Church Schools and the Minimum Wage

Court rules that church-run schools must pay the minimum wage.

Church Law and Tax 1991-01-01 Recent Developments

Employee Relations

Does a church school have to pay its employees the “minimum wage”? Yes, concluded a federal appeals court in a significant ruling. A fundamentalist Baptist church in Virginia opened a private school in 1973 with a full-time curriculum that included instruction in the Bible and traditional academic subjects taught from a Christian perspective. For the first few years of the school’s operation, teacher salaries were very low. To attract and retain teachers, the church began paying “salary supplements” to each teacher who was a “head of household.” Between 1976 and 1986, all married male teachers received a salary supplement, but married women were not eligible to receive the supplement, since “the Bible clearly teaches that the husband is the head of the house, head of the wife, head of the family.” Also, between 1976 and 1982, 91 persons who worked at the school as support personnel were paid less than the hourly minimum wage. These workers included bus drivers, custodians, kitchen workers, bookkeepers, and secretaries. In 1978, the United States Department of Labor asserted that the school violated the “Fair Labor Standards Act” by paying women less than men and by not paying the minimum wage. The church agreed that it paid women less than men, and that it did not pay some workers the minimum wage. However, it asserted that (1) the school was not covered by the Fair Labor Standards Act, (2) school employees were “ministers” and therefore excluded from coverage under the Act, and (3) that applying the Act to the church’s school would violate the constitutional guaranty of religious freedom. A trial court rejected the church’s arguments, and ordered it to distribute $177,680 among those female teachers who had been paid less than men, and $16,818 among those workers who had not received the minimum wage. The church appealed, and a federal appeals court upheld the trial court’s decision in favor of the government. In rejecting the church’s claim that the Fair Labor Standards Act did not apply to a church-operated school, the court noted that the Act was amended in 1966 to specifically cover nonprofit, private schools. The church also claimed that school employees were really church employees and therefore exempt from the Act. It pointed out that the school was “inextricably intertwined” with the church, that the church and school shared a common building and a common payroll account, and that school employees must subscribe to the church’s statement of faith. The court rejected this reasoning without explanation. The court also rejected the church’s claim that its school employees were exempt from the Act because they were “ministers” who considered teaching at the school “their personal ministry.” It noted that they “perform no sacerdotal functions, neither do they serve as church governors. They belong to no clearly delineated religious order.” Further, “the exemption of these teachers would create an exception capable of swallowing up the rule”—since it would mean that all teachers at church-operated schools would be exempt (contrary to the intent of the 1966 amendment to the Act that was designed include them). Finally, the court rejected the church’s claim that its constitutional right of religious freedom would be violated by subjecting its school employees to the minimum wage and “equal pay” provisions of the Act. The church claimed that its “head of household” salary supplements (paid to males) “was based on a sincerely-held belief derived from the Bible,” and that employee wages should be fixed by the church acting under divine guidance rather than by the government. The court acknowledged that the church might suffer a burden on the practice of its religion, but it insisted that any burden would be limited. It observed that although the church’s head of household salary supplement (for males) “was grounded on a biblical passage, church members testified that the Bible does not mandate a pay differential based on sex. They also testified that no [church] doctrine prevents [the school] from paying women as much as men or from paying the minimum wage. Indeed, the school now complies with the Fair Labor Standards Act ….” This limited burden on the church’s religious beliefs was outweighed by the government’s compelling interest in ensuring that workers receive the minimum wage. The court observed that school employees whose religious convictions were violated by the school’s coverage under the Act could simply return a portion of their compensation back to the church. Or, they could volunteer their services to the school. This ruling indicates that church-operated primary and elementary schools in the fourth federal circuit (which includes the states of Maryland, North Carolina, South Carolina, Virginia, and West Virginia) must comply with the Fair Labor Standards Act’s “equal pay” and minimum wage provisions. Note that this ruling only applies to church-operated primary and secondary schools. It does not apply to churches themselves. The Act has never been construed to apply to churches that are not engaged in commercial activities. However, the court’s rather cavalier rejection of the church’s religious beliefs suggests that any attempt by Congress to include church employees under the coverage of the Act would be deemed permissible. Coverage of church employees (not engaged in commercial activities) has not yet been contemplated by Congress. Note further that clergy are specifically exempt from the provisions of the Act. Dole v. Shenandoah Baptist Church, 899 F.2d 1389 (4th Cir. 1990).

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