The Government Is Watching Churches

magnifying-glass-699777_1920The Fair Labor Standards Act (FLSA) requires payment of the minimum wage for all hours worked and overtime at 1 ½ times an employee’s (church) regular rate for all hours worked over 40 in a week. FLSA has included exemptions from both the minimum wage and overtime requirements for: – Executives; – Administrative employees; Professionals, Outside sales employees, Computer employees.

What is Ministerial Exemption?

Not explicitly included in FLSA, but clergy and religious workers were described as exempt from overtime in 2004 DOL report (not law). Persons such as priests, lay brothers, ministers, deacons and other members of religious orders who serve pursuant to their religious obligations in schools, or other institutions operated by their church shall not be considered to be “employees.”

The Government is proposing the following changes. THIS COULD HAVE A HUGH IMPACT ON CHURCHES AND RELATED MINISTRIES

Set the minimum salary required for exemption for executive, administrative, and professional employees at the 40th percentile of weekly earnings for full-time “non-hourly paid” church employees.

  • Currently, $921/week or $47,892/year
  • Expected to increase to $970/week or $50,400/year by the time a Final Rule is issued in 2016
  • Requiring employees to spend a minimum amount of time performing work that is their primary duty.
  • Adopting the “California rule” requiring that 50% of an employee’s time be spent exclusively on work that is the employee’s primary duty.

Act Now

  • Act now to determine the potential impact of a $50,440 minimum salary level.
  • Review job duties of exempt positions.
  • Update job descriptions to support exempt classification


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