Overtime: Does Your Ministry Comply?

Failure to pay overtime is one of the leading causes of claims against employers.

It can happen to the most careful of administrators—you miscalculate overtime wages, misclassify an employee, or fail to pay overtime to an employee legally entitled to it. Any one of these can result in serious consequences for a ministry. Failure to pay overtime is one of the leading causes of claims against employers.

Many leaders don't realize that wage and hour laws can apply to churches and religious organizations. To pay employees fairly and avoid being surprised by a lawsuit, it’s important to understand and follow overtime rules.

What are the rules?

The Fair Labor Standards Act (FLSA) is a federal law that governs minimum wage and overtime pay. Unless an exemption applies, employers must:

Pay at least the federal minimum wage.
Pay overtime after someone works 40 hours in a workweek.
Pay overtime worth at least 1 ½ times a worker's regular hourly wage.

Many states and communities have even stricter rules.

What are the Penalties?

Employers who violate federal minimum wage and overtime laws are liable for the amount of the unpaid minimum wage or unpaid overtime, plus an equal amount in damages. Employees who win such cases also may collect reasonable attorney fees from your ministry.

If a court determines that your ministry “willfully or repeatedly” violated the law, you could be fined up to $1,000 for each violation.¹ Employees can collect up to two years’ worth of back wages for unintentional violations and up to three years’ worth for willful ones.² Willful violations of FLSA regulations may be prosecuted criminally and fined up to $10,000.¹

Most wage and hour claims are excluded from insurance coverage, so your ministry could be responsible for paying not only the judgment, but also legal expenses.

Aren’t religious organizations exempt?

Some ministries wrongly assume that they’re exempt from the Fair Labor Standards Act (FLSA), since the law applies to businesses or individuals that “engage in interstate commerce.” Courts interpret the phrase “interstate commerce” very broadly.

If your church or its employees do any of the following activities regularly, you probably engage in interstate commerce:

Order teaching materials or other supplies from out of state.
Mail newsletters or other information to people out of state.
Travel to other states for work purposes.
Maintain a website from which people from out of state may order items.

Related Resource

1 “Enforcement.” U.S. Department of Labor, https://www.dol.gov/general/topic/youthlabor/enforcement. Accessed 16 October 2019.
2 “Backpay.” U.S. Department of Labor, https://www.dol.gov/general/topic/wages/backpay. Accessed 16 October 2019.
3 “Fact Sheet #22: Hours Worked Under the Fair Labor Standards Act (FLSA).” U.S. Department of Labor, Wage and Hour Division, https://www.dol.gov/whd/regs/compliance/whdfs22.pdf. Accessed 16 October 2019.

Updated April 24, 2024

The information provided in this article is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. We strongly encourage you to regularly consult with a local attorney as part of your risk management program.