Update from the Editors (November 23): The new overtime rules that were set to take effect on December 1 have been put on hold after a nationwide injunction was handed down on November 22 by a federal judge in Texas. Read more about the injunction here.
Update from the Editors (September 26): New information has come to our attention concerning Examples 15 and 16 in the article below relating to classification of employees in organizations engaged in “enterprise” activities. The corrected and clarified copy has been added to the article and is clearly identified in the text.
Key point 8-08.5.* The Fair Labor Standards Act exempts employees employed in an executive, administrative, or professional capacity from the minimum wage and overtime pay provisions. To be covered by one of these exemptions, an employee must perform specified duties and be paid a salary in excess of a specified amount.
Key point 8-08.6. Ministers who are employed to perform ministerial services, and who are paid a salary that meets or exceeds the "salary test," are professional employees exempt from the provisions of the Fair Labor Standards Act. Ministers not compensated on a salary basis, or who earn a salary below the salary test, may not be covered by the Act. Department of Labor regulations suggest that the Act does not apply to any ministers, and a few federal courts have ruled that the so-called ministerial exception prevents the application of the Act to ministers.
Last May, the United States Department of Labor (DOL) issued new regulations that update the so-called "white collar" exemptions from the overtime pay requirement. Many church leaders are confused about the effect the new regulations will have on churches. This confusion is being fueled by questionable, and in some cases, erroneous information on the internet. This article will review the overtime pay requirement and the white-collar exemptions, and assess the effect of the new rules on churches.