Does the Overtime Law Affect Pastors?


The new overtime law that goes into effect December 1, 2016 will require many churches to review how they are managing their staff. Churches are not exempt from the New Overtime Law and it will have affect the way employees are compensated.

One big question we’re getting Does the New Overtime Law Affect Pastors?

The short answer is NO!

While that maybe is not definitive, all the initial considerations are showing that Ministerial (clergy) Employees will not be affected because of the ministerial exemption that exists in the FLSA. Furthermore, we can also conclude that even with no specific comment about pastors in the new law, their is a “duties test”put out by the Department of Labor that would provide job duties that would exempt an employee from the New Overtime Law. Since most pastors serve as the leader of their ministry or organization, it may be fair to determine that they would be exempt as an “Executive, Administrative or Professional” employee.

To view for your own knowledge, Ministers are considered exempt from any FLSA coverage which can be viewed on Table 3-1 of the final regulations which lists “clergy and religious workers” as one of the six categories of “Occupations Exempt from FLSA’s Overtime Provisions.” In plain English, pastors are not subject to minimum wage or overtime requirements of the FLSA. This would encompass people that function in a “spiritual/pastoral” function and not only through ordination. You can see that in the DOL Final Report on page 7 of the .pdf

The New Overtime Law for Churches

The new overtime law raises the minimum salary level for which a salaried employee must be compensated if they worked more than 40 hours per week. The former salary level was $23,600 per year which has now been raised to $47,476. Basically, anyone earning less than that amount (including salary, bonuses & commissions) is eligible for overtime pay.

What Does The New Overtime Law Mean for Pastors?

In general, pastors compensation will not be affected as they perform their duties as a minister for the church. Since they are exempted from FLSA under the ministerial exemption, they are not eligible for overtime pay.

4 Things Your Church Can Do To Prepare For The New Overtime Rule?

1. Consult legal advice. We’ll do our best to give you the facts, but your situation may be fact dependent on your current organization. You should view this article as legal advice.
2. Adjust pastor job descriptions with the following line: ” Religious Worker Not Covered By FLSA, Not Entitled to Overtime or Minimum Wage”
3. Review your church employment policies – it’s always good to do this periodically to make sure everything is up to date and current. Don’t let this document get out of date as your church grows.
4. Review your other employees to see if they may be affected by the new law – Here’s another article we wrote on how the new Overtime Law Will Affect Churches

As always, our goal is to help your church be freed up to focus on ministry. This stuff can get very complex and confusing and pull you away from focusing on your Church Mission and Vision. Let us partner and help you manage your payroll and accounting so you can focus on ministry. If you’d like to know more about how we help churches manage these parts of ministries, Get In Touch With Us.

How the New Overtime Law Will Affect Your Church


Here’s what you need to know about the New Overtime Law for Churches

There is a lot of buzz right now as people are talking (sometimes freaking out!) about the New Overtime Law that goes into affect this December 1, 2016. There is a lot of chatter out there about what this means and how it will affect your organization and we’ll deal specifically with how this affects your church.

The new overtime law was put in place as an effort for the Government to require employers to pay what they consider “fair wage”. I will try my best to avoid political undertones and cynicism but forgive me if some comes through. I’m a skeptic of the value of this idea to say the least.

Under the new law, anyone making less than $47,476 per year regardless of white collar, blue collar, salary or hourly will need to be eligible for overtime pay. (In most cases, hourly employees were already entitled to overtime pay)

The intent of the law is to increase the number of people who qualify for overtime pay. For an illustration, this will greatly impact Restaurant Managers who work long hours and previously were paid a set salary. Overtime was just part of the gig.

The New Overtime Law For Churches

For our purposes here, we’ll assume your church is paying an Ordained Pastor, has a part time Ministry Assistant paid a set salary and an hourly custodian.

For paying your pastor, they will not be affected by the new law. Pastors are Clergy and not covered by the FLSA under the ministerial exemption from Labor Laws. What this means is that they are not subject to minimum wage concerns, nor do they benefit from the FLSA new Overtime Rules. We won’t get into the definition of Clergy according to FLSA or the IRS but in almost every case, the pastor will not be affected.

For NON-CLERGY employees, you must now increase the amount of documentation you are keeping. In that documentation, you will need to keep record that:
– the employee is paid at least your local/state minimum wage
– the employee did not qualify for overtime pay during each and every pay period (basically showing they did not work more than 40 hours/week)

What Happens If Our Church Doesn’t Follow The New Overtime Law?

The repercussions are pretty severe for an employer (your church) that doesn’t comply with the new law.

1. An employee may be entitled to unpaid back wages for “Off the Clock” volunteer work
1. We all know that ministry has to happen and in many cases, the Paid Staff are working when ministry happens. Many times they also volunteer for other ministries not directly related to their position. Unfortunately, since they are an employee and the church is an employer, there will not be a clear distinction between duties on and off the clock. This further provides reasoning for very clear and accurate time records. Also, take the additional step to add into the Employee Agreement or Offer Letter that describes their job and clearly states that any volunteer activities within the church are non-compensated.

2. The Fines can be Expensive!
1. Failure to comply can result in “Liquidated Damages” of two times unpaid wages and overtime assessed.

How Can Your Church Prepare For The New Overtime Law?

1. Make sure you employee documentation is clear, accurate and up to date. This should specify clergy and non-clergy roles as well as job descriptions.

2. Consider offering Comp-Time to your ministry staff.
Of course ministry has to happen, and there are times when people will put in long hours. Consider adding in comp time to the schedule and document those hours so you can be sure you’re avoiding anyone working over 40 hours per week. This may require giving an afternoon off to your secretarial staff to keep their total hours down.

3. Put a time system in place to track your Non-Clergy staff. Even if they are salary this should be done. The analysis may also help in future hiring decisions!

4. Use a professional Payroll System like ours to be sure people are paid accurately and the documentation is in place.

Is Your Church Financially Healthy?

We’ll Show You HOW To Find Out And     WHY It Matters In This Free Guide!

It’s time to change the way we talk about giving in church!