Church Employment Practices and Staffing Liability: Protecting Your Church as an Employer
How employment law, HR practices, and insurance work together to protect churches with growing staff.
Your Church Is an Employer. The Law Treats You Like One.
As your church grows, so does your team. Every hire, termination, and HR decision creates potential legal exposure. Employment practices liability is one of the fastest-growing risk areas for churches, and most are underinsured or uninsured for these claims.
Churches often operate with informal HR practices that worked when the staff was small. But as a church grows past five to ten employees, the legal landscape changes significantly. Federal and state employment laws apply to churches in most situations, and Massachusetts has particularly strong employee protections.
Key Employment Risk Areas for Churches
Hiring and Screening
Every hire should include a written job description, consistent interview process, background check, and reference verification. Churches that skip these steps face greater exposure if an employee later causes harm or files a claim. Consistent hiring practices also protect against discrimination allegations.
Worker Classification: Employee vs. Contractor
Misclassifying workers is a common and costly mistake. In Massachusetts, the ABC test sets a high bar for independent contractor status. Musicians, childcare workers, part-time custodians, and event coordinators are frequently misclassified, leading to tax penalties, back-pay claims, and potential lawsuits.
Termination and Discipline
Churches often struggle with terminations because of the relational nature of ministry. But emotional decisions without documentation lead to wrongful termination claims. Progressive discipline policies, written warnings, and consistent enforcement across all staff are essential to defensible employment practices.
Wage and Hour Compliance
Non-exempt employees must receive overtime pay under both federal and Massachusetts law. Salaried ministry staff may qualify for the religious exemption, but administrative, custodial, and support staff typically do not. Massachusetts wage laws are stricter than federal requirements in several areas including overtime, meal breaks, and final pay timelines.
Harassment Prevention
Churches are not immune to workplace harassment claims. In fact, the power dynamics inherent in ministry settings can increase risk. Written anti-harassment policies, regular training, and clear reporting channels are both legally required in Massachusetts and practically necessary for a healthy work environment.
Employment Practices Liability Insurance (EPLI)
EPLI covers legal defense costs and settlements arising from employment-related claims. This includes wrongful termination, discrimination, harassment, retaliation, and wage disputes. Most standard church liability policies do not include EPLI. It must be added as an endorsement or purchased as a separate policy.
For churches with more than five employees, EPLI is not optional. It is essential. Defense costs alone for a single employment claim can exceed $50,000 even if the church prevails. Without EPLI, the church pays those costs out of its operating budget.
Building an HR Risk Framework for Your Church
These practices reduce employment risk, improve insurance outcomes, and create a healthier workplace:
Employee handbook: Document policies on conduct, discipline, benefits, leave, and grievance procedures. Review and update annually with legal counsel.
Consistent hiring process: Use the same application, interview questions, and screening procedures for comparable positions across the organization.
Performance documentation: Conduct regular performance reviews and document issues as they arise, not just at the point of termination.
Harassment training: Massachusetts requires anti-harassment training. Conduct it annually for all staff, leadership, and board members.
Legal review: Have an employment attorney review your handbook and consult on key HR decisions, especially terminations and restructuring.
Frequently Asked Questions About Church Employment Practices
Does the ministerial exception protect our church from all employment claims?
No. The ministerial exception applies to roles that involve religious leadership and teaching functions. It does not cover administrative assistants, custodians, daycare workers, bookkeepers, or other non-ministerial roles. Even for ministerial roles, its protections have limits and vary by jurisdiction.
Do we need EPLI if we only have a few employees?
Even small staffs create exposure. A single wrongful termination claim from a part-time employee can cost tens of thousands in legal fees before it even reaches court. EPLI is affordable relative to the risk it covers, and it is one of the most important coverages for any church with paid staff.
How do Massachusetts employment laws differ from federal?
Massachusetts has stricter worker classification rules (ABC test), broader anti-discrimination protections, mandatory paid family and medical leave, specific requirements for non-compete agreements, and earlier thresholds for various employment law triggers. Churches operating here must comply with both state and federal law.
What should we do before terminating an employee?
Document the performance issues, follow your progressive discipline policy, consult your employee handbook procedures, review the situation with legal counsel, and ensure you have a clear, defensible rationale. Never terminate in anger, without documentation, or without following your own written policies.
Are church interns covered under employment law?
It depends on the arrangement. Unpaid interns who primarily benefit the church rather than receiving genuine educational value may be classified as employees under Massachusetts law. Structure internship programs carefully, document the educational component, and get legal guidance on classification.
What is the most common employment claim churches face?
Wrongful termination is the most common employment claim against churches. It often arises from terminations that were handled emotionally rather than procedurally, lacked documentation, or did not follow the church’s own written policies. Consistent processes and EPLI coverage are the best defenses.
Request a Church Insurance Review
If you’re unsure whether your current policy truly protects your church, we can help. Hale Street Insurance specializes in insurance for churches and faith-based organizations. We’ll review your current coverage, identify gaps, and help you secure protection designed for ministry operations.