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.
