Employee Classification: Simplified

On February 27th, Transform Minnesota hosted a Ministry Equip with Virginia (Ginny) Cronin, who spoke to a full room on the importance and nuance of properly classifying employees. Ginny has been a practicing attorney since 2005, and was previously also the Executive Director of a Minnesota Christian nonprofit. Her perspective was particularly helpful for the various nonprofit and church ministry leaders present. Ginny spent the morning laying a foundational understanding of wage and hour law, and offered helpful metrics for assessing the current needs of specific organizations in a subsequent Q&A session.   

It is critical that nonprofit and ministry leaders understand the differences between Federal, Minnesota, and local laws, and also recognize that often a combination or all three may be applicable to an organization. Ginny educated those in attendance on the Fair Labor Standards Act (FLSA) and went into detail on minimum wage, maximum working hours, overtime compensation, equal pay, payroll requirements, and record keeping. Employers have to consider state, federal, and local law—and should err on the side of providing the strongest and broadest level of employee protection. Ginny cautioned that should an employer find they have misclassified an employee and now owe backpay, legal counsel should be contacted. The price of backpay pales in comparison to the expensive and often painful process of an investigation. 

Ginny encouraged those with ministries in Minneapolis or St. Paul to pay close attention because federal minimum wage is lower than Minnesota minimum wage, and city minimum wage is higher than Minnesota minimum wage. Last year, Minnesota passed one of the nation’s strongest wage theft laws, and the record keeping requirements are crucial to any nonprofit or ministry organization. There are no exceptions for religious organizations and nonprofits are subject to oversight by the attorney general. When an employee begins a position, they must be provided with critical information about their salary, classification, policies and procedures etc. This form can be found through the Minnesota Department of Labor and Ginny recommended customizing this form to each organization. Employers should document this conversation with each employee and keep a copy of all materials. Any changes to this required information must also be documented and communicated with employees. Ginny encouraged all present to make sure their job descriptions and employee handbooks are both current and accurate.

In general Ginny encouraged attendees that preparation, diligence, and implementing process improvement techniques can ensure employers stay ahead of and on top of any potential classification issues:  

1) Make sure staff is classified correctly

2) Make sure job descriptions are accurate

3) Make sure your management team is trained properly

4) Educate your team on their rights

5) Create an environment where discussing classification is welcome