American Church Group - Colorado

This change will likely affect all businesses—and ministries. If you have an employee performing exempt job duties, and you pay the employee less than $47,476 per year, your ministry will need to do one of two things:

1. Raise the employee’s salary to meet the new minimum salary level, or
2. Reclassify the employee as non-exempt. This will subject the employee’s pay to minimum hourly wage requirements and overtime.

Does the FLSA Apply to Ministries?*

The FLSA covers most ministries, so it is important that your ministry properly classify employees as non-exempt or exempt. Non-exempt employees must be paid minimum wage, and they must be paid overtime if they work more than 40 hours per week.

Exempt employees generally are paid on a salary basis and are not eligible to receive overtime. The courts have held that clergy (those who are ordained or who function in a similar religious capacity) are exempt from federal wage and hour laws. For non-clergy employees, ministries should follow FLSA rules and classify them as either exempt or non-exempt.

Qualifying Tests for Exempt Employees

An exempt employee must meet the following three tests:

1. Salary basis test: requires that an exempt employee be paid a salary, and limits the types of deductions that can be made to the employee’s salary.
2. Salary level test: requires that an exempt employee be paid at least the FLSA minimum salary amount, $47,476 per year ($913 per week).
3. Primary duties test: requires that an exempt employee typically perform executive, administrative, professional, or creative professional job duties. Job duties, not job title, are the primary factors in passing this test.

Employees who fail to meet all three of these tests generally must be considered non-exempt and paid at least minimum wage and overtime.

Consult an Expert

Ministry leaders should consult a locally licensed attorney who’s familiar with employment law and with your ministry organization to ensure that you are complying with all applicable federal and state employment laws, as well as help you protect your ministry’s interests.