We know you’re focused on summer camp at the moment, but the UMCRM Association wants to be sure that camp leaders are prepared for an important labor law change coming up in just a couple of weeks. Starting July 1, 2024, a new law from the U.S. Department of Labor will drastically alter overtime pay eligibility for salaried workers. The new rule raises the wage threshold for overtime exemption, which might affect your ministry. Ministries must prepare for these changes by evaluating their payroll procedures and modifying the wages of employees who fall below the new levels. 

Disclaimer: None of these resources should be construed as legal advice. Please seek legal employment counsel as needed.

Last week, the UMC’s General Council on Finance and Administration (GCFA) led a webinar and published a fact sheet helping to interpret the implications of the upcoming rule change.

View the GCFA Resources, including the June 5th webinar recording

This week, the American Camp Association (ACA) published an article addressing key wage issues for camps that provides camp-specific interpretation of the Seasonal and White Collar Exemptions. 

Read the ACA article, Compensating Camp Staff in 2024: Key Issues to Consider In Setting Your Pay Policies

Here are the facts you need to know: 

• The Fair Labor Standards Act (FLSA) applies to organizations with annual revenue of $500K+ (does not include donations & grants) OR if you engage in interstate commerce (if your campers and guests cross state lines, for example) – pretty much all camps do this. 

This is figured upon your 501c3 umbrella organization, so if your organization is part of your Annual Conference, that is the entity that will be considered.

• Camp/retreat ministries need to comply with federal minimum wage laws unless your state has a higher minimum wage that you must meet. 

• “Exempt employees” are not entitled to receive time-and-a-half pay for overtime. For everyone else, you must track actual time for hourly workers on a DAILY and WEEKLY basis (on paper or online is fine). They must be paid time-and-a-half for any hours worked over 40 in a work week. Paid time off does not count toward that calculation.

There are 3 tests for an employee to be considered “exempt”: Job Duties, Salary, and Pay Rate. All must be satisfied. 

1. Job Duties

• Executive: managing a department, supervising at least 2 full-time employees
• Administrative: not just job title, but duties listed in job description must be primarily office, non-manual work AND they make independent business decisions
• Professional: generally won’t apply for camp/retreats; mostly applies to doctors, lawyers, software developers

2. Salary: The employee is paid a guaranteed, unchanging weekly salary.

3. Pay Rate: Right now this minimum rate is $684/week. The updated rule we must be prepared for: On July 1, this threshold increases to $844. On January 1, 2025, it will be increased again to $1,128/week. Anyone who makes less will be reclassified as non-exempt, must track their time worked, and will be entitled to overtime pay over 40 hours.

Ministerial Exception: The employee doesn’t fall under FLSA protection. They do not need to be ordained clergy, but their job duties must be carefully analyzed. You would need to document this and consult an employment attorney. State laws may come into play, as well. Also consider labor justice – don’t try to use this to unfairly compensate people in ministry roles!

Camp Specifics (starts 27:08 in GCFA webinar recording)

• Most camps must comply with FLSA. Possible seasonal exemption: if you operate less than 7 months of the year OR if receipts from your camp’s 6 least-busy months equal no more than 33.3% of your camp’s 6 busiest months (based on previous calendar year). Those 6 months do not need to be consecutive. This calculation must be done every year to make sure your organization is continuing to meet the exemption requirements. 

View the Dept of Labor Seasonal Exemption fact sheet 

• A salaried worker CAN be classified as non-exempt. They need to track their hours and must be paid at least the equivalent of minimum wage (federal, or state if that is higher). They receive their regular salary unless they go over 40 hours, in which case they are entitled to overtime.

• If you have currently-exempt employees who will no longer meet the pay threshold and will be reclassified as non-exempt on July 1, then make sure that is communicated to them, they are set up for hours tracking, and they are trained in the new procedures. Do they know they cannot work off the clock? (They also cannot be considered an unpaid volunteer for the same duties they are normally paid for.) Will overtime require approval? (Note that you legally still do need to pay unapproved overtime). Review your personnel policies.

• Consider PTO policies and break requirements. Are those different for your exempt and non-exempt workers? What does your state require regarding breaks for hourly workers? FLSA says a true meal break is at least 20 minutes in duration.

• Housing and utilities are NOT considered part of the salary for threshold requirements. The exception is if a housing allowance is included on the worker’s paycheck.

• If you are knowingly misclassifying your employees, you are at risk of a charge or audit and liability for overtime back pay for up to 3 years.

• Part-time salaried employees are still protected by FLSA. 

The UMCRM Association engaged legal counsel in 2019 to create a white paper full of robust FLSA information for UMC Camp & Retreat leaders. GCFA encourages us to share this with Treasurers. 

View UMCRM FAQ White Paper - FLSA 2019

Still have questions? 

Join the UMCRM webinar

Monday, June 17th at 1:00 pm PT / 4:00 pm ET with Tricia Baker from GCFA

Contact Jessica by Sunday evening if you have a question you would like to see addressed in Monday's webinar.