to the policy. This policy should address any conference and training requirements imposed by the church. It should also convey any restrictions on reimbursements of certain expenses. For example, many churches refuse to reimburse the cost of alcoholic beverages.

If the church provides a church-issued credit card to employees, the handbook should include the credit card policy or a reference to the policy. In addition, the handbook should include whether the church requires employees to enter into a credit card agreement to be issued a credit card.


Every church must adopt a whistleblower policy to comply with federal law. The handbook should summarize and reference the policy.

Conflict of Interest

The IRS requires every church to adopt and follow a conflict-of-interest policy. The handbook should summarize and reference the policy as applicable to employees.

Confidentiality and privacy

The church handles many confidential matters. The handbook should tell employees how the church defines and handles confidential matters.

The Health Insurance Portability and Accountability Act (HIPAA) applies to some churches, meaning the church must treat all medical information confidentially in accordance with the law.

The church also needs to enact safeguards to keep financial and personal data private.

Note. Financial-related and personal information may also constitute a trade secret, creating a mechanism for pursuing employees who steal such information.

Many employees have a level of expectation of privacy while working. Therefore, the handbook should describe the church’s privacy policies and inform employees how and when the church may use their private information.

A policy should also inform employees about the church’s surveillance tools, including screening emails, surveillance cameras, and scanning computers and laptops assigned to them.

Access to employee files

This policy should detail the files the church maintains on each employee, the contents of each file, and whether an employee has access to that file. The policy should follow state laws regarding this topic.

Employee Discipline

Not every employee performs at the level the church expects. The church has much latitude in implementing a discipline policy. But it should seek to address employee shortcomings fairly and provide a mechanism for employees to initiate reports of unfair treatment by other church employees.

The discipline section should describe the process implemented when an employee fails to meet the church’s expectations. Many churches use a progressive disciplinary system in which an employee receives a verbal warning, a written warning, a performance improvement plan, and termination if the employee fails to meet the church’s expectations.

The handbook should state that employees may not require the church to follow its disciplinary system in all circumstances. It should allow for immediate termination if the church determines that action best serves the church.

Separations from employment

Separations are either voluntary or involuntary.

The policy should state that employees are required to give notice before voluntarily leaving employment.

Involuntary separations include layoffs and employer-initiated separations from employment. A policy may describe how the church will implement a layoff if the need for one arises.

This section should include the church’s policy on separation payments, if any. Since most former church employees cannot claim unemployment benefits based on their church employment, many churches provide for generous separation payments. If the church provides a generous separation payment, the church should consider securing a separation agreement with a release.

This section also should include the exit interview process and discuss the process for rehiring if the employee and church desire.


While a church cannot utilize a mandatory retirement age for employees not covered by the ministerial exception, the handbook should describe the process for employees who want to retire. The handbook may describe when the church may require ministerial exception employees to retire.


The church should include its policy regarding references provided to former employees. Some states provide immunity to former employers who provide negative references if former employees consent in writing to the reference beforehand. In addition, some churches adopt a policy of providing only the dates of employment, job titles, and final compensation.

Alternate dispute resolution

Should your church have an alternative dispute resolution policy and agreement and, thus, include it in your handbook?

Many churches prefer to use biblically based alternative dispute resolution to resolve disagreements with employees. The main benefit is that disputes are handled privately and outside of a public forum.

Biblically based alternative dispute resolution services will appoint a neutral mediator to see if the dispute can be resolved by an agreement instead of arbitration or a lawsuit. The neutral mediator will utilize biblical principles and legal principles to assist the parties in settling their dispute. Good mediators typically will have an 80-percent success rate.

The most significant disadvantage of mediation or private arbitration is cost. The mediator or arbitrator will require payment for his or her services, while the government pays a judge. If not resolved in mediation, an arbitrator or arbitrators will cost several thousand dollars a day to conduct the arbitration.

My experience is that an arbitration costs slightly less than regular lawsuits. Still, arbitrator fees, experience, and efficiencies can tilt the expense scale otherwise, depending on the dispute in arbitration.

Suppose the church wants to implement a biblically based alternative dispute resolution policy. It should describe the process in the handbook and require all employees to sign an agreement to use alternative dispute resolution as the exclusive remedy for the alleged wrongful decisions.

Caution. Some states restrict the use of alternative dispute resolution for employee disputes. The church should check its state law on the topic before implementing it. Also, because the handbook is not necessarily a contract, and because the policies may be amended without notice to an employee, a policy that seeks to require biblically based alternative dispute resolution may be unenforceable under law.

Due care with the guidance of a qualified attorney should be taken to create an enforceable agreement if biblically based alternate dispute resolution is the church’s choice. Additionally, churches should check with their insurers about coverage. Some insurance companies will not pay the cost of biblically based alternative dispute resolution, while they will pay for defending a lawsuit if the church has employment practices liability insurance.

Implementing an employee handbook

All churches with over two employees should adopt a comprehensive handbook. Smaller churches may adopt a shorter handbook because it will not need to address employment matters inapplicable to a small workforce.

In comparison, larger churches (more than 15 employees) need a more comprehensive handbook because they must consider a greater array of regulations. Whether a small church or large church, implementation represents a significant undertaking.

Tip. By using this PDF checklist, you’ll have a systematic process for tackling this expansive project and covering everything that needs to be included in your handbook.

Suggested steps for developing and reviewing a handbook

Here are suggested steps for developing a handbook and then conducting periodic reviews of it:

  • The church’s governing body should formally decide the church needs a handbook, and along with its creation, also direct subsequent periodic reviews. Frequently, the governing body will delegate the drafting and updating to a personnel committee, assisted by the church’s HR director, other staff, and the church’s attorney.
  • The personnel committee will decide what will go in the handbook and utilize the accompanying checklist to help move through the process of developing the handbook or reviewing a current one. The committee will frequently enlist volunteer HR professionals from the church or engage an outside law firm to draft and update the handbook.
  • Once the personnel committee approves the draft, the church’s attorney should review it for compliance with employment laws applicable to the church.
  • The senior leadership should then review, comment, and suggest changes to the draft. Afterward, the senior leadership should recommend the handbook and all updates to the governing body for approval. After senior leadership’s approval, the governing body should adopt the handbook and require distributing it to all employees.
  • Every one to two years, the personnel committee should review the handbook with assistance from church staff, an HR professional, and an attorney.
  • Any changes should be drafted and approved by the personnel committee and the church’s attorney before presenting them to the senior leadership or governing body.
  • Once approved by the governing body, the revised handbook should be distributed to all employees. Publishing a handbook has become simpler with the internet. Most churches publish the handbook on the church’s website behind an employee login.

Caution. I do not recommend publishing it on the church’s website without the login because the handbook represents a trade secret under many state laws. This login requirement means that the church may protect its contents from misuse. Also, the handbook should be marked as protected by copyright. This copyright protection means that others cannot copy and use it without the church’s permission.

  • After approval by the governing body, senior church leaders need to confirm that all employees have read, understood, and agreed with the handbook. Most churches require all new employees to sign an agreement within a few weeks of employment. The agreement reflects that the employee has read, understood, and agreed with the handbook. The employee agreement should be renewed with each subsequent revision.

Stewarding your most valuable earthly asset

Developing an employee handbook may seem like a daunting task. But taking the time and effort to do so will help your church confidently exercise good stewardship over its most valuable earthly asset–its employees.

My hope and prayer is that the guidance and accompanying checklist will help streamline the process and offer the framework needed to both create and implement a handbook that is legally compliant and serves your church and its employees well.

The author thanks CPA Elaine Sommerville for her useful comments and edits to this article.

Return to series home page.

Frank Sommerville is a both a CPA and attorney, and a longtime Editorial Advisor for Church Law & Tax.

Recommended Reading

Key Employee Issues Unique to Churches—and How to Navigate Them

Several employee issues that are unique to churches can have a material effect on whether a ministry succeeds or fails.

Churches often lack clarity and fail to comply with applicable law in several areas related to employment. Attorney Frank Sommerville takes an in-depth look at each area with the goal of giving greater clarity, encouraging tax and labor law compliance, and detailing best practices.

For additional reading beyond this series, see Richard Hammar’s analyses of notable court decisions about common employment disputes.

Part 1 of 6

Applying the Ministerial Exception to Church Employees

Understanding this key legal doctrine, how it works, and when it matters—or doesn’t—for specific positions.

The ministerial exception is a valuable legal protection allowing churches to make internal employment decisions without the fear of government intervention or entanglement.

Yet this legal doctrine is often misunderstood or misused by churches.

This article aims to help leaders learn how the ministerial exception does—and does not—apply to employees and properly use it to maximize its effectiveness. Doing so requires developing a working knowledge of the legal doctrine as well as understanding key legal rulings where the exception has applied. Here are two examples that merit mentioning as we begin this article, along with this series, on employment law for churches:

  • In January 2012, the United States Supreme Court unanimously decided a teacher could not sue her Christian school employer for violating the Americans with Disabilities Act because her employment met the ministerial exception to employment laws. Hosanna-Tabor Evangelical Lutheran Church & School, v. EEOC, 565 U.S. 171 (2012).
  • In July 2020, the United States Supreme Court decided two teachers could not sue their Christian school for age discrimination under the Age Discrimination in Employment Act (in one instance) or disability discrimination under the Americans with Disabilities Act (in the other instance) because the teachers’ employment met the ministerial exception to employment laws. Our Lady of Guadalupe School, v. Morrissey-Berru, 140 S.Ct. 2049 (2020).

These landmark decisions validated the concept of the ministerial exception, cementing the doctrine’s role in church employment matters.

Series Overview

This series of articles on church employment aims to give clarity, offer best practices, and encourage tax and labor law compliance in several key areas of church employment:

Part 1 Applying the Ministerial Exception to Church Employees

Part 2 Developing Strong Job Descriptions for Employees and Volunteers

Part 3 Internships: Blessings or Blind Spots?

Part 4 The Importance of a Legally Sound Employee Handbook

Part 5 Title VII and Church Employment Practices

Part 6 The Remote Worker and the FLSA

Additional Reading: Attorney Richard Hammar analyzes notable court decisions about common employment disputes.

This first article in my series begins by explaining the concept of religious autonomy and briefly discusses Supreme Court cases that form the basis of the ecclesiastical abstention doctrine, a pioneering legal doctrine supporting religious autonomy. From there, I explain how religious autonomy and the ecclesiastical abstention doctrine paved the way for the ministerial exception.

I then further explore the ministerial exception’s scope, describing how courts determine if a job description fits within that scope. I conclude with practical ways to apply the ministerial exception to common departments or employment areas in the church.

My prayer is that church leaders become better educated about the ministerial exception and more readily equipped to use it appropriately for their employment decisions.

Religious autonomy and the ecclesiastical abstention doctrine

The historical concept of religious autonomy is well established in the United States. Referred to in the courts as the ecclesiastical abstention doctrine, this concept is the key to understanding the ministerial exception and its application to employment decisions involving religious organizations, including churches, and certain employees.

Based on the freedom of religion clauses of the First Amendment to the US Constitution, the ecclesiastical abstention doctrine prohibits the government from intruding into religious or spiritual decisions within a religious organization.

All Supreme Court decisions in this area employ a “totality of the circumstances” test to apply the ecclesiastical abstention doctrine rather than focus on a specific set of facts. When weighing whether to apply the doctrine to a church’s employment decisions, courts use a specific version of this test called the ministerial exception. With this test, the court applies the totality of the circumstances related to the employment decision to determine whether the government’s intrusion into that decision may violate the religious autonomy principle. This principle means that the government must abstain from ordering the church or other qualified religious employer to make a different employment decision with respect to a worker involved in religious or spiritual matters of the employer.

Court decisions paving the way for the ministerial exception

Understanding the history of judicial decisions forming the ecclesiastical abstention doctrine helps explain how the ministerial exception came into existence and has evolved through the present day. The first significant legal ruling establishing the ecclesiastical abstention doctrine dates back nearly 150 years.

Read More

Explore cases recognizing the ministerial exception and cases not recognizing the ministerial exception in attorney Richard R. Hammar’s Pastor Church & Law.

In Watson v. Jones, 13 Wall. 679 (1872), the Supreme Court found that the government cannot intrude into a church’s internal governance unless there is either an allegation of fraud or the court can apply a neutral law to resolve the dispute without considering the beliefs of the church.

Stated another way, churches have the right to govern themselves and make decisions without governmental interference into religious polity. The government cannot become involved in the church’s internal decisions because doing so violates the First Amendment.

A little more than 100 years later, the Supreme Court reaffirmed this First Amendment principle in Serbian Eastern Orthodox Diocese for United States and Canada v. Milivojevich, 426 U.S. 696 (1976), a case involving a dispute over control of the American-Canadian Diocese of the Serbian Orthodox Church, including its property and assets. Both federal and state courts frequently cite this ruling and Watson v. Jones to find that the government cannot intrude into a church’s internal decision-making.

These decisions play a crucial role when one considers what unfolded during the 20th century. The federal government began regulating the relationship between an employer and its employees. These employment laws and regulations extend to all employers, including religious employers. By the middle of the century, the courts, out of concern for potential violations of the First Amendment, started applying the First Amendment to employment cases involving religious organizations.

The courts based these decisions on the ecclesiastical abstention doctrine. In 1972, using Watson v. Jones as its basis, the Fifth Circuit Court of Appeals applied the ecclesiastical abstention doctrine to prevent the court from considering a claim filed by a minister against her church under Title VII of the federal Civil Rights Act of 1964. McClure v. Salvation Army, 460 F.2d 553 (5th Cir. 1972). Frequently cited as the beginning of the “ministerial exception” cases in employment law, the court observed:

The relationship between an organized church and its ministers is its lifeblood. The minister is the chief instrument by which the church seeks to fulfill its purpose. Matters touching this relationship must necessarily be recognized as of prime ecclesiastical concern. Just as the initial function of selecting a minister is a matter of church administration and government, so are the functions which accompany such a selection. It is unavoidably true that these include the determination of a minister’s salary, his place of assignment, and the duty he is to perform in the furtherance of the religious mission of the church.

In the nearly 50 years since McClure, over 200 lower courts and over 35 appellate courts have considered the ministerial exception when an employee claims a religious organization violated an employment statute. The lower courts have applied the ministerial exception well beyond churches and beyond church-recognized clergy. They have applied the ministerial exception to many positions and virtually every employment law in existence. See the chart for key details of more than 40 appellate cases.

Scope of the ministerial exception

Frequent errors made by churches

Based on the way courts have shaped the ecclesiastical abstention doctrine, and along with it, the ministerial exception, churches possess broad latitude regarding how they handle their affairs, especially in the realm of employment. But common errors made by both churches and their professional advisors, including legal counsel, often result in a limited application of the ministerial exception.

Understanding the ministerial exception’s true scope can help ensure it retains its effectiveness. And while many advisors worry about the potential over-application of the principles, it is equally (if not more) essential not to limit the principles’ application. Doing so works only to the detriment of churches.

One of the most common errors involves too narrowly defining who falls under the exception. Churches frequently limit the ministerial exception’s application by incorrectly limiting the ministerial exception only to their clergy or recognized ministers. This error arises because church management is already conditioned to treat clergy differently for tax purposes. Those who follow this train of thought do a disservice to the church.

Only licensed, ordained, or commissioned ministers qualify for treatment as ministers for tax purposes, so it seems natural and logical to apply this requirement to the ministerial exception. But the tax law test for treatment as a minister differs from the employment law test. The employment law concept is much broader than the tax concept. No ministerial credential is required for the application of the ministerial exception.

Additionally, the tax law concept is concerned with the time spent on religious duties. The employment law concept is more concerned about the importance of the religious duties. The ministerial exception may apply to positions throughout the church involved with delivering and disseminating the church’s faith and message.

Another common error made by churches involves a mistaken belief that the ministerial exception only applies to specific employment laws. Ministerial exception prevents the application of all federal and state employment statutes. No exceptions exist to this rule.

Caution. The ministerial exception does not bar all civil lawsuits against a church by employees who fall under the ministerial exception. All courts have refused to apply the ministerial exception to torts and similar causes of action, enabling them to proceed through the judicial process.

Also, some courts have allowed sexual harassment claims to go forward because they create issues mixed between Title VII (sex discrimination) and torts (invasion of privacy, defamation, intentional infliction of emotional distress, bullying). Also, some courts have allowed claims under Title VII for a hostile work environment despite qualifying for the ministerial exception. The courts have also allowed suits based on sexual misconduct that are brought by employees who, for employment law purposes, would likely qualify for the ministerial exception.

However, it is also worth noting that some courts have applied the ministerial exception to certain breach-of-employment-contract claims because the reason for the breach involves the employee violating the church’s religious beliefs. In those situations, the lawsuits are not allowed to proceed.

Lastly, churches also frequently err because they impose higher involvement in religious duties than the law requires. In Hosanna-Tabor, the Supreme Court rejected the view that the worker must perform religious duties most of their work time. Instead, churches should focus on the significance of an employee’s religious duties. The teacher in the Hosanna-Tabor case lead a 15-minute devotion out of a 6-hour instruction day. But she also incorporated the church’s teachings into each subject when appropriate. This level of religious activity was sufficient to support the application of the ministerial exception to her.

The “totality of the circumstances” test

Although there is no rigid formula in determining whether the ministerial exception applies to an employee, the courts consider the totality of circumstances by relating the employee’s duties to the church’s religious functions. The courts focus on four areas of inquiry:

  1. the employee’s formal title;
  2. education or training;
  3. the employee’s use of the title; and
  4. the “important religious functions” the employee performed. The last factor is the most important.

Frequently, the courts defer to the church’s determination of who qualifies for the ministerial exception. As a result, churches must classify positions as subject to the ministerial exception in their internal documents, such as job descriptions. The courts and government regulators rely on job descriptions as one of the most critical documents in determining whether a position qualifies for the ministerial exception.

A job description must accurately reflect an employee’s position

The church’s definition and explanation of an employee’s role in the life of the church’s activities are important. Job descriptions must accurately reflect the spiritual or religious nature of the position.

Caution. Often, a church copies job descriptions from a secular source, resulting in job descriptions that fail to reflect a position’s spiritual or religious nature. The secular title may not reflect the religious significance of the position, and the educational requirements may not reflect the religious training needed for the job. The job description also will not describe how the position accomplishes the church’s religious mission.

If the job description fails to address the ministerial exception factors, the position, as described, will not qualify for the exception, and the religious employer may be forced to try to prove the ministerial exception applies to the employee by other means or evidence.

Job descriptions and employment contracts should require employees to carry out the church’s religious mission and specify their work evaluations include evaluating their spiritual responsibilities. The church must view the position as playing a vital role in carrying out the church’s mission and state as much in the job descriptions and contracts.

Explicitly stated duties should include assisting others in participating in religious activities, praying with others, and attending church services, as applicable. A job description should also require the individual to perform all duties and conduct their personal lives according to the church’s teachings and practices. Additionally, in most ministerial exception positions, the employee should be leading others to live according to the church’s teachings and practices.

Job descriptions should address the following factors.

The level of religious training required for the position

The courts do not look for a seminary degree. Instead, they focus on what religious education is required for the position. The church may have different educational requirements for different positions.

A youth minister position might require Bible school courses, while the church might require a childcare worker to complete a workbook and Bible class that reflects the church’s teachings. The church might believe that completing particular Bible study courses at the church is sufficient.

In other cases, regular attendance at the church over an extended time frame might suffice for the religious training. A new employee orientation class including teachings on the church’s beliefs and practices might be appropriate sometimes.

Some courts separate personal religious training from professional religious training for the position held. For these courts, preparation to lead others in the faith is what separates personal religious training from more professional religious training.

The key concept here is that the job description includes details about the religious training needed for this position and any additional training to maintain the position.

The church’s formal title for the employee and the title the employee uses to describe his or her job

The courts and the US Department of Labor (DOL) caution placing too much importance on the title. At the same time, titles frequently play a role in determining whether the ministerial exception applies. Some courts interpret this factor to include the employee’s subjective perception of their role at the religious employer. Stated another way, did the employee believe that they were carrying out the religious or spiritual mission of the church as part of their job duties?

A job title should reflect the position’s spiritual responsibilities, and if appropriate, churches should use “Pastor” or “Minister” in the title.

Suppose the employee writes communications to members about the church’s activities, beliefs, and practices. An appropriate title might be “Spiritual Communications Director” instead of “Communications Director.”

However, the church should also avoid over-spiritualizing position titles. Naming the facilities’ employees “Levites” as keepers of the “temple” will not qualify them for the ministerial exception.

Job titles should reflect the position’s spiritual or religious duties and responsibilities and reflect how congregants view the position.

Whether the employee must perform job duties according to the church’s theological beliefs and standards

Workers carrying out the church’s mission should perform their duties consistent with the church’s theological beliefs and standards.

For example, suppose the position involves leading a parenting class. In that case, the job description should require the worker to teach the parenting class consistent with the church’s theological beliefs and standards. The job description should require the worker to follow biblical standards in parenting his or her children as well.

Since the worker represents the church to the world at large, a church should also require the worker to abide by its teachings on a 24/7 basis. The key concept is that the church’s written policies and procedures require the employee to perform duties and to live in agreement with the church’s teachings.

Whether the employee’s job duties reflect a role in conveying the church’s message and carrying out its mission

The job description should describe how the position fits within accomplishing the church’s religious mission. It should also include how the position communicates the church’s message to its members and those outside the church.

Suppose the position includes drafting messages for the church’s social media accounts. In that case, the job description should include how social media communicates the gospel on behalf of the church. It should require the worker to be familiar with the church’s doctrine and its practical application. It should require that all posts agree with the church’s theological beliefs. It might also require the worker to draft messages that seek to reach the unchurched or those who have drifted from the church.

Whether the employee selects or creates religious content

The job descriptions should provide detailed guidelines for workers who select or author content. The worker need not create content as a preaching pastor does. But the worker might select a religious class curriculum or select content from the pastor’s sermons for newsletters or social media, for instance. Such types of creation and selection should be specifically noted and described to demonstrate the responsibilities and requirements intertwined with religious functions.

Caution. Simply selecting content from the pastor’s sermons might not be enough to qualify for a ministerial exception. See “Media and communications” below.

Whether the employee is charged with leading others toward maturity in their faith and teaching the church’s religious beliefs

If the position involves educating others about the faith or leading others in discipleship training, the job description should explain how the position educates or trains others about the religion. While this factor applies to teachers, it also covers anyone who plays a role in helping other believers understand the church’s faith and religious practices. This factor also covers those whose jobs include praying for and with others.

Whether the church periodically reviews the employee’s required religious skills and responsibilities

Measuring spiritual tasks can be challenging. Finding ways to measure spiritual tasks objectively can be even more challenging. But the job description should include objective standards for the position’s spiritual duties.

The job description should identify the worker’s supervisor and the religious skills and performance expected for the position. For example, perhaps the worker must post to social media at least 40 times per day, and at least half of those posts must include a religious value of the church. Or, for example, a director of pastoral care might include a specific number of home visits per week.

Whether the church educates the employee to support its ministry of the gospel

If the church values the worker’s religious duties, the church should also find continuing education to improve those religious duties. Nothing prevents the church from creating and hosting continuing religious education classes.

Most churches already require continuing religious education for their pastors. The challenge comes in finding appropriate continuing religious education for positions outside of pastors. For example, the church might require childcare workers to complete an annual course on how to relate the gospel to preschool children.

The bottom line: Minimum continuing education requirements should always be reflected in job descriptions.

Digging Deeper

Part 2 in this series takes a deeper look at the topic of job descriptions, creating a framework for analyzing specific positions and helping church leaders explore changes they can make to affect the outcome.

Applying the ministerial exception

Churches must intentionally seek to understand and apply the ministerial exception. Since an employee’s duties are the core of the analysis, it helps to understand how the concepts may be applied in various church areas and departments.

Administrative support

Administrative support positions would likely not qualify for the ministerial exception. These positions usually do not have independent spiritual duties.


The person in charge of the benevolence ministry can usually qualify for the ministerial exception. Employees who meet and pray with applicants for assistance also usually qualify for the ministerial exception. Those employees with administrative or clerical support functions, however, rarely qualify for the ministerial exception.

Children or youth

The person in charge of children or youth ministries likely qualifies for the ministerial exception since they will be charged with the department’s overall spiritual direction.

Department leaders will be directly involved in disseminating a church’s religious messages and/or indirectly involved through the selection, creation, or approval of the department’s materials and programs.

Other workers may also qualify if they are actively involved in training children or youth in the faith.


If counselors must follow the church’s teachings and doctrine, they likely qualify for the ministerial exception.


Custodial caretakers would likely not qualify. These positions usually do not have independent spiritual duties.


The courts have yet to approve a position with only duties related to facilities management. One court approved a position that has facilities responsibilities in addition to ministerial responsibilities.


The courts have yet to approve a ministerial exception position in the finance area. It is unlikely a business administrator qualifies for the ministerial exception unless they have religious duties outside the business office.

There may be instances when a finance-related role encompasses duties triggering the ministerial exception. Suppose, for instance, the Pastor of Administration has religious duties, such as teaching a religious class or regularly serving in the pastoral care rotation as a part of the mandated duties. In this case, the position comes closer to qualifying for the ministerial exception.

Again, special circumstances likely must be present with finance-related positions. Any application of the ministerial exception in finance and administration areas should be carefully considered and may require the input of professional advice.


Interns may qualify for the ministerial exception if they have spiritual duties and responsibilities. If the intern’s primary goal is to observe others conducting ministry, he or she likely does not qualify for the exception. If the intern’s primary duties support a department, he or she likely does not qualify for the ministerial exception. But if the position has ministerial duties and responsibilities under the supervision of a minister, then the position might qualify for the ministerial exception. For example, the intern who is required to teach specific religious classes or participate in spiritual counseling or pastoral calls may qualify for the ministerial exception.

Digging deeperPart 3 in this series delves further into the topic of interns and internships.

Media and communications

Departments encompassing media and communications may present some of the most challenging worker classifications for the ministerial exception.

The test looks at the totality of the responsibilities, not only specific tasks. If a position requires the creation or review of media that communicates the church’s message, the position likely qualifies for the ministerial exception. If the position repeats a spiritual message created by others, then the position likely does not qualify.

For example, a position that only creates presentation materials to accompany the sermon likely does not qualify. Also, a position that only posts snippets from a sermon on social media likely does not qualify. But a position that selects the snippets from a sermon that best illustrates the church’s message and expounds on ways the information furthers the church’s message might qualify.

Music and worship

Music is considered a significant avenue through which a church’s spiritual goals are accomplished. The person in charge of the music ministry generally qualifies for the ministerial exception because of his or her significant influence over this crucial church programming area.

Individuals in charge of selecting music included in worship services will also likely qualify since music selection constitutes a spiritual message.

Worship leaders also likely qualify for the ministerial exception since they are influential in the spiritual direction of worshipers and the services they attend.

Vocalists and musicians may not qualify unless they have responsibilities related to content selection. Simply following the leading of a worship leader or choir director does not create a spiritual duty. Likewise, the administrative support positions associated with music and worship rarely qualify for the ministerial exception.

Pastors or ministers

Every person possessing a ministerial credential and conducting typical ministry responsibilities will likely qualify for the ministerial exception. Even if a position does not have a formal minister credential, it will likely qualify if a credentialed minister typically fills it. Typical ministry responsibilities include preaching and teaching, creating spiritual messages, and the congregation’s pastoral care.

The church usually looks at the executive pastor as one of its spiritual leaders, frequently requiring a ministerial credential. But some executive pastors only have management or operational duties. If so, the church should carefully scrutinize the job description to include any actual or expected religious duties. Frequently, executive pastors act as a pastor to the staff, so their spiritual responsibilities lie toward the staff instead of the members. The job description should reflect that responsibility.

Schools and daycares

The person in charge of the church-operated school or daycare usually qualifies for the ministerial exception, provided they are responsible for the school’s spiritual direction and involved in selecting and/or approving the weaving of the spiritual teaching into the educational instruction.

Teachers with mandatory spiritual duties and responsibilities also usually qualify. Teachers who teach only secular subjects and have no responsibility to train the students spiritually rarely qualify.

School guidance counselors usually qualify if required or expected to include a spiritual component to their counseling duties. Administrative or clerical support positions rarely qualify for the ministerial exception, though.

Never underestimate the importance of applying the ministerial exception

The ministerial exception is available to every religious organization and likely applies to some positions in every church.

While this article describes some of the analysis, each church should engage a knowledgeable human resources professional or employment law attorney to correctly classify positions that do not easily fit within the exception.

Every church should engage an employment law attorney if any employee files a complaint with a state or federal employment regulatory agency.

If a DOL examiner asks to audit a church’s compliance with employment laws, the church should engage a competent employment law attorney to represent it.

The bottom line: The ministerial exception offers important legal protections to churches. Its well-developed history, starting with the First Amendment of the Constitution and continuing through numerous decisions made by the Supreme Court and federal courts, reinforces the doctrine’s validity and value. Churches do well to understand its unique history and its comprehensive scope, and then use it effectively for positions carrying spiritual functions and responsibilities.

Reviewing the ministerial exception’s applications is a church’s first line of defense in any complaint lodged by an employee or a regulatory agency. It should be done long before any sign of trouble ever arises.

Through careful assessments of positions, titles, and job descriptions, leaders can avoid common errors, limit legal vulnerabilities, and maximize protections their churches are rightly entitled to receive.

The author thanks CPA Elaine Sommerville for her useful comments and edits to this article.

Return to series home page.

Frank Sommerville is a both a CPA and attorney, and a longtime Editorial Advisor for Church Law & Tax.

Part 2 of 6

Developing Strong Job Descriptions for Employees and Volunteers

Well-crafted job descriptions are critical to each church’s mission and proper functioning.

While an often neglected tool, well-crafted job descriptions support the church’s mission, enhance ministry effectiveness and the effectiveness of those who do ministry, assist in legal and tax compliance areas, and so much more. Besides summarizing essential job responsibilities, the type of work performed, qualifications, and skills for a position, good job descriptions may include information about the church’s culture, mission, and benefits. In fact, a well-crafted job description functions a lot like DNA.

When God created the human race, he wrote detailed instructions into the body through DNA. DNA instructs each cell as it is formed about how it should function. Those instructions organize the formation, growth, and function of the body. These instructions tell one cell to form a fingernail while directing another cell to become a bone. A functioning human is created when all cells are working together by following the correct instructions.

The Bible describes the church as the Body of Christ, a “body” of individuals working together to accomplish God’s purposes. Just as God provided instructions in human DNA, job descriptions provide instructions to the Body of Christ.

In writing to the Corinthians, Paul desired the church to understand that it would take people with diverse gifts and talents organized well to perform different jobs accomplishing God’s purposes. He used the human body to illustrate how to organize a church, even naming a few distinct parts (1 Cor. 12:12-31).

Paul was addressing a church in Corinth that included people from all over the world (different races and cultures) and those with different occupations and economic statuses. This diverse group had never worked together for a common purpose. Yet Paul knew that if the church could work together like a human body, it could accomplish God’s purposes in Corinth.

Today’s church is no different. If the church hopes to accomplish God’s purposes, its members and staff must work together as one body. Job descriptions can be viewed as the DNA or the set of instructions guiding the church to accomplish God’s purposes through the church’s diverse staff and volunteers.

In Part 2 of my series on church employment, I will describe how job descriptions fit into church management, the benefits of using them, what they should contain, and the strategies to follow for effective implementation. There are few legal requirements for job descriptions, but following best practices to create and use job descriptions can help avoid legal problems.

Vital Instructions for both staff and volunteers

Job descriptions are not just for staff. Volunteers represent the most significant workforce at many churches. Yet, most churches expect their volunteers to function without written instructions. This assumption reduces the effectiveness of the volunteers and increases the time church leaders spend managing them.

Written instructions are necessary to determine how staff members and volunteers fulfill their God-given roles in the local body of believers. Job descriptions describe their roles, responsibilities, and duties. Without these instructions, employees and volunteers may have little guidance about what they do and how they do it.

Without explicit instructions, it is easy for chaos to occur, potentially reducing the effectiveness of the local church. Job descriptions help bring order out of the chaos.

Human resource professionals agree that job descriptions are essential. They provide the roadmap for accomplishing a church’s mission. They also provide an effective tool for communicating expectations and responsibilities. The importance of this tool is why drafting job descriptions deserve church leaders’ time and attention.

Ten benefits of well-written job descriptions

There are many benefits of a well-crafted job description. Here are ten.

1. Defines the role

If everyone knows their role and works at accomplishing that role, the church will be more effective. This key element is also why drafting job descriptions cannot be delegated solely to an administrator or human resources department within a church. Pastors and senior leaders need to help shape the job descriptions, listing the gifts, skills, and talents needed to perform the job and the church’s expectations for the job.

Tip. Church leaders should be honest about the gifts and talents needed to accomplish a specific task and strive to match those requirements to the gifts and talents of staff and volunteers. The goal is for each worker to do what they do best.

For an example of how a person’s gifting and abilities are used in a job description, see the sample job description accompanying this article.

2. Avoids hiring mistakes

Many church leaders face situations where someone wants to be hired for a position because they need a job, regardless of their qualifications. Screening each candidate based on minimum job qualifications listed in a job description helps ensure that an unqualified person—including a friend or relative—is not hired.

If the church has a written job description and is disciplined enough to hire only qualified persons, hiring disasters can be avoided. A solid job description allows a church to honestly convey care to unqualified applicants while communicating their inadequacies for the job at hand.

3. Assists with legal and tax compliance

Since the 1930s, federal, state, and local governments have enacted hundreds of laws that govern the relationship between employers and employees. No church can comply with all these laws on an ad hoc basis.

Failure to comply with employment laws may draw the unwanted attention of regulatory authorities, cost a church hundreds of thousands of dollars, bring unwanted publicity, cause members’ wrath, and jeopardize careers.

Job descriptions provide guardrails against serious law violations in making employment decisions. Compliance requires structure and discipline. Job descriptions can provide structure and give church leaders a tool to develop self-discipline in making employment decisions that avoid legal entanglements.

Legal entanglements can arise from a regulatory investigation or an employee lawsuit. For example, if done correctly, a job description can help avoid employee claims against the church for unpaid overtime.

4. Reinforces good compensation practices

Job descriptions may improve compliance by including compensation information for paid employees. They establish the facts to support a reasonable range of compensation for a position.

Including compensation data in job descriptions helps enforce good compensation practices. It forces the church to adopt a compensation philosophy to guide compensation decisions and encourages the church to research compensation for comparable positions in the market. This information allows the personnel and finance committees to make informed decisions when setting the budget and approving a reasonable range for each position.

Tip. See the sample job description for an example of how compensation information can be handled.

Some churches consider compensation private and confidential to each employee and will reject this suggestion. Many churches wrongfully tell employees not to discuss their compensation with other employees. In today’s world of “transparency,” employees are growing more accustomed to compensation information that is public and readily shared among employees. For additional insights, see “Compensation” in the next section.

Caution. The United States Department of Labor suggests that some employers utilize compensation privacy policies to hide unlawful discrimination and strongly discourages this practice.

5. Guides employment decisions

Church leaders should review an employee’s job description before making any critical personnel decisions. That is, leaders should make decisions consistent with the job description. The review process can help a church leader make more objective personnel decisions.

Consider these two specific benefits of a well-crafted job description:

  • Provides sound guidance when making decisions about hiring, firing, promotions, or employee transfers to other departments—or moving a volunteer from one area of service to another.
  • Provides the structure needed when creating, combining, or eliminating positions.

6. Provides a performance tool

Job descriptions set the baseline for the minimum performance expected for the position. Employee reviews should be structured around it, making the review more straightforward and more consistent.

The reviewer should go through the job description and compare the worker’s performance against each item listed as a job duty. The reviewer can document whether the employee’s performance equals or exceeds the church’s expectations for each task. If a worker fails to improve after receiving notices of performance deficiencies, it is easier to justify firing the individual.

Caution. For a job description to be a helpful measurement tool, the duties and responsibilities listed should be measurable and contain specific behavior objectives.

7. Assists with communication

Job descriptions make great communication tools. When a job description is clear about how to do tasks and responsibilities correctly, the church can often avoid unmet expectations between the worker and the church.

Job descriptions can also inform other staff members of the duties of each position and clarify responsibilities among all team members.

Tip. Make the title and role components of a job description available to both staff and volunteers that regularly interact with each other and need to know one another’s duties and responsibilities.

Regarding candidates for a position, a job description communicates the minimum qualifications and significant duties and responsibilities. It also acts like a brochure touting the benefits of working at the church while informing the candidates about the church’s work culture.

8. Helps track changes

Some HR and church leaders view job descriptions as static. But nothing could be further from the truth. In 2020, the COVID-19 pandemic demonstrated why job descriptions must be fluid to allow the church to accomplish its goals. Accomplishing ministry objectives during the pandemic required forging new paths. The objectives did not change, but the methods changed. Job descriptions had to be changed to reflect new expectations and new skill requirements.

Example. The 2020 pandemic created needs for churches that previously did not exist—or did not rise to a high level of priority. But the virus, and the government-related restrictions caused by it, suddenly created the need for employees with social media and online streaming skills, for instance. Few churches included such skills in job descriptions, though. Reviews and updates to those job descriptions, in light of those changing realities, became crucial for churches as they sought to meet the needs of their congregations and communities during the pandemic. Similarly, regular reviews and updates can provide similar positive changes for churches.

While 2020 brought monumental changes, it wasn’t an anomaly. Changes frequently happen in the church world. Church leaders should review job descriptions with the workers at least annually and possibly more frequently.

Employees should initiate changes to their job descriptions when supervisors instruct them to perform a task outside their listed duties. This accountability helps supervisors stay within their responsibilities. It also provides employees with an avenue of appeal if they object to the new responsibilities.

9. Provides a discipleship tool

Church leaders rarely recognize the spiritual value of job descriptions. Yet, they can play an essential role in the spiritual development of the staff.

Job descriptions can help the worker understand the importance of their spiritual walk and how their spiritual walk may affect how they accomplish their job. Job descriptions may include the level of spiritual maturity expected from the worker and also detail the spiritual growth expected from the employees.

Tip. Job descriptions should explain how this position assists the church in accomplishing its mission.

Caution. For employees who fall under the ministerial exception, job descriptions must list the position’s spiritual duties and responsibilities, the spiritual qualifications, the religious training needed (both past and ongoing), and the spiritual performance expected of them. If the position requires a person to have ministerial credentials, then this should also be included.

For a full discussion of when employees qualify for the ministerial exception, how to properly apply the exception to church employees, and how to create job descriptions demonstrating the ministerial exception’s applicability to those employees, see Part 1 of this series, as well as the accompanying PDF.

10. Attracts more qualified candidates

Job descriptions should help attract qualified candidates by listing clear expectations for the position and the pay scale for the position. Listing or referencing the potential fringe benefits may also attract qualified candidates (see below). Many candidates make their employment decisions based on the fringe benefits as much as the cash compensation arrangements.

Composition of a job description

This section lists potential components of a job description. Not all job descriptions include everything discussed in this section. Church leaders should make a thoughtful decision about each item, including the justification for why it is included or excluded.

Job title

The title communicates the role the position plays in the church. If the position involves spiritual duties and responsibilities, the title should reflect the position’s spiritual nature. Except for positions where the title signifies religious duties, the title should avoid internal religious terminology that may have little relevance outside of the church.

For additional insights on job titles that reflect spiritual responsibilities, see Part 1 of this series on the ministerial exception.

Job summary

A job summary should contain a short description of the position and a brief description of the church, its mission, culture, and work environment. By communicating how this position helps the church accomplish its mission, this component can help convince candidates that this is a great place to work.

Minimum qualifications

Minimum qualifications should be detailed for three categories.

First, the education or training expected from candidates should be detailed.

Second, relevant experience required for the job should be described. The description should include the specific type and length of experience the church believes will prepare an individual for this position.

Third, the job description should include both hard and soft skills. For example, the administrative assistant to the pastor must be proficient in Microsoft Office, a hard skill. But the position must also have a well-developed ability to protect the pastor from unnecessary interruptions in a diplomatic manner, which is a soft skill.

The minimum qualifications component for ministerial exception positions will detail the candidate’s religious educational requirements and religious practices.

Sometimes, mandatory qualifications may include any religious qualifications for certain positions. For example, the church may require that candidates be professing Christians and members of the employing church.

Responsibilities and duties

Detailing responsibilities and duties is the substance of the job description. It should concretely describe specific tasks to be accomplished by the position. For example, consider this possible task for a donor accounting clerk: “A donor accounting clerk is expected to enter all donations into the church management and accounting software.”

Refer to the sample job description for other specific examples of responsibilities and duties.

Physical requirements

Job descriptions should indicate the physical duties required of the position. For example, the facilities person might have to lift at least 20 pounds and carry it more than 50 feet, or a clerical position might require the worker to sit for an extended period. By listing the physical requirements, job candidates become aware of the church’s expectations in this area.

This component helps the church comply with the federal Americans with Disabilities Act in two ways.

First, it sets the minimum essential physical requirements for the position. If a disabled person cannot perform the minimum essential physical requirements, even with accommodations, the church may avoid hiring that person for that position.

Second, it places applicants or employees with disabilities on notice that they must affirmatively inform the church of their limitations. The applicant or employee’s notice to the church places the responsibility on the church to discuss with the candidate or employee the potential ways the church can reasonably accommodate the applicant or employee’s disabilities in that position.

Lines of authority

This component of a job description places the position within the hierarchy of the church. It should describe the department, its role in the church, and how it interacts with other church departments.

This component also must detail who supervises this position and name any positions that report to this position, whether paid or unpaid.

This component may also include the number of workers in the department to assist the worker in understanding the size of their team.


Classification for employment law and payroll tax purposes should be stated in a job description. This component will include whether this position is classified as a ministerial exception position, exempt from overtime, or nonexempt from overtime for wages and hour rules. It should also designate if the position requires the worker to be classified as a minister for federal payroll tax purposes.

Additional help. Find detailed guidance for properly classifying workers in chapters 4 and 5 of Church Compensation, Second Edition: From Strategic Plan to Compliance by CPA Elaine Sommerville.


Including a pay scale is critical to attracting qualified candidates, avoiding unlawful employment decisions, and fostering an atmosphere of transparency and fairness among employees.

This disclosure means that the church must review the pay scale at least annually to assure fairness to both the church and the employee.

As noted above, including compensation information in job descriptions helps enforce good compensation practices, including initial and ongoing research regarding pay rates for comparable positions inside and outside of churches. For an example, see the sample job description.

A brief statement about the church’s fringe benefit plans may also be helpful as a part of this component. Note, for example, the sample job description contains this sentence about benefits: “This position is eligible for generous fringe benefits as described in the Employee Handbook.”

Tip. ChurchSalary, a sister site of Church Law & Tax, provides reliable market data, customized reports (including localized salary recommendations), and more for churches.


Besides the formal requirements of a specific job, many churches have specific conditions that candidates and workers must meet to be employed.

For example, any job offer for positions working with children is conditioned on receiving an acceptable criminal background report. Finance department positions frequently require an excellent credit report. Sometimes the church’s offer of employment is conditioned on a negative drug test.

Some churches require all workers to agree with their statement of faith as a condition of applying for a position and continued employment.

Most churches have adopted a code of conduct that applies to all workers. Where allowed by law, the church may discipline workers for infractions of the conduct code unrelated to their work activities. For example, the code of conduct requires that employees not use illegal drugs. Violation of this requirement allows the church to impose discipline on an employee convicted of possession of an illegal substance.

If the church places conditions on applicants and workers, it should ask an employment attorney to review those conditions for compliance with applicable employment laws.

Implementing job descriptions

Church leaders reading this article may become overwhelmed by the work needed to implement job descriptions. This feeling can cause “leadership paralysis” because leaders cannot imagine drafting all of the job descriptions needed for both staff and volunteers in their churches.

This leadership paralysis reminds me of a question posed during my graduate business program: How does one eat an elephant? Answer: One bite at a time. Church leaders can overcome this paralysis by breaking the enormous task of drafting job descriptions into bite-sized tasks.

Here are some suggested steps to consider as you create your plan of action:

  • Delegate the task to a group or committee. Larger churches often include HR professionals willing to assist. In smaller churches, the board members can assist in the task. If your church has a personnel committee, its members should be active in drafting, editing, and approving job descriptions. I also suggest recruiting church members who’ve developed job descriptions to assist with the task.
  • Start with a small department with no more than five employees and/or volunteers.
  • Get input from the people who know. Along with senior leadership and department supervisors, employees in the department can provide essential information about their current job duties and responsibilities.
  • Set a deadline for completing the first draft for the first group of job descriptions, such as 30 days. Set a deadline for the second draft, maybe 15 days.
  • Set a deadline (maybe between 15 and 30 days after the second draft) to finalize the job descriptions for the department.
  • After meeting the above deadlines, select another department. Repeat the process until all paid employees and volunteers have job descriptions.

In my experience, church leaders should plan to complete the entire process in two to three years at most, depending on the church’s size. In this way, leaders can “eat the whole elephant.” This task is too important to delay implementation because of leadership paralysis.

Moving forward as a well-functioning body

Time spent developing and maintaining job descriptions pays enormous dividends, both in time management and spiritual development, and helps ensure compliance with tax and labor laws.

Most importantly, placing job descriptions into their proper role in church management is critical when it comes to accomplishing a church’s mission effectively.

So, instead of suffering through the confusion and resulting chaos, senior leaders can concentrate on moving the church forward in accomplishing God’s purposes as it functions as a well-coordinated body with each part understanding his or her role in accomplishing the church’s kingdom purposes.

The author thanks Rev. Jay Fleener and CPA Elaine Sommerville for their useful comments and edits to this article.

Return to series home page.

Frank Sommerville is a both a CPA and attorney, and a longtime Editorial Advisor for Church Law & Tax.

Read the Latest Update

Key Loan Forgiveness Program Change May Help Church Workers with Student Debt

Education department expands eligibility after 2017 Trinity Lutheran decision—but acceptance is still no certainty.

Editor’s Note: This article has been updated to clarify the precise eligibility requirements of individuals for the Public Service Loan Forgiveness program prior to the rule change that took effect on July 1, 2021. It was updated again on October 12, 2021, to report temporary changes made to the program to further expand borrower eligibility.

For the first time ever, clergy and church workers engaged in religious education, worship, and proselytizing—and who have carried debt from certain federal student loans for at least 10 years—are now eligible to seek forgiveness through the US Department of Education’s (DOE) Public Service Loan Forgiveness (PSLF) program.

The change went into effect on July 1, 2021.

The program forgives a borrower’s remaining balance on subsidized and unsubsidized Direct loans after the borrower has “made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer,” according to the PSLF website.

In a subsequent advisory issued by the DOE on October 6, 2021, the program will temporarily consider monthly payments made to certain other qualifying federal loan plans (explained further below) and also will temporarily count “(p)ast ineligible loan payments … toward [the] 120 total payments.”

Eligible employers and employees

Since the program’s 2007 founding, qualifying employers have included US-based 501(c)(3) tax-exempt organizations and nonprofits. But individuals who worked for those entities could not count any work hours spent conducting religious education, worship, or proselytizing, effectively rendering many, if not most, clergy and religious workers ineligible.

On the heels of the US Supreme Court’s 2017 decision in Trinity Lutheran Church of Columbia, Inc. v. Comer—which found churches and religious organizations could not be excluded from public benefit programs—as well as subsequent guidance issued by the US Attorney General, the DOE sought the change to PSLF.

With the revision now in effect, the PSLF site has been updated to include individuals “employed by a not-for-profit organization” and who spend their time “on religious instruction, worship services, or any form of proselytizing.”

Religious liberty concerns

The change was first proposed in 2018 and went through a standard administrative rulemaking process involving public notice and invitations for public comment.

The final version of the DOE’s rule change, published in the Federal Register in August of 2020, extensively cited Trinity Lutheran. It noted “(t)he Supreme Court has made it clear that a ‘policy preference’ of ‘achieving greater separation of church and State than is already ensured under the Establishment Clause’ is insufficient to justify excluding religious organizations from generally available benefits.”

It continued:

Indeed, there is substantial Supreme Court precedent supporting the proposition that the government must not discriminate against individuals or entities on the basis of their religious identity. . . . The final regulations set religious individuals and entities on equal footing with their secular counterparts by allowing such individuals and entities to qualify for the same aid already available to nonreligious individuals and entities. Therefore, such treatment is correcting an inequality, not creating one.

Some comments opposing the change suggested such an alteration “would be subsidizing inherently religious activities, such as religious education and proselytizing, in violation of the Establishment Clause.”

The DOE disagreed, though, adding the revision “would merely be providing financial aid for otherwise eligible students to attend postsecondary education regardless of their membership in a religious order and without considering that order’s primary objective.”

Welcome help—but no sure thing

According to, the DOE reported in the spring of 2021 that student loan borrowers nationwide “owe a collective $1.6 trillion in federal and private student loan debt.” A 2020 study by NerdWallet estimated the average US household owes $57,520 in student debt, and the site also notes recent US Census data shows about 43 million Americans are saddled with student loan debt—or roughly 1 in 8 Americans.

Additionally, NerdWallet estimates the average graduate school loan debt for a US household measures $71,000.

School debt has long been identified as a key stressor for clergy and religious workers, too. For instance, in a 2015 survey of 4,000 pastors conducted by the National Association of Evangelicals (NAE), 30 percent of pastors carried student loan debt averaging $36,000.

Financial stress ranked highly among the majority of pastors, the survey also found, reinforcing a nationwide, multiyear initiative by the Lilly Endowment to help churches compensate their leaders more fairly—and find other ways to creatively reduce financial stresses even when church budgets get tight. (Editor’s note: The Lilly initiative provides funding to, a sister site of Church Law & Tax.)

While the expansion of PSLF is likely welcome news for clergy and other religious workers, the ability to gain approval from PSLF is no sure thing.

As attorney Adam Minsky, a Forbes columnist, recently pointed out, “the program continues to be mired in problems including application backlogs, low approval rates, and poor management by student loan servicers.”

Efforts to reform PSFL, Minsky added, likely remain years away.

Determining eligibility

The PSLF notes the following criteria for eligibility:

  • A borrower is considered full-time if he or she meets their employer’s definition of full-time or he or she “work(s) at least 30 hours per week, whichever is greater.”
  • A borrower who works more than one qualifying part-time job is considered full-time if he or she works a combined 30 hours or more each week between the employers.
  • Federal Direct Loans (also known as William D. Ford Federal Direct Loans) qualify for PSLF, and the DOE is temporarily including the Federal Family Education Loan Program (FFEL), Perkins Loans, and certain other federal loans all outlined here (but note that federal Parent PLUS loans remain ineligible).
  • Student loans from private lenders do not qualify.
  • The borrower must make at least 120 qualifying monthly payments, meaning the payments came after Oct. 1, 2007, under a qualifying repayment plan, for the full amount due on each bill, no later than 15 days after each bill’s due date—and while working for a qualifying employer, but the DOE also will temporarily count “(p)ast ineligible loan payments … toward [the] 120 total payments.,” according to its October 6, 2021, advisory.
  • When loans are in “in-school status,” a grace period, a deferment, or a forbearance, the site cautions any payments made are not considered to be qualifying ones.

Those interested to learn more about their potential eligibility are encouraged to set up an account with the PSLF Help Tool.

In its October 6, 2021, advisory, the DOE said the tool “will be updated in the coming months to process applications for users with FFEL and Perkins loans. In the meantime, employment can still be verified in Step 1 of the Help Tool, and loan consolidation can still be requested, but a PSLF application through the tool may not be available in the short term.”

Matthew Branaugh is an attorney, and the content editor for Christianity Today's Church Law & Tax.

Supreme Court’s Fulton Decision Reinforces Religious Freedom Protections

Religious freedom protections reinforced by Supreme Court’s ruling against a policy in Philadelphia.

On June 17, 2021, the United States Supreme Court ruled unanimously (9-0) that the City of Philadelphia’s refusal to contract with a church-affiliated group for the provision of foster care services—unless it agreed to certify same-sex couples as foster parents—violates religious free exercise protected by the US Constitution’s First Amend­ment.

Catholic charity served the city for more than 50 years

The Catholic Church has served the needy children of Philadelphia for over two centuries. In 1798, a priest in the city organized an association to care for orphans whose parents had died in a yellow fever epidemic. During the 19th century, nuns ran asylums for or­phaned and destitute youth. Later, the Church established the Children’s Bureau to place children in foster homes. Catholic Social Services (CSS) continues that mission today.

The Philadelphia foster care system depends on coopera­tion between the city and private foster agencies like CSS. When children cannot remain in their homes, the city’s Department of Human Services (DHS) assumes custody of them. The department enters standard annual contracts with pri­vate foster agencies to place some of those children with foster families.

The placement process begins with review of prospective foster families. Pennsylvania law gives the authority to cer­tify foster families to state-licensed foster agencies like CSS. Before certifying a fam­ily, an agency must conduct a home study. During home studies, it considers statutory-based criteria, including the family’s “ability to provide care, nurturing and supervision to children,” “existing family relationships,” and ability “to work in partnership” with a foster agency. The agency must decide whether to “approve, disapprove or provision­ally approve the foster family.”

When DHS seeks to place a child with a foster family, it sends its contracted agencies a request (a “referral”). The agencies report whether any of their certi­fied families are available, and the department places the child with what it regards as the most suitable family. The agency continues to support the family throughout the placement.

The religious views of CSS inform its work in this system. CSS believes that “marriage is a sacred bond between a man and a woman.” Because the agency under­stands the certification of prospective foster families to be an endorsement of their relationships, it will not certify un­married couples—regardless of their sexual orientation—or married same-sex couples. CSS does not object to certifying gay or lesbian individuals as single foster parents or to plac­ing gay and lesbian children.

No same-sex couple has ever sought certification from CSS. If one did, CSS would direct the couple to one of the more than 20 other agencies in the city, all of which currently certify same-sex couples. For over 50 years, CSS successfully contracted with the city to provide foster care services while holding to these beliefs.

A newspaper article prompts scrutiny from city officials

But things changed in 2018. A local newspaper ran a story in which a spokesman for the Archdiocese of Philadelphia stated that CSS would not be able to consider prospective foster par­ents in same-sex marriages.

The City Council called for an investigation, saying that the city had “laws in place to pro­tect its people from discrimination that occurs under the guise of religious freedom.” The Philadelphia Commission on Human Relations launched an inquiry. And the Commissioner of DHS held a meeting with the leadership of CSS. She remarked that “things have changed since 100 years ago,” and “it would be great if we followed the teachings of Pope Francis, the voice of the Catholic Church.”

Immediately after the meeting, the department informed CSS that it would no longer refer children to the agency. The city later explained that the refusal of CSS to certify same-sex couples violated a non-discrimination provision in its contract with the city, as well as the non-discrimination requirements of Philadelphia’s Fair Practices Ordinance. The city stated that it would not enter a full foster care contract with CSS in the future unless the agency agreed to certify same-sex couples.

CSS pursues legal help

CSS and three foster parents (the “plaintiffs”) filed suit against Philadelphia. They alleged that the referral freeze violated the Free Exercise of Religion and Free Speech Clauses of the First Amend­ment. The plaintiffs sought a pre­liminary injunction directing DHS to continue referring children to CSS without requiring the agency to certify same-sex couples.

The district court denied CSS any relief. It con­cluded that the non-discrimination require­ments in the city’s contract and the city’s Fair Practices Ordinance were constitutional under the US Supreme Court’s 1990 decision in Employment Division v. Smith, 494 U.S. 872 (1990).

In the Smith case, the Supreme Court narrowly interpreted the First Amendment’s religious free exercise clause. It concluded that laws that are “neutral and generally applicable” and only incidentally burden religion (e.g., religious organizations are not singled out for less favorable treatment, and religious and secular organizations are treated the same) are valid without proof of a compelling governmental interest.

The Court in Smith repudiated its much more robust interpretation of the First Amendment’s free exercise clause that had prevailed for nearly 40 years. Sherbert v. Verner, 374 U.S. 398 (1963). In Sherbert, the Court concluded that a law that imposes a substantial burden on the exercise of religion must satisfy “strict scrutiny,” meaning that it is nar­rowly tailored to serve a compelling government interest. Since strict scrutiny is a very difficult test to satisfy, its requirement typically led to the invalidation of laws and regulations burdening religious freedom.

The district court in the present Fulton case concluded that the nondiscrimination provisions in both Philadelphia’s contract with foster care providers and the city’s Fair Practices Ordinance were constitutional under Smith because they “categorically prohibited” all foster care agencies from discriminating on the basis of sexual orientation and thus they were neutral and generally applicable. Religious agencies were not treated less favorably than secular agencies—they all were subject to the same nondiscrimination provisions. As a result, strict scrutiny was not required.

The plaintiffs appealed, but a federal appeals court agreed with the district court. The plaintiffs then appealed to the United States Supreme Court.

The Supreme Court’s decision

On appeal, the plaintiffs claimed that the city’s actions burdened CSS’s religious freedom by putting it to the choice of curtailing its mission or approving relationships inconsistent with its beliefs. The city disagreed. In its view, certification reflects only that foster parents satisfy the statutory criteria, not that the agency endorses their relationships.

The Supreme Court noted that its task “is to decide whether the burden the City has placed on the religious ex­ercise of CSS is constitutionally permissible.”

The plaintiffs urged the Court to overrule Smith and return to the Court’s previously broader interpretation of religious free exercise announced in Sherbert. However, only three of the Court’s nine Justices said they would have overruled Smith as a part of CSS’s case.

Instead, the Court concluded that it did not have to overrule Smith because “this case falls outside Smith” inasmuch as “the City has burdened the religious exercise of CSS through policies that do not meet the requirement of being neutral and gen­erally applicable.”

As evidence that the city’s nondiscrimination policy was not neutral or generally applicable, the Court cited the nondiscrimination requirement of the city’s standard fos­ter care contract that permits exceptions to this requirement at the “sole discretion” of the DHS Commissioner. The Court concluded that “this inclusion of a mechanism for entirely discretionary exceptions renders the non-discrimination provision not generally applicable,” thereby triggering strict scrutiny.

The Court also rejected the city’s argument that CSS’s refusal to certify same-sex couples constitutes an “Unlawful Public Accommodations Practice” in viola­tion of the Fair Practices Ordinance. That ordinance for­bids “denying or interfering with the public accommoda­tions opportunities of an individual or otherwise discriminating based on his or her race, ethnicity, color, sex, sexual orientation . . . disability, marital status, famil­ial status,” or several other protected categories. The city contended that foster care agencies are public accommodations and therefore forbid­den from discriminating on the basis of sexual orientation when certifying foster parents.

The Court noted that the ordinance defines a public accommodation in rele­vant part as “any place, provider or public conveyance, whether licensed or not, which solicits or accepts the pat­ronage or trade of the public or whose goods, services, facil­ities, privileges, advantages or accommodations are ex­tended, offered, sold, or otherwise made available to the public.” It added:

Certification is not “made available to the public” in the usual sense of the words. To make a service “available” means to make it “accessible, obtaina­ble.” Related state law illustrates the same point. A Pennsylvania antidiscrimination statute similarly defines a public accommodation as an accommodation that is “open to, accepts or solicits the patronage of the general public.” It fleshes out that definition with examples like ho­tels, restaurants, drug stores, swimming pools, barber­shops, and public conveyances. The “common theme” is that a public accommodation must “provide a benefit to the general public allowing individual members of the general public to avail themselves of that benefit if they so de­sire.”

Certification as a foster parent, by contrast, is not readily accessible to the public. It involves a customized and selec­tive assessment that bears little resemblance to staying in a hotel, eating at a restaurant, or riding a bus. The process takes three to six months. Applicants must pass back­ground checks and a medical exam. Foster agencies are re­quired to conduct an intensive home study during which they evaluate, among other things, applicants’ “mental and emotional adjustment,” “community ties with family, friends, and neighbors,” and “existing family relation­ships, attitudes and expectations regarding the applicant’s own children and parent/child relationships.” Such inquiries would raise eyebrows at the local bus station. And agencies understandably approach this sensitive process from different angles. As the City itself explains to prospective foster parents, “each agency has slightly different requirements, specialties, and training programs.” All of this confirms that the one-size-fits-all public accommodations model is a poor match for the foster care system. . . .

We agree with CSS’s position, which it has main­tained from the beginning of this dispute, that its “foster services do not constitute a ‘public accommodation’ under the City’s Fair Practices Ordinance, and therefore it is not bound by that ordinance.”

The Court concluded:

As Philadelphia acknowledges, CSS has “long been a point of light in the City’s foster-care system.” CSS seeks only an accommodation that will allow it to continue serving the children of Philadelphia in a manner consistent with its religious beliefs; it does not seek to impose those beliefs on anyone else. The refusal of Philadelphia to contract with CSS for the provision of foster care services unless it agrees to certify same-sex couples as foster parents cannot survive strict scrutiny, and violates the First Amendment.

The Court remanded the case back to the appeals court for “further proceedings consistent with this opinion.”

Learn whether your state and its most-populated municipality has public accommodations laws or ordinances on the books—and what it means for churches—through this downloadable 50-state survey available for purchase.

What the ruling means for religious freedom and public accommodations laws

The Court’s decision was narrow and will have little direct effect on churches. But there are two points worth noting:

  1. The Court refused to overturn the Smith case.
    For now, this means that the fundamental First Amendment protection of religious liberty will be interpreted under the Smith case (1990), which represents a significantly more narrow understanding of religious freedom than what existed prior to that ruling under the Sherbert case. While the Religious Freedom Restoration Act (1993) and the Religious Land Use and Institutionalized Persons Act (2000) each sought to stanch the damage, a Supreme Court ruling overturning Smith would have been more powerful. Justice Alito, in a concurring opinion for the Fulton decision, observed: “RFRA and RLUIPA have restored part of the protection that Smith withdrew, but they are both limited in scope and can be weakened or repealed by Congress at any time. They are no substitute for a proper interpretation of the Free Ex­ercise Clause.”

  2. The Court waded into the topic of public accommodation laws.
    In so doing, the Court concluded that a church-based adoption agency is not a place of public accommodation. Most states have enacted such laws that generally prohibit several forms of discrimination by places of public accommodation, including sexual orientation and gender identity. Many church leaders wonder if their church is a place of public accommodation subject to such a law. While there is some variation from state to state, a few generalizations can be made.

    First, churches are exempt from such laws in some states, either by statute or court rulings. However, conditions often apply.

    Second, some churches rent their property to members of the community in order to generate revenue. A common example is the rental of the church sanctuary for weddings by nonmembers. It is possible that this practice, as with any other commercial use of church property, would be sufficient to trigger the non-discrimination provisions of a state or local public accommodations law.

    In Fulton, the Philadelphia ordinance defined a public accommodation in rele­vant part as “any place, provider or public conveyance, whether licensed or not, which solicits or accepts the pat­ronage or trade of the public or whose goods, services, facil­ities, privileges, advantages or accommodations are ex­tended, offered, sold, or otherwise made available to the public.” To some, this language is broad enough to cover commercial exploitation of church property solely for revenue-raising purposes, thereby making such a church a place of public accommodation subject to discrimination laws in the use and rental of its property.

    Third, church leaders should seek legal counsel before engaging in any commercial use of church property to assess the potential application of the non-discrimination provisions of an applicable state or local public accommodations law.

    Fourth, few courts have addressed the issue of the exposure of religious organizations to public accommodations laws. Review the leading cases in this article summarizing them.

Learn whether your state and its most-populated municipality has public accommodations laws or ordinances on the books—and what it means for churches—through this downloadable 50-state survey available for purchase.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Minimizing the Risk of Cybercrime

If it looks suspicious, pause and take these steps.

Nick B. Nicholaou, author of Church IT: Using Information Technology for the Mission of the Church, consults with churches about their IT needs and issues. Here, Nicholaou shares advice on how churches can avoid becoming victims of cybercrime.

What is a typical example of email fraud targeting a church?

We see churches targeted specifically with emails that look as if they’re legitimate, like, “Hey, the senior pastor told me to contact you and get a check for X amount of money.” Those kinds of things.

We also see a lot of fraudulent emails appearing to be from general vendors, like Microsoft and Apple. They look legit, asking you to update or confirm your profile information at places like LinkedIn or Facebook. And, of course, if you click the link, you’re taken to a site where your data can be collected or your identity stolen.

Is this a problem specific to churches or are churches getting caught up in something that happens to all businesses?

Everybody is being targeted, and many do not have appropriate spam filters that minimize exposure.

So spam filters will help prevent email scams?

A spam filter will prevent many of the emails that appear as if they’re from general vendors like Microsoft and Apple. A spam filter probably won’t block emails that appear to come from someone on staff. When this happens, the best approach would probably be to forward the email to the person that is referenced in it. They can then verify whether or not the request is legitimate.

What about verifying by making a phone call?

That would be wise. Sometimes you can reach them by phone; sometimes you can’t. But I would say to at least try calling them. Texting them on their smartphone is not as reliable since their phone may have fallen into someone else’s hands or been compromised. Public Wi-Fi is not always secure, and if they get the text via public Wi-Fi the verification is not solid. Someone could be “sniffing” the public Wi-Fi airwaves and reading the text and other data that people are transferring via that public Wi-Fi. In that case, it’s possible that someone could be picking up information that could compromise a system.

For a lot of pastors, coffee shops become a second office. So, it would seem that hackers would be more likely to be in those public settings.

Your observation is accurate. My recommendation is to not trust public Wi-Fi. Instead, turn on the Wi-Fi hotspot on your smartphone that turns it into a “MiFi.” Your connection will then go over your cellular data stream rather than over the public Wi-Fi. When using your notebook computer at Starbucks, for instance, connect via the hotspot (or MiFi) feature of your smartphone, even though MiFi is a little bit slower and it means you may be paying for data. But you’ll know that by doing it that way your data transfers—like text and email—are more secure.

One final piece of advice: never click links in emails asking you to verify your data.

Minimum Wage and Overtime Pay Requirements May Apply to More Church Employees

A look at how the recent withdrawal of the Independent Contractor Rule by the Biden administration affects churches.

On May 6, 2021, the US Department of Labor (DOL) announced the withdrawal of the Independent Contractor Rule adopted in early January by the Trump administration. As a result, the minimum wage and overtime pay requirements of the Fair Labor Standards Act (FLSA) will apply to more employers, including churches.


Enacted in 1938, FLSA requires that, among other things, covered employers pay their nonexempt employees at least the federal minimum wage for every hour worked and overtime pay for every hour worked over 40 hours in a workweek. It also mandates that employers keep certain records regarding their employees.

The FLSA does not define the term “independent contractor.” Federal courts have uniformly held, and the DOL has consistently maintained, that independent contractors are not “employees” for purposes of the FLSA. The courts and the DOL have struggled to articulate definitions distinguishing employees from contractors. The US Supreme Court has, on a number of occasions, indicated that there is no single rule or test for determining whether an individual is an independent contractor or an employee for purposes of the FLSA. The Court has held that it is the total activity or situation which controls.

Among the factors the Court has considered significant:

  • The extent to which the services rendered are an integral part of the principal’s business.
  • The permanency of the relationship.
  • The amount of the alleged contractor’s investment in facilities and equipment.
  • The nature and degree of control by the principal.
  • The alleged contractor’s opportunities for profit and loss.
  • The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
  • The degree of independent business organization and operation.

The Court has noted that there are certain factors that are immaterial in determining whether there is an employment relationship. Such facts as the place where work is performed, the absence of a formal employment agreement, or whether an alleged independent contractor is licensed by a state or local government are not considered to have a bearing on determinations as to whether there is an employment relationship.

Additionally, the Supreme Court has held that the time or mode of pay does not control the determination of employee status. Suffice it to say that the Supreme Court’s pronouncements have been of very limited assistance.

How the Trump administration rule affected employee classifications

On January 6, 2021, the DOL announced a new “Independent Contractor Rule” clarifying the standard for employee-versus-independent-contractor status under the FLSA. The effective date of the Independent Contractor Rule was March 8, 2021. The rule, adopted by the Trump administration, generally made it easier for employers to classify workers as contractors rather than employees, thereby relieving employers of the need to comply with the FLSA.

In the final rule, the DOL reaffirmed an “economic reality” test to determine whether an individual is an independent contractor or employee.

A federal appeals court previously described this six-factor economic reality test as follows:

  1. the degree of the alleged employer’s right to control the manner in which the work is to be performed;
  2. the alleged employee’s opportunity for profit or loss depending on his managerial skill;
  3. the alleged employee’s investment in equipment or materials required for his task, or his employment of helpers;
  4. whether the service rendered requires a special skill;
  5. the degree of permanency of the working relationship; and
  6. whether the service rendered is an integral part of the alleged employer’s business.
  7. The final rule also:
  8. Identified and explained “two core factors” that are most probative to the question of whether a worker is economically dependent on someone else’s business or is in business for him or herself:

    • The nature and degree of control over the work.
    • The worker’s opportunity for profit or loss based on initiative and/or investment.
  9. Why the DOL withdrew the rule
  10. On May 6, 2021, the DOL announced the withdrawal of the Independent Contractor Rule for the following reasons:
  11. The Independent Contractor Rule was in tension with the FLSA’s text and purpose, as well as relevant judicial precedent.
  12. The Rule’s prioritization of two “core factors” for determining employee status under the FLSA would have undermined the longstanding balancing approach of the economic realities test and court decisions requiring a review of the totality of the circumstances related to the employment relationship.
  13. The rule would have narrowed the facts and considerations comprising the analysis of whether a worker is an employee or an independent contractor, resulting in workers losing FLSA protections.
  14. The Biden administration has yet to define and promote a new test for distinguishing employees from contractors, but President Biden has said that he favors California’s “ABC Test.” The California Department of Industrial Relations defines this test as follows:
  15. Under the ABC test, a worker is considered an employee and not an independent contractor unless the hiring entity satisfies all three of the following conditions:

    A. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

    B. The worker performs work that is outside the usual course of the hiring entity’s business; and

    C. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

  16. What this means for churches
  17. As stated at the beginning of this article, the withdrawal of the Independent Contractor Rule means that the minimum wage and overtime pay requirements of the FLSA will apply to more employers, including churches. Note three important points.
  18. First, penalties and damages for FLSA overtime and minimum wage violations can be significant, and include the following:
  19. A $2,074 maximum civil monetary penalty.
  20. “Double back pay” consisting of (1) backpay (i.e., the amount of unpaid overtime and minimum wage) and (2) “liquidated damages” (an amount equal to any backpay owed). Damages can be sought either in a private civil lawsuit by an aggrieved employee, or by the DOL’s Wage & Hour Division.
  21. Second, be cautious in treating any worker as an exempt independent contractor. As noted above, the distinction between an exempt contractor and a nonexempt employee is confusing and has not been helped by recent precedent from the DOL or the courts.
  22. Third, when in doubt, seek legal counsel.
Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Advantage Member Exclusive

Should My Church Consider a Merger Right Now?

On-Demand Webinar: The critical information church leaders should know if they are thinking about a merger.

Loading the player...

Editor’s Note. This video is part of the Advantage Membership. Learn more on how to become an Advantage Member or upgrade your membership.

Church mergers—already increasingly popular throughout the country in recent years—may draw even more interest in 2021. Some congregations face financial struggles and uncertainties compounded by the COVID-19 pandemic. Others want to expand their ministry presence and effectiveness further, rebalance the scales between the size of their facility and the current needs, or make other adjustments as the needs inside and outside of their congregations only continue to grow.

Attorney Erika E. Cole, a Church Law & Tax senior editorial advisor, has observed these trends firsthand through her practice serving churches. The author of a new four-part article series guiding churches on mergers, Cole presents this webinar exclusively for Advantage Members to explore how leaders contemplating one should carefully approach key legal and ministerial questions.


  • The process most effective to evaluate a merger opportunity from start to finish;
  • The documents needed for merger evaluation and execution;
  • The types of decisions needed to make certain a merger makes sense—and goes according to expectations; and,
  • The specific steps to take to successfully complete a merger.
Erika E. Cole, Esq., known as The Church Attorney®, is one of only a handful of attorneys in the nation who practices exclusively in the area of church law. She currently serves as a senior editorial advisor for Christianity Today’s

Recommended Reading

Church Mergers: When, Why, and How

From consideration to final steps, let the experts guide you each step of the way.

Church mergers are on the rise. Is it the best decision for your congregation? If so, how can you legally navigate the complexities of two (or more) churches becoming one? Attorneys Erika E. Cole and David Middlebrook provide the details.

ALSO: Reference Richard R. Hammar’s Pastor, Church & Law for additional insights on merger and consolidation.

Religious Freedom Protections Expanded in South Dakota, Montana

Religious freedom protections expanded in South Dakota and Montana, meaning 24 states now require higher standards for their governments to meet whenever they “substantially burden” religious exercise.

Last Reviewed: April 16, 2024

South Dakota and Montana have joined the ranks of 22 other states now legally requiring their governments to meet higher judicial standards for justifying laws or activities that substantially burden the religious exercise rights of individuals, churches, and organizations.

South Dakota passed its “Act to provide protections for the exercise of religious freedom” in March of 2021. The “Montana Religious Freedom Restoration Act” became law a month later.

The states were the first to pass such statutes since 2015, when Indiana and Arkansas did so. While one state—Virginia—has had such a law on the books since 1786, the remaining states passed theirs after a key, controversial 1990 ruling by the US Supreme Court.

That ruling—Employment Division v. Smith—established a lower judicial standard for reviewing neutral, generally applicable laws, even when those laws substantially burden religious exercise.

Such an outcome affords greater protections for government activities, making it less likely a legal challenge brought by an individual, church, or organization could succeed.

How religious freedom laws developed

The Smith decision prompted the US Congress to pass—nearly unanimously—the federal Religious Freedom Restoration Act (RFRA) in 1993. RFRA says a law or government activity shown to substantially burden an individual, church, or organization must advance a compelling government interest in the least-restrictive way possible. That constitutes a higher standard, making it more likely the law or activity will get struck down.

Four years later, the Supreme Court struck down the federal RFRA, and courts have subsequently ruled it applies only to federal government actions. This triggered some states to respond with their own RFRAs addressing state-level actions and activities. South Dakota and Montana’s laws mostly mirror the language used in the federal RFRA as well as those of most other states.

Pandemic challenges prompt additional protections by South Dakota

South Dakota went two steps further, though, likely in response to religious liberty clashes witnessed nationwide throughout the COVID-19 pandemic. South Dakota’s law forbids its government leaders from treating “religious conduct more restrictively than any secular conduct of reasonably comparable risk,” or treating “religious conduct more restrictively than comparable secular conduct because of alleged economic need or benefit.”

Religious liberty advocates have contended pandemic-related restrictions and executive orders issued by governors have unevenly treated religious groups compared to similarly situated secular entities. Lawsuits filed by churches have led to varying conclusions by federal courts. The Supreme Court has consistently decided that any restrictions imposed on churches violates the First Amendment unless those restrictions also are uniformly applied to similar secular businesses and organizations.

Less than half of the country’s states have RFRAs on the books, but at least five states have high-level state court decisions using the compelling government interest/least restrictive means standard for determining the constitutionality of their respective governments’ actions.

To date, 14 states offer no RFRA or similar protections, whether through a law or a court decision.

Looming uncertainty for the federal RFRA

H.R. 5, better known as “The Equality Act,” was passed along party lines by the US House of Representatives in February of 2021. It is now under consideration with the US Senate.

As it is currently written, the Act would expand antidiscrimination protections found under Title VII of the Civil Rights Act of 1964 to the lesbian, gay, bisexual, transgender, and queer (LGBTQ) communities.

The Equality Act also would explicitly prohibit use of the federal RFRA as a defense to discrimination claims. Houses of worship would still have use of the “ministerial exception” when making employment decisions tied to ministerial roles. However, it remains uncertain how houses of worship would be able to handle employment decisions about non-ministerial positions in the event The Equality Act passed.

Learn more about religious freedom protections available to churches and ministries through Church Law & Tax’s 50-State Religious Freedom Laws Report, a downloadable resource by Matthew Branaugh, attorney and content editor, and Richard Hammar, attorney and senior editor.

Matthew Branaugh is an attorney, and the content editor for Christianity Today's Church Law & Tax.

Part 1 of 4

Is a Merger the Right Next Step for Your Church?

A primer on how to do it right.

The steadily changing landscape and makeup of the church in America, along with the financial uncertainties brought on by the 2020 global pandemic, have prompted some churches to weigh their long-term futures.

Even prior to the pandemic, many churches expressed concerns about their lasting viability due to decreasing membership, declining revenues, and, subsequently, budgets that cannot sustain existing church programs and ministries.

A merger may be a great option for keeping a struggling church alive in a new and fresh way. It can also be a great way to expand the footprint of an otherwise healthy church. No matter the circumstance, if a merger is to be pursued, it should be planned well. As an attorney, I have seen numerous outcomes. The goal, of course, is for it to go well. When it does, it’s because a host of considerations, both substantive and practical, made it possible. My four-part series is designed to guide you step-by-step (see sidebar to the left).

Options for structuring your merger

Church mergers are on the rise.

“Thanks in large part to the innovations of the multisite movement, [mergers] have become a viable, even positive, option for churches on the brink of closure—and for many that are doing just fine,” Christianity Today reported in 2019 in an article titled “The New Math of Church Mergers.” Add to this the financial concerns created by the ongoing pandemic and an even greater number of congregations might be seriously considering the merger option.

But what exactly is a merger and how is it done? While there are several legal options for how to properly structure a merger, the term merger is often used in a broad sense for how two (or more) churches come together as one. This may be done by a joint venture, consolidation, asset transfer, or other arrangement, but I have chosen the term merger for simplicity’s sake. As a general matter, there are three ways a merger can be done.

Option 1: Church A merges into Church B (the surviving entity)

Under this option, both the assets and the liabilities of Church A are transferred to Church B, so it’s critical that there is great transparency between the parties. Additionally, tax laws governing exempt organizations do not allow the assets of a church to be transferred to any individual. Rather, they must go to another tax-exempt organization with a similar mission.

Under this option, Church A’s assets would go to Church B, the surviving entity. This is likely the concept most people visualize when they think of a merger. This option fits well under a circumstance where Church A is a smaller congregation with minimum assets and a much smaller footprint compared to Church B.

Option 2: Church A dissolves, leaving its assets to Church B after all of Church A’s liabilities are disposed

For this option to work, an asset purchase agreement would need to be prepared. The agreement would need to outline all of the assets and liabilities of Church A, along with setting a certain date to complete the winding down of Church A. Thereafter, any remaining assets of Church A would need to be legally transferred to Church B.

Unlike Option 1, no debts or liabilities are transferred to Church B, so in theory, the transaction between the parties should be more streamlined in that sense. On the other hand, most states have statutes requiring that notice be given to creditors and to the attorney general before an entity can dissolve. So, while the merger between the two churches may be less complex under this option, the pre-merger responsibilities for Church A are a precursor to the merger process. This option may be a realistic choice when Church A has no (or few) liabilities and mostly liquid assets.

Option 3: Both Church A and Church B dissolve and form a new Church C

This third option, legally known as a consolidation, “is sometimes chosen because of the reluctance of either partner to be the corporation that dissolves while the other survives,” notes the authors of The Nonprofit Mergers Workbook. It is also, perhaps, thought of as a way to create a fresh start for both congregations.

This was the option selected when I assisted two synagogues, each with long histories of more than 150 years, and respective congregations with strong legacies of family memberships. Each congregation wanted to preserve its individual history and identity while creating something new and more enduring for a successful future. (Just like in the Christian church, there are many other faith communities experiencing decreases in attendance, giving, and general participation, but those communities still possess unique dynamics and histories that they want to preserve while establishing futures that allow them to continue to exist.)

Note. I should pause here to acknowledge that I realize some churches have chosen not to incorporate. A church that operates as an unincorporated association is not prohibited from merging, although this may be one of the many matters contemplated when assessing the relative strengths and weaknesses that each church brings to the table.

Learn about the legal ramifications of unincorporated churches, and the personal liability they can pose to their members, in Church Law & Tax’s Legal Library.

Why a church merger?

Mergers are a well-known reality in the for-profit world, but church mergers are too often overlooked by congregations as viable means of growing alliances. Unlike the hostile takeovers of a fierce competitor, such as those studied in business schools and depicted in Hollywood movies, the purpose of a church merger is more often about missionally minded matters.

For example, in one successful merger, an active seven-year-old church (Church G) with about 200 members was thriving. Having outgrown the school the church rented, the church’s leaders weighed buying a facility.

The founding pastor, a trained educator who loved building a strong curriculum of teaching in the church, found his greatest joy in leading Bible study. His church also had a thriving music ministry, which excelled, in part, because of his own musical abilities. However, he found the weekly Sunday sermon prep increasingly becoming a burden. He did it, but he didn’t feel it was his strength.

Just a few miles away, Church H owned a sizeable building led by a pastor who loved preparing Sunday morning messages, but he did not feel gifted at developing the teaching components of the ministry. The church had also been without a music ministry for months after its primary music leader left.

The two churches came together and found that where one lacked, the other had strength. I was able to assist in ensuring that my client (which merged into Church H) was able to exit its lease without penalty, advise the board on how to properly navigate the governance requirements for the merger, prepare the needed state dissolution documents, and overall navigate a high-stress situation.

Other circumstances or scenarios that might bring a church to consider a merger include the loss of the senior pastor; yearslong declining membership; financial struggles; and unexpected expenses, such as longstanding facility repairs, that swallow up budgets.

While a merger can be a sought-after solution in challenging times, it is also a great way to expand the existing footprint of a healthy church. For example, I’ve been able to help churches merge and create additional campuses, thereby scaling the growth of the church at a rate not otherwise likely. This expanding geographic footprint could mean connecting churches that are in relative proximity or expanding the church to add a location in another state or town.

Key strategic questions church leaders should ask

Before merger discussions begin, the leaders from the churches involved should ask the following questions:

  • What are the primary considerations for a potential church merger?
  • Would my congregation benefit from a merger?
  • Would the churches accomplish more as a combined entity than they would as separate ones?
  • Are the churches’ doctrines, visions, and cultures sufficiently similar to result in a successful merger?

Exploring the potential benefits of a church merger

The Christianity Today article quoted earlier points to a 2016 Barna study finding that “89 percent of churches that underwent a merger or acquisition reported a positive result.” When a church merger is successful, the benefits can last for decades.

With a successful merger, the combined churches can experience one or more of the following benefits:

  • increased programming
  • stable senior leadership, especially after one church loses a key pastor or senior leader
  • increased revenue
  • expanded campuses or geographical locations
  • greater visibility
  • increased assets
  • resources to afford deferred facility repairs or needed renovations
  • boosted attendance, especially among congregations with dwindling numbers
  • increased racial and generational diversity
  • expanded capacity capitalizing upon the unique gifts of each church’s leaders

From the list above, two specific outcomes especially stand out.

One, expanding the demographics of the body of Christ has been a notable consideration for some mergers, especially as many churches age. Building an alliance with a younger church, which often includes younger church leadership, can help an older church construct a framework for succession and longevity.

And two, some churches have found a merger broadened their racial diversity. By example, a church located in the same area for decades recently revealed the community’s demographics had changed over time, but the congregation did not reflect those changes. The church boasted a 500-seat sanctuary, but drew only dozens, all of whom lived outside of the community. This church connected with a nearby congregation in need of larger worship space—one that also more closely reflected the community’s diversity. Together, both churches moved past their respective limitations and welcomed more people in the process.

The potential downsides of a church merger

As mentioned earlier, mergers have been a staple in the for-profit arena, and when done properly, a merger can be a great benefit to the merging churches. However, when done improperly or illegally, a merger can create difficult hardships.

One such example involves Church X, which existed for over 20 years and amassed over $1 million in liquid assets.

The pastor of Church X felt it was time for him to end his pastoral ministry and felt led to join forces with a local church that was thriving. He shared his vision with the governing board, and they unanimously voted in favor of a merger with the larger, local Church Z. In fact, the board of Church X transferred its assets to Church Z and invited its entire congregation to begin attending Church Z, just as the pastor and other leaders had begun to do.

Although Church X was a congregational church, the members were not given the opportunity to vote on the merger. Moreover, there was a state statute requiring notice to the membership when there is an intention to transfer all, or substantially all, of the assets of the church. Neither of these preliminary conditions were met, and the disgruntled members sued.

While the court decision in this case is still pending, the lessons from it are apparent: a merger is more than a spiritual coming together. It is a legal process with longstanding effects on all parties involved. The value of doing the needed due diligence upfront (see below) to ensure each required step is completed correctly is well worth the effort.

In another example, a denominational church combined resources with another church in its denomination. The two churches brought together their employees and changed their name to reflect a mutually agreed upon “new” church, believing they had completed a merger since the denomination had recorded the two churches as merged. However, confusion with state authorities and the Internal Revenue Service (IRS) followed, since the names and employer identification numbers (EINs) of the two churches remained on the books and now conflicted with the name and EINs of the merged church.

Due diligence

While there are missional reasons why a merger might make sense, choosing to merge should only happen after proper due diligence is performed. What is due diligence? Due diligence involves a process of closely and methodically reviewing the legal and financial situations of the churches seeking to merge.

Two intentional reviews can help achieve the needed vetting:

  • A legal due diligence review, which is a kind of legal audit. Each church undertakes a comprehensive examination of the other party’s (or parties’) legal status and risks, examining the articles of incorporation, contracts, legal claims and pending and current litigation, human resources and benefits programs, real estate ownership, and other issues.
  • A financial due diligence review, which is usually less comprehensive than a full financial audit. The organization performs an examination, usually based on the other party’s (or parties’) past audited financial reports, to obtain an accurate and complete picture of the current financial positions and risks.

Due diligence should never be neglected for the good of all parties involved. Another compelling reason is this: As Jerald Jacobs notes in The Legal Guide to Nonprofit Mergers & Joint Ventures, “courts have held that the members of the governing board . . . can be personally and individually responsible if the results are untoward and the board members failed to closely examine the transaction.”

It is very important that each congregation have the proper neutral third parties help them make the best decisions. Typically, attorneys handle legal due diligence while accountants handle the financial due diligence.

Given the nature of the information potentially shared between the parties, the churches should reach a premerger confidentiality agreement before serious talks begin. At its core, this document should note the merger is an expression of the interests of the parties, and that they will enter into a level of previewing relevant information from the other, all while keeping any and all information received confidential. Additionally, there should be a written nondisclosure agreement between any key employees who may be a part of the early discussions.

Consider other options besides merging

Churches are merging today for many reasons. However, if a church decides a merger would not be beneficial, either because it isn’t appropriate, it isn’t a good fit, or the timing is not right, two or more organizations may find other ways to work together to share resources and better serve the community.

Those other opportunities could include a cost-sharing agreement allowing the churches to contribute costs for employees, administrative needs, and building operations; a joint agreement for the sharing of space for programming; connecting with a denomination that may have available property; or subleasing. (These options are detailed in Part 4.)

Weighing the benefits and pitfalls

Declining membership and financial challenges, especially those prompted by the recent pandemic, have spurred some church leaders to contemplate a church merger. The potential benefits are many. But potential pitfalls also loom. Selecting the merger strategy that fits your circumstances and answers key strategic questions about your church and the potential partner church(es) are the basis for a merger that creates the best harmony, rather than the sounds of discord.

Also in this series:

Part 2: The Documents Needs for a Successful Church Merger

Part 3: Deciding Factors for a Sound Merger

Part 4: Finalizing a Merger

Erika E. Cole, Esq., known as The Church Attorney®, is one of only a handful of attorneys in the nation who practices exclusively in the area of church law. She currently serves as a senior editorial advisor for Christianity Today’s
ajax-loader-largecaret-downcloseHamburger Menuicon_amazonApple PodcastsBio Iconicon_cards_grid_caretChild Abuse Reporting Laws by State IconChurchSalary Iconicon_facebookGoogle Podcastsicon_instagramLegal Library IconLegal Library Iconicon_linkedinLock IconMegaphone IconOnline Learning IconPodcast IconRecent Legal Developments IconRecommended Reading IconRSS IconSubmiticon_select-arrowSpotify IconAlaska State MapAlabama State MapArkansas State MapArizona State MapCalifornia State MapColorado State MapConnecticut State MapWashington DC State MapDelaware State MapFederal MapFlorida State MapGeorgia State MapHawaii State MapIowa State MapIdaho State MapIllinois State MapIndiana State MapKansas State MapKentucky State MapLouisiana State MapMassachusetts State MapMaryland State MapMaine State MapMichigan State MapMinnesota State MapMissouri State MapMississippi State MapMontana State MapMulti State MapNorth Carolina State MapNorth Dakota State MapNebraska State MapNew Hampshire State MapNew Jersey State MapNew Mexico IconNevada State MapNew York State MapOhio State MapOklahoma State MapOregon State MapPennsylvania State MapRhode Island State MapSouth Carolina State MapSouth Dakota State MapTennessee State MapTexas State MapUtah State MapVirginia State MapVermont State MapWashington State MapWisconsin State MapWest Virginia State MapWyoming State IconShopping Cart IconTax Calendar Iconicon_twitteryoutubepauseplay