Unemployment Compensation – Part 1

A New York court ruled that a woman employed by a church-operated child care facility was entitled to unemployment benefits following her termination.

Church Law and Tax 2000-05-01

Unemployment Compensation

Key point. Church employees generally are not eligible for unemployment benefits in the event of their termination. This exemption is restricted in some states to employees who perform primarily religious duties.

A New York court ruled that a woman employed by a church-operated child care facility was entitled to unemployment benefits following her termination. A woman (the “employee”) was employed at a day-care center operated by a church. She worked 6 hours per day, caring for 10 to 12 children ranging in age from 14 to 24 months. Her principal duties were changing diapers, feeding the children and keeping them clean, supervising their play and taking them for walks. The church’s rules required that the children were to say grace before meals and have a half hour per day of Bible study and singing. The employee testified that she did not spend any time engaged in these religious activities; rather, her time was spent in “regular taking care of babies as a daycare.” The employee’s employment was terminated, and she sought unemployment benefits. The church claimed that it was exempt from paying unemployment benefits under a state law exempting any “person employed at a place of religious worship … for the performance of duties of a religious nature.” The church asserted that because the day-care center was established in furtherance of the church’s religious mission, and its primary purpose was to inculcate Biblical teachings at the earliest possible age, the employee’s duties, while including the basic care of the children, were primarily religious in nature.

A state agency ruled that the employee’s “essential function” was as a day-care worker responsible for attending to the children’s basic needs and not as a religious instructor, noting that given the young age of the children and the inability of most of them to speak, no religious activities were actually performed by the employee. The church appealed.

A state court rejected the church’s position, and ruled that the employee was entitled to unemployment benefits. It concluded, “We find that the record contains abundant evidence that [the employee’s] duties were primarily secular and thus not excluded from coverage. It is uncontroverted that most, if not all, of [her] working day was spent tending to the basic needs of these young children, all of whom were still in diapers. For a portion of each day, she alone was responsible for the supervision and care of at least 10 children 24 months old and younger. That [her] services were rendered on behalf of a religious organization does not alter their essential secular character.”

Application. This case illustrates an important point-church employees may be eligible for unemployment benefits in the event of their termination if they perform secular rather than religious tasks. Jones v. Center Road Baptist Church, 689 N.Y.S.2d 284 (Sup. Ct. 1999).

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