Legal Developments

FLSA and the Ministerial Exception

Federal court rules that a seminarian cannot claim unpaid overtime compensation.

Richard R. Hammar, Attorney, CPA
Bio

Church Law & Tax Report

FLSA and the Ministerial Exception

Federal court rules that a seminarian cannot claim unpaid overtime compensation.

Richard R. Hammar, J.D., LL.M., CPA

Key point 8-08.7. 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.

A federal appeals court ruled that it was barred by the so-called “ministerial exception” from resolving a seminarian’s claim for unpaid overtime compensation. The court noted that federal courts “have grappled with determining whether a particular church employee, though not ordained, nevertheless should be considered a ‘minister’ for purposes of the ministerial exception.” It declined to adopt a specific test for deciding who is a ministerial employee, since “under any reasonable construction of the ministerial exception [a seminarian] meets the definition of a minister.” It concluded:

We hold that the First Amendment considerations relevant to an ordained minister apply equally to a person who, though not yet ordained, has entered into a church-recognized seminary program to become a minister and who brings suit concerning employment decisions arising from work as a seminarian. The principle of allowing the church to choose its representatives using whatever criteria it deems relevant necessarily applies not only to those persons who already are ordained ministers, but also to those persons who are actively in the process of becoming ordained ministers. Similarly, we can no more ask the church for a religious justification for its decisions concerning seminarians (ordained ministers in training) than we can ask the church to articulate a religious justification for its personnel decisions concerning its ordained ministers …. [The plaintiff] challenges the sufficiency of his wages for duties performed as part of his seminary training to become an ordained Roman Catholic priest. Because the ministerial exception applies to those claims, we affirm the district court’s dismissal of the complaint.

What This Means For Churches:
This case is significant for three reasons. First, it is a decision by a federal appeals court, which lends considerable force to its conclusions. Second, the court ruled that the ministerial exception applies to seminarians and others involved in training to become a minister, as well as to currently active ministers. Third, the court concluded that the ministerial exception applied not only to employment disputes between churches and clergy pertaining to selection, termination, and discrimination, but also to claims under state and federal minimum wage and overtime pay laws. Alcazar v. Corporation of the Catholic Archbishop, 627 F.3d 1288 (9th Cir. 2010).

This Recent Development first appeared in Church Law & Tax Report, November/December 2011.

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