• 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
• Key point 10-18.1. Some courts have found denominational agencies liable for the acts of affiliated ministers and churches on the basis of a number of grounds, including negligence and agency. Denominational Liability
An Alabama court ruled that a pastor who had been injured in a job-related automobile accident may be entitled to recover workers compensation benefits on the ground that he was an “employee” of a regional denominational agency. A Methodist pastor was injured in an automobile accident while engaged in church business. He later sued the local church he served and the North Alabama Conference of the United Methodist Church for workers compensation benefits. The pastor later dismissed the local church from the lawsuit because it regularly employed fewer than five workers, and so was not a covered employer under the state workers compensation law. The North Alabama Conference asked the court to dismiss it from the lawsuit on the ground that the local church, not the Conference, was the pastor’s “employer.” The trial court agreed with the Conference, and ruled that the pastor was not entitled to workers compensation benefits. The pastor appealed.
A state appeals court noted that the Conference had more than five employees, and so the only remaining issue was whether it was the pastor’s “employer.” The court observed that the state workers compensation law defines an “employer” as “every person who employs another person to perform a service for hire and pays wages directly to the person.” The court further noted that the test to be used in determining the relationship between the pastor and the Conference was whether the Conference “had a reserved right of control over the means and agencies by which the work was done or the result produced, not the actual exercise of such control.” The pastor insisted that this test was met, and therefore he should be treated as an employee of the Conference. He cited the following facts in support of his position: (1) the Conference and the bishop’s cabinet have the final say as to which local church an individual minister will be placed in. (2) The Conference establishes a minimum salary for the ministers, and if a local church cannot pay the minimum salary, then the Conference will pay the minister. (3) A committee within the Conference administers the ministers’ pension plans. (4) Groups and subdivisions within the Conference-not the local church-were responsible for ensuring that the pastor’s preaching was in accordance with the Book of Disciple, an organizational guide for Methodist churches. (5) The local church was unable to hire or fire the pastor, and it was not responsible for seeing that he carried out his duties. (6) The Conference owned the land and the residence where the pastor resided and allowed him to live at this residence while he was the minister at the local church.
The court concluded that the pastor had “presented substantial evidence creating a genuine issue as to whether the Conference reserved a right of control over the manner in which [he] performed his ministerial duties.”
Application. This case is significant for two reasons.
1. Workers compensation coverage. As this case illustrates, a number of states have workers compensation laws that exempt employers having fewer than a specified number of employees.
2. Conference employees. The more important aspect of this ruling is the court’s conclusion that there was “substantial evidence” that the pastor was an employee of the Conference. This not only makes the Conference potentially liable for workers compensation benefits for all of its pastors, but more importantly, it exposes the Conference to a much greater degree of liability for the acts of its pastors. Street v. North Alabama Conference of the United Methodist Church, 1999 WL 500044 (Ala. App. 1999).
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