Indiana employers need to be ready for religious freedom law

by Angela Johnson and Martha Lemert

The new Indiana Religious Freedom Restoration Act (IRFRA) is set to take effect July 1 after being signed into law in March and then amended in April because of objections that the statute would be used to discriminate, particularly on the basis of sexual orientation.

In its amended form, the IRFRA doesn’t authorize most employers to discriminate on the basis of race, color, religion, ancestry, age, national origin, disability, sex, sexual orientation, gender identity, or military service. That’s the case even if an employer raises a religious objection.

As federal laws, Title VII of the Civil Rights Act of 1964 (which prohibits discrimination based on race, color, national origin, sex, and religion but not sexual orientation or gender identity) and the Uniformed Services Employment and Reemployment Rights Act (USERRA) (which prohibits employment discrimination based on military service) cancel out the IRFRA if they conflict. Therefore, an employer’s obligation to comply with Title VII and USERRA remains the same.

Under the IRFRA amendment, Indiana municipalities that have expanded employment discrimination protections beyond Title VII’s mandates (e.g., to prohibit discrimination on the basis of sexual orientation or gender identity) may continue to do so. Employers must continue to comply with those laws even if they object to employing individuals in a protected class on religious grounds. However, in most municipalities, employees are afforded no such protection. The IRFRA does not prohibit employers from drafting and maintaining nondiscrimination policies that are broader than what is required by law.

What the IRFRA means for employers’ rights

Although the IRFRA doesn’t allow most employers to discriminate on the basis of race, color, religion, ancestry, age, national origin, disability, sex, sexual orientation, gender identity, or military service, the nondiscrimination provisions in the Act’s amendment do not apply to:

  • Churches and other tax-exempt nonprofit religious organizations or societies, including affiliated schools; and
  • Rabbis, priests, teachers, ministers, pastors, or designees of a church or other nonprofit religious organization or society when they are engaged in a religious or affiliated educational function of a church or religious organization or society.

Therefore, churches and other tax-exempt nonprofit religious organizations or societies may refuse to hire individuals if doing so conflicts with their religious beliefs and the decision is not “on the basis of” the individuals’ protected status. The protections provided to religious employers under the IRFRA are more expansive than Title VII’s “ministerial exception.”

Also, the IRFRA permits employers to enforce policies that are consistent with their religious beliefs as long as they don’t discriminate based on an employee’s protected class in violation of federal or local laws. For example, employers may refuse to offer healthcare plans that cover certain medications such as birth control or the “morning after” pill.

The IRFRA specifically defines “person” to include closely held for-profit corporations. The IRFRA’s definition also includes entities that “exercise practices that are compelled or limited by a system of religious belief held by: (i) an individual … or (ii) the individuals … who have control and substantial ownership of the entity, regardless of whether the entity is organized and operated for profit or nonprofit purposes.”

For more information on the IRFRA, see the May 2015 issue of Indiana Employment Law Letter.

Angela Johnson and Martha Lemert are attorneys with Faegre Baker Daniels LLP. Johnson can be reached at angela.johnson@faegrebd.com. Lemert can be reached at martha.lemert@faegrebd.com.

About Indiana Employment Law Letter:
Excerpted from Indiana Employment Law Letter, written by attorneys at the law firm of Faegre Baker Daniels LLP. INDIANA EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems, but rather to provide information about current developments in Indiana employment law. Questions about individual problems should be addressed to the employment law attorney of your choice. Contact the attorneys at Faegre Baker Daniels LLP.
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