Court Rules Former Employee of Church School Ineligible for Unemployment Benefits

Key point. Employees of churches and church-affiliated schools are ineligible for unemployment benefits in most states.

An Illinois court ruled that a former employee at a church-affiliated school was not eligible for unemployment benefits.

A former church employee (the "plaintiff") filed a claim for unemployment benefits with the Illinois Department of Employment Security. A hearing was conducted to determine the plaintiff's eligibility for benefits. Testimony at the hearing demonstrated that the church is a nonprofit Illinois corporation organized for religious purposes, and that it operates a school. The church hired and supervised all school personnel and determined their compensation.

The plaintiff was hired by the board of directors of the church. The school did not have a separate corporate charter or legal organization. The church did not pay unemployment contributions ...