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Illinois can't force kids ministry to pay unemployment taxes, court rules

Illinois can't force kids ministry to pay unemployment taxes, court rules

A Christian afterschool ministry tied to The Moody Church in Chicago is sufficiently religious enough to qualify for an exemption from having to pay into a state insurance program, an appeals court ruled last week.

A three-judge panel of the Appellate Court of Illinois on Wednesday upheld a lower court decision and ruled 2-1 that the By The Hand Club for Kids should have been given an exemption to the state’s Unemployment Insurance Act.

The Illinois Department of Employment Security’s Board of Review concluded in 2017 that the By The Hand Club was not eligible for an exemption to the state unemployment insurance system.

In the majority opinion authored by Justice Margaret McBride, the court ruled that the board of review failed to recognize the pervasive religious nature of the student club.

This included the club requiring members and staff to be Christian, hosting Bible studies and chapel services and leading field trips to faith-based events like Christian music concerts.

“The advancement of religion is unquestionably the stated primary purpose of the afterschool program; religion pervades every aspect of the program, and income from various donors enables By The Hand to operate entirely free-of-charge to the children rather than as a commercial enterprise with an eye toward profit,” wrote McBride.

“The Board’s decision to the contrary is clearly erroneous. Based upon the law and record, we are left with a firm and definite conviction that a mistake has been made.”

Justice Cynthia Cobbs authored a dissenting opinion, arguing that By The Hand should not be exempted since the ministry mostly performs secular activities like providing meals for underprivileged children and academic assistance.

“It is clear that Christian ideals are promoted throughout the program. It is equally clear that a good many of the program’s activities are secular in nature and are specifically geared towards education assistance with a focus on literacy,” wrote Cobbs.

“By The Hand’s recruitment effort offers tutoring to a targeted population of students deficient in reading skills, with information provided to its potential participants that religious training is a component of the program. Not the other way around.”

Alliance Defending Freedom Senior Counsel Jeremiah Galus, who helped represent By The Hand,said in a statement released last Thursday that he was “thankful” for the ruling.

“We’re thankful that the Illinois Appellate Court has rejected the state’s flawed arguments and recognized that By The Hand’s provision of free food, free medical care, and free education is an act of worship, a genuine exercise of faith,” stated Galus.

“The state agency truly ‘erred by recharacterizing them as secular activities’ and we’re hopeful that the court’s important decision motivates other state governments to respect their faith-based allies and the important ways ministries serve under-resourced communities.”

In 2016, Kim Wimberly, who formerly served as human resources director and volunteer coordinator, left the nonprofit and applied for unemployment compensation.

By The Hand rejected the request, arguing first that Wimberly left voluntarily and thus was ineligible to receive such benefits, and then that, as a religious group, they were exempted from paying unemployment taxes.

In March 2017, the Illinois Department of Employment Security held a hearing and concluded that By The Hand was not eligible for the religious exemption given their secular activities.  

The club filed a complaint in response with Cook County Circuit Court Judge James M. McGing, who reversed the decision of the board in an order issued in July 2018.

“Plaintiff is organized primarily for religious purposes as that term is understood in the Act. The Board clearly erred when it substituted its own judgment of religious purpose for Plaintiff’s,” concluded McGing.   

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