Once you’ve determined that you do indeed have employees working for your church or faith-based organization, the next step is to ensure that you are paying them properly. While the federal government sets the national minimum wage, both states and local municipalities can increase the minimum wage within their jurisdiction.
For example, the federal minimum wage in the United States is $7.25 per hour but California’s state minimum wage is $9.00 per hour and will increase to $10.00 per hour on January 1, 2016. Beyond that, however, San Francisco’s minimum wage is currently $11.05 per hour and will increase to $12.25 per hour in May of this year.
In order to avoid fines and penalties for underpaying employees do some research to find out what the minimum wage is for the area in which your business is located. In addition, work with a payroll specialist to ensure that the proper taxes and withholding are being deducted from each employee’s paycheck.
California has significant penalties for businesses that fail to properly pay their employees’ wages. The “waiting time penalty” is measured at the employee’s daily rate of pay and is calculated by multiplying the daily wage by the number of days that the employee was not paid. The maximum number of days the daily rate can accrue is capped at 30. In other words, if you fail to pay your employees properly, you may not only owe them the money you did not pay, but you might have to pay a penalty of up to 30 days worth of wages.
This penalty may not seem like much when thinking about just one employee, but if you have improperly paid one person, chances are you’ve made the same mistake with other employees as well. The waiting time penalty applies to each employee, which can add up quickly if you made the same mistake across the board.
If you have questions, speak with a payroll specialist or labor & employment attorney to get you on the right path.
Asha Wilkerson is the founder of The Wilkerson Law Office. She is also the author of Employment Law for Church Leaders. Ms. Wilkerson provides skilled advice and counsel to for-profit, non-profit, and faith-based organizations in the areas of business and employment law. The mission of The Wilkerson Law Office, is to preserve the longevity of your business by ensuring that every aspect of your organization is legally sound and operating in compliance with state and federal law.