The Office of General Counsel of the United Church of Christ has issued a memorandum explaining recent changes to the Fair Labor Standards Act (FLSA). The FLSA is the primary federal law governing employee rights. These changes may require some local churches to change their practices with regard to overtime pay for lay employees.
We encourage you to read the memorandum in its entirety (but please note the Massachusetts-specific information on this page). Access the document here.
Here are some key points which will be relevant to many local congregations. All page numbers refer to the memorandum.
1. Local churches need not apply the FLSA overtime provisions to their ordained clergy, so long as those clergy have ‘ministerial functions’ (page 6). Ministerial functions include preaching and administering sacraments. If an ordained Christian Educator or pastoral care minister does these things in the course of their regular duties, the presumed ministerial exemption to the FLSA would apply to them. However, if an ordained person works for a church in a non-clergy capacity, such as a custodial or secretarial job, this exemption would not apply.
2. In general, local churches should assume that most lay employees are covered by the overtime provisions of the FLSA. (Some will still be exempt from overtime pay – see # 3, below.)
a) Churches which operate preschools are generally covered as ‘enterprises’ under the FLSA (page 3-4).
b) Employees who engage in ‘interstate commerce’, including sending mail or making telephone calls to other states, are covered as employees under the FLSA (page 4-5).
3. Employees who are ‘non-exempt’ – that is, eligible for overtime pay under the FLSA – must be paid at least the Massachusetts minimum wage (currently $10 per hour, to be raised to $11 per hour as of January 1, 2017). In addition, they must be paid at time-and-a-half pay for any hours they work in excess of 40 hours in a week (page 7).
4. The FLSA exempts some employees from overtime pay. To be exempt, an employee must:
a) have certain kinds of job duties (executive, administrative, professional or artistic – pages 7-8) AND
b) be paid at least a designated “standard salary level”. The current salary level for an exempt employee is $455 per week, or $23,660 per year. On December 1, 2016, the standard salary level will increase to $913 per week, or $47,476 per year (page 7). This is the most significant recent revision to the law.
5. The relevant governing bodies of local churches should look at the duties and compensation each of their lay employees who are currently exempt under the FLSA, and determine whether they will still be exempt when the new standard salary level becomes effective on December 1st of this year (page 9). Note that the same standard salary level applies, whether or not an employee is full-time (page 11).
6. If they will no longer be exempt as of December 1st, provisions should be made to begin tracking their hours, so that, beginning in December, they can be paid one-and-one-half their usual hourly rate for any hours worked over 40 in a given week (pages 10-11).
7. Churches are encouraged to develop policies that require prior authorization for overtime work (page 10).