FLSA Requirements Regarding Enterprise Coverage for Nonprofits

Q. In the context of reviewing the impact of the FLSA changes for our ministry, if we do not appear to meet the requirements for enterprise coverage, does that mean we do not need to comply with FLSA requirements?

A. No, there are two distinct coverage tests an organization needs to review to determine whether workers are subject to FLSA. The first is the enterprise coverage test. However, even if an organization does not meet the requirements for enterprise coverage, the organization must still walk through the second test, individual coverage.

Generally, the threshold for individual coverage is fairly low. The Department of Labor has indicated “....an individual is covered if the employee makes or receives interstate telephone calls, ships materials to another state, or transports people or property to another state.” In today’s technologically connected world, it is hard for a worker not to have interaction with people across state lines. With the likelihood of some interaction across state lines, it is safest to assume a worker is subject to individual coverage unless they are clearly exempt.

To learn more about the impact of the new FLSA Overtime Regulations, listen to the Impact of New Overtime Regulations on Churches and Ministries Webinar-On-Demand. A webinar FAQ document will be released soon.


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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