Overtime and the Fair Labor Standards Act (FLSA)

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Overtime and the Fair Labor Standards Act (FLSA)

Do you believe in slavery? Because we believe in the dignity of all people, we have enacted various laws to protect our workers. Whether you want to read this article or not, you need to! Our society is complicated. There are rules designed to keep our employees from being our slaves and working long, unpaid hours. Let’s personalize the discussion with a mini-case study.

Working Hard and Loving It

Stephen is an immigrant, hired by the church for entry-level computer work in the church database program. He has a high school diploma and is working on a bachelor’s degree.

As an immigrant, his English language skills need improvement—and he is actively working on full proficiency. Yet, his current skills mean that he works a little slower than others.

To make up for his language skills, and because of his love for the church and Christ, he skips his lunch period and works about thirty minutes over each day. Sometimes, when he has to leave a little early to take a class at the community college, he takes work home and finishes his daily tasks. Since the church database program is online, he can easily work from home.

Counting all those hours is a bit of a hassle, so Stephen simply puts down that he works 40 hours a week. Everyone knows that Stephen works hard and that he isn’t cheating the church. Shelly is his supervisor and just winks at the time sheet, as does the Executive Pastor. No one is stealing from the church, so it’s okay.

Another great thing about Stephen is his willing spirit. He is always available to talk by cell phone. If a pastor needs his help on a Saturday or Sunday, he can call Stephen. This is really handy for the church staff.

When Stephen’s parents learned of this, they consulted an immigration attorney, who referred them to an HR attorney. It was determined that the church had stolen $7,500 in wages from Stephen—and there were fines against the church, as well.

Working the Problem

As you review the mini-case study, can you see how the church broke the law? Take a moment to list at least five ways that the church violated Stephen:

The following are some thoughts about how we must follow specific rules about employees and whether or not they receive overtime pay. I like to say that because our church follows “God’s laws,” we seek to honor Christ by fully complying with all local, state and national laws.

These ideas are not legal opinion, as that is not my area of expertise. Talk to legal counsel or HR professionals in your own state about any nuances that may apply to your church. This article is not the last word on the issue, but is designed to get you to begin to think deeply on the problem.

Exempt from FLSA

One of the basic questions is, who is exempt? When people say exempt, they mean exempt from the Fair Labor Standards Act. On a practical level, this question is “who does not receive overtime pay after 40 hours of work?”

Pastors are exempt because they are considered professionals, like lawyers, doctors, and dentists. They can work over 40 hours a week for no additional pay.

Key leaders may be exempt if their ministry descriptions comply with “exempt executives” or “exempt administrative” job duties (see the following summary of FLSA for more information). In your church, Directors and Managers might be exempt, based on wages and/or managerial duties. Executive Assistants might be exempt, based on the role of “managing the lives of their executives.” Interns might be exempt as “trainees” if their ministry descriptions comply with some tightly defined rules.

Only those people who fit an exemption are not subject to the rules and directives in the Fair Labor Standards Act.

Nonexempt from FLSA

It is logical that the opposite of exempt is nonexempt. Yet, it seems counterintuitive when we say nonexempt means a person must follow rules and directors in the Fair Labor Standards Act. It seems to be a double negative but that is the way things are worded.

Let’s look at what non-exempt means. If you work over 40 hours in a workweek, you will be compensated at time and a half after 40 hours. Or, if you live in California, you must abide by the FLSA and some state additions to the rules. For example, most workers in California must be paid time and a half if they work more than 8 hours in a day.

You cannot “time shift” between two workweeks. This means that if you work 50 hours in one week, you can’t put 40 in one week and roll 10 hours into another week. This is often called “comp time.” This is illegal for nonexempt employees.

Your church can insist that you take off time before the end of the workweek so that you won’t exceed 40 hours. You can send home any worker who reaches their daily maximum number of regularly paid hours.

In your church, most Administrative Assistants, Food Service Workers, Nursery Caregivers and Facility Workers are nonexempt. These are just a few of the common categories of workers in a church.  You must examine the job description of every worker and make a fair and reasonable determination if they are exempt.

What Work Counts for Overtime?

Let’s get into what may be bad news for some of you. There are lots of situations where you are asking an employee to work overtime.

All work done at the office is counted. Work done on breaks, such as answering a phone during coffee break or running an errand during lunch, is counted as work. In California, if a supervisor asks an employee to photocopy something during the employee’s 30-minute mandated lunch break, then they are working.

Even though the workday has ended, and most people have gone home, if an employee stays and works, that time is counted as working hours. The employee can’t say, “I am volunteering the time to finish my work.” A supervisor can’t easily say, “I was ignorant!” of such activity. They are the boss and need to know when their employees are working.

All work done at home is counted. In the era of internet research and email, it is easy for someone to do more work at home. Supervisors can check the time an email is sent to see if the employee is working from home! If you call your employee at home, you are making them work.

Voluntary work in the employee’s job description must be counted. You can’t have employees say, “I’ll just volunteer to do the rest of this work because I ran out of time.” A nonexempt employee cannot volunteer to do work that is in his or her job description. A nonexempt employee can only volunteer for work that is outside of his or her job description.

For example, Mike is nonexempt and in charge of collecting money for the youth trip. If Mike decides to help the department on Sunday, for the purpose of those youth trip registrations, that is payable time. Mike can only volunteer in the youth department in roles that are clearly outside of his job description, or he can volunteer in other areas of church ministry. Pay Mike when he is working within his job description.

Another solution is to have Mike come on Sunday and work for 2 hours collecting registrations for the youth trip. Count those hours as work time and don’t let Mike work more than 40 hours that week. Otherwise, pay Mike time and a half for all hours over 40 in the workweek.

Unauthorized work is counted if the supervisor knows or should know it is being done. Ignorance is not bliss! You can’t say, “I never told them to do this.” If work seems to magically get done overnight, the supervisor is expected to check into when it was done.

It is best that a supervisor approve of all overtime hours in advance. The FLSA rules put the employer in the seat of responsibility. You are in charge of your people, their work and their hours.

Three Steps

The FLSA rules can be complicated. In a training session, people might understand how they are supposed to count their hours. Yet, six months later, it can be hard to remember the rules.

I like to give clear pathways to employees to get help and advice. These apply to both asking questions before a problem, once a problem is discovered and if there is any kind of cover-up. Here are the steps that I recommend:

First, employees should ask questions about their work hours in the privacy of their supervisor’s office. Do not have informal hallway conversations. Those informal conversations can often be misunderstood. Employees should be empowered to get advice from an Office Manager before talking to their supervisor. Talking about a work problem with co-workers is not acceptable.

Second, sometimes there is conflict between an employee and a supervisor. It might seem, or actually be the case, that the supervisor is violating the rights of the employee. Each employee must know that if an issue about work is not resolved in a timely manner, they must talk to the Human Resources Department.

Third, if the problem is not resolved expeditiously, then the employee should immediately talk to the Executive Pastor or other designated leader. All issues should be resolved in the workweek in which they occur. No issue should languish in “email purgatory” for weeks at a time.

Conclusion

At heart, we want to treat our employees fairly. The Fair Labor Standards Act sets out guidelines so that an employee is not abused into performing excess work.

You have some simple choices. Be the leader and control the number of hours that your employees work—or pay them time and a half. As the leader, you are called to lead your people into green pastures … even if that means protecting them from working beyond their hours.

Need more information? Then read on …

Federal Information on the Fair Labor Standards Act

The following information is a digest of government information and examples of the Fair Labor Standards Act. Your state may have supplements to this!

More information can be found at:

Work

Work done “at home” or at a place other than the normal work site is work, and the time must be counted. “Voluntary” work is work, and the time must be counted. “Unauthorized” or “unapproved” work is work and must be counted (provided that the employer knows or should know it is being done and permits the employee to do it). It is the privilege and responsibility of the employer to “control the work” of its employees.

The Threefold Test

With few exceptions, to be exempt an employee must (a) be paid at least $23,600 per year, and (b) be paid on a salary basis, and also (c) perform exempt job duties.

Exempt Duties

An employee who meets the salary level tests is exempt only if s/he also performs exempt job duties. These FLSA exemptions are limited to employees who perform relatively high-level work. Whether the duties of a particular job qualify as exempt depends on what they are. Job titles or position descriptions are of limited usefulness in this determination. (A secretary is still a secretary even if s/he is called an “administrative assistant,” and the chief executive officer is still the CEO even if s/he is called a janitor.) It is the actual job tasks that must be evaluated, along with how the particular job tasks “fit” into the employer’s overall operations.

There are three typical categories of exempt job duties, called “executive,” “professional,” and “administrative.”

Exempt Executive Job Duties

Job duties are exempt executive job duties if the employee regularly supervises two or more other employees, and also has management as the primary duty of the position, and also, has some genuine input into the job status of other employees (such as hiring, firing, promotions, or assignments).

Supervision means what it implies. The supervision must be a regular part of the job, and must be of other employees. Supervision of non-employees does not meet the standard. The “two employees” requirement may be met by supervising two full-time employees or the equivalent number of part-time employees.

The supervisory employee must have “management” as the “primary duty” of the job. The regulations contain a list of typical management duties: interviewing, selecting, and training employees; setting rates of pay and hours of work; appraising productivity; handling employee grievances or complaints, or disciplining employees; determining work techniques; planning the work; apportioning work among employees; determining the types of equipment to be used in performing work, or materials needed; planning budgets for work; monitoring work for legal or regulatory compliance; providing for safety and security of the workplace.

A “rule of thumb” is to determine if the employee is “in charge” of a department or subdivision of the enterprise. An employee may qualify as performing executive job duties even if s/he performs a variety of “regular” job duties as well. For example, the night manager at a fast food restaurant may in reality spend most of the shift preparing food and serving customers. S/he is, however, still “the boss” even when not actually engaged in “active” bossing duties.

The final requirement for the executive exemption is that the employee have genuine input into personnel matters. This does not require that the employee be the final decision maker on such matters, but rather that the employee’s input is given “particular weight.” The employee makes these kinds of recommendations frequently enough to be a “real” part of the job, and that higher management takes the employee’s personnel suggestions or recommendations seriously.

Exempt Professional Job Duties

The job duties of the traditional “learned professions” are exempt. These include lawyers, doctors, dentists, teachers, architects, clergy. Professionally exempt work means work which is predominantly intellectual, requires specialized education, and involves the exercise of discretion and judgment. Advanced degrees are the most common measure of this, but are not absolutely necessary if an employee has attained a similar level of advanced education through other means.

Exempt Administrative Job Duties

The most elusive and imprecise of the definitions of exempt job duties is for exempt “administrative” job duties. The Regulatory definition provides that exempt administrative job duties are (a) office work, which is 
(b) directly related to management or general business operations of the employer, and 
(c) a primary component of which involves the exercise of independent judgment and discretion about 
(d) matters of significance.

The administrative exemption is designed for relatively high-level employees whose main job is to “keep the business running.” Administrative employees provide “support” to operational employees.

Examples of administrative functions include labor relations and personnel (human resources employees), payroll and finance (including budgeting and benefits management), records maintenance, accounting and tax, public relations, and some computer-related jobs (such as network, internet and database administration).

To be exempt under the administrative exemption, the work must be office and must be for matters of significance. Administratively exempt work typically involves the exercise of discretion and judgment, with the authority to make independent decisions on matters which affect the business as a whole or a significant part of it.

Questions to ask might include whether the employee has the authority to formulate or interpret company policies; how major the employee’s assignments are in relation to the overall business operations of the enterprise (buying paper clips versus buying a fleet of delivery vehicles, for example); whether the employee has the authority to deviate from company policy without prior approval.

Merely clerical work may be administrative, but it is not exempt. Most secretaries, for example, may be performing administrative work, but their jobs are not usually exempt. Similarly, filling out forms and preparing routine reports, answering telephones, making travel arrangements, working on customer “help desks,” and similar jobs are not likely to be high-level enough to be administratively exempt.  However, to “count” the exercise of judgment and discretion must be about matters of considerable importance to the operation of the enterprise as a whole.

Routinely ordering supplies (and even selecting where to buy supplies from) is not considered high-enough to qualify the employee for administratively exempt status. There is no “bright line.” Some secretaries may indeed be high-level, administratively exempt employees (for example, the secretary to the CEO who really does “run his life”), while some employees with fancy titles (e.g., “administrative assistant”) may really be performing nonexempt clerical duties.

Rights of Exempt and Nonexempt Employees

An exempt employee has virtually “no rights at all” under the overtime rules. Nonexempt employees are entitled to time and one-half their “regular rate” of pay for each hour they actually work over the overtime threshold in the work period.

“Overtime” and “FLSA overtime”

The normal “work period” is the “work week”—7 consecutive days—and the normal overtime threshold is 40 hours per work week. Thus, under the overtime rules, “nothing happens” unless and until a nonexempt employee has actually worked more than 40 hours in a work week.

Work Time

All time spent by an employee performing activities which are job-related is “work time.” This includes the employee’s regular “on the clock” work time, plus “off the clock” time spent performing job-related activities (which benefit the employer). Potential work is actual work if the employer “suffered or permitted” the employee to do it. An employer suffers or permits work if it knows the employee is doing the work (or could have found out by looking), and lets the employee do it.

With only a few exceptions, all time an employee is required to be at the premises of the employer is work time. This includes “breaks” and “nonproductive” time. Work done “at home” or at a place other than the normal work site is work. “Voluntary” work is work, and the time must be counted. “Unauthorized” or “unapproved” work is work and must be counted (provided that the employer knows or should know it is being done and permits the employee to do it). It is the privilege and responsibility of the employer to “control the work” of its employees.

For example, assume an employee’s regular schedule is 5 shifts per week from 8:00 am to 5:00 pm, Monday through Friday, with an hour for lunch. If, however, the employee takes a vacation day on Thursday, s/he will have actually worked only 32 hours in that work week. If the employee takes Thursday off, but worked a double shift the previous Monday, s/he will have 40 total hours actually worked that work week (and no overtime pay is due).

Some employees, for example, may “come early” and start working before the official start time. Such time counts as work time and must be included in pay computations, provided only that the employer knew or should have known that the employee was beginning work early. Post-shift work time could also include time spent by an employee performing job-related activities “on the way home,” as, for example, a secretary who drops off the day’s mail at the post office or delivers some paperwork to a customer or supplier. Some employees take work home. That time may well be work time. Similarly, if an employee is contacted at home by telephone for work related reasons, the time spent is work time.

Thus, a nonexempt employee’s time worked “vests” at the end of each work week (or work period). Work time may not be “averaged” from work week to work week. For example, an employee who works 44 hours in week one, followed by 36 hours in week two, is entitled to 4 hours of overtime pay.

An employer may “adjust schedules” within a work week to avoid an employee working overtime. For example, if nonexempt employees work “extra” time early in a work week, the employer can “send them home” later in the same work week so that total hours actually worked in that work week will not exceed 40.

By | 2016-10-12T11:00:07+00:00 June 27th, 2013|Key Articles, Leadership, Legal|

About the Author:

For over 35 years, David has served churches from 1,000 to 8,000 members. As well as being a pastor, David is a spiritual entrepreneur. He founded XPastor as a global ministry tool for leaders of churches of all sizes. XPastor provides a website, an XP-Newsletter, the annual XP-Seminar, workshops, and online courses.