This was too good not to share. Thanks Kevin!
“New Overtime Regulations and the Impact on Churches” by Kevin S. Conner, CCA, MBA
On December 1, 2016 the Department of Labor’s final rule updating overtime regulations will go into effect. It is estimated that within the first year alone, this new rule will extend overtime pay protections to over 4 million workers, and some of these workers are likely employed by your church. The primary change which is most likely to affect churches in this final rule is the change to the standard salary level threshold for exempt employees. Exempt employees are those employees who are not entitled to overtime pay according to the Fair Labor Standards Act (FLSA). Employees can be classified as exempt on the basis of how much they are paid, how they are paid, and what kind of work they do. The exemptions fall into one of three categories; executive exemption, professional exemption, and administrative exemption. The Department of Labor’s website provides substantial resources to help employers with performing job duties tests to determine if one of these exemptions applies to certain employees. Performing these tests is crucial for employers (including churches) to ensure that its employees are being compensated in compliance with employment law. If, after a duties test, an employee is classified as exempt, the employer is also required to meet a salary threshold of $455 per week ($23,660 per year) in order to keep the employee in this exempt status. The application is such that an exempt employee does not have to track his or her hours and employers do not have to pay overtime wages to exempt employees working in excess of 40 hours in a work-week. The final rule going into effect December 1, 2016 will increase the salary threshold from $455 per week to more than double; $913 per week ($47,476 annually). This means that employees who are currently classified as exempt, but are making under $913 per week ($47,476 annually) will either need to have their compensation raised to this level or will lose their exempt status under FLSA. The options for a church facing this issue are fairly straightforward, but by no means simple. The employee would need to be given a raise to get them to the new compensation level, or the employee would need to be reclassified as a non-exempt employee and would need to immediately begin to track his or her hours each week. The church would then be legally obligated to pay time-and-a-half for all hours worked over 40 in a given work-week. Any way you slice it, after December 1, 2016, churches will have a new burden to bear. The burden could be financial, administrative, or both. Whatever situation your church is in, this is not a piece of legislation that should be ignored. It will be law, and will not be likely to change. In fact future automatic changes to this threshold are scheduled to occur every three years, beginning January 1, 2020. For more thorough information on this issue and how your church can navigate its way through it, and to learn more about other ways this could impact your church, I recommend taking a look at the following resources:
Website: Department of Labor Website Link https://www.dol.gov/whd/overtime/final2016/overtime-factsheet.htm
The Church Law Group http://churchlawgroup.com/resources/blog/new-overtime-regulations/ Webinars: Evangelical Council for Financial Accountability Impact of New Overtime Regulations on Churches & Ministries (Cost: $29.00) https://www.ecfa.org/WebinarRecordings.aspx?ProductID=85
The Church Network New Overtime Rules and the Effect on Churches (Cost: $59.00-$79.00) https://www.pathlms.com/tcn/courses/2921