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Compensation Guidelines for Congregations
Based on Board Recommendations
The Basic Measure of Service
1. A unit-based system for measuring service.
Realizing that ministers and other religious professionals often work irregular hours, expectation of a typical 9 a.m. to 5 p.m. workday is unrealistic. The basic salary ranges are intended to be used in conjunction with a unit-based system, with each morning, afternoon, or evening devoted to congregational duties considered a unit. Twelve units per week equals full-time service. For purposes of these Guidelines, religious professionals are defined as ordained ministers, directors of religious education, music directors, and business administrators. It is important that other church staff are compensated for all time worked and are not asked to volunteer hours in addition to their paid employment.
2. Congregations are encouraged to adopt the basic salary recommendation ranges for religious professionals.
Basic salary ranges were recommended in 1995, and updated in 1997 and 2000, for congregations in the United States. Due to differences in compensation patterns and benefits provided by law, the Canadian Unitarian Council has established its own compensation consultants to work with local Canadian congregations.
The ranges are intended as guidelines—not mandates—to be accomplished over time as congregational priorities. Often, new resources must be developed to accomplish these aims.
The basic salary ranges are recommended as appropriate for religious professionals serving our congregations. These ranges were established with information from surveys, compensation and benefit data from private industry and governmental bodies, and salary ranges used by other religious denominations. Earnings of professionals in comparable secular positions were also taken into account.
The minimum, midpoint, and maximum ranges are not intended to limit congregational decisions. It is not assumed that all new professional employees will begin at the minimum of a range. Also, a higher rate of pay is appropriate for those with longer service or who demonstrate exceptional abilities or contributions to the congregation's well-being. Typically, employees are at the midpoint of a range within three to five years.
Wage levels for positions such as secretary, office manager, bookkeeper, or custodian have not been recommended. It is expected that these very important support staff positions will be compensated at rates prevailing in the local community.
Implementation of Guidelines
3. We urge congregations to consider factors such as length of service and other relevant work/life experience in using the minimum, midpoint, and maximum ranges.
4. We urge congregations to implement the Guidelines as soon as practicable.
* These Guidelines were approved by the Unitarian Universalist Association (UUA) 1995 General Assembly and are recommended for use in the Fair Compensation Congregation Self-Assessment Process.
5. Congregations adopting and meeting the Guidelines Program will be designated as Fair Compensation Congregations (Practicing). Congregations adopting the Guidelines as a goal and developing a plan for reaching the goal within a five-year period shall be designated Fair Compensation Congregations (Committed).
Adjustment for Cost of Living Differences
6. When setting and applying the basic salary ranges, congregations are urged to consider cost of living differences from the basic amounts.
No salary recommendations should outlast the naturally changing wage patterns in the economy or inflation. Measurements such as the local Cost of Living Index should be taken into account annually to be sure that staff do not experience a decline in real wages over time. Contained in the Clergy and Church Staff 2000 Compensation Report are salary tables adjusted for economic characteristics in many geographical areas. These should be used to assure that local congregations offer compensation linked to wage rates and labor costs in their local economy.
7. Congregations are urged to provide a basic benefits package in addition to salary.
Like other employers that desire to attract and retain qualified personnel, Unitarian Universalist (UU) congregations should provide group health insurance, term life insurance, and long-term disability insurance coverage for their regular employees. It is not expected that 100% of the premiums will necessarily be paid by the employer-congregations, and the portion of premiums paid by the employer is usually pro-rated for part-time staff.
8. Congregations are urged to determine benefits coverage prior to the establishment of salary (or clergy housing allowance in the case of a minister); benefits should not be the subject of bartering about compensation.
9. Congregations are urged to make a health insurance program available to each religious professional. Ideally, such coverage would be on a fully paid basis for such religious professionals.
In 1995, this recommendation expected that the employer-congregation would pay 100 percent of the health insurance premiums for their staff. With the cancellation of the UUA Health Insurance Policy by Blue Cross in 1998, local congregations have had to arrange coverage through carriers registered in their own states. It is not uncommon now for 70 or 80 percent of the health insurance premiums to be paid by the employer and 20 or 30 percent to be paid by the employee on a salary reduction basis. Staff might pay the entire premiums for spouses, partners, or dependents.
Provision for Retirement
10. Congregations are urged to make payment into a retirement plan in an amount equal to 10 percent of salary (including clergy housing allowance in the case of ministers) for all religious professionals.
The UU Organizations Retirement Plan is a 401(a) qualified plan managed by Fidelity Investments into which employer-congregations make the initial contributions on behalf of their employees. It is not a plan where the employee makes the initial contribution with an employer 'match.'
Employer-congregations must enroll at least 70 percent of their eligible employees, defined as persons age 21 or older who work at least 1,000 hours per calendar year, and who have been employed for one year. Previous employment with the same or another UU organization meets the one-year requirement.
Where employer-congregations contribute at least 10 percent of employee wages, employees may make additional voluntary contributions up to the US federal limits.
The original 1995 Compensation Guidelines called for a 14 percent employer contribution. With the addition of the employee contributions in 1999, the recommended employer contribution percentage has been changed to 10 percent. This recommended contribution may seem generous compared to many plans in corporate America. On the other hand, millions of American employers and employees are greatly under-funding the tax-deferred savings they will need for an even modest retirement income. It is also recognized that many ministers now enter this profession in mid-life and have used their previous savings for seminary education. Thus there may be more pressure to make 'catch-up' contributions in retirement planning.
11. Congregations are urged to provide long-term disability insurance with benefits, payable to age 65.
The UU Group Insurance Plan is available to congregations as a convenient way to accomplish this recommendation. When long-term disability insurance premiums are paid by the employee, any benefits received later are exempt from US income tax; many staff elect this favorable tax treatment.
Other Group Insurance
12. Congregations are urged to offer a group term life insurance policy to protect dependent survivors; the face value should equal at least two years' salary.
The UU Group Insurance Plan offers term life policies with a face value equal to 200 percent of salary (including housing allowance in the case of ministers), up to a maximum of $150,000, at a unisex rate. Premiums may be paid by the employer or the employee. The plan also offers dental insurance as a voluntary option.
Employer's Share of Social Security Tax
13. Congregations are urged to pay one half of the US self-employment tax of ministers "in lieu of employer's FICA."
Since ordained ministers in the U.S. are considered self-employed for purposes of social security, they must pay 100 percent of the social security self-employment tax (SECA); this is double the percentage usually withheld from employee wages.
This Guideline recognizes that ministers are usually not in the same high-income levels as other self-employed professionals; it essentially levels the playing field with the employer-congregation voluntarily contributing half of this tax over and above the base salary and housing allowance. The amount contributed by the congregation "in lieu of employer's Federal Insurance Contributions Act (FICA)" is itself subject to both income tax and SECA on the minister's 1040 tax return. Ministers are taxed at the same rates as other taxpayers. More and more Protestant denominations are urging implementation of this provision.
14. One month of sabbatical leave should be provided for each year of service for full-time religious professionals.
Professionals are typically eligible for sabbatical leave after five to seven years of service, with the requirement that they return for at least one full year of employment following. Congregations may need to plan financially for replacement ministerial services during the sabbatical period.
15. Congregations are urged to provide one month of paid vacation time as a minimum for each religious professional.
This benefit is typically pro-rated for persons who work less than full-time.
Professional Expenses Guidelines
16. Congregations are urged to determine a professional expense allowance prior to the establishment of a salary and clergy housing allowance for ministers and salary for other religious professionals.
17. Professional expenses include automobile and travel, conference and professional association expenses, attendance at professional meetings, UUA district events, General Assembly, continuing education, and other necessary related obligations.
This portion of a congregation's Total Cost of Ministry 'package' is usually established by the minister and will vary greatly from ministry to ministry depending upon age, career stage, and professional interests. Expense allowances for Directors' of Religious Education (DREs), music directors, and business administrators should also be provided for in the congregation's overall budget, and to also provide paid time for attendance at professional gatherings.
18. Congregations are urged to provide adequate time for continuing education for religious professionals, including sabbatical leave, such time not to be confused with vacation.
Many ministers arrange their annual work schedule to take one month per year of paid 'on-call leave' to be used for study, educational offerings, or travel. This is in addition to the month of paid vacation leave.
Should the minister have to return for a congregational emergency during the month of on-call leave, the travel costs are borne by the minister. Emergency travel back to the congregation during vacation leave should be paid for by the congregation. It is often mutually beneficial that these two periods not occur during consecutive months. Some ministers take one month of leave in the summer and the other after the first of the year.
Committees and Follow Through
19. Congregations are urged to designate the responsibility for administration of these Guidelines to a newly created compensation and benefits committee or to an existing committee.
Many congregations have been stimulated to create new personnel committees to oversee and review compensation patterns and to develop and administer general personnel policies.
Like other employers, religious congregations, find it beneficial to have personnel policies in writing so that all staff are assured of equal treatment and the congregation's staffing needs are made clear. This helps avoid policy decisions made on an ad-hoc basis or which may lead to allegations of favoritism or discrimination.
These Guidelines and salary recommendations have been deemed appropriate for compensation practices by UU congregations, and they should be used by a church seeking the Fair Compensation Congregation designation.
With the exception of the regulations for enrollment in the UUA retirement plan, they are not to be considered binding mandates that must be adopted by all UU societies. The retirement plan policies have been set by the plan trustees and are equally applied to all participating congregations.
More hierarchical religious denominations generally permit their congregations little flexibility on these matters. It has been found that most UU religious societies see the wisdom of compensation patterns that are considered fair by both the congregation and its employees. Over time, such patterns are conducive to better recruitment and retention practices, and to higher staff performance and congregational appreciation.