The church said in a statement that it welcomed the settlement, and that the document it is now required to distribute was merely “confirmation in writing of policies long followed by its Greater New York Division,” rather than an assertion of anything new.

Ms. Lown, who is Jewish, recalled on Tuesday that she had been overseeing the Salvation Army’s children’s services division in New York in 2003 when she was asked to have her employees fill out a form asking about their church attendance and their ministers’ names. The move coincided with a reorganization at the Salvation Army to more closely align the missions of its religious and social services wings.

“I felt it wasn’t right,” she said. “We were publicly funded, we were providing services on contract with New York City and State, and they were really imposing a religious test.”

The lawsuit, filed in 2004 on behalf of 18 former and current employees, also charged that the Salvation Army was proselytizing while delivering services to vulnerable populations, like foster children. Much of the case was dismissed in 2005, and in 2010, another part of the case was settled when several state and city agencies agreed to audit the Salvation Army for two years to make sure it did not cross the church-state line in its delivery of services.

The auditing protocol established by the case is now in use with other faith-based providers, to make sure that they are not proselytizing during their work with the poor and needy, said Donna Lieberman, the executive director of the New York Civil Liberties Union.