Hiring Workers Without Social Security Numbers

Helpful guidance for church treasurers.

Church Finance Today

Hiring Workers Without Social Security Numbers

Helpful guidance for church treasurers.

Background. Occasionally, persons applying for a position at a church will disclose that they do not have a social security number. They insist that this is perfectly legal, and may even insinuate that it would be “unlawful” not to hire them on this basis. Is this true? Not according to a recent federal appeals court ruling. An applicant for employment was not hired by a secular employer because he did not have a social security number. The applicant sued the employer, claiming that his decision not to have a social security number was based on his religious belief that such numbers represent the “mark of the beast” in the Book of Revelation, and therefore the employer’s decision not to hire him amounted to unlawful religious discrimination.

The court’s ruling. The court concluded that an employer that hires an employee without a social security number is in “violation of federal law,” since section 6109 of the tax code requires that employers list employees’ social security numbers on W-2 forms. An employer’s duty to accommodate an employee’s religious beliefs does not require that it violate the law, the court concluded.

The court acknowledged that the tax code specifies that no penalty is imposed on an employer for failing to report an employee’s social security number on a W-2 form if it is able to demonstrate that “such failure is due to reasonable cause and not to willful neglect.” However, the court concluded that “even if a waiver could be obtained, we think that the expense and trouble incident to applying for it imposes a hardship” and that the waiver provision “does not exist to benefit employees who caused the penalties to be imposed.”

The court also rejected the applicant’s argument that the employer could have accommodated his religious beliefs by hiring him as an independent contractor.

Relevance to church treasurers. According to this case, churches are free to deny employment to persons who do not have a social security number. This is so for 2 reasons: First, churches are free to discriminate on the basis of religion in their employment decisions under federal law and the laws of most states. As a result, they generally cannot be sued for “religious discrimination” in their employment decisions. Second, as this case demonstrates, employers are legally required to report employees’ social security numbers on W-2 forms, and they need not ignore this mandate (or seek a waiver of it) because of the religious beliefs of an employee or an applicant for employment. This case is binding in the eighth federal circuit, which includes the states of Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota. It amounts to a persuasive, but nonbinding, precedent in other states. Seaworth v. Pearson, 2000-1 USTC ΒΆ 50,244 (8th Cir. 2000).

This article originally appeared in Church Treasurer Alert, July 2000.

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

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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