Wage & Hour Info

The Wage and Hour Division of the Department of Labor is increasing the minimum wage allowable for an employee to be classified as “Exempt” from the current level of $455.00/week ($23,660.00/year) to $684.00/week ($35,568.00/year), effective as of January 1, 2020.  Minimum wages for “Non-Exempt” employees are not affected.
 
There is no blanket exclusion from Wage and Hour laws for churches.  There are some exclusions from the law for religious organizations that have arisen over the years, but these exclusions arise from various court decisions, are not consistent, and do not provide clear-cut guidelines.  When there is a doubt as to whether or not the job qualifies as “Exempt”, the safe course of action is to consider the job “Non-Exempt”, and pay the employee using an hourly pay rate.  Schools…including schools run by churches…are specifically included under the Wage and Hour laws, and both wage and job duties tests apply when classifying a job as “Exempt”.
 
In order to continue to classify a job as “Exempt” after January 1, 2020, the employee must be paid a minimum allowable salary of at least $684.00 per week and pass the duties test.  To comply with the new regulations, parishes and schools will either need to increase the pay of their “Exempt” employees to this new level, or change their status to “Non-Exempt”, pay them an equivalent hourly rate, and track and record the hours worked by them.  “Non-Exempt” employees must record their hours worked.
 
The term “Exempt” means the job is exempt from the Wage and Hour laws.  “Non-Exempt” means that the job is subject to Wage and Hour laws.  When there is any doubt that a job qualifies as “Exempt”, employers should classify the job as “Non-Exempt”.  All jobs are considered to be “Non-Exempt” unless proven otherwise, and the sole burden of proof lies with the employer.
 
In addition to paying a minimum salary of $684.00 per week, to be classified as “Exempt” the job must pass what is called the duties test.  This test checks the job duties actually performed, and is not based on the job title, or any other criteria.  That means that the job duties must meet the criteria outlined in one of these job categories:

1. Executive (upper level management of an organization, or a recognized department, with hire/fire authority, directing the work of at least 2 full-time employees – supervision of employees, by itself, is not sufficient)
2. Administrative (office positions that deal with making or administering policy, exercising discretion and judgement, and with the authority to make independent decisions - this category does not include clerical positions such as Administrative Assistants)
3. Professional (generally a member of a recognized profession, such as accountant, lawyer, etc. requiring advanced knowledge customarily acquired through a lengthy education, and requiring consistent exercise of discretion and professional judgement, or a creative professional whose primary duties are the performance of duties requiring originality or talent in a recognized artistic or creative endeavor)
4. Computer Professional (systems analyst, programmer, software engineer, etc., but not lower level computer jobs such as help desk employees or equipment repair or installation staff)
5. Outside sales positions

1. Teachers, including preschool teachers, provided their duties are educational and not just child care.
2. School administrative staff (but not clerical), provided that they are paid at least the amount paid to the lowest paid teacher in the school.
3. Ministerial positions including, but not limited to, ordained clergy and members of religious orders.
4. Employees with job duties that are ministerial in nature, where the ministerial function is the essential part of the job, such as a DRE.

 
Again, the religious exemptions from the Wage and Hour laws arise out of court decisions.  They are not exemptions written into the law itself, and are therefore not always clear-cut.  It is essential to have clear, well written, current job descriptions to justify any claim of “Exempt” status.  It will always be the job duties actually being performed by an employee that govern whether or not a job is properly categorized as “Exempt”, not the job title or even the job description itself if it varies from the duties actually being performed.  But, a current, accurate job description raises a valid, good faith defense in the event that an employee or third person challenges the “Exempt” classification.