The U.S. Supreme Court has agreed to hear a case brought by the Catholic Charities Bureau, the social ministry arm of the Catholic diocese in Superior, Wisconsin, seeking a religious exemption from the state’s unemployment insurance tax. A ruling in favor of the bureau could compel Wisconsin and other states to broaden their exemptions to align with First Amendment religious protections. Arguments in the case are expected to be heard, with a decision anticipated by June.
Wisconsin became the first state to establish unemployment compensation in 1932, taxing employers to provide temporary benefits to unemployed workers. By 1935, a federal-state unemployment insurance system was in place, with all states adopting similar programs. Wisconsin, like 46 other states, exempts religious entities “operated primarily for religious purposes” from unemployment taxes. However, state officials determined in 1972 that the Catholic Charities Bureau did not qualify for this exemption.
Founded in 1917, the Catholic Charities Bureau provides services for the poor, disabled, elderly, and children, describing its work as an expression of the Catholic Church’s social ministry. Despite this, the Wisconsin Supreme Court ruled in March 2024 that the organization’s activities were “primarily charitable and secular,” as its services are open to all and do not promote Catholic teachings. The ruling denied the group’s 2016 exemption request for several subsidiaries offering job training, daily living services, and support for people with disabilities.
The bureau appealed to the U.S. Supreme Court, arguing that the Wisconsin court’s decision infringes on First Amendment protections by favoring certain religions, entangling courts in religious matters, and interfering with church autonomy. They also contend that the state court imposed an excessively high legal standard for proving First Amendment claims.
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