What the new overtime regulation means for your church-Updated 11/29/16

The new salary requirement for an exemption to the Fair Labor Standards Act (FLSA) rules for overtime pay will not take effect December 1.

On November 22, a federal judge from Sherman, TX, issued an injunction halting the enforcement of a change to the "salary test" for an exemption to the FLSA rules for overtime pay. Currently, in order to satisfy the salary test a "white collar" employee must make $455 a week ($23,660 annually). That amount was set to increase to $913 a week ($47,476 annually) beginning December 1. The district court ruling means that the salary test will not change, for the time being.

It is important for churches to remember that the salary test is only one of the necessary elements for a church employee to qualify as exempt under the white collar exemption. Before an employee can qualify for the exemption the employee must (1) be considered an executive, administrative, or professional employee under the FLSA, (2) be paid a salary (employees paid on an hourly basis do not qualify) and (3) the salary must be a minimum of $455 a week.

Many employees who believed they would receive an increase in salary or be paid for their overtime work, may begin questioning whether their job qualifies under the white collar exemption. Churches would be wise to consider whether an employee's job fits under the white collar exemption as well. This will require the church to look at each individual position to determine whether the job is an executive, administrative, or professional position under the FLSA.

The Department of Labor may choose to appeal the district court's ruling to the U.S. Court of Appeals for the 5th Circuit. However, the Secretary of Labor is a Cabinet position. A new Secretary of Labor may choose to withdraw any pending appeal. Churches need to stay informed about whether this change to the law will occur. You may read the Department of Labor statement about the injunction here. Also see the Church Law and Tax post here. Texas Baptists' Office of Church Administration will also monitor this case and update churches about any changes to the FLSA.