Paying Church Employees Overtime

Failure to pay overtime is one of the leading causes of claims against employers.

As a Christian employer, you want to pay your employees fairly. As a small, non-profit organization, you may struggle to contain costs and track everyone’s hours. Failure to pay overtime is one of the leading causes of claims against employers. To avoid being blindsided by a lawsuit, it’s important to comply with applicable overtime rules and avoid common mistakes.

What are the Penalties?

Employers who violate federal minimum wage and overtime laws are liable for the amount of the unpaid minimum wage or unpaid overtime, plus an equal amount in damages. Employees who win such cases also may collect reasonable attorney fees from your ministry. If a court determines that your ministry “willfully” violated the law, you could be fined up to $11,000 for each violation. Employees can collect up to two years’ worth of back wages for unintentional violations and up to three years’ worth for willful ones. Most wage and hour claims are excluded from insurance coverage, so your ministry could be responsible for paying not only the judgment, but also legal expenses.

Aren’t Religious Organizations Exempt?

Some ministries wrongly assume that they’re exempt from the Fair Labor Standards Act (FLSA), since the law applies to businesses or individuals that “engage in interstate commerce.” Courts interpret the phrase “interstate commerce” very broadly. Nearly all ministries are covered by the FLSA. Consult an attorney before concluding that you’re not.

What Counts as “Work”?

All time employees spend doing job-related activities potentially can count as work time, whether the work is done “on the clock” or not. This includes work done from home, work performed outside of normal working hours, and work done “voluntarily.”

All hours that you “suffer or permit” an employee to work— even if you don’t request it—count as work time. If you know or have a reasonable suspicion that employees are doing the work, you must compensate them.

What About Flex Time?

While you can’t give employees future “comp time” instead of overtime pay, you can adjust schedules within a workweek to prevent employees from incurring overtime. For example, if your youth leader works 10 hours on Wednesday, you can send him home early on Thursday or Friday, so his work doesn’t exceed 40 hours. This flexibility doesn’t allow you to average time over multiple weeks.

How Can We Avoid Mistakes?

The biggest mistake your ministry can make is assuming that you don’t have to comply with wage laws. Even if one or two of your employees may be exempt from the FLSA, it’s best to assume that most people fall under its jurisdiction. You need to learn about federal wage and hour rules, monitor the hours your employees work, and keep detailed pay records. You also need to be aware of minimum wage laws and overtime rules in your state, since these can be stricter than federal rules. The U.S. Wage and Hour Division can help get you started. Find your state labor office here.

The information in this article is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. We strongly encourage you to regularly consult with a local attorney as part of your risk management program.

You could claim up to $33,000/employee with the
Employee Retention Credit.

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