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

Case Studies

§ 8.08.08
Individual Coverage of Church Employees
  • A church has annual revenue of $300,000 and employs four persons (a pastor, a youth pastor, a church secretary, and a custodian). It engages in no "businesses" that compete with for profit companies, and does not operate a preschool or school. The church secretary asks the pastor if she is entitled to overtime pay for hours that she occasionally works in excess of 40 per week. The secretary is not entitled to the overtime provisions of the Fair Labor Standards Act on the basis of enterprise coverage for two reasons. First, the church is not engaged in commerce or in the production of goods for commerce; and second, the church does not have business income of $500,000 or more.
  • Same facts as the previous case study except that the secretary purchases office supplies from a local office supply store two or three times each year. Do these purchases satisfy the individual coverage provisions of the Act, entitling the secretary to overtime pay for hours worked in excess of 40 each week? Probably not. The Department of Labor's Opinion Letter dated November 4, 1984, states that church employees are individually covered under FLSA, even if their employing church is not an "enterprise," if they "regularly and recurrently use the telephone, telegraph, or the mails for interstate communication or receive, prepare, or send written material across state lines." However, individual coverage will not be asserted "for office and clerical employees of a church who only occasionally or sporadically devote negligible amounts of time to writing interstate letters or otherwise handle interstate mail or make bookkeeping entries related to interstate transactions."

Log In For Full Access

Interested in becoming a member? Learn more.

Table of contents

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations."

Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.