Ministers who are employed to perform ministerial services, and who are paid a salary that meets or exceeds the "salary test," are professional employees exempt from the provisions of the Fair Labor Standards Act. Ministers not compensated on a salary basis, or who earn a salary below the salary test, may not be covered by the Act. Department of Labor regulations suggest that the Act does not apply to any ministers, and a few federal courts have ruled that the so-called ministerial exception prevents the application of the Act to ministers.
|
|
In 2010, a North Carolina court ruled that it was barred by the First Amendment guaranty of religious freedom from resolving a priest's compensation dispute with his diocese. A Catholic priest claimed that his diocese had failed to assign him to a suitable position and failed to properly compensate him for his services. He submitted his grievance to the Vatican's "Congregation for Clergy." The Congregation later instructed the diocese to "provide some priestly ministry for this priest and ensure that he is henceforth to be provided with an adequate means of livelihood."
The priest alleged that the diocese never followed this mandate, and has continued to refuse to give him either an assignment or a salary. As a result, he sued the diocese, claiming that it had violated the North Carolina Wage and Hour Act. The Act provides that employers must "pay every employee all wages and tips accruing to the employee on the regular payday," and that "employees whose employment is discontinued for any reason shall be paid all wages due on or before the next regular payday either through the regular pay channels." The priest alleged that the diocese had violated these provisions by refusing to comply with the decision and instruction of the Congregation. A trial court dismissed the lawsuit, and the priest appealed.
In affirming the trial court's dismissal of the lawsuit, the appeals court observed:
Source: Church Law and Tax
Richard R. Hammar is an attorney, CPA, and author specializing in legal and tax issues for churches and clergy. He is a graduate of Harvard Law School, and attended Harvard Divinity School. He is the author of several books, including Pastor, Church & Law, the annual Church and Clergy Tax Guide, Reducing the Risk, the biannual Compensation Handbook for Church Staff and the Essential Guide to Copyright Law for Churches. He also is senior editor of Church Law & Tax Report, a bimonthly newsletter reviewing significant legal and tax developments for churches and clergy, and Church Finance Today, a monthly newsletter for church treasurers.
Leave a comment