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U.S. Labor Department Says Religious Community Members Are Not Employees

    Client Alerts
  • January 10, 2019

Nonprofit entities often question the dividing line between volunteer work and work considered compensable employment. On December 21, the federal Department of Labor’s Wage and Hour Division issued an opinion letter affirming that members of a religious community who provide services that benefit the community are not employees subject to the minimum wage and overtime provisions of the Fair Labor Standards Act.

The opinion letter responded to an inquiry from a religious organization that requires members to give up all material possessions and to live in a communal setting. Members work on behalf of the community, both within the community and, in some cases, in conjunction with two nonprofit ventures that generate income for the organization. Members are not paid for their services but do receive food, shelter, medical care, and funds for personal subsistence.

DOL agreed that the work described by the organization is not compensable labor under the FLSA. First, members of the organization do not expect to receive compensation for their services, making them akin to volunteers. DOL saw no evidence of coercion, and support provided by the community to members is based on need, not relative contributions. Second, DOL compared the organization to a monastic community, therefore making it exempt from the FLSA under the ministerial exemption. Community members basically take vows of poverty in return for spiritual benefits received from their lifestyle choices.

Nonprofit organizations should carefully review whether labor provided to them constitutes volunteer time or compensable working hours. Despite DOL’s position in this situation, if the workers expect some form of compensation for their efforts, and if the work competes with other businesses subject to the FLSA, this work may be considered compensable. The DOL opinion letter can be found here