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3. Fair Labor Standards act
Rev. Nate Berneking Director of Finance & Administration

4. Wage Hour Law
In May 2016, the Department of Labor issued new regulations for employers governed by the Fair Labor Standards Act (FLSA).

5. Wage Hour Law – The Old Way
Under the old regulations, employers used several different exemptions to avoid paying overtime rates to employees. Without knowing it, churches often excluded employees that should NOT have been excluded.

6. Wage Hour Law – The New Way
The new regulations are meant to include more people, which requires more employers to pay overtime, thereby increasing the rate of pay. It’s a chance to reset.

7. Aren’t Churches Exempt?
No!
“Enterprise” and “Intra-State Commerce” exemptions likely will not apply.

8. First, Who’s Covered By FLSA?
Everyone
Unless the FLSA or Federal Courts say otherwise. The FLSA itself provides five exemptions:
Professionals
Administrative Employees
Computer
Outside Sales
Executive

9. Exemptions Determined By:
Job description
Education requirements
Actual compliance
Titles and descriptions are NOT enough

10. Exemptions ALSO Require a Certain Salary
Until May 2016, the rate of pay was about $24,000 annually. Employees paid less than that in a year still required overtime even if they were a professional or met the definition of an administrative employee. The new regulations raised the threshold for salary from $24,000 to $47,476 ($913/week).

11. New Regulations = More Paperwork
The new regulations require more paperwork by the employer.
Tracking of hours.
Increased pay for employees who qualify and who work overtime.
Or, it might mean the employee works fewer hours because the employer prefers not to pay the overtime rate.

12. But Aren’t Churches Exempt?
Again, NO. The exemption that works for employers generally is probably NOT going to apply. The only other exemptions apply to individual employees.

13. Aren’t Pastors Exempt? Probably. ONLY probably.
No statutory exemption.
However, one Federal Court stated that the First Amendment provided a “ministerial exemption.”

14. Aren’t Pastors Exempt?
Most full-time pastors will qualify under the “professional exemption”.
Minimum compensation requirements for full-time licensed, ordained and commissioned clergy set pay above the threshold.
Part-time clergy often fall below the new thresholds.
We are going to ASSUME a ministerial exemption applies until we are told clearly it doesn’t .

15. What About Other Church Employees?
The FLSA has no definite exemption that covers them.
Employees doing the work of a “pastor” are PROBABLY exempt IF they have education and ministerial job (i.e. youth pastor).
Others might qualify as “professionals” or “administrative employees,” but remember, they now must make at least $47,476.

16. Can’t We Just Pay a Salary To Be Safe?
The amount of salary is irrelevant without a clearly defined exemption.
Employees must be professional, administrative and paid enough.
Clergy might be exempt entirely, but anyone else will need to be paid sufficiently with hours recorded.

17. What If We Don’t Comply?
There is no criminal penalty. If an employer fails to comply, an employee is entitled to record his or her own time and pursue the church in federal court for back-pay with interest and penalties.

18. GCFA Help
Offering a review of job descriptions and related positions to determine if exempt.
The cost for this service is $60 per review.
It can be accessed through the Conference Treasurer or GCFA

19. Treasurer’s Office Help
Consults on time tracking and payroll.
Referrals for payroll companies.
Contact Angela Thomas
Legal Questions, Contact Nate

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Questions?
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