Church planting is very similar to starting a business or having a baby. If you don’t start on a firm legal footing, you could run into some serious problems later. When churches are closing their doors, strong, legally secure church plants are vital. Here are 7 areas in which church plants could be legally vulnerable.
1. Church plants face an increase in zoning difficulty. Managing attorney Josh Bryant makes it a matter of habit to read every reported case he can in which a church is a party to the law suit and one of the more frequent subjects of litigation are zoning difficulties. To undo the deleterious effects of a U.S. Supreme Court case on religious liberty, Congress passed two pieces of legislation – the well-known Religious Freedom Restoration Act, and the lesser-known Religious Use of Land and Institutionalized Persons Act. The latter has become the basis of more frequent suits between churches and municipalities as churches fight to use their land for religious purposes and defend against discriminatory zoning laws.
2. Church plants routinely use borrowed foundational documents. In theory, there is nothing wrong with copying the articles of incorporation and bylaws or constitution of another church for use in a church plant. In practice however, churches must be able to properly use and follow their bylaws. Church bylaws should reflect the vision and mission of the church, which is unique from church to church. Josh Bryant routinely works with churches on writing their bylaws and articles of incorporation to fuel their vision, not work against it.
3. Church plants are wise to launch with solid policies and procedures in place. It is invariably easier to launch with established policies and procedures than to write them when dozens or hundreds of people want to speak into them. Josh Bryant has worked with dozens of churches on getting policies and procedures in place for the first time decades after launching. Many times, they must work through policy and procedure at that time because of an incident that hurt the church – one that could have been avoided with well documented and trained policies and procedures.
4. Church plants do a lot of ministry relative to the number of people attending the church. Outreach, evangelism, events, and programs designed to attract the community to the church are good things. With each event, program, and ministry of the church comes one or more risk vectors with potential liabilities for the church. Food kitchens and pantries could cause food poisoning. Doctors serving in free medical clinics could commit some form of malpractice. Kids jumping on inflatables at block parties can break bones. As a former pastor, Josh Bryant has worked with church plants to conduct these types of events with less risk of liability.
5. Church plants must frequently look to cut costs. Many a church planter knows how necessary it is to operate on a shoestring budget. Josh Bryant has seen church planters successfully obtain property to meet in out of tax or mortgage foreclosure for pennies on the dollar. Then again, he has seen them mess it up and lose everything they invested in a property. There are churches who have navigated the rezoning process alone without incident. Then there are many others who have waited until it is too late to get help and ended up owning property that they could not put a church on.
6. Church plants often rent using leases or landlord-tenant laws that are heavily landlord friendly. Josh Bryant’s own home state is one of those in which landlords have rights but tenants have none. Some of that can be remedied by contract. Some of it, you just have to deal with. Some states are much friendlier to tenants. In any case, commercial lease negotiation and interpretation are not classes taught at most seminaries.
7. Church plants need to make sure they are secure with the IRS well in advance. Depending on the denominational affiliation of the church, churches may need to secure their 501(c)(3) tax exempt status. Others may be able to rely on a letter ruling granted to the entire denomination. Others may prefer to exist as a church outside of the 501(c) regime and follow the IRS guidelines for exempt but unregistered churches. Either way, churches need legal and accounting counsel to help get them set up. Josh Bryant has secured 501(c) status for several organizations, including many churches.
Church planting is a noble, exciting calling. It is also very exacting and trying at times. Josh Bryant and Church General Counsel are here to help church plants get established. Call us at (866)597-5621 today to get started.
by Josh Bryant | Managing Attorney
Remember a few years ago when the Department of Labor announced that it was going to double the salary requirement for exempt employees under the Fair Labor Standards Act? What a disaster for churches that would have been! Fortunately, the courts intervened and struck that particular regulation down before it went into effect. But now it seems many churches have been lulled into a false sense of security. We cannot forget that proper classification of job positions is important; failure to do so can bring a lot of liability on your church. Here are five reasons why you need to have Josh Bryant and Church General Counsel review your job descriptions to determine whether the job could or should be classified as exempt or non-exempt.
1. It may make sense for you to reclassify some of your positions. A great many people work above the $455 per week limit for non-exempt employees right now and qualify as exempt under the salary level test. Simply paying them a guaranteed minimum amount (a salary instead of an hourly wage) would allow them to qualify under the salary basis test. By adding a few duties that qualify under the duties test to classify a position as exempt, you can eliminate your overtime exposure, obtain a greater degree of certainty in personnel costs, and maybe even protect your church from liability in other areas of law. Josh Bryant will help you walk through that analysis to determine what is best.
2. Churches are staffed with many creative and ministry professionals still earning an hourly wage. Some positions within the church are truly administrative and involve little more than copying, filing, answering phones, greeting people, entering data, and so forth. However, many ministry assistant or secretarial positions in churches also require a very special skill set. For example, do your ministry assistants use InDesign or another piece of creative software to create slides, flyers, and so forth? If a good amount of their job involves duties like this, they could be exempt and not subject to overtime requirements. Do you require your ministry assistant's to have any spiritual duties? You should. If spiritual duties occupy a good portion of their time, they could be exempt as well. In addition, courts do not often get involved in employment disputes between churches and employees with spiritual duties. Josh Bryant can help you reclassify those jobs to help protect your church if it is appropriate to do so.
3. Churches are also staffed with many senior administrative personnel. Do you have someone on staff responsible for all technology, including computers, sound equipment, projection devices, televisions, and so forth? If so, they could be considered exempt under the administrative duties test. Do you have a human resources professional? They could be exempt too. There are many people who work for churches earning an hourly wage that do office work directly related to the general operation of the church which primarily involve the exercise of independent judgment and discretion about significant matters in the church. As such, they could also be classified as exempt. Josh Bryant can help identify these employees and reclassify their jobs accordingly.
4. It may make sense for you to seek more non-exempt employees. If you have jobs in which work is high volume in some seasons and slow in others, it may make sense to have that position classified as non-exempt to the extent possible considering all the factors. This can help you save money by only paying for hours worked instead of a salary when a person only has part time work to do. If your church grants different fringe benefits to different levels of employee, it may save money to get more non-exempt employees than exempt ones. But you have to remember that you may gain overtime exposure with non-exempt employees. Josh Bryant can help you with this analysis as well.
5. You might need to consider contract labor. If there is a singular task that needs to be done, you might could hire an independent contractor to do it, even on a full time basis. Your pastor could even be an independent contractor if you wanted him to be. The downside is that contractors must have absolute discretion in how they carry out their jobs. You only get to negotiate what job is done and the cost of doing that job. The contractor then determines how, what employees he or she needs to get the job done, and so forth. The upside is that you do not have the administrative hassle of wage withholding - that shifts to the contractor. Furthermore, your contractor is responsible for any damage caused to others during the scope of their employment rather than the church as is most often the case. Josh Bryant can help you with the contracts necessary if contract labor is more appropriate.
In short, job classification is very complicated, and they don't teach it in seminary. You have to consider not only the duties assigned to the person and their educational needs, but also the other policies of the church, your budget, and the pros and cons of having a job be classified as exempt, non-exempt, or contract. Below is a sample policy and procedure document designed to help you classify your jobs. Of course, we're here to help at Church General Counsel. Give us a call at (866)597-5621 for any help you may need.
Church General Counsel Managing Attorney Josh Bryant, J.D., M.Div., authors most of the posts in this section. From time to time, he will post articles from others in the field of church growth, administration, and operations.