Faith-based groups may have specific questions regarding how the wage and hour laws the Department of Labor (DOL) enforces apply to them, such as what is permissible with respect to volunteering or which laws may apply to summer camps – many of which are run by faith organizations. This resource is meant to organize existing DOL guidance into a simplified document useful to faith-based organizations.
FLSA Coverage of Faith-Based Entities
The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime, recordkeeping, and youth employment standards.
Non-profit charitable organizations, including some faith-based entities, are not covered enterprises under the FLSA unless they engage in ordinary commercial activities, such as operating a gift shop, that result in sales made or business done of at least $500,000 annually.
Employees of organizations that are not covered enterprises may still be individually covered if the employees engage in activities affecting “interstate commerce” on a “regular and recurrent” basis. Engaging in interstate commerce includes making or receiving interstate telephone calls, shipping materials to or ordering materials from out-of-state, purchasing goods from interstate retailers, and traveling or transporting others across state lines. This is determined on a case-by-case basis.
Even where the FLSA applies to religious nonprofit entities, individuals in certain positions may nevertheless be exempt from coverage under the “ministerial exception.” The First Amendment’s Free Exercise and Establishment Clauses protect a religious institution’s autonomy with respect to internal management decisions that are essential to its central mission. Among these matters is the selection of whom to employ in certain key roles. Because the exception was first recognized in cases dealing with church ministers, it became known as the ministerial exception, though an employee does not have to be ordained or have a particular job title to qualify. There is no rigid formula for determining who qualifies for the exception. Instead, an employee qualifies based on his or her role in conveying the organization’s message and carrying out its mission. The relevant factors are those that shed light on that question, which will vary from situation to situation.
Wage and Hour Guidance
The following topics may be of particular interest to faith-based organizations:
Volunteers – The Wage and Hour Division (WHD) distinguishes between paid staff and individuals who voluntarily donate their time freely without anticipation of compensation for spiritual or humanitarian reasons. The WHD provides guidance on when individuals may volunteer their services to religious and nonprofit organizations without being considered employees under FLSA. Fact Sheet #14A: Non-Profit Organizations and the Fair Labor Standards Act (FLSA)
Summer camps – The FLSA includes specific exemptions for seasonal and recreational establishments like summer camps, affecting whether minimum wage and overtime rules apply to camp staff. Fact Sheet #18: Section 13(a)(3) Exemption for Seasonal Amusement or Recreational Establishments Under the Fair Labor Standards Act (FLSA)
Religious conference centers – Like summer camps, religious retreat and conference centers may qualify for seasonal exemptions under the FLSA, and WHD guidance helps organizations determine their coverage and obligations. Fact Sheet #18: Section 13(a)(3) Exemption for Seasonal Amusement or Recreational Establishments Under the Fair Labor Standards Act (FLSA)
Preschools and Day Care Centers – Some entities, such as preschools and day care centers, are considered enterprises for purposes of establishing FLSA coverage even when they are affiliated with religious nonprofit organizations which are not covered under the Act. WHD Factsheet #46: Daycare Centers and Preschools Under the FLSA. Nevertheless, as explained in the factsheet, teachers in preschools and day care centers may qualify for exemption from the minimum wage and overtime pay requirements as “professionals” under the same conditions as a teacher in an elementary or secondary school. Teachers and other employees at preschools and day care centers that are affiliated with a religious nonprofit entity may also be exempt under the ministerial exception, depending on the particular facts. WHD Opinion Letter FLSA2021-2
Opinion Letters
WHD issues guidance to the public, including faith-based entities, businesses, employees and others through opinion letters. An opinion letter is an official written opinion issued by WHD on how a particular law applies to the specific situation. They are designed to offer practical, reasoned answers to help the public understand their rights and responsibilities under the laws. Generally, these letters concern matters where the application of existing regulations or guidance is unclear. The responses can be particularly powerful for organizations relying on an opinion letter concluding that a practice is lawful should the relevant practice be challenged at a future time.
Examples of relevant opinion letters
FLSA2021-2 – Addressing whether the ministerial exception allows a private religious daycare and preschool to pay its teachers on a salary basis that would not otherwise conform with the requirements of the FLSA.
FLSA2018-29 – Application of the ministerial exception to members of an egalitarian religious community.
FMLA-76 – Religious institutions as “employers” under the Family and Medical Leave Act.
How to request an opinion letter
When existing WHD guidance does not address a specific situation, organizations may request an official opinion letter interpreting how federal labor laws apply to a particular set of facts.
Tips for writing a request
Requesting an opinion letter can be quick and easy. These tips can help you present your question in a way that highlights for us why your request should be addressed.
Reference any specific laws, regulations or other guidance that you think is relevant.
Include an accurate and complete description of the facts.
Confirm that the request is not related to an existing lawsuit or investigation. Note that we do not issue letters for use in any investigation or litigation matter that existed before submitting your request.
Do not include sensitive personal or confidential business information – responses may be published publicly on our website.
Include your phone number in case we need to follow up.