What the Court Order Blocking the Overtime Rule Means for Your Church or Nonprofit

Churches, Employment, Exemptions, HR, Ministerial Exception, Nonprofit, Payroll, Wage and Hour by
As you may have learned by now, on November 22, 2016, a U.S. District Court Judge granted a preliminary injunction enjoining the federal Department of Labor’s Overtime Final Rule from going into effect on December 1, 2016. If the injunction had not been granted, the rule would have required employees who meet the executive, administrative, or professional exemptions under the Fair Labor Standards Act (FLSA) to be paid a salary of $47,476 annually for a full-year worker ($913 per week).

What does the court order mean for your nonprofit organization or church? The answer is not clear, as the rule is not dead, but is merely stayed from being implemented. The status of the rule may change in the near future depending on further court or congressional action. Thus, although the court order may grant your organization temporary relief, it remains to be seen if the rule will be revived.

If you are a California church or nonprofit organization, the court order does not affect your obligation to comply with California’s white-collar exemption requirements.  For example, employers with 26 or more employees must pay said employees a salary of at least $3,640 per month (or $43,680 annually) starting on January 1, 2017.  You can read more about California’s wage requirements from our previous blog entry here. Your organization must also still comply with any city or county ordinance regarding wages, such as Los Angeles, Pasadena, or San Diego.

If you are a church, neither the court order, nor the Department of Labor’s Overtime Final Rule affect your church’s ability to rely on the “ministerial exception.” If you plan to rely on the ministerial exception to hold that ministers are exempt from overtime laws, you should consult a local attorney who is familiar with the exception to ensure proper compliance.

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