Recently the Department of Labor raised the salary threshold for overtime protection to $913 a week or $47,476 per year. The new level takes effect December 1, 2016.
Types of coverage
There are two types of coverage to consider in determining the applicability of the Fair Labor Standards Act (FLSA): enterprise coverage and individual coverage. The enterprise coverage is generally not applicable to churches as the $500,000 annual sales threshold covers only activities performed for a business purpose (i.e. operating a book store or school) and does not apply to the church’s charitable activities. Individual coverage applies to employees engaged in commerce between states.
Church employment classifications
Individual church employment is assessed through two classifications, ministerial or non-ministerial. Based on several federal court rulings, ministerial employees are generally considered exempt from FSLA. However, under individual coverage, non-ministerial employees will usually be entitled to FLSA protections as many daily activities such as phone calls, emails, record handling and shipping of supplies are considered interstate commerce.
FLSA coverage does not apply to volunteers who are not employed by the church. However, employees’ volunteer time spent performing the same type of work for which they are employed is not exempt from coverage. These employee volunteer hours would be included as work hours in applying overtime pay regulations.
If you determine you are subject to the overtime regulations your church may prepare for the new overtime regulations by considering the following alternatives for non-ministerial employees engaged in interstate commerce:
- Increase the salary to meet the new FLSA threshold.
- Pay overtime for any hours worked (including volunteer time if performing the same type of work) in excess of 40 hours per week.
- Limit work and volunteer hours to 40 hours or less per week.
The church cannot work around the new regulations by offering compensatory time off in a future week. Averaging work over multiple weeks is also not permitted. The 40 hour limit must be applied on a week-by-week basis.