Frank Sommerville, JD, CPA — in partnership with Church Mutual Insurance Company — discusses harassment, hiring practices, terminating employees, and wage/overtime rules compliance.
Do common employment laws extend to every employee?
Sommerville: Some of the laws that we’re going to talk about apply even if you have one employee, while other laws that we’re going to talk about apply only if you have 15 or more employees. Employment law is found in federal statutes, but it’s also found in state statutes and city ordinances and county statutes. So, there are multiple layers of regulation over employment law. I’m going to be addressing the federal law today. You need to talk to an employment lawyer in your locale to determine what the state and local laws are that will also govern your employment practices.
How is ‘harassment’ defined by law?
Sommerville: It is unwanted attention paid to you based on your gender. So, it can be extremely subjective. That is part of why it’s hard to fit a single definition into a policy or procedure. However, you should regularly inform your employees that harassment for any reason is not going to be tolerated, and you need to tell them about the procedure that should be followed if it occurs to them.
What procedures should be followed in the event of a situation involving harassment?
Sommerville: With a serious harassment — meaning inappropriate touching or a condition of a promotion or a raise being tied to them doing sexual acts — that needs to be reported immediately. Otherwise, you should at least try to deal with that with the harasser first.
How should staff handle these reports?
Sommerville: Many times, the person reporting it wants confidentiality, but you can’t guarantee that because sometimes you might have to interview other witnesses to determine whether harassment took place. You need to have a very prompt investigation after it’s reported.
A problem that churches often have is, the person that’s to receive the complaint of harassment is male. Females have a difficult time reporting this to males. So, one of the things I strongly suggest is that you have alternative individuals available to receive the harassment complaints, and at least one of those people needs to be a female. You also need to have alternatives other than the senior pastor, because I’ve dealt with cases where the harasser was the senior pastor.
Secondly, I suggest that you require the employees to produce their complaint in writing so that it’s not a changing story. Then, you investigate it and take appropriate action based on the findings of the investigation. The most severe action is termination. In cases where it is unclear whether harassment took place, some preventative training should be provided.
What is ‘ministerial exclusion’?
Sommerville: This is when none of the employment laws apply — except for sexual harassment — to ministers. So, part of your job as a church is defining who is a minister.
This is confusing because we’re talking about employment and labor laws, and many people are used to applying the definition from the IRS to award a housing allowance and to exclude them from payroll taxes. The Department of Labor rules and the court cases that come out with the minister exclusion do not require any form of a ministerial credential. So, you can have people who are performing duties of ministry that are considered ministers for employment law purposes, but not ministers for tax purposes. Evaluate your positions, and determine whether they are integral to the practice of faith, to determine who is a minister. Identifying whether minister exclusion applies should be present in a job description.
How can we maintain effective hiring practices?
Sommerville: The best hiring practices are always those that focus on the job description. Every question, every part of your interview process, your explanation of the position — all should begin with that initial job description. Then, you’re going to review the applications and compare them with that job description to determine who’s the best match.
What are we not allowed to ask in a job interview?
Sommerville: Age — The law protects those over the age of 40 from discrimination. So, you cannot ask how old someone is.
Place of birth — You cannot ask where someone was born, because there are some individuals that might be born outside of the United States. Therefore, you would be involved in discrimination on the basis of national origin.
Race and/or nationality — You can’t ask any questions about race or nationality. During the interview process, you can’t even ask whether they are citizens. You can ask only if they are authorized to work and satisfy those requirements.
Criminal record — You cannot ask about arrest records and criminal records. Minority groups have been accused and convicted of crimes more often than Caucasians, so it could be a form of unlawful discrimination based on race or nationality. Also, an arrest record is not a conviction.
Marital status — You cannot ask any questions about marital status.
Gender — You cannot ask any questions to determine whether someone is a particular gender, according to the court. You cannot have positions that you only fill with males or females.
Sexual orientation — In certain states, you may not ask anything about sexual orientation because, again, that is related to their gender, as the courts have ruled. Some state laws prohibit you asking questions about sexual orientation or sexual perception.
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• Employee harassment
• A harassment policy
• Best hiring practices
• Terminating employees
• Compliance with minimum wage/overtime rules
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Children and childcare — You cannot ask anything about children or childcare. What you’re permitted to ask is, “Do you see any impediment in you working 8:00 to 5:00 every day?” because your main concern is if they can show up and do the job.
History of drug/alcohol abuse — You cannot ask about a history of alcohol or drug abuse because that could lead into an Americans With Disabilities Act discrimination. What someone has a history of is not relevant to whether they can perform the job functions.
Hobbies/sports activities — Sometimes you should not be asking about hobbies or sports activities because many of those discussions can lead to unlawful information such as marital status, children, or political activity.
Disabilities — You cannot ask about any disabilities or physical limitations because the Americans with Disabilities Act protects against that. You can ask if the candidate feels confident that they can perform the duties listed.
Ask open-ended questions, and be consistent in the questions asked for each candidate.
When should a background check be performed?
Sommerville: It’s OK to do a criminal background check for positions that are exposed to children, youth or the elderly — those who are most vulnerable in our churches. There are certain crimes that would automatically preclude them from being offered a position dealing with these groups, such as sexual assault of a child.
With other convictions, you need to look at the background and consider how long ago the conviction was. For example, if someone had a possession-of-marijuana conviction when they were 18 and they’re 50 today, and they haven’t had any further criminal activity, that would not automatically prevent them from serving children, youth or elderly. You have to go through and make an individual valuation in these cases.
It they’re involved in finances or accounting, it’s important to run a credit background check.
If something on a candidate’s background check or credit report excludes them from the position, how is this communicated?
Sommerville: You are required to give a copy to the applicant and give them a copy of a summary of their rights. The company that conducts the background check will give you that summary of their rights. Then, they get notice of the adverse decision.
You must provide them with an opportunity to explain criminal records or a low credit score. This is very important because I have seen reports that up to 65 percent of criminal background checks contain serious material errors.
You also need to make sure that the applicant is the person who is represented in the report. If the applicant has a common name, many times, you’ll have five or 10 different individuals that have a criminal background that show up with the same name. You need to give them an opportunity to say, “No, this wasn’t me,” or explain the circumstances surrounding anything listed in their reports. If they are hired, keep this explanation in their file.
The best hiring practices are always those that focus on the job description. Every question, every part of your interview process, your explanation of the position — all should begin with that initial job description.
How do we store this personal information?
Sommerville: The credit and criminal background reports need to be secure at all times. If it’s an electronic version, it needs be password-protected. If it is a paper report, it must be kept in a locked file cabinet with a limited number of keys.
You must securely destroy them, also. If it’s on paper, it must be shredded. If it’s an electronic version, it must be destroyed using Department of Defense wiping procedures, which means it’s rewritten over many times. You can be fined or even do prison time if you do not maintain security over background checks.
How do we prepare for terminating an employee?
Sommerville: Document the problems contemporaneously, in writing. You’re leaving the church exposed if you’re not doing this. Churches are known for their grace, and I applaud that, except for when it comes to employment law. Don’t worry about hurting their feelings; grace still extends to them in the faith practices, but it doesn’t extend to them as an employee when you’re dealing with issues.
How should a termination conversation occur?
Sommerville: Decide when to terminate employees on your own timetable, and not on that employee’s timetable. You never want to do it on a Friday, because then it gives them the weekend to stew, and they can’t do anything about their circumstances. Mondays, Tuesdays and Wednesdays are much better times to terminate.
I prefer earlier in the day, rather than late in the day, because everybody is worrying about it during the day. You might as well call them in when they first get there.
Do not allow them to control the conversation. Bring them in with a witness that you’ve created so there are at least two people present on behalf of the church. Say, “This meeting is to let you know that you are being terminated.”
While this meeting is occurring, instruct the IT people to change passwords, and secure keys and possessions of the church that the employee has.
Should we provide severance pay?
Sommerville: Severance is a good idea, especially because in most states, churches are not part of the state unemployment system. So, once you terminate a person, they might not be eligible to draw unemployment.
Many lawyers think that getting a release at the same time former employees receive the severance is a good idea. That way, they’re releasing the church from any liability.
If the employee refuses to sign the release, then you know you have a problem and you can start dealing with that issue and figure out what causes of action that employee might be trying to assert.
What determines whether someone is ‘exempt’ or ‘nonexempt’?
Sommerville: In any job description, you should put whether or not the position qualifies as exempt or not. In order to be exempt, the employee must be paid $455 per week. So, if you have an employee who is making less than $455 per week, they cannot be exempt.
An exempt employee cannot perform nonexempt duties more than 20 percent of their work time. If you have a position that is a mixture of exempt activities and nonexempt activities, most of the time they are going to end up being treated as nonexempt because of the presence of their nonexempt duties.
What positions are exempt from overtime?
Sommerville: The only exemptions from overtime are the executive, administrative, professional, and computer professional. The executive exemption is someone who supervises two or more full-time employees and makes important decisions regarding the organization. The administrative exemption is for someone who oversees a particular area and/or a significant segment of the church, and makes decisions on behalf of the church regarding significant items. A professional would be a position that requires a college degree to do their tasks.
What happens if we dock an employee’s pay?
Sommerville: Docking an exempt employee’s salary (for disciplinary reasons) can convert them to nonexempt. You can only dock exempt employees’ salary in one-day increments. However, you can require them to use paid time off in increments less than one day — this doesn’t violate anything.
Many times, we find churches want to dock somebody who is an exempt employee because they were late or because they were out for half a day tending to some personal business. You can’t really do that. This would come into play after an employee has already used up all their paid time off.
How do we pay overtime?
Sommerville: Overtime on all hours over 40 within a seven-day work period is what you have to pay. In California, it’s all work over eight hours within a 24-hour period.
Work time is when the employee works or must standby for work. So, one of the issues that we talk about here is if a nonexempt employee has to be on standby for work, then you must pay them for that standby time.
How do time sheets need to be kept?
Sommerville: You have to keep the time sheets for all of your nonexempt employees. That includes the time when they signed in and signed out. It doesn’t have to be electronic; but, it needs to be something where you have required them to keep those time sheets every day that they work.
You must keep these detailed time records for two years after the close of the year. You can be fined up to $5,000 for having inadequate work records. That would be $5,000 per employee per week.
What mistake in managing employees do places of worship commonly make?
Sommerville: Most churches make the mistake of making administrative assistants and pastors exempt. After analyzing these cases for over 25 years, I haven’t found one yet that met the criteria to be an exempt administrative person or an exempt executive person because they derive their authority from their boss. They don’t derive their authority from their own position.
Also, an intern is always a nonexempt employee unless they fit within the ministerial exemption with all the employment laws.
— Reporting by Joyce Guzowski
This Q&A is brought to you in partnership with Church Mutual Insurance Company in Merrill, Wisc.