Churches can’t ignore new overtime pay regulations
Seth Brown, BR Content Editor
November 15, 2016

Churches can’t ignore new overtime pay regulations

Churches can’t ignore new overtime pay regulations
Seth Brown, BR Content Editor
November 15, 2016

The Biblical Recorder reported in June that changes to federal labor laws, scheduled to take effect Dec. 1, could affect churches and other ministries. Some human resources experts were unsure whether the updated overtime regulations would apply to employees of religious organizations, but many Southern Baptist leaders are now urging churches to review and update personnel policies to ensure compliance. (See guest column.)

The U.S. Department of Labor (DOL) announced May 18 that it was updating overtime regulations of the Fair Labor Standards Act (FLSA) to “simplify and modernize” the rules. Salaried employees making less than $47,476 annually ($913 per week) will be eligible for overtime pay if they work more than 40 hours per week, according to new federal labor protections.

U.S. House Republicans introduced a bill in September that would delay the Dec. 1 start date by six months. The Regulatory Relief for Small Businesses, Schools, and Nonprofits Act (or HR 6094) passed by a vote of 246-177.

The bill is now before the Senate, but President Barack Obama has vowed to veto the bill if passed, according to news reports.

The DOL’s action came in response to a memo issued by the president in March 2014, directing Labor Secretary Tom Perez to revise the overtime rules.

The president said regulations “have not kept up with our modern economy” and “millions of Americans lack the protections of overtime and even the right to minimum wage.”

Previous rules set the salary threshold at an outdated $23,660, covering an estimated 7 percent of full-time salaried workers, said the DOL, down from 62 percent in 1975. The new expansion covers 35 percent, according to Perez.

In addition to congressional opposition, two lawsuits have been filed in response to the new overtime rules, challenging the salary threshold increase and a provision that automatically updates the salary threshold every three years.

GuideStone Financial Resources (guidestone.org), the financial services auxiliary of the Southern Baptist Convention, posted an overview of the new changes to its website Oct. 17, outlining how the overtime rules apply to ministries.

GuideStone also pointed its monthly e-newsletter readers to a document published by Brotherhood Mutual, an insurance company.

The document said, “It’s likely that all businesses – including ministries – will be affected by this change.”

The regulations will probably not entitle pastors to time-and-a-half pay for labor over 40 hours, based on judicial and regulatory precedents, but many church support staff and other employees of religious organizations may qualify.

Most non-profit organizations, including churches and other ministries, are exempt from blanket overtime pay regulations. Yet, many non-profits have employees that qualify for individual coverage, which is based on “the nature of the particular employee’s work activities,” according to a DOL supplemental document.

Organizations often affiliated with churches such as preschools, institutions of higher education, hospitals and elder-care facilities are covered by FLSA protections, although there are exemptions for most teachers.

Salaried “white collar” workers may be exempt from overtime pay regulations if they make more than $47,476 per year and their primary job duties are considered professional, administrative or executive.

Employers have three options for complying with overtime regulations: raise an individual’s salary above the threshold, offer appropriate overtime pay or reallocate duties to reduce the amount of overtime work.