Employment in the Church Pacifica Synod October 6, 2018

Presenter: Gerry Marecek Retired HR Professional Master of Science in HR from Chapman Regional HR Manager for Fortune 200 Company Supported manufacturing plants in Virginia, Tennessee, Kentucky, Illinois, Indiana, Arizona, Nevada, and California Located in facility in Torrance as home base

Outline Job Classification Exempt Nonexempt Independent Contractor Time-Keeping for Nonexempt

Fair Labor Standards Act The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments. Passed in 1938, it's a federal statute passed to protect workers from abuses that were occurring during the Industrial Revolution and Great Depression. It’s revised periodically by state or Federal actions.

Classification Employees whose jobs are governed by the FLSA are either "exempt" or "nonexempt." Nonexempt employees are entitled to overtime pay. Exempt employees are not. Most employees covered by the FLSA are nonexempt. These requirements are outlined in the FLSA Regulations. Common business usage refers to hourly and salaried positions, although salaried positions may be either exempt or nonexempt, depending upon the work done by the employee. It’s cleaner and easier to refer to positions as exempt or nonexempt.

Exempt Executive Administrative Professional Highly Compensated (no need to discuss)

Executive Exemption To qualify as an exempt executive, an employee must: manage other workers as the primary job duty direct the work of two or more full-time employees have the authority to hire, fire, discipline, promote, and demote others or make recommendations about these decisions, and Earn at least the applicable exempt salary of $43,680 in 2018 (based on $10.50 minimum wage) & $45,760 in 2019 (25 or fewer employees).

Administrative Exemption An administrative employee generally must: Primarily perform office or non-manual work directly for company management or administration Primarily use his or her own discretion and judgment in work duties, and Earn at least the applicable exempt salary of $43,680 in 2018 (based on $10.50 minimum wage) & $45,760 in 2019 (25 or fewer employees).

Professional Exemption To qualify as an exempt professional, an employee must: Perform work requiring invention, imagination, originality, or talent in a recognized creative field—such as music . . . or Perform work requiring advanced knowledge—work that is predominantly intellectual, requires a prolonged course of instruction, and requires the consistent exercise of discretion and judgment, such as . . . Teaching . . . and Earn the exempt minimum

Ministerial Exception Creation Not created in the FLSA; created judicially and legislatively (Title VII, Civil Rights Act of 1964). Recognized as constitutional under the First Amendment This category relates primarily to labor law A “ministerial exemption” carries tax implications beyond wage (e.g., social security offset) for ordained ministers only

Ministerial Exception Factors Supreme Court found four factors EEOC v. Hosanna-Tabor Evangelical Lutheran Church: Employee was formally commissioned or ordained as a Lutheran “minister” She did perform “important religious functions” in addition to her teaching of lay subjects in the classroom The fact that lay people taught the same classes she did was not “dispositive” in the decision Her non-religious duties, however extensive, did not make a difference. Chief Justice Roberts noted that the Court was unsure whether any church employee would ever exclusively perform religious duties

Ministerial Exception Practice Job descriptions should recognize the key factors and note the position as exempt Actual job duties must be consistent with the job description and correlate to the key factors identified by the Supreme Court Wage doesn’t have to meet the exempt level

Independent Contractor Dynamex Ops. West, Inc. v. Superior Ct., the California Supreme Court held that a worker will be considered an employee of the “hiring entity” for purposes of the Wage Orders unless the “hiring entity” can establish all three of the following factors: The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact The worker performs work that is outside the usual course of the hiring entity’s business The worker is customarily engaged in an independently established trade, occupation, or business

Dilemma: Dynamex v Lee As the United States Supreme Court observed in Board v. Hearst Publications (1944) 322 U.S. 111, 121: “Few problems in the law have given greater variety of application and conflict in results than the cases arising in the borderland between what is clearly an employer-employee relationship and what is clearly one of independent, entrepreneurial dealing.”

Current Case Law The Dynamex decision shows that most church positions will be filled by employees, rather than by independent contractors. It’s difficult to find a position that meets all three of the California Supreme Court’s standards noted in Dynamex.

Nonexempt Time-Keeping and Pay All time worked must be paid, whether at home, in the office, or at any location Nonexempt employees cannot legally “donate” hours of work for any tasks that would be done as a part of their jobs

Required Meal Period Chart

Required Rest (Break) Period Chart

Questions? If you need to follow-up on any topics, feel free to reach out to me gerry.marecek@gmail.com