Church in Hot Water for Not Paying Workers

Nonprofit organizations are allowed to use unpaid volunteers, as long as the volunteers’ work is part of the nonprofit activities of the organization. If, however, a nonprofit organization also runs a commercial business, the Fair Labor Standards Act (FLSA) requires that those working in that business be classified as employees and be paid minimum wage and overtime.

An Ohio televangelist allegedly ran afoul of that rule when he used unpaid volunteers in a for-profit buffet restaurant that his church operates. Now the Department of Labor (DOL) has filed a wage-and-hour lawsuit against the church and its leader.

The lawsuit also accuses the televangelist of a slate of other bad actions:

•    Violating laws that restrict the hours minors may work;
•    Incorrectly classifying several managers as exempt employees and not paying them minimum wage or overtime;
•    Ignoring a previous DOL audit that told him he was required to pay the workers;
•    Trying to cover up the whole thing by destroying timecards and payroll reports;
•    Creating fraudulent records by telling workers to clock out and then go back to work.

This case shows that employees and volunteers in nonprofit organizations should be aware of the following:

•    Volunteering without pay is fine, but only when working on the organization’s nonprofit side;
•    If people work in a for-profit business run by the nonprofit organization, the FLSA considers them employees, and they are covered by the same minimum wage and overtime rules as any other employees; and
•    Nonprofit organizations, just like for-profit organizations, are not allowed to attempt to cover up violations or to engage in recordkeeping fraud.

Are you confused about your rights in the workplace? Call Joseph & Kirschenbaum LLP right now at (212) 688-5640, or email the team at info@jhllp.com, to explore what you can do about an employer who has harassed you or violated other laws, like the Fair Labor Standards Act (FLSA) or New York Labor Laws (NYLL).