Laid-Off Religious Workers Denied Jobless Benefits

May 20, 2009

Author: Steven G. Vegh

Source: Religion News Service

God may provide, but the state may not when it comes to unemployment benefits for employees laid off by churches, synagogues and other religious groups.

Carol Bronson discovered that a few months ago after she lost her secretarial job at Temple Emanuel synagogue in Virginia Beach. Bronson assumed she could draw unemployment benefits, but when she filed a claim, she was denied.

It was a hard way to learn that under Virginia law, as in many states, tax exemptions for religious organizations include freedom from paying unemployment taxes, though the IRS requires they pay Social Security and withholding taxes.

“I had no idea that there would not be any benefits for me after leaving my job,” said Bronson, who worked at the synagogue for two years. She’s since found a job with a wholesale flower market.

Neither did Rabbi Howard Mandell of Temple Emanuel. The synagogue had no knowledge of Virginia tax law when it decided on a layoff, he wrote in an e-mail.

Budget cuts, including layoffs, are one way religious congregations are coping with a recession that has slashed their income from investments or contributions.

Earlier this year, a survey by the National Association of Church Business Administration showed that 32 percent of responding U.S. churches were having economy-related difficulties, up from 14 percent in August. Twenty percent said they had laid off staff.

For workers who are left jobless, unemployment benefits are a big piece of the social safety net. In Virginia, payments range from $54 to $378 weekly. Benefits are available only to people whose employers paid the unemployment tax.

Not every state bars unemployment compensation to employees of religious groups.

In New York, for example, employees whose work is not religious in nature, such as a cook or a secretary, are entitled to benefits, and their employer must pay the state unemployment tax, said Karen Williamson of the New York Department of Labor.