Some big news just came out of the United States Department of Labor about overtime pay.
Overtime pay is where certain employees must be paid 1.5 times their normal rate for any hours worked beyond 40 hours in a work week. Yesterday the Department of Labor released an update to the overtime regulations under the Fair Labor Standards Act (FLSA) on who is and is not eligible to receive overtime pay.
Here are some things you should know about the new regulations and existing regulations that still apply:
- Churches are not exempt. While there are some very limited exceptions, church employees are not exempt from overtime regulations.
- There is a ministerial exemption (sort of). The FLSA does not specifically provide a ministerial exemption, but some case law applies a ministerial exemption to wage and hour laws. In short, there is no definitive answer to this, especially if a minister does not meet the minimum salary requirements.
- There is a new minimum salary level. This is actually the only provision that is new. The former salary level was $23,600 per year. The new salary level as of December 1, 2016, is $47,476. The general rule is that anyone making under that amount per year is overtime-eligible.
- Employees cannot volunteer their time. Any employee or employer cannot get around the rules by the employee “volunteering” any hours worked in a week over 40, if what they are volunteering for are the same duties for which they are getting paid.
- Compensatory (Comp) Time is not legal. In order to get around overtime rules, you cannot offer time off in a future week for work done in the current week beyond 40 hours. You can adjust the scheduled work hours for an employee during the current week to maintain their work hours at 40 or under.
- Averaging hours is not legal. You cannot average an employees work hours over a period of time in determining if they are working more than 40 hours a week. Calculations are done on a single work week (7 consecutive days).
- Preschool or Daycare Teachers might be exempt – If you run a preschool or daycare, then employees that work in those areas whose primary duty is teaching, are exempt from the overtime rules. The Department of Labor’s Fact Sheet #46 covers details on this exemption.
Churches should pay close attention to the new and existing Department of Labor Regulations dealing with overtime, and determine how their staff members fit into the wage and hour requirements of the FLSA. A church could always benefit from seeking the legal advice of an attorney that specializes in wage and hour issues.
Note: This post is not intended to communicate legal advice. A qualified attorney should be consulted for legal opinions.