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Thread: Unemployment insurance (US and churches)

Net Spinster
Shipmate
# 16058

Posted

In the US federal law exempts religious organizations from paying into the unemployment insurance pools and almost all states also exempt them (except Oregon). Saves money for the religious organizations but means that when they layoff employees those employees don't get unemployment benefits. They are required to inform employees of this though it apparently can be somewhat hidden and can come as a shock

Now in at least some (maybe all?) states religious organizations can opt into the pool and thereby ensure their former employees, laid off because of budget cutbacks, have something to tide them over. And some don't and some self-fund (which means the church itself decides whether you are eligible for unemployment benefits).

St. Louis Catholic diocese's explanation of why they don't opt in

25 of 45 Catholic dioceses in 2009 pay into the pool or self-fund (which leaves 20 that do not and a good 150 or so unaccounted for). As far as I can see the United Methodists and the ELCA national organizations do not pay into the pool or self-fund. The Episcopal Church seems mixed (the dioceses of Northern California and San Diego do but this is a relatively new thing for them, not sure about the national organization) and individual parishes also have to decide whether to fund or not fund.

So the questions

(a) Should the exemption for religious organizations be removed?

(b) While the exemption lasts, should religious organizations, many of whom profess to be concerned for the plight of the unemployed, opt in to the pool or self-fund for their own employees?

(c) How many religious organizations in the US are opting in?

(d) Am I completely misreading the situation?

TEC San Diego diocese's explanation for opting in

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spinner of webs

Posts: 1093 | From: San Francisco Bay area | Registered: Dec 2010 | IP: Logged

Ricardus
Shipmate
# 8757

Posted

Looks like a classic example of how 'not living by the standards of the world' means 'not even living by the standards of the world'.

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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)

Posts: 7247 | From: Liverpool, UK | Registered: Nov 2004 | IP: Logged

Enoch
Shipmate
# 14322

Posted

Net Spinster, here all employers have to follow the same rules. Nobody has ever suggested otherwise. What is the argument that is supposed to justify such a weird exemption? Does it apply to all charities or just churches?

We do have an issue here that gets argued quite often as to whether clergy are correctly classified as self employed, or whether they should be entitled to claim to be employees of their dioceses, circuits etc. The issue usually arises in connection with claims for unfair dismissal, but there are swings and roundabouts about it. Clergy would undoubtedly bridle if their bishops could tell them what to do and when with the degree of direction that goes with being an employee. Also, the self employed are in a much more favourable position when it comes to setting off their expenses against tax.

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Brexit wrexit - Sir Graham Watson

Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008 | IP: Logged

Baptist Trainfan
Shipmate
# 15128

Posted

I think the word Enoch is looking for is "office holders". I do know that, a few years ago, the Department of Employment held lengthy talks with representatives of the major denominations over precisely this issue. The situation is especially pertinent to Baptist churches (and some others) as ministers are employed by individual congregations rather than by the denomination.

For instant the standard "Terms of Appointment" for Baptist ministers specifically says, "These recommended Terms of Appointment do not bring about a ‘contract of service’ or in any way affect the minister’s status as the ‘holder of an office’. Legal advice should be obtained before including in the Terms of Appointment details of duties or any specific job description. A minister is classified as an ‘employed person’ for national insurance purposes only, though subject to income tax under the PAYE system as the holder of an office".

Posts: 9750 | From: The other side of the Severn | Registered: Sep 2009 | IP: Logged

gog
Shipmate
# 15615

Posted

quote:
Originally posted by Enoch:
We do have an issue here that gets argued quite often as to whether clergy are correctly classified as self employed, or whether they should be entitled to claim to be employees of their dioceses, circuits etc.

Clergy in England and Wales at least who serve in church roles are not employees or self employed but are "Office Holders" which adds a whole other set of complications.

As to the OP who is the body that pays the workers in these cases? Is it the central body of the denomination or is it the local congregation; might be an even more complicated picture depending where they pay comes from.

Posts: 103 | From: somewhere over the border | Registered: Apr 2010 | IP: Logged

Enoch
Shipmate
# 14322

Posted

I was trying to simplify this by not going into what an office holder is. Usually, whether it's a clergy person or a coroner, there's a mechanism attached to the office that says what security of tenure they have, how and to whom they resign and what mechanism has to be followed to sack them.

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Brexit wrexit - Sir Graham Watson

Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008 | IP: Logged

Net Spinster
Shipmate
# 16058

Posted

The Federal Rules (note that there are both federal and state pools, the exemption cannot be waived for federal). Federal rules exempt 501(c)(3) organizations which includes charitable organizations as well as religious denominations. Except for religious organizations they are generally not exempt from the State rules (though they can sometimes opt for direct reimbursement for unemployment paid to their former employees, as far as I can see only Oregon does not exempt religious organizations though some others might exempt other charities). For instance California rules exempt from the unemployment taxes

"Employees of a church or convention or association of churches or an organization operated primarily for religious purposes which is operated, supervised, controlled, or principally supported by a church or convention or association of churches."

"Duly ordained, commissioned, or licensed ministers in the exercise of their ministry and members of religious orders."

Also exempt are salaries of elected officials and judges, but, regular charities have to cover.

As far as who is paying, I think it depends on the denomination and also the particular church body. According to an
older post at The Lead, it seems Episcopal parishes are each responsible for their own payroll though in some dioceses (e.g., California) many may pool administration at the diocese level to take advantage of various savings. I assume the TEC national organization also has its own direct employees.

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spinner of webs

Posts: 1093 | From: San Francisco Bay area | Registered: Dec 2010 | IP: Logged

cliffdweller
Shipmate
# 13338

Posted

quote:
Originally posted by Ricardus:
Looks like a classic example of how 'not living by the standards of the world' means 'not even living by the standards of the world'.

Exactly. Religious organizations in general have a crappy reputation as employers, with good reason. In denominational churches, ordained clergy usually have some good protections (benefits, insurance, pension, etc) enforced by the presbytery/ diocese/ conference, although in non-denoms that's gonna be hit-and-miss. But for those lower down on the ecclesiastical ladder-- those lowest paid and thus least able to deal with a fiscal time-bomb-- those protections are usually non-existant. The failure to see this as a justice issue really hampers our moral authority to speak to any other justice issues we might want to weigh in on.

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008 | IP: Logged

Crœsos
Shipmate
# 238

Posted

quote:
Originally posted by Net Spinster:
St. Louis Catholic diocese's explanation of why they don't opt in

From the article:

quote:
[Kevin] Loos [managing director of human resources for the Archdiocese of St. Louis] said the St. Louis Archdiocese has had the discussion every few years, but the decision is always to spend the church’s resources elsewhere.

Loos says a former archbishop taught him to think about the little old lady in the pew on Sunday putting her money in the basket as it passes by. How would she like her money invested?

For context, here's what constitutes "elsewhere" in the Archdiocese of St. Louis.

quote:
The St. Louis archdiocese has spent more than $10 million on costs related to sexual abuse since 2004, according to its 2013 annual report.

This is just idle speculation on my part, but I'm reasonably confident that "the little old lady in the pew on Sunday" would probably rather have her donation going towards helping support the unemployed than helping to buy US$10 million worth of child rape.

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Humani nil a me alienum puto

Posts: 10706 | From: Sardis, Lydia | Registered: May 2001 | IP: Logged

SvitlanaV2
Shipmate
# 16967

Posted

Ironically, this looks like an ethical problem for the most successful American churches rather than the smallest and weakest. The latter surely can't afford to employ a lot of staff and then sack them when problems arise, or when times are tough.

It's a good argument for small churches! Also a good argument for not seeking paid work in a church unless you're passionately committed to the doctrines and ministry of that church. Why risk a bad situation unless you believe it's God's will?

Posts: 6668 | From: UK | Registered: Feb 2012 | IP: Logged

cliffdweller
Shipmate
# 13338

Posted

quote:
Originally posted by SvitlanaV2:
Ironically, this looks like an ethical problem for the most successful American churches rather than the smallest and weakest. The latter surely can't afford to employ a lot of staff and then sack them when problems arise, or when times are tough.

It's a good argument for small churches! Also a good argument for not seeking paid work in a church unless you're passionately committed to the doctrines and ministry of that church. Why risk a bad situation unless you believe it's God's will?

In my experience in both large and small churches that's very much not the case. While small churches have small staffs they also have small budgets. And the small staff they do have are even more likely to be cut as well as less likely to have any benefits if they are

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008 | IP: Logged

Pigwidgeon

Ship's Owl
# 10192

Posted

quote:
Originally posted by cliffdweller:
In my experience in both large and small churches that's very much not the case. While small churches have small staffs they also have small budgets. And the small staff they do have are even more likely to be cut as well as less likely to have any benefits if they are.

They're also less likely to have benefits while they're employed. About seven years ago (IIRC) the Episcopal General Convention passed a resolution requiring health insurance for lay employees who work 30+ hours a week and pension benefits for lay employees working 20+ hours a week. You can guess what happened -- hours were cut for most employees to less than 20 hours a week and full-time employees were replaced by part-timers (e.g., one full-time staff member replaced by two half-time employees).

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"...that is generally a matter for Pigwidgeon, several other consenting adults, a bottle of cheap Gin and the odd giraffe."
~Tortuf

Posts: 9835 | From: Hogwarts | Registered: Aug 2005 | IP: Logged

cliffdweller
Shipmate
# 13338

Posted

Yes I've seen that as well-- and again, more often in small churches than large tho quite common in both. And of course the same thing is happening in workplaces all over. But it hampers our ability to speak out on workplace injustices when we're doing the same things

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008 | IP: Logged

Lamb Chopped
Ship's kebab
# 5528

Posted

From where I stand it seems that the reason nonprofits (including but not limited to churches) don't do the unemployment thing is because they're cutting muscle, not fat, at this point. If it's a choice between shutting down / reducing services and cutting worker benefits (including unemployment), you know what they're going to do. And they can get away with it because their employees are far more likely to agree to live sacrificially.

This is probably a good thing for certain small desperately-needed financially strapped nonprofits, as long as everyone involved recognizes the magnitude of what the workers are sacrificing. Where things get fucked up IMHO is when the leadership (it's usually leadership) begins to take this situation as normal and expected, and stops seeing it as something to be a) honored and b) changed as soon as possible.

And yeah, I was in this boat just recently. And IMHO there was no substantive reason for my ex-employer not to be paying into the system, given what I know of their circumstances.

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Er, this is what I've been up to (book).
Oh, that you would rend the heavens and come down!

Posts: 20059 | From: off in left field somewhere | Registered: Feb 2004 | IP: Logged

cliffdweller
Shipmate
# 13338

Posted

quote:
Originally posted by Lamb Chopped:
This is probably a good thing for certain small desperately-needed financially strapped nonprofits, as long as everyone involved recognizes the magnitude of what the workers are sacrificing. Where things get fucked up IMHO is when the leadership (it's usually leadership) begins to take this situation as normal and expected, and stops seeing it as something to be a) honored and b) changed as soon as possible.

Yes-- this.

Compounding this is the common practice of listing in the church budget a single figure for the entire cost of employing someone rather than separating salary & benefits. This is a problem because churches are pretty much the only place that does this. So people hear the figure as "salary" when in fact it is salary, pension, health insurance, liability, malpractice, etc. This can create confusion in the hiring (the first church position I was hired to I was offered a salary of $19K, and told "we have excellent insurance"-- only after I moved cross-state and rented a house did I find out the $19K included the cost of the insurance so my real salary was far, far less than that). But it also leads to lots of misunderstandings for the congregants since most people have absolutely no idea how much their benefits cost their employer. So they hear this figure that sounds generous-- even extravagant-- but often is half what they really think it is.

And yes, clergy do get that nice (and unfair) tax benefit, but that's only again, the ordained clergy, not the more lowly paid lay staff, and is nowhere near what the inflated salary + benefits figure looks like.

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008 | IP: Logged

RuthW

liberal "peace first" hankie squeezer
# 13

Posted

quote:
Originally posted by cliffdweller:
And yes, clergy do get that nice (and unfair) tax benefit, but that's only again, the ordained clergy, not the more lowly paid lay staff, and is nowhere near what the inflated salary + benefits figure looks like.

I can't tell you how much it chaps my hide that the church I work for pays into pensions for ordained ministers and not for anyone else. The people who make the most money and thus have the greatest ability to save money for retirement are the ones who get pensions. Apparently the rest of us are just supposed to work until we die, given how far Social Security will go in the LA metroplex.

Every time someone from this church talks about how they're all for worker justice, I just laugh. Tell that to the church custodians.

Posts: 24453 | From: La La Land | Registered: Apr 2001 | IP: Logged

Lamb Chopped
Ship's kebab
# 5528

Posted

Mostly agreeing with everything, but that "nice tax benefit"? My experience is that pastors are counted by the IRS as bloody self-employed, regardless of their relationship with their congregations, and therefore liable to pay the double taxes such people pay. Which really sucks when large chunks of your tiny paycheck vanish into the gaping maw of the taxman. I'm pretty sure the same is not true for other church employees, don't know why.

So if there is a tax benefit (what tax benefit? Are you possibly referring to the possibility of a housing allowance? 'Cause I can't think of any other thing, and that is open to other workers as well, including teachers and youth workers), anyway, if there is one, please tell me, so we can use it.

(On second thought--no, we couldn't use it. Because it would only apply to church-given salary, whatever it is, and we don't have one. [Waterworks]

But I'd still like to know.)

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Er, this is what I've been up to (book).
Oh, that you would rend the heavens and come down!

Posts: 20059 | From: off in left field somewhere | Registered: Feb 2004 | IP: Logged

cliffdweller
Shipmate
# 13338

Posted

Yeah, I was referring to the housing allowance, because anytime you talk about the problems with clergy compensation, someone's gonna bring it up. And I agree, it is unfair (no one else gets it) but the reason no one's done anything about it is precisely because it's such a measly amount no one can be bothered to do so.

And, yeah, the self-employment tax-- add that to the list of things I mentioned above that aren't represented accurately when churches are quoting salaries.

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008 | IP: Logged

Leorning Cniht
Shipmate
# 17564

Posted

quote:
Originally posted by cliffdweller:
Compounding this is the common practice of listing in the church budget a single figure for the entire cost of employing someone rather than separating salary & benefits. This is a problem because churches are pretty much the only place that does this.

Every budget I have ever worked on or with has used the fully-burdened cost of employment, not the headline salary. For us, the budgeted cost (including all overheads) is about a factor of 2.5 times the salary. (Some of that overhead is an internal "tax" to support admin etc. - it's not all employment taxes and benefits.)

Posts: 5026 | From: USA | Registered: Feb 2013 | IP: Logged

Lamb Chopped
Ship's kebab
# 5528

Posted

Housing allowance can be established by a church for anybody that falls within a very elastic definition of "minister." My own denom has this worked out legally to include pastors, teachers, youth diectors, and I believe a host of other less common church careers like deaconess, dir. of evangelism, and possibly fulltime music. The church simply declares a percentage of the salary to be "housing allowance"--they don't pay a penny more, all it costs them is a simple fiat in the voters assembly (or other governing authority). And in practice, this is yet another way nonprofits get out of having to pay livable salaries. The worker is not receiving a nice little extra--he or she is being given a consolation prize in lieu of the actual added salary he or she ought to be receiving (but the nonprofit finds it easier to make ends meet by substituting the housing allowance benefit, which is no skin off their noses at all.) Did I mention that no matter how generous the allowance looks on paper (hey! Half your takehome pay will be considered untaxable!!) yet it is only allowed if you provably spend that amount on housing, with receipts etc? Not an easy thing to do if you don't have a large house payment or lots of repairs. I imagine this becomes an issue for older workers who could use the extra $ more than a theoretical housing allowance that doesn't get fully used.

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Er, this is what I've been up to (book).
Oh, that you would rend the heavens and come down!

Posts: 20059 | From: off in left field somewhere | Registered: Feb 2004 | IP: Logged

Rocinante
Shipmate
# 18541

Posted

quote:
Originally posted by Enoch:
Net Spinster, here all employers have to follow the same rules. Nobody has ever suggested otherwise. What is the argument that is supposed to justify such a weird exemption? Does it apply to all charities or just churches?

Hollow laughter from this uk church employee. No National Insurance contributions, no paid holidays, no sick pay. Had to fight tooth and nail for my last pay rise (first in 5 years.) I pay income tax on my church earnings, but that's entirely organised by me, the church couldn't care less.

Fortunately I also have a secular employer who treats me far, far better (i.e. they obey the law of the land.)

The expectation in church work seems to be "we're the Church so you should do it for love".

Posts: 384 | From: UK | Registered: Jan 2016 | IP: Logged

Baptist Trainfan
Shipmate
# 15128

Posted

quote:
Originally posted by Lamb Chopped:
Housing allowance can be established by a church for anybody that falls within a very elastic definition of "minister." ... The church simply declares a percentage of the salary to be "housing allowance"--they don't pay a penny more, all it costs them is a simple fiat

It doesn't work out quite like that in our denomination. The Minister's stipend (admittedly lower than in some other denominations) includes the use of a Manse with Council Tax and Water Rates paid "for the furtherance of their duties". But this is never regarded as part of the "headline figure".

There is something called a "housing allowance" which has sometimes caused confusion. When a church's pension contributions to the central fund are based on the stipend combined with a notional "housing allowance" - this is purely a ruse to enhance the pension contributions and is not an amount that the Minister actually gets.

However it has caused problems in cases where a Minister or Church Employee has been asked to live in rented property: churches understand this as the amount which should be added to the stipend to pay for the rental. Quite apart from any issues linked to tax etc., the allocated sum is totally insufficient for this purpose and was never intended for it!

P.S. To Rochinante: that does sound grim, I agree. Presumably they "get away" with this because your working hours and salary level are too low to be covered by employment legislation?

[ 30. April 2016, 08:00: Message edited by: Baptist Trainfan ]

Posts: 9750 | From: The other side of the Severn | Registered: Sep 2009 | IP: Logged

Rocinante
Shipmate
# 18541

Posted

quote:
Originally posted by Baptist Trainfan:

P.S. To Rochinante: that does sound grim, I agree. Presumably they "get away" with this because your working hours and salary level are too low to be covered by employment legislation? [/QB]

I'm not sure they've thought about it that deeply. I think they just assume that as someone who also has a "proper" job (also part time), they have no obligation to pay me at all. I don't want to start a legal process as experience suggests that this would probably result in my having to leave, possibly with a settlement, possibly not. I don't want this as I find the work fulfilling and would need to replace it with something (I couldn't live for very long on just my "secular" earnings).

Posts: 384 | From: UK | Registered: Jan 2016 | IP: Logged

Lamb Chopped
Ship's kebab
# 5528

Posted

Baptist Trainfan, I think we might be in different countries to boot. I'm in the U.S.

You're right that things are a tad different if there actually IS a property supplied (parsonage or similar). We were in that boat for several years and were asked to reckon the fair market value of the rental (always supposing the church could have rented it--not likely). The housing allowance would then be reduced by that much. Given the fact that it was a six-bedroom place actually in one wing of the church building and had been built for a pastor with at least ten kids (there were just the two of us then), and we had no choice in the matter of where to live, this seemed a bit much. The fact that it was in a dangerous neighborhood helped shave some of the estimate, though. Otherwise we would have been in the lovely spot of having the whole housing allowance effectively nullified and no extra salary to replace it, either.

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Er, this is what I've been up to (book).
Oh, that you would rend the heavens and come down!

Posts: 20059 | From: off in left field somewhere | Registered: Feb 2004 | IP: Logged

cliffdweller
Shipmate
# 13338

Posted

quote:
Originally posted by Leorning Cniht:

quote:
Originally posted by cliffdweller:
Compounding this is the common practice of listing in the church budget a single figure for the entire cost of employing someone rather than separating salary & benefits. This is a problem because churches are pretty much the only place that does this.
Every budget I have ever worked on or with has used the fully-burdened cost of employment, not the headline salary. For us, the budgeted cost (including all overheads) is about a factor of 2.5 times the salary. (Some of that overhead is an internal "tax" to support admin etc. - it's not all employment taxes and benefits.)

The budget obviously has to include all the costs of employment. I'm talking about the way we talk about compensation. Outside of church work, I have never heard anyone anywhere report that total figure as "salary" or "compensation". Sometimes you'll hear total package but that language itself signals that there's more here than just salary. But by far the most common practice in every other field is simply to report the salary, and then the benefits that come with that. Again, most people have no idea how much their benefits cost their employer.

I'm not suggesting that churches shouldn't report that "full employment cost" in their annual budgets-- obviously they should. But they should do so in a way that is clear to congregants who will be unfamiliar with all these issues. The best way to do that is to report the salary portion separate from benefits. This helps avoid the really problematic miscommunications that commonly occur in "first called" positions (such as I experienced) as well as inaccurate impressions of inflated salaries by congregants which can lead to the sort of attitudes Lamb Chopped was describing.

[ 30. April 2016, 13:50: Message edited by: cliffdweller ]

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008 | IP: Logged

chris stiles
Shipmate
# 12641

Posted

quote:
Originally posted by cliffdweller:

I have never heard anyone anywhere report that total figure as "salary" or "compensation". Sometimes you'll hear total package but that language itself signals that there's more here than just salary.

And generally, IME, 'total package' is almost always used in preference to 'salary' when the actual 'salary' is lower than it should be. Which tends to underline your point.

Posts: 4035 | From: Berkshire | Registered: May 2007 | IP: Logged

Net Spinster
Shipmate
# 16058

Posted

I should point out that the US housing allowance tax exemption only applies to religions not to other non-profits. It seems to have been a modification, for religions only, of a longer practice of not taxing as income the value of housing owned by a non-profit that employees were required to live in by condition of their employment (e.g., parsonage adjacent to a church, housing provided in residence teachers at boarding schools, etc.). Both exemptions have been heavily abused by some religious leaders (think prosperity gospel).

Military people living off base may also get a tax free housing allowance; however, in that case the federal government would be paying either way.

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spinner of webs

Posts: 1093 | From: San Francisco Bay area | Registered: Dec 2010 | IP: Logged

Leorning Cniht
Shipmate
# 17564

Posted

quote:
Originally posted by cliffdweller:
The budget obviously has to include all the costs of employment. I'm talking about the way we talk about compensation.

But you were talking about the church budget. That's the only time I encounter anything to do with the church staff's salary - at the AGM budget presentation, where total cost is the relevant number.

quote:
Again, most people have no idea how much their benefits cost their employer.

I get a letter once a year with that in. I can't speak for anyone else.

quote:
I'm not suggesting that churches shouldn't report that "full employment cost" in their annual budgets-- obviously they should. But they should do so in a way that is clear to congregants who will be unfamiliar with all these issues.

Posts: 5026 | From: USA | Registered: Feb 2013 | IP: Logged

Lamb Chopped
Ship's kebab
# 5528

Posted

quote:
Originally posted by Net Spinster:
I should point out that the US housing allowance tax exemption only applies to religions not to other non-profits. It seems to have been a modification, for religions only, of a longer practice of not taxing as income the value of housing owned by a non-profit that employees were required to live in by condition of their employment (e.g., parsonage adjacent to a church, housing provided in residence teachers at boarding schools, etc.).

This may be (probably is?) true, but it might be good to add here that this is legally construed to apply not just to churches and church schools, but to things such as church-owned publishing houses, denominational bureaucracy workers, refugee services, and so forth. Which means that more people than one might think are eligible--say, a church-rostered director of music presently serving at a publishing company owned by the denomination, or a medical doctor holding a missionary call serving a reservation in the US. So it's all very weird.

--------------------
Er, this is what I've been up to (book).
Oh, that you would rend the heavens and come down!

Posts: 20059 | From: off in left field somewhere | Registered: Feb 2004 | IP: Logged

Lamb Chopped
Ship's kebab
# 5528

Posted

quote:
Originally posted by Leorning Cniht:

quote:
Originally posted by cliffdweller:
The budget obviously has to include all the costs of employment. I'm talking about the way we talk about compensation.
But you were talking about the church budget. That's the only time I encounter anything to do with the church staff's salary - at the AGM budget presentation, where total cost is the relevant number.

yeah, but... In many churches, particularly the small and poorer ones, the people who put together the budget breakdown for publishing and approval are amateurs*. Which means it's quite easy to get a heading like "Expenditures: Pastor" in one place and then have a heading like "Church staff insurance" elsewhere, with no indication of whether the first heading really means "total package," "salary only," "salary plus everything BUT insurance," or what the heck.

And when you look at the second heading, "Church staff insurance," that could mean anything from "including the pastor, duh" to "everybody BUT the pastor, s/he's not staff, s/he's the pastor, duh!" depending on how the compiler of the document mentally classes pastors.

If you're lucky, some alert person will question the ambiguous headings. But it's all too easy for people to simply assume they already know what they mean, and act accordingly.

* How do I know this? Because I was in charge of producing the bloody things at my congregation years ago, and my only qualification for doing so was the fact that I could typeset both English and Vietnamese together. Fortunately, we received no compensation from the church itself, so never had to worry about screwing up the pastoral compensation line.

--------------------
Er, this is what I've been up to (book).
Oh, that you would rend the heavens and come down!

Posts: 20059 | From: off in left field somewhere | Registered: Feb 2004 | IP: Logged

cliffdweller
Shipmate
# 13338

Posted

quote:
Originally posted by Leorning Cniht:

quote:
Originally posted by cliffdweller:
The budget obviously has to include all the costs of employment. I'm talking about the way we talk about compensation.
But you were talking about the church budget. That's the only time I encounter anything to do with the church staff's salary - at the AGM budget presentation, where total cost is the relevant number.

I was talking about how it is reported in the church budget, which is primarily read (and in some traditions, voted on) by laypeople not employed by churches so unaware of this peculiar custom. I am suggesting that when it is reported in the church budget, salary and benefits should be separate line items for clarity, since when a layperson sees "associate pastor" and a figure of $60K next to it, s/he assumes that means the associate pastor is taking home $60K, when the reality is probably little more than half that. That's a pretty huge misunderstanding with a lot of real-life implications, as both Lamb and I have attested to. The simple step of adding a line for benefits in addition to salary could rectify that.

quote:
Originally posted by Leorning Cniht:

quote:
Again, most people have no idea how much their benefits cost their employer.
I get a letter once a year with that in. I can't speak for anyone else.

There may be cross-pond differences here. I've worked for various sorts of employers in the last 40 years, but churches have been the only ones that reported the cost of the benefits to the employer. Similarly, when benefits are listed separately on a church budget, laity are usually shocked by how expensive they are-- even though they are in line with what those benefits cost every employer.

quote:
Originally posted by Leorning Cniht:

I'm not suggesting that churches shouldn't report that "full employment cost" in their annual budgets-- obviously they should. But they should do so in a way that is clear to congregants who will be unfamiliar with all these issues.

Clarity is always a good thing. Whether this is best done by breaking down the budgetary cost of each employee into wages, employment taxes, cost of each benefit to employer and so on, or whether it's best done in an explanatory document is an open question. [/QUOTE]

Based on my 30 years experience and that of most of my colleagues, I'd say at least two lines-- one for salary (or "base + housing"), one for benefits-- is absolutely essential. Whether you break down the various components of the benefits package would be an open question. But listing benefits separately from salary is not. It's just not. Again, this is standard practice everywhere else, which is why it's confusing when churches handle this differently. And again, as we've already seen, the end result of that confusion can be really nasty.

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cliffdweller
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# 13338

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The reason it needs to be clear in the budget, not a separate doc, is that the budget is the thing that people look at, refer back to later, and will bring up every time they are pissed at the pastor for some matter or another. When the personnel figure appears inflated, that's going to be a problem. And there's just no down side to having a separate line item for benefits. And a LOT of down sides for conflating them.

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cliffdweller
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# 13338

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Separating out salary & benefits also helps to identify when lay staff receive fewer benefits than ordained clergy-- which, as we've seen here, is often the case. When the lay staff benefits line is significantly smaller than that of the ordained staff, that's going to be more apparent than it is when they're lumped together.

I think all of this is important for precisely the reason Lamb identified-- that church boards are not full of mean, miserly people-- they're doing the best they can with very limited means. But once something that is "less than best practices" is put into play, it can all-too-easily become the "new normal" that is taken for granted. Often it goes unexamined until the staff member leaves and the church suddenly discovers they can't replace him/her because what they're offering is so substandard. Making practices as clear and transparent as possible is an important step in maintaining awareness.

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Baptist Trainfan
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# 15128

Posted

quote:
Originally posted by cliffdweller:
There may be cross-pond differences here. I've worked for various sorts of employers in the last 40 years, but churches have been the only ones that reported the cost of the benefits to the employer.

This may partly be because of the way such "emoluments" had to be reported to the Inland Revenue - although this has recently changed. I take your points, though.

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Baptist Trainfan
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# 15128

Posted

quote:
Originally posted by cliffdweller:
Separating out salary & benefits also helps to identify when lay staff receive fewer benefits than ordained clergy-- which, as we've seen here, is often the case. When the lay staff benefits line is significantly smaller than that of the ordained staff, that's going to be more apparent than it is when they're lumped together.

It can also work the other way.

One of my denominations advertised for a staff post in London at a certain salary. This was set considerably higher than the Ministerial Stipend to reflect the fact that no "tied" housing was included. Indeed I think it was a fixed term post so the assumption was that the employee would need to rent a property.

There was a furore - "Why should we pay this apparatchik £xxk more than our ministers?" - folk simply didn't understand the different basis. In retrospect, it could have been handled better.

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Enoch
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# 14322

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There are at least three different figures here, and they should not be merged together. That is a recipe both for confusion and evasion.

1. Salary, i.e. take home pay, what an employee is actually paid, monthly or weekly extrapolated for the year.

2. Any benefits in kind that have a financial value to the employee. There are two figures involved in this one, (a) cost to the employer and (b) value they represent to the recipient. They aren't automatically the same thing.

In the US, I would imagine health insurance and unemployment insurance come under 2. In the UK, the equivalent is deducted at source from 1.

The total package is the sum of 1 and 2. For the employee, it is (b) that matters. For the annual accounts if the organisation it is (a).

I would imagine that in most countries, tax is assessed on some version of 1+2b, but how will vary. E.g. if a person contributes to a pension (which will produce taxable income in the future) does the Revenue let them deduct what they pay towards it from the taxable version of 1?

3. Other costs following on from the fact that you are employing them, e.g. the office space they occupy, office computer, photocopier, travelling expenses etc etc. These are the overheads of the enterprise. In some cases, they are relatively low. In others they can be comparable to 1+2.

If the employee is provided with accommodation they have got to live in to do their job as, say, a night watchman, then although they receive a benefit from it, that is collateral. This really belongs in 3. If they are provided with a house or money towards one as a bonus, that belongs in 2.

In most countries there is an ongoing war of attrition going on between tax collectors and the public as to where the boundary lies between 2b and some of 3.

Incidentally, what may cause confusion on this thread is that in the US, I understand compensation can be used to refer to salary, whereas elsewhere, it means specifically reimbursement for a loss incurred, e.g. damages, or in employment terms, pre-incurred expenses. So it reads very oddly when someone talks about being compensated for doing their job. It sounds as though I do my work and my employer pays me as favours.

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Baptist Trainfan
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# 15128

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Yes ... although I have certainly seen job adverts in Britain which talk about the "compensation package" on offer.

And wasn't a ministerial stipend originally a "compensation" for the fact that he (and it was "he" in those days) was spending his life serving God and so could not earn a living in the usual way?

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Arethosemyfeet
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# 17047

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