5 Provisions to Include in Your Pastor or Minister’s Employment Agreement

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Many churches, especially those that do not operate as part of a larger denomination, do not give a lot thought to the terms of employment when they call a pastor to serve their church. However, establishing clear terms of employment in a clear and concise employment agreement are as important to the church-pastor relationship as any employee-employer relationship.

Using an employment agreement for pastors and ministers is important as they define the financial and legal relationship between the two parties. Therefore, having an experienced attorney to oversee the process of negotiating an employment contract on behalf of your church can be crucial to protecting your church’s interests.

All employment contracts should contain certain general information, such as the duration of the contract and a clear explanation of the salary and benefits that the minister will be entitled to under the contract. The contract will also likely outline the minister’s job duties and responsibilities throughout the contract. To some degree, the contract contents may depend on the denomination, church doctrine, and the policies of the church’s parent organization.

However, an employment agreement with your pastor or minister should contain at least five essential elements, as follows:

  • Good cause for termination of employment

Generally, under California law, employees are employed at will, meaning that they can be terminated for any reason, although there are some exceptions to the employment at will doctrine. However, when an employee has an employment contract, it generally negates the “at will” status of the employee and guarantees employment for the duration of the contract, except as otherwise stated in the contract. Therefore, the contract must contain a “good cause” or “just cause” reason for termination of the contract. While you cannot possibly cover every scenario that might lead to termination, you can use broad terms that encompass most of the reasons that would lead to termination, such as immoral behavior that violates church teachings, excessive absenteeism, or failure to carry out the duties and responsibilities of the position.

  • Leave time and work hours

Clearly defining leave time – sick time, vacation time, personal time, bereavement leave, and parental leave – can help avoid any misunderstandings about the amount of time the minister or pastor can be absent from the church for the contract duration. Likewise, establishing set work hours, or a minimum number of work hours, can ensure that both parties have the same expectations when it comes to performing the necessary duties of the minister or pastor.

  • Severance pay or other benefits if the church ceases operations

The employment agreement should specifically address what the minister or pastor is entitled to in terms of severance pay or other benefits if the church ceases operations. This is likely to be a subject of negotiations, particularly if the church struggles with finances, attendance, or other issues. Many ministers will want assurance of payment if they agree to take on a contract under these circumstances.

  • Contract renewal provisions

The employment agreement should address the timeframe for potential renewal, so both parties know what to expect as the end of the contract nears. The contract also should address potential temporary extensions of the current contract, if needed, while the parties continue to negotiate a renewal contract. Finally, the contract likely should state that the church has no obligation to renew the contract of any minister or pastor. Therefore, if a church is unhappy with a minister but unable to prove just cause to terminate the contract, they still could eventually terminate the contract by simply refusing to renew it.

  • Compensation and other benefits

The contract should be very specific about the salary paid during the contract term and any other monetary compensation that the minister receives, such as a housing allowance, utility allowance, mileage reimbursement, cell phone reimbursement, or similar types of compensation. Likewise, the contract should cover all fringe benefits that come with the position, including medical insurance, dental and vision insurance, life insurance, disability insurance, and retirement plans.

Let Us Assist With an Employment Agreement

Church Law Center gears its practice to legal matters that affect nonprofit organizations, churches, and other religious organizations. This focus allows us to concentrate our efforts on keeping abreast of the ever-changing laws and policies as they develop over time. We are here to represent your interests throughout every stage of your legal matter. Call our California nonprofit attorneys today at (949) 245-3177, or visit us online and see what we can do for you.

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