I. Does FLSA Apply to Your Ministry Overall Because It Is an Enterprise?

A. Should You Want FLSA to Apply?

Many ministry workers expect fair compensation, including minimum wage and overtime. However, ministries often operate under unique circumstances such as stipends, missions work, and volunteer-driven roles, which require careful classification.

B. Is Your Ministry an Enterprise?

FLSA applies to enterprises engaged in commerce with at least $500,000 in annual business revenue, or certain institutions such as schools and hospitals.

Churches and ministries are not automatically exempt. However, if they are not engaged in commercial activity, they may not qualify as an enterprise.

Donations are not considered business revenue for this threshold.

II. Is the Employee Covered?

Even if the ministry is not an enterprise, employees may still be covered if they are engaged in interstate commerce.

Due to the broad definition of commerce, most employees will fall under FLSA unless their work is entirely local.

A. Executive, Administrative, and Professional Exemptions

Employees may be exempt if they meet both a duties test and salary threshold.

1. Executive Exemption

• Manages the organization or a department
• Supervises two or more employees
• Has authority over hiring or firing

2. Administrative Exemption

• Performs non-manual work related to operations
• Exercises independent judgment on significant matters

3. Professional Exemption

• Requires advanced knowledge in a field of learning
• Includes professions like law, teaching, or medicine

B. Highly Compensated Employees

Employees earning over $134,004 annually may qualify for exemption if they meet certain criteria.

C. Employees Working in Foreign Countries

Employees working outside the U.S. are generally exempt from minimum wage and overtime requirements.

D. Volunteers

FLSA does not apply to bona fide volunteers. However, receiving significant benefits may change classification.

E. Camps

Seasonal camps may qualify for exemptions if they operate less than seven months per year.

F. Ministerial Exception

Courts have recognized a ministerial exception that may exclude certain religious roles from FLSA coverage.

G. Clergy and Religious Worker Considerations

Although not explicitly stated in the statute, Department of Labor guidance indicates that clergy and religious workers are generally not considered employees under FLSA.

III. What if FLSA Applies?

A. Minimum Wage

Employees must be paid at least the federal minimum wage, with state laws potentially requiring higher amounts.

B. Overtime

Employees must receive 1.5x pay for hours worked beyond 40 per week unless exempt.

C. Recordkeeping Requirements

Employers must maintain records including:

• Employee identity and address
• Hours worked
• Wages and deductions
• Overtime earnings

Payroll records must be kept for three years; supporting records for two years.

D. Youth Employment Standards

FLSA sets minimum age requirements and restricts hazardous work for minors.

IV. Conclusion

Determining FLSA applicability requires careful evaluation of each role and organizational structure. Ministries should balance legal compliance with fair compensation practices.

Even where exemptions may apply, organizations should consider fairness and sustainability in compensation decisions.