Religious School Exempt From Arizona Unemployment Insurance Tax

In Above and Beyond Child Care Inc. v. State of Arizona, (App. Bd., Dec. 19, 2014), the Arizona Department of Economic Security Appeals Board held that a church-affiliated pre-school and K-6 elementary school is exempt from the state unemployment insurance law.  The state had contended that the exemption for organizations operated primarily for religious purposes does not apply because the school's primary purposes are child care and teaching of secular subjects. The appeals board disagreed, holding that the school's teaching personnel are not covered by unemployment insurance.  It emphasized that the school's curriculum and class operations are infused with religious faith. An ADF press release last month announced the decision.