04.6 - Communicating Changes in Lay Compensation

by Scott Selman

When words are many, transgression is not lacking, but the prudent are restrained in speech.
Proverbs 10:19 (NRSV)

Changes in lay compensation should always be communicated in a letter or memorandum. (Clergy compensation is communicated through the Pastor’s Compensation Profile form.) A written notification allows both parties (the church and the employee) to clearly understand the correct amount of compensation. 

Notification prior to or near the effective date of a compensation change enables an employee to anticipate his or her income for the year. A letter is a good way to communicate changes in compensation. A memo is also effective, but may not be as personal as a formal letter. Here’s a sample salary notification letter:

Church Letterhead

Ms. Alice Wesley

100 Asbury Drive
City, State and Zip

Dear Alice:

On behalf of Local United Methodist Church (use actual church name) and its Staff-Parish Relations Committee (or Finance Committee),  I want to express our appreciation for your service during 20__  (or  over the last twelve months).  In recognition of your efforts and performance,    I am pleased to advise you that effective January 1, 20__  (or other date as applicable), your annual salary will be ________________ (indicate authorized amount). Please remember that each employee of Local United Methodist Church (use actual church name) is expected to maintain the confidentiality of salary information.


SPRC Chair, Finance Chair or Pastor

The sample letter includes a specific reference to performance, but does not include a discussion of the employee’s actual performance. An employee’s performance should be documented in his or her personnel file, but not in the compensation letter. While performance should always be considered in setting an annual salary, this does not mean an outstanding employee would necessarily receive a large increase due to other factors that must be considered.

Whether the church pays weekly, biweekly, or monthly, salary amounts should usually be communicated in terms of an annual amount. Notice that the sample letter also includes a directive that all salary information should be considered confidential. Whenever two or more persons discuss compensation, it is easy for someone to become dissatisfied. Accordingly, letters of notification about changes in compensation should be mailed to an employee’s home address. Confidentiality must be maintained.

The sample letter does not include a discussion of benefits that the employee may be receiving. In general, if the benefits (pension, health insurance, and/or disability) are unchanged, it is not necessary to include these components of compensation in an annual salary notification letter. However, if the benefits have changed or if there is any question about benefits, it would certainly be appropriate to provide up-to-date information.   
Local churches should refrain from including subjective comments in a compensation letter. Examples of subjective comments may include:  “We couldn’t have done it without you!” or “We appreciate your good work and look forward to many more wonderful years.” Compensation letters should be professional and factual, but should generally address only the twelve-month period following the effective date. Be careful not to promise future employment.
Who should sign the letter? The answer to that question will vary from church to church. The person that signs the letter should be someone who has the authority to speak on behalf of the salary-setting body (usually the SPRC or the finance committee). The local church should keep a copy of all salary notification letters in the appropriate personnel file.  
Note:  Alice Wesley is a fictional person and any similarities to a real or living person are unintended.

Discover, Develop and Deploy Spiritual Leaders to Make Disciples of Jesus Christ for the Transformation of the World.