What is an appropriate severance for pastors on their way out of a church?
A power group surprisingly forced out Pastor Timothy after four years of successful ministry. Pastor John was caught embezzling funds and was fired immediately. After ten years, the board removed Pastor Ed because they believed he was not a leadership match for the congregation.
Should these pastors receive a severance? It depends.
Severance pay is a common practice in many industries. Some employers will offer severance as a gesture of goodwill to those laid off, but it is not required by law under the Fair Labor Standards Act. Many severances are based on the length of employment. A reasonable expectation is one to two weeks of severance for each year of employment. The stipulations of severance are often outlined in an employment contract. Unfortunately, most people do not have employment contracts.
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What about paying a pastor severance? Whether to pay a pastor a severance depends upon the scenario, ministry tenure, and church budget.
What is the scenario?
Retirement. A long-tenured pastor beginning retirement may receive a severance for a few months following an official departure date. In this scenario, the church desires to honor the faithfulness of their shepherd by making the transition out of a pastoral role a little easier. These severances are generally good but should be kept under a year.
Disqualification. When a pastor’s sins are to the degree of disqualification from ministry, the decision to pay a severance is a more difficult decision. Visceral reactions will land on both sides. Some will call for justice and want to cut off the pastor immediately. Others will desire to extend grace and help the family for a season.
Each case is different. While it’s difficult to give a general rule for disqualified pastors, I believe the best path is to offer a one-month to three-month severance. Have a posture of grace and generosity. Potential exceptions would be cases of abuse and embezzlement, in which termination is immediate with no severance.
Conflict. Some pastors are wrongly forced out due to circumstances entirely out of their control. Others create conflict and deserve to go. A severance is warranted in many cases of church conflict. For a shorter-tenured pastor, offer three months. For a longer-tenured pastor, offer six months. If a power group forces out the pastor, then give a year.
What is the pastor’s tenure?
Pastor Ed served his church without major incidents and minimal conflict. The church declined slightly over his tenure, and the board believed a leadership transition was in order. They asked Pastor Ed to step down. Most people liked him. At the same time, the church was not likely to split over his departure. In cases like this one, a general rule of thumb for severances is one month’s salary for every year served, up to a year. If a pastor served for nine years, then offer a nine-month severance. In Pastor Ed’s case, he should receive a severance for ten months. Severances beyond a year are not typically beneficial to the church or the pastors receiving them.
Also, about half of pastors in the United States are bi-vocational. Unfortunately, these pastors rarely get anything in the form of severance and are often neglected when transitioning between pastoral positions.
What is the state of the church budget?
If compassion were currency, then many churches could afford to pay better severances. The reality is the budget will be a determining factor in the size of the payout. Some churches offer lump sums upfront. Frankly, I believe a better approach is to pay the severance on the normal pay cycle over a set period. The severance should include salary, benefits (health and retirement), and transition services like counseling.
Lastly, it’s important to note that church employees are generally not eligible for unemployment benefits since most churches do not pay the unemployment tax in their respective states. As you determine a severance, consider these three questions. What is the scenario? What is the pastor’s tenure? And what is the state of the church budget?
Originally published at Church Answers.
Sam Rainer is president of Church Answers and pastor at West Bradenton Baptist Church in Florida.
