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Alert: Don’t Let The Fair Labor Standards Act Overtime Rules Cost You

Alert: Don’t Let The Fair Labor Standards Act Overtime Rules Cost You

Fair labor standards act could affect churchesDid you know an important Fair Labor Standards Act employment law is changing? You’ve probably gotten a lot of emails about the new FLSA employee overtime ruling that took place on May 18, 2016.

If you haven’t heard, the United States Department of Labor made a change to who qualifies as an exempt employee under the Fair Labor Standards Act (FLSA).

This new change means that some of your workers may soon be eligible for overtime pay.

The ruling, states that employees who make less than a certain monetary amount per year will be classified as non-exempt employees and be eligible for overtime if they work more than 40 hours per week. They also must be paid the current minimum wage.

Here’s a little more detail on how this change might affect you.

Most businesses most likely use the Department of Labor’s Reference Guide to determine whether they need to do anything with the FLSA.

I can already hear you telling me “Hey, we’re a church, not a business – we aren’t classified as an “enterprise” by the government.”

Some churches are classified as enterprises and some aren’t. Even if your church doesn’t perform a “business purpose” some of your employees may still fall under the new ruling.

Because of the way the federal government classifies ministries, most are covered by the Fair Labor Standards Act in some form or another. That means you’ll need to correctly classify your employees as exempt or non-exempt.

So who’s exempt?

If your ministry is governed by the FLSA you must classify your employees as exempt or non-exempt. Non-exempt employees must be paid minimum wage (and overtime if they work more than 40 hours a week) and exempt employees should be salaried and do not earn overtime pay. Ordained clergy are exempt.

If your employee performing exempt job duties is paid less than $47,476 per year, you will need to either:

  • Increase the employee’s salary to meet the new minimum salary level
  • Reclassify that employee as non-exempt. The employee will now be eligible for minimum hourly wages and overtime.

The new rule also allows for an automatic salary threshold increase every three years in order to keep up with the minimum salary level of the 40th percentile of full-time salaried workers in the lowest wage Census region.

Is your ministry affected by these changes? Have you had to make drastic changes to stay compliant? Tell us about it in the comments, below.

You can also talk to us any time by calling 800-843-6054.

We’re also available on Facebook or Twitter if you’d like to comment on the Fair Labor Standards Act changes and how they may affect ministries and churches.