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Sample Personnel Policy Manual

By Richard Nugent, Jan Gartner

Two people talking over a desk with a book and papers.

This Sample Personnel Policy Manual (Word) is intended to assist Unitarian Universalist congregations and other UUA-related organizations that are creating a Personnel Manual for the first time, or updating their current Personnel Manual. This Manual is an outgrowth of the work done by UUA Compensation Consultants, regionally-based volunteers, who work with congregations around issues of fair and equitable compensation. The attached contains recommendations grounded in the core of the UU commitment to social and economic justice. However, we recognize that each congregation will need to consider its financial circumstances and community standards in determining the level of benefits, including time off, provided.

In any work setting, employees should know what the congregation expects, how commonly occurring situations are handled, e.g. time-off and other benefits. A policy manual or handbook should address these issues. Without such a manual, decisions are ad hoc and the congregation will be open to claims of favoritism or unfair treatment, and even possible legal liability. Compliance with a policy manual will help to ensure that all employees are treated equitably.

The UUA does not mandate any particular policy or procedure. Each congregation must decide for itself whether to have a manual and what content to include. In addition, each congregation using this Sample Manual must make appropriate modifications to comply with applicable state or local laws, and the facts and circumstances of the congregation.

It is impossible to draft any manual that will address all of the myriad differences in our member congregations and the different state and local employment laws. Therefore, any congregation utilizing this Sample Manual must have the final manual reviewed by an attorney or other qualified professional familiar with applicable state and local employment laws.

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General Information When Preparing/Revising a Personnel Policy Manual or Handbook

I. the Congregation as Employer

This Sample Manual has been created for congregations in the United States. When a congregation hires one or more persons, it is considered an employer and must comply with various federal, state, and local laws. Although not required by law, it is a good idea to provide new employees with some basic information about the employer’s expectations and the type of benefits that the employer provides. Such information helps to ensure that all employees receive the same information and are treated equitably.

There are many legal requirements that govern the employment relationship and are applicable to all employers. Some laws apply only when an employer has a minimum number of employees. Also, as a religious body, a congregation may be exempt from certain legal obligations.

As our member congregations are located throughout the country, the Sample Manual has been drafted to comply with federal laws that set the minimum standard that must be met. However, many States have passed laws that provide greater protections than federal laws. Each congregation that uses this Sample Manual should obtain legal advice regarding the laws applicable to the congregation in any particular state or locality.

Compliance with the minimum required by federal and state law is advised to avoid unnecessary liability for back pay, fines or damages. However, in keeping with our Unitarian Universalist values, congregations should consider providing more than the minimum. For instance, although the federal minimum wage in 2019 is only $7.25 per hour with many states requiring a higher minimum wage, a congregation should consider not just the minimum, but the appropriate rate for compensating its staff. In addition, although the law does not generally require an employer to provide certain benefits, we urge each congregation to consider offering the benefits provided by the UUA’s Office of Church Staff Finances, which offers various employment benefits in which the congregation may participate.

A. Status as Employee not Independent Contractor

Employers are required to maintain certain records and meet certain financial and legal obligations. Some employers try to avoid those requirements by classifying individuals as independent contractors. However, such a classification may violate the Internal Revenue Code if the individual works under the direction and control of the employer, who also controls the manner and means of the work. Under the IRS standard, an administrative assistant, administrator or custodian/sexton would be employees, not independent contractors. Some states, such as Massachusetts, also further restrict or limit the use of independent contractor status. When a person is in business for themselves or works for a company contracted to provide a particular service, such as accounting or construction services, then the individuals may be legitimate independent contractors. Ultimately, the determination of whether an individual qualifies for independent contractor status is one which will depend on the specific facts and circumstances of the situation. For more information go to the IRS website.

B. Minister’s Contract

Ministers are employees of the congregations to which they are providing services. Ministers generally have a written employment agreement with their congregation, and the terms of that agreement will supersede contrary provision in this Manual, but not the provisions of the various benefit plans. The same is true for other staff with employment agreements. In areas not addressed in a specific agreement, the terms of the Sample Manual would generally apply. Due to First Amendment issues, courts are very reluctant to intercede in disputes between congregations and their ordained clergy. Thus, some of the legal protections provided to lay employees by the language of the Manual may not be applicable to or enforceable by ministers against their congregations.

II. Some Legal Issues Applicable to Employers

This summary is not intended to be comprehensive. There are many federal and state statutes that could impact a congregation's relationship with its employees that are not discussed in this summary.

A. Equal Employment or Anti Discrimination Laws

As Unitarian Universalist congregations, we value the inclusion of all individuals regardless of race, color, national origin, age, religion, sex, sexual orientation, gender identity, or disability. We also seek to treat everyone with respect and dignity without discrimination, harassment or retaliation. These values are reflected in laws which may or may not apply to a congregation. However, the standards set by these laws provide the legal minimum which all congregations should seek to exceed. Therefore, the laws are briefly summarized here for information.

There are three major federal statutes that prohibit discrimination in employment:

  • Title VII of the Civil Rights Act of 1964 (Title VII) prohibits discrimination on the basis of race, color, religion, national origin, and sex by employers with 15 or more employees, including part-time employees. Although not specifically set forth in the statute, agency guidelines and case law make it clear that harassment on the basis of these protected classes is also prohibited. Title VII specifically exempts congregations and other religious organizations from the prohibition on religious discrimination. Thus, religious organizations may, but many do not, require affiliation with a particular faith as a requirement for employment.
  • Age Discrimination in Employment Act (ADEA), prohibits discrimination in employment on the basis of age against persons who are 40 years of age or older. It only applies to employers with 20 or more full and part-time employees.

Americans with Disabilities Act (ADA) prohibits discrimination in employment against qualified applicants and employees with disabilities. The terms "qualified" and "disability" are defined in the statute; not everyone with a physical or mental impairment is a qualified person with a disability. In addition to prohibiting discrimination against individuals with disabilities, the law requires employers to provide “reasonable accommodations” necessary to enable a disabled individual to perform essential functions of a job. The ADA only applies to employers with 15 or more employees, and part-time employees have to be counted.

Many states also have anti-discrimination statutes that may cover smaller employers. For example, Minnesota's Human Rights Act applies to any employer with one or more employee. In addition, state and some local laws provide protection to additional categories or groups which include, among others, sexual orientation, gender identity, marital status, status with regard to public assistance, and age discrimination at any age.

B. Insurance, Retirement, and Benefits Laws

Religious institutions are not necessarily subject to the federal Employee Retirement and Income Security Act (“ERISA”). The UUA Health Plan is a Qualified Church Plan, and it is operated in accordance with ERISA. The dental plan offered by the UUA Office of Church Staff Finances is also an ERISA plan. The UU Organizations Retirement Plan is a Qualified Church Plan, but not an ERISA plan.

The UUA also offers life and long-term disability insurance to congregations and other UUA-related organizations. A few states are now mandating short-term disability coverage, paid sick leave, or paid family and medical leave.

Some states obligate congregations to carry workers' compensation insurance; others do not. Such coverage provides replacement income and health benefits during a period when an employee is unable to work due to a workplace injury and paying for necessary medical treatment. Congregations should consider purchasing this coverage (if available), whether or not they are required by law to do so.

Finally, most, but not all, states exempt congregations from participating in the state’s unemployment benefits program. For instance, Oregon requires participation, while several states make participation by congregations optional. Because of this, congregations in states which exempt the congregation from participation or congregations which choose not to participate in unemployment insurance, are encouraged to include severance benefits to all employees not discharged for cause.

C. Wage and Hour Laws

The federal Fair Labor Standards Act (“FLSA”) and similar state statutes which exist in almost every state require employers to pay minimum wage and overtime for hours worked in excess of 40 in a work week unless the employee qualifies for an exemption based on criteria contained in the law. In March 2019, the federal minimum wage is $7.25 per hour. A number of states and cities have established a higher minimum wage. Make sure your congregation is complying with the highest rate that applies to your locality.

Unless exempt, employees are also entitled to be paid overtime, normally 1.5 times the regular hourly rate for all hours worked in excess of 40 hours in any one work week (not pay period).

Some states have additional overtime requirements beyond the 1.5 times pay for hours over 40 in a week (see the Department of Labor website for state by state minimum wage and overtime rules).

Contrary to an often-prevailing practice, "compensatory time off" as a substitute for pay for more than 40 hours of work by a non-exempt employee is not allowed by federal law for private sector employees. However, with careful scheduling, the employer may be able to relieve the employee of hours of work later in a workweek to reduce the total number of hours worked in the workweek.

Ministers, and other employees who perform “essential religious duties,” are exempt from FLSA requirements under the ministerial exception (sometimes called the ecclesiastical exemption). Under this exemption, other employees, such as religious educators or music directors, may be exempt. Please review the FAQ sheetto help you determine who can be considered exempt under this ecclesiastical exemption. When in doubt, the safest route is to determine whether an employee qualifies for the executive, administrative, or professional exemption applicable to non-ministers.

Although there are exceptions in the statute that might apply to certain congregations or certain individual employees, the Sample Manual is drafted to assume coverage. As with all other employment laws, it is important to check your state and local legal requirements as they may set different minimums and/or requirements.

For non-ministers to be exempt from the payment of minimum wage and overtime, an employee must perform the duties of a bona fide executive, administrative or professional employee which requires the exercise of discretion on matters of significance to the organization, pay on a salary basis and other specific requirements. The minimum salary level is $455 per week or $23,660 per year[1] and must be paid on a salaried basis as defined by the law. The fact that an employee is paid a salary (versus hourly) is not alone sufficient to qualify the employees as exempt. It is important to check your local and state laws as the requirements for an exemption and/or the extent of any exemption may be different from the federal requirements.  More on the Fair Labor Standards Act (FSLA)

The FLSA does not require employers to give rest breaks or meal period breaks to employees during the workday. However, many states have statutes requiring that rest or meal breaks be given if an employee works more than a certain number of hours.

Wage and hour compliance is an area where an employer can incur significant financial liability if the employer does not classify employees correctly and/or fails to pay overtime as required. Accordingly, congregations should obtain legal guidance when there are questions or doubts.

D. Leaves of Absence Laws

Federal laws require that employees be given time off to serve in the military. In addition, some time off may be required as a reasonable accommodation if a Congregation is subject to the ADA or state laws prohibiting discrimination on the basis of disability. Further, although it is not likely that a congregation will employ the 50 or more employees required for coverage under the federal Family and Medical Leave Act (“FMLA”), an FMLA policy providing for 12 weeks of unpaid leave is included in this Sample Manual as an alternative. Even if a Congregation is not able to provide such a leave at this time, such a leave would be consistent with many UU goals.

It is important to note that many states have laws requiring employers to provide time off or leaves of absence to eligible employees for a variety of reasons. Those reasons can include time off for voting, jury duty, to address issues related to domestic violence, the birth or adoption of a child, or illness/injury of the employee or family member. An increasing number of states are enacting paid sick leave laws and some are developing paid family and medical leave laws. It is important that employers understand what time off and leaves of absence are required by law in their locality and state.

We urge congregations to not only meet the legally required minimums established for all employers, but to consider whether it is possible to exceed those minimum limits in the spirit of fair and just treatment of employees. For example, we encourage you to include a paid medical and parental leave benefit in your Manual even though it may not be required by law.

Conclusion

The process of creating and adopting a Personnel Policy Manual will provide an opportunity for the congregation to review its policies and procedures and help clarify its relationship as an employer with its employees. Once adopted, the Manual can serve as an important communication tool with employees and ensure that all employees get the same information. Ultimately, the Manual can help congregations be socially responsible employers.

The policies outlined in this manual must be understood in the order of legal and policy precedence as follows:

  1. Federal, state, and local employment laws.
  2. Rules governing UUA benefit plans in which the congregation participates.
  3. Employment agreements with specific employees, such as a minister.
  4. The policies in this Manual.
  5. The UUA compensation guidelines, which are recommendations from the UUA to congregations on wages and benefits.

The UUA Office of Church Staff Finances encourages congregational leaders – both lay and staff – to collaborate on the adoption of a Personnel Manual. Many resources are available on our website including the Benefits Tune-up Workbook. In addition, OCSF staff and our regionally-based Compensation Consultants are available to answer questions.


[1] In March 2019, the U.S. Department of Labor proposed raising the minimum salary level from $455 per week to $679 per week or $35,308. Following a public comment period, the USDOL may issue a revised standard in late 2019.