What the new overtime regulation means for your church

On May 17, 2016*, the Obama administration announced that it will increase the salary threshold for determining if an employee is eligible for overtime pay to $47,476.00 annually. This is an increase from the current threshold of $23,660.00 and this new regulation goes into effect on December 1 of this year.

This new regulation doesn’t change the duties tests for the various current overtime exemptions (such as administrative, executive, professional), but it does significantly raise the pay threshold and the pay threshold must be met in order for the duties tests to be in consideration.

What does this all me to our Texas Baptists churches? Right now, it means that this is the time to get ready and that is exactly what we want to help you to do. The new regulations don’t go into effect until December 1. We have questions – we know you do as well. We are working to get clarification as to what this means to our staff and yours.

We can share now that if the regulations stand and go into effect on December 1, all non-ministerial employees on the church staff earning less than the equivalent of $47,476.00 annually will be eligible for overtime if they work over 40 hours in a work week. Also, there are currently a number of legislative actions being proposed and debated to limit or eliminate these new regulations before they go into effect. We are researching and seeking clarity on the potential impact, if any, on ministerial staff and the progress of this whole situation and we will keep you posted on our findings as soon as we have them to share.

What can you do now to begin to get ready? Here are some things to consider doing:

• Make a list of your current staff, both ministerial and non-ministerial employees who currently (or will be) making less than $47,476.00 annually by December 1.
• Track how many hours they are working currently in excess of 40 hours per week.
• Be sure that all employees you currently have classified as exempt meet the duties test for the exemption that you are applying. The following link is to a Fair Labor Standards Checklist that you can use to help evaluate your positions.
  http://www.nibmimages.com/nibm/Audit-TestYourCompliance.pdf
  
• Stand by for more clarification from us. We will keep you posted on our findings as we head toward December 1.

*The official announcement from the United States Department of Labor came on May 18, 2016. See the details here.