Fair Labor Standards Act: What You Need To Know!
By Trace Haythorn, Executive Director/CEO | April 2016 [LAST UPDATED October 2016]
We continue to receive questions about the implications of the changes
to the Fair Labor Standard Act (FLSA), especially as it relates to
financial compensation for residents. Susan Campbell, a national
labor/human resources attorney with Bryan Cave, has provided a memo with
specific recommendations. We recommend you share this memo with your
human resources department as you make final decisions related to the
There are at least two pieces of legislation currently before the US
Congress that could impact the implementation of the FLSA rules. We will
keep you posted should we receive word of any further changes. In the
meantime, you can access the new memo here.
Background: As many of you have heard, the Department of Labor is changing the FAIR Labor Standards Act (FLSA), initiating new rules governing overtime compensation. Beginning January 1, 2017, the base salary for one to be considered “exempt” will rise to $47,892, much more than our residency stipends. All non-exempt staff are eligible for overtime, something our programs have ordinarily not included. What are the implications, then, for residency programs?
Response: Working with attorneys from a national law firm that addresses law related to personnel and human resources management, ACPE asked for guidance to assist program directors, managers and administrators in constructing their personnel budgets in a manner that meets the requirements of the FLSA. Please review the Chaplaincy Residency Exemption from Overtime letter for specifics. This opinion has since been reversed.
Contrary to our prior information, you do not need to make any changes. This past week, one of our supervisors, Lerrill White, did some work of his own. Lerrill dug into the Department of Labor’s Field Operations Handbook, i.e. the guidance provided to Department of Labor employees as they work to assure implementation of rules. We shared Lerrill’s finding with our attorney David Yandle of Womble Carlyle. David sent the following response:
"The Field Operations Manual provides some very strong guidance that your chaplains working in hospitals that are not church affiliated would not be subject to FLSA minimum wage and overtime requirements. Although Section 10b14 describes a program that closely matches what ACPE provides, that section specifically applies to paramedical positions with several identified examples that do not include chaplains. With the general rules of interpretation under the FLSA that any exception will be strictly construed, I don’t think 10b14 will cover your situation.
Section 10b20, however, seems to fit very closely with your program. That section addresses administrative hospital positions in which students of a college/university remain on the rolls of the school while working at a hospital under the supervision of a faculty member and are responsible to the school for academic work related to the training they are receiving. According to this guidance, the Department of Labor will not consider those students as employees of the hospital to which they are assigned. Your chaplains are working under the supervision of a staff chaplain and are responsible to ACPE for academic work related to the training they are receiving. ACPE can strengthen its argument that the chaplains are not employees of the hospital by formalizing the relationship with the staff chaplain and ensuring that the chaplains in your program remain students of ACPE until completion of the hospital training and academic work related to it. I don’t think you would need to make the staff chaplains faculty members of ACPE, but it probably would be wise to have at least a memorandum of understanding between ACPE and the hospital defining the expectations for the relationship and the supervision/guidance the staff chaplain will provide to your students.
Even if you are or a cooperating hospital is challenged, your reliance on the Field Operations Manual setting out the Department of Labor’s position that it does not consider administrative residents employees should give you strong cover. The work described in Section 10b20 is much more closely related to your program than that described in Section 10b14, but the combination of those two sections should provide any court reviewing this very strong guidance that your chaplains are not employees of the hospital.
Although I don’t think you need any additional support for the chaplains serving in church affiliated hospitals, Section 10b20 adds a second level of protection to you.”
In short, the new rules of FLSA should not apply to CPE Residents/Students. Feel free to share this information with your HR department. The Field Operations Manual is available online.
Thank you for your patience as we work to fully understand the implications of the new rules. Please join me in sharing your appreciation for Lerrill’s diligence on our behalf. We hope you receive this as good news and can structure your programs accordingly.
If you have questions or need further assistance, please contact me at email@example.com or (678) 636-6217.