BY ACCEPTING FEDERAL AID, RELIGIOUS ORGANIZATIONS MAY SUBJECT THEMSELVES TO STATE LAW MANDATES.
Under some state laws, acceptance of government aid – even federal aid – triggers new legal obligations and restrictions. For example, the Colorado Anti-Discrimination Act (CADA) generally prohibits employers from discriminating on the basis of religion, sex, sexual orientation, and gender identity. CADA expressly exempts “any religious organization” from these requirements. But the exemption is lost if the organization “is supported in whole or in part by money raised by taxation or public borrowing.” C.R.S. § 24-34-402(7).
Even without this exemption, CADA still permits religious organizations to select employees based upon religious preference. But as with Title VII, this may not permit an employer to discriminate based on other protected classes, such as sexual orientation and gender identity.
Most Colorado churches and ministries aren’t subject to CADA because they’re not supported by government aid. But accepting PPP or EIDL loans could change that and cause an organization to lose at least some of its religious exemption.
Many religious organizations find themselves in dire straits as a result of this crisis. And each will have to balance the economic threat to their operations with the legal risks that come with accepting the government’s help. Every church and ministry will have decide for itself how to strike that balance. But each should go into it with eyes wide open, mindful of the potential costs to their mission and values. As always, you should consult with an attorney regarding your specific situation.