Church Secretaries Covered By Unemployment

New York case reveals important information for churches to consider.

Church Law and Tax1993-05-01Recent Developments

Unemployment Taxes

Key point: In most states, church workers are subject to unemployment compensation laws.

A New York court concluded that church secretaries are covered by the state unemployment compensation law. New York law exempts from unemployment compensation coverage “a lay member elected or appointed to an office … and engaged in religious functions” and “a person employed at a place of religious worship … for the performance of duties of a religious nature.” A state agency determined that a church’s secretaries were covered by the state unemployment compensation law and did not qualify for these exemptions. It concluded that services performed by the church secretaries were neither “religious functions” nor “duties of a religious nature.” Further, the agency concluded that these exemptions applied only to persons having authority or responsibility within a congregation. The church vigorously disputed this result, pointing out that the secretaries were appointed by the pastor and church board and that they in fact performed a religious function. A state appeals court rejected the church’s contention:

Even accepting the employer’s contention that the secretaries were appointed by the pastor and the board of deacons, the record evidence indicates that their duties were mainly secular. Although all church staff members are required to be church members and to sign a form entitled “standard for workers” outlining the religious standards they must follow, there is no proof apart from the belief expressed by a secretary employed by the church during the period in question, and the church pastor who was hired soon thereafter, that the secretaries’ duties were religious in nature or that the services they actually furnished were anything other than the secular duties performed by all similarly employed persons, namely answering the telephone, screening calls, making appointments for the pastor, taking inventory, ordering supplies, preparing the minutes of the congregation meetings, filing, and working on layout, typing and copying of the church bulletin …. [W]hile [one secretary] did provide some religious counseling and taught Sunday school for toddlers, her testimony was that she did so on a voluntary basis, not as part of her paid secretarial job duties.

The court also rejected the church’s argument that subjecting its secretaries to unemployment compensation coverage violated the constitutional guaranty of religious freedom. It observed: “We are not convinced that the [church] has shown that the [unemployment compensation law] which the [church] equates to a tax, burdens a sincerely held religious belief. Nor is there any evidence that the payment of the unemployment contributions itself violates the church’s religious teachings. And the fact that the impact of this statute, which applies generally to all employers, decreases the funds available for the church’s religious activities is not constitutionally significant.”

What is the significance of this decision to local churches? Consider two points. First, the case illustrates that churches may be subject to unemployment taxes with respect to lay employees having no religious function. Second, are even more troubling, is the court’s rather abrupt conclusion that church secretaries perform no religious function and do not perform duties of a religious nature. Is this really so? And, is it even appropriate for civil courts to resolve such a question? The United States Supreme Court said no to these questions in a 1987 ruling upholding the constitutionality of a provision in Title VII of the Civil Rights Act of 1964 exempting religious organizations from the ban on religious discrimination in employment decisions. A disgruntled maintenance worker who had been fired by a religious organization for not fully complying with the organization’s religious standards sued his employer for wrongful dismissal. The employer relied on the exemption provision in Title VII giving religious organizations the right to discriminate in employment decisions on the basis of religion. The Court rejected the worker’s contention that the exemption should only apply to religious workers, and not “secular” workers. The Court’s reasoning for refusing to make a distinction between religious and secular employees of church organizations is enlightening and directly relevant. The Court observed: “Nonetheless, it is a significant burden on a religious organization to require it, on pain of substantial liability, to predict which of its activities a secular court will consider religious. The line is hardly a bright one, and an organization might understandably be concerned that a judge would not understand its religious tenets and sense of mission. Fear of potential liability might affect the way an organization carried out what it understood to be its religious mission.” Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints v. Amos, 483 U.S. 327 (1987). Unfortunately, the New York court failed to understand or apply this logic. Matter of Faith Bible Church, 582 N.Y.S.2d 841 (A.D. 3 Dept. 1992).

See Also: Unemployment Taxes | Unemployment Taxes

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