New federal rules covering minimum wage and paid overtime take effect December 1, 2016, and churches are generally NOT exempt from these rules, nor are California churches exempt from more generous state laws governing time-keeping issues such as overtime and paid sick leave (which took effect July 1, 2015). Penalties for violations can be severe.
The U.S. Department of Labor issued new rules under the Fair Labor Standards Act concerning the classification of an “exempt” employee for purposes of determining who must be paid overtime when hours worked exceed 40 in one week. California law, however, has long been more generous to employees by requiring time-and-one-half pay for all hours worked in excess of eight in one day and/or 40 in one week.
Although most churches are not “covered enterprises” under the FLSA, most of their employees are individually covered under the Act. A “flex-time” policy that allows an employee to work 9 hours in one day and 7 the next might pass muster under federal law but is prohibited under California labor law.
This is not a new requirement for church employees – most have been subject to federal and state wage and overtime rules. The issue some churches have unwittingly created for themselves is the misclassification of employees. Many believe that by paying a fixed salary rather than an hourly wage, an employee does not have to be paid for overtime. Such employees are known as “exempt,” but simply paying an employee a fixed salary does not make that employee exempt; most specified characteristics of exempt employees include professional or managerial duties.
To learn more, download the article for complete information about the federal rules covering minimum wage and paid overtime.