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New Ruling Could Mean Higher Payroll Costs for Your Organization

by ECCU

overtime pay

May 24, 2016

The US Department of Labor (DOL) has issued a final ruling that may mean higher payroll costs for organizations like yours. Today, DOL overtime regulations stipulate that anyone on your staff who earns $23,660 per year or less is legally entitled to receive overtime pay if they work more than 40 hours per week. On December 1 of this year, that annual salary threshold will jump to $47,476 per the new ruling.

In what it calls a “major shift,” the Evangelical Council for Financial Accountability (ECFA) reports in a news release that “the new rules will have a significant impact on the finances and human resources of churches and ministries throughout the United States.”

The DOL website says that besides increasing the salary threshold for overtime pay, the new rule will:

  • Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability
  • Strengthen overtime protections for salaried workers already entitled to overtime
  • Provide greater clarity for workers and employers

Employers will have several options for complying with the new rule:

  • Pay time-and-a-half for overtime work
  • Raise workers’ salaries above the new threshold
  • Limit workers’ hours to 40 per week
  • Some combination of the above

Since the rule takes effect in just six months, the ECFA says that “now is the time” for employers to consider the impact it will have on them, including:

  • Staffing budgets
  • Work schedules
  • Job responsibilities and position descriptions
  • Employee handbooks

To help ministry organizations get ready, the ECFA is presenting a webinar on June 23 titled “Impact of New Overtime Regulations on Churches and Ministries.” For details and to register, visit the ECFA website. .

Category: News