Nonprofit Law/pastor pay

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Question
My husband was hired as a pastor in Nov.2010.In May 2011, the church started not paying him, but once a month. Then by April 2012,they stopped paying him at all. During this time there was no taxes taken out and reported to IRS. And at no time did he receive insurance, retirement, etc. After saying all of that,my question is this, What does the law say about churches and paying their full time employee?(Texas) Their by-laws state that the section is responsible for pay the churches financial responsibility, if the church can not. But the section and district, say that "the pastor's pay is faith based, and not guaranteed." The organization is now refusing to pay him his back pay.

Answer
My profile explains that this free forum is only for questions directly relating to the federal tax exemption matters of 501(c)(3) organizations.  You matter is actually an employment law matter but I may be able to direct you. The IRS has published, "A licensed, commissioned, or ordained minister is generally the common law employee of the church, denomination, sect, or organization that employs him or her to provide ministerial services." http://www.irs.gov/taxtopics/tc417.html

I am assuming that your husband had no written employment contract and, therefore, I would need to know of any oral contact terms made.  But, in any case, we can look to the church' pattern of treatment at least as to the payments made to him during the first few months of his employment.

Unless one of the listed exceptions on that IRS web page applies, your husband is an employee and not an independent contractor of the church.  Therefore, the church is liable for regular employment tax liabilities.  Treatment of Social Security is discussed in IRS Publication 517 "Social Security and Other Information for the Members of the Clergy and Other Religious Workers" at http://www.irs.gov/pub/irs-pdf/p517.pdf

Your husband can not rely upon the bylaws of the church unless they were referred to in his employment contract with the church and, therefore, the section and district would not have any liability to pa him unless they specifically guaranteed the church's payments to your husband.

Your husband can seek relief from the State of Texas Labor Department by filing a wage claim at
http://www.twc.state.tx.us/customers/jsemp/employee-rights-laws.html
and/or he can sue the church in a court for his back pay.

Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com  

Nonprofit Law

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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