Reducing Fringe Benefits
An important question for church treasurers.

Alston v. City of Camden, 471 S.E.2d 174 (S.C. 1996)

Background. Many churches have policies or handbooks that describe employee "fringe benefits." Common examples include vacation leave, sick leave, medical and life insurance, and retirement plans. What happens when a church decides that it cannot maintain fringe benefits at current levels? Does it have a legal right to reduce these benefits? This is a complex and controversial question that was addressed in a recent ruling.

Facts. A city issued a new employee handbook that replaced its old one. All employees were notified of the change and were informed of reductions in certain fringe benefits. These included (1) a reduction in the maximum accrual of annual leave from 60 days to 45 days; (2) discontinuance of a policy that had permitted employees to "redeem" accrued sick leave for cash; and (3) a reduction in the amount contributed by the city for employees' health insurance. When employees learned of these reductions in fringe benefits under the new employment handbook, they sued the city claiming that their contractual rights under the old handbook had been violated.

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