Published on February 25th, 2011 by Alan L Sklover
Question: I have just been “let go” from my position at a church where I worked for five years. I know that my former employer did not pay into unemployment and I have read that church employees cannot collect unemployment. Is this true?
Thanks so much.
Charlotte, North Carolina
Answer: Dear Lisa: Yes, What you have read is generally true: most employees of churches and other religious organizations are not eligible to collect unemployment benefits because their employers generally do not contribute to unemployment benefit programs for them. However, some do, as explained below. (In reading my note, below, by “church” I mean any religious organization.)
a. Because our U.S. Constitution prohibits federal government intrusion into religion, our federal government does not tax churches or other religious organizations. For this reason, by federal law, “service performed in the employ of a church . . . or an organization which is operated primarily for religious purposes” is exempt from federal unemployment taxes.
b. Though, by law, our State governments are permitted to require churches to pay unemployment taxes, few do so. In this area, states are permitted to impose this tax on churches, and provide this benefit to church employees. Few do.
c. Even still, churches can voluntarily contribute but, again, very few do so. A church is free to adopt its own policy of being included in unemployment insurance coverage. Few do so. Unless a church voluntarily establishes its own policy to pay unemployment taxes, its former employees cannot receive unemployment benefits.
According to a published report in the National Catholic Reporter newspaper, The Richmond, Virginia, Catholic Diocese willingly pays unemployment benefits. Though exempt by law, it established an agreement with the Commonwealth of Virginia to participate in its unemployment benefits system.
From your letter, it seems that your former employer was not one of the few churches that contribute on their employees’ behalf to unemployment insurance funds. Thank you for writing in, though, and I do hope that you will find new work soon.
© 2011 Alan L. Sklover, All Rights Reserved.