In September, the Department of Labor made an announcement regarding the overtime pay of “white-collar” salaried workers. The new rule more than doubles the salary threshold from $23,660.00 to $47,476.00 of these workers annually. This is scheduled to go into effect on December 1, 2016.

What exactly does this mean for your church?

It means that all workers who earn less than $47,476 per year ($913/week) are now eligible for overtime pay if they work more than 40 hours per week. This is significant for churches because most non-ministerial salaries are below the new minimum threshold. This could have a huge impact on church budgets, salary considerations, and more.

Dave Olsen, payroll strategist and President of Northstar Payroll addressed some key things that organizations should know about this new regulation. You can check it out here.

overtime pay

Here is what your church should know:

1. Churches are not exempt.

As a general rule, the new rules and regulations will apply to most church staff employees.

2. A limited category of church employees are exempt.

Ministers aren’t subject to minimum wage or overtime requirements of the act. These new provisions will primarily affect administrative employees in churches. It also includes any employees whose work is based around spiritual or pastoral functions but does not include ordination (think along the lines of children’s pastors, youth pastors, small group pastors, etc.)

3. Comp time is not allowed

You cannot work around the new rules by offering compensatory time. Compensatory time is time off in a future week for work done in the current week beyond the 40 hour threshold.

4. Volunteering is not a way around the rules.

Employees cannot be considered to have “volunteered” any overtime hours if they are doing the same work for which they normally get paid.

5. You cannot average hours.

In determining whether an employee works more than 40 hours per week, you must consider it on a week-by-week basis. Averaging hours across weeks will not be allowed.

What steps can your church take to ensure compliance?

First, review your church staff payroll and make a list of all employees. This includes both ministerial and non-ministerial. It’s important to take into account all who will be making less than $47,476.00 as of December 1, 2016.

Second, for each of your church staff employees, review their weekly hours and begin tracking how many hours in excess of 40 hours per week each employee is working. Determine whether any extra hours are seasonally related (Christmas services, Easter services, etc), or project related (launching new ministries), etc. The more information you have about each employee’s hours, the easier it may be to tweak their hours. This will be crucial during peak times in order to avoid paying overtime.

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