Workers Compensation

The Tennessee Supreme Court ruled that a person’s entitlement to workers compensation benefits based on “total disability” was not affected by the receipt of wages for services performed as a music minister at his church.

Church Law and Tax2006-05-01

Workers compensation

Key point 8-02. All states have enacted workers compensation laws to provide benefits to employees who are injured or become ill in the course of their employment. Benefits generally are financed through insurance premiums paid by employers. Churches are subject to workers compensation laws in most states.
Workers Compensation

* The Tennessee Supreme Court ruled that a person’s entitlement to workers compensation benefits based on ‘total disability’ was not affected by the receipt of $215 each week for services performed as a music minister at his church. An employee (‘Don’) of a manufacturing company was ruled to be totally disabled because of a respiratory condition acquired as a result of his employment. He also was ruled to be totally disabled for Social Security. However, Don was paid $215 per week for serving as his church’s music minister. Even though he played the piano for his church on Sunday, he was unable to do so for more than ten minutes at a time. He was also unable to sing because of his respiratory condition. Don insisted that he was not looking for employment and in fact could not work due to the following factors: (1) he could not go outside because he experienced breathing problems; (2) he could not be around people who wore cologne or perfume, or people who smoked; (3) dust and carpet residue irritated his breathing, and walking ten feet exhausted him.

Don’s employer claimed that he no longer was eligible for workers compensation benefits because the services he performed for his church as a music minister demonstrated that he was not totally disabled. The employer quoted from the workers compensation law, which defines ‘total disability’ as a condition that ‘totally incapacitates the employee from working at an occupation which brings the employee an income.’ The court concluded that the income Don received as a music minister did not affect his ‘totally disabled’ status: ‘His lung condition is so severe that he cannot engage in any manual labor and he must avoid environments that expose him to dust, smoke, smells or other irritants that will trigger asthmatic attacks. He receives Social Security disability for a 100% disability. While he has skills as a musician, his own pastor testified that when the weather is bad, he cannot come to church or rehearsals because he becomes congestive and that ‘it seems like he goes into some type of spell, gagging, and cannot even come to church and play the keyboard for the church.” The pastor testified that such events occur ‘often, very often.’ Nevertheless, the church paid him $215 for working ‘twice a week, Tuesday and Sundays.’

The court noted that Don’s physicians testified that there was no manual work that he could do, and that he could only perform non-manual work for short periods. It concluded that the only reason that he received income from his church ‘was due to the generosity of the church, not because he was employable in the open labor market …. The evidence in this case supports a finding that the combination of limitations and other factors rendered Don unemployable in the open market and therefore totally disabled’ despite the income paid to him by his church.

Application. This ruling suggests that in rare cases a person who is receiving workers compensation or Social Security benefits based on total disability may be able to receive compensation for performing limited services on behalf of a church so long as (1) the person meets the definition of ‘totally disabled’ under applicable law, and (2) the compensation paid by the church ‘is due to the generosity of the church, not because the person was employable in the open labor market.’

Generally, a church is not subject to any penalties if it knowingly hires and compensates a person who is receiving workers compensation benefits. It is the employee, and not the employer, who may be required to return benefits paid while he or she is earning wages from a job. Still, it is a ‘best practice’ for churches to consider the following precautions: (1) If a church employee is injured on the job (either at church or at a ‘second job’), and is receiving workers compensation benefits, be sure the employee is legally permitted to perform compensated employment before allowing him or her to continue working. (2) If a church employee is injured on the job (either at church or at a ‘second job’), and is receiving workers compensation benefits, be sure the employee complies with any ‘notification’ requirements prescribed by state law. Persons receiving workers compensation benefits may be required to notify a state agency if there is any improvement in their condition, or if they perform compensated employment. Failure to do so may make the recipient legally obligated to return some or all of the workers compensation benefits that were paid. Note that an injured employee is performing ‘compensated employment’ (which may jeopardize eligibility for workers compensation benefits) if he or she is receiving compensation for performing services. The fact that the amount of compensation is small may be irrelevant. And, the employee cannot avoid disqualification by characterizing church compensation as ‘love gifts.’ Cage v. Yasuda Fire & Marine Insurance Company, 2005 WL 1412135 (Tenn. 2005).

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.

ajax-loader-largecaret-downcloseHamburger Menuicon_amazonApple PodcastsBio Iconicon_cards_grid_caretChild Abuse Reporting Laws by State IconChurchSalary Iconicon_facebookGoogle Podcastsicon_instagramLegal Library IconLegal Library Iconicon_linkedinLock IconMegaphone IconOnline Learning IconPodcast IconRecent Legal Developments IconRecommended Reading IconRSS IconSubmiticon_select-arrowSpotify IconAlaska State MapAlabama State MapArkansas State MapArizona State MapCalifornia State MapColorado State MapConnecticut State MapWashington DC State MapDelaware State MapFederal MapFlorida State MapGeorgia State MapHawaii State MapIowa State MapIdaho State MapIllinois State MapIndiana State MapKansas State MapKentucky State MapLouisiana State MapMassachusetts State MapMaryland State MapMaine State MapMichigan State MapMinnesota State MapMissouri State MapMississippi State MapMontana State MapMulti State MapNorth Carolina State MapNorth Dakota State MapNebraska State MapNew Hampshire State MapNew Jersey State MapNew Mexico IconNevada State MapNew York State MapOhio State MapOklahoma State MapOregon State MapPennsylvania State MapRhode Island State MapSouth Carolina State MapSouth Dakota State MapTennessee State MapTexas State MapUtah State MapVirginia State MapVermont State MapWashington State MapWisconsin State MapWest Virginia State MapWyoming State IconShopping Cart IconTax Calendar Iconicon_twitteryoutubepauseplay