The U.S. Supreme Court is hearing arguments on Monday regarding a case involving Catholic Charities and its claim to be exempt from a state’s unemployment compensation system for its employees. This case arises from Wisconsin, notable for being the first state to establish an unemployment compensation program during the Great Depression in 1932. Initially failing due to non-compulsory contributions, a revised federal-state system was introduced three years later. This system mandated that all employers, including non-profits, contribute, albeit with exemptions for religious employers operating primarily for religious purposes.
The current case involves Catholic Charities, specifically a chapter associated with the Diocese of Superior in northern Wisconsin. The chapter argues for an exemption from the state’s mandatory unemployment contributions, citing its role as a charitable organization with a religious mission. However, the organization does not engage in religious indoctrination and employs individuals irrespective of their religious affiliations. Eric Rassbach, representing Catholic Charities, argues that the organization’s charitable work aligns with its religious mission as per Catholic teachings.
The state of Wisconsin challenges the claim, arguing that Catholic Charities’ operations are similar to other non-profits. The state maintains that the organization does not qualify for an exemption because its services lack a distinctly religious nature. Wisconsin’s stance is that if Catholic Charities were permitted an exemption, it could disrupt the system’s integrity, as other non-profits, including other Catholic Charities chapters, do not seek exemptions despite operating under similar conditions.
Rassbach suggests that requiring Catholic Charities to participate in the state’s system infringes on their religious freedom and creates an unconstitutional entanglement between church and state. He describes the current setup as “perverse,” asserting that the organization could only opt out if it employed overtly religious practices, which is contrary to its current inclusive approach.
The desire to opt out stems from Catholic Charities’ interest in joining the Church Unemployment Pay Program (CUPP), which provides unemployment benefits to employees of religious institutions like churches and Catholic schools. Rassbach believes this move would allow the charity to save money and better fulfill its mission.
The Economic Policy Institute, represented by Laurence Dupuis, argues against Catholic Charities’ position, indicating concerns over the reliability of CUPP compared to state programs. Dupuis warns that allowing such exemptions could incentivize other religious organizations to follow suit, potentially straining the viability of state unemployment systems nationwide. According to Dupuis, such a change could affect approximately 1.2 million people employed by religiously affiliated non-profits across the United States.
The Supreme Court, with its conservative majority, may lend an ear to Catholic Charities’ arguments, particularly given the organization’s respected status in social aid. Historically, the court has often supported the Catholic Church in religious matters.
