FLSA Minimum Wage and Overtime Ruling update
November 30, 2016 / By UNY Communications
A federal judge has just struck down the FLSA overtime ruling to increase the minimum salary for exempt employees to $913/week ($47,476/year) just two weeks before it was supposed to take effect on December 1.
What does this mean for local churches? The federal minimum salary for exempt employees will now remain at $455 a week; however, New York State already has its own minimum salary for exempt staff of $675 week.
Some churches may not be subject to FLSA minimum wage and overtime rules. Click on this flow chart for more information. Even if a lay employee is not covered under FLSA minimum wage and overtime rules, the employee still must be paid at least NYS minimum wage and overtime. Click here to get to the New York State Department of Labor web page on minimum wage.
Below is information on how to help determine if you should classify your employees as Exempt or Non-Exempt:
Exempt Employees: An employee who is exempt from the overtime pay provisions or both the minimum wage and overtime pay provisions of the FLSA. In order to be Exempt from overtime, an employee must meet all three of the following criteria*
Rate of Pay: $675/week in accordance with NYS wage and hour law (eff. 12/31/15)
Pay Type: Paid on a salary basis
Duties: Meet job duties test as defined by FLSA, most commonly used are Administrative, Professional, and Executive. Click here for a list of overtime and minimum wage exemptions, and information on how to determine if your employees pass the job duties test.
*Clergy are not subject to the FLSA minimum wage and overtime rule
Non-Exempt Employees: An employee who must receive at least the minimum wage and overtime pay for time worked.
Rate of Pay: At least $9.70 per hour in accordance with NYS minimum wage law (eff. 12/31/16)
Pay Type: May be paid an hourly or weekly rate of pay, but must receive time and a half for any hours worked over 40 in a work week.
In order to ensure employees who are non-exempt are paid properly, including receiving overtime, it is recommended that they be made hourly and track their time worked.
It is recommended that all local churches retain an attorney with expertise in employment law to facilitate proper interpretation and compliance with State and Federal law.
Penalties for Misclassifying Non-Exempt Employees as Exempt
From New York State Department of Labor website: The Department of Labor will “help collect underpayments for workers who have not received the minimum wage. Often, we collect the funds without resorting to court action. However, an employer that violates the Minimum Wage Law is subject to criminal prosecution and penalties. Action may also be taken in civil court. The Commissioner of Labor may require an employer to pay: Minimum wage underpayments and liquidated damages PLUS Interest and civil penalties up to 200 percent of the unpaid wages.”