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    10. 20. 2021

    Current Events

    The Minimum Wage Ripple Effect on Churches

    | 2 min read

    Written by Matt Steen
    Sep 29, 2021 10:10:34 AM

    A Chemistry Conversation with Dan Navarra

     

    Matt Steen, Co-Founder of Chemistry Staffing, and Dan Navarra talk through church salary. Minimum wage increases are coming. How does this influence what churches will need to pay their staff? Dan encourages churches to be aware and mindful of their state's laws surrounding compensation and invites youth ministry leaders/pastors to participate in the latest Youth Pastor's Compensation Survey.

     

    Watch the conversation or view the transcript.  

     

     

    About Dan: 

    Dan Navarra has over fifteen years experience in vocational ministry out in sunny California. Dan has expertise specializing in church finances, HR, and Youth Pastor compensation; having run the largest-ever national compensation survey of over 4,000 Youth Pastors to-date. His work with Youth Pastors has been featured at Church Law & Tax, the National Network of Youth Ministries, and he’s held coaching calls all over the country to help Youth Pastors turn their calling into a sustainable career. 

     

    Youth Pastor Compensation Survey:

    Are you serving as a paid youth pastor or youth ministry leader? If so, we’d love for you to take 15-minutes out of your day to participate in this Youth Pastor Compensation Survey. 

     

    Why participate?

    • The results of this survey help those serving in paid youth ministry to understand and negotiate fair salaries for themselves.
    • The results help pave the way for future youth ministry leaders who are called to ministry but need sustainable income.
    • The results educate and encourage executive leadership to pay staff at a rate that is more comparable and fair. 

    Take the Youth Pastor Compensation Survey

     

    Do you want to talk through some of the nuances of youth pastor compensation? Schedule a conversation with Dan Navarra or shoot him an email.

     

    As always, we are here for you, and we're praying for churches and teams all over the United States!

     

    matt

     


    Read the Full Transcript

     
    Matt Steen: Well hey, it’s Matt Steen, Co-Founder of Chemistry Staffing, and this is another Chemistry conversation. Today, I’m excited to be joined by Dan Navarra. Dan is a member of the Chemistry team, has about a zillion years of ministry experience, and one of the cool things that he’s done through the years has been to do a salary survey for youth pastors just to a sense of what youth pastors are making and to serve as a great tool for youth pastors as they’re trying to figure out their compensation plans and all that kind of thing. Dan, thanks for taking some time to talk.

    Dan Navarra: Yeah, happy to be here. Thanks for having me, Matt.

    Matt Steen: Always love having Dan time. So dude, you’re working with a bunch of churches, you’re getting ready and gearing up for the next round of the salary survey. So you’re doing a whole bunch of things for a whole bunch of people. What are you learning about the church right now?

    Dan Navarra: As everybody said and I’m going to echo it, everything’s changed in the last 18 months or so as we figure out COVID. I’m out here on the west coast. Things have especially changed in California and on the west coast where lockdown mandates are a little bit different than they are in other states. Wage increases and things like that are sneaking up on churches fast. Sunday’s always coming, I like to say. So churches are getting caught, not realizing, holy smokes, we needed to plan differently in our budget year. There’s a lot of that that’s happening. It’s a weird time in the church, and we’re seeing it fleshed out and transition is happening everywhere.

    Matt Steen: Yeah, transitions are crazy this year. Transitions to new churches, transitions to new career fields, transitions out of ministry. It’s all sorts of transition. So you mentioned something there that I want to touch on. This is one of those things that’s probably on the horizon that churches need to be thinking about. But talk to me a little bit about what you said about salary increases creeping up on people and catching them unawares.

    Dan Navarra: Yeah. So wage increases are happening for minimum wage employees across our country right now. States one at a time are moving past the federal minimum wage minimums. And then there are salary minimums that are also being affected by that, and they’re being affected differently in different states. So like in California for instance, which is an outlier, but nonetheless, so California goes so a lot of the country goes. So be salary exempt from overtime, you need to make double minimum wage over a 40-hour workweek. As minimum wage increases to $14 and $15 an hour in the next few years, that means you’re going to need to pay a youth pastor or any other pastor $30 an hour over a 40-hour workweek. That’s $52,000 a year to keep them exempt from paying overtime wage, which is time and a half. So it’s complicated and it’s sneaking up on people because the wage increases are happening so fast.

    Matt Steen: So let’s go back to that real quick. So you said $52,000 a year. Is that 2021, or when does that take effect in California?

    Dan Navarra: So it depends on the size of your church. Organizations that have 24 or less employees are a year behind larger churches. So if you’re a larger church, 25 or more employees - and by the way, that counts preschool staff - in one 501(c)(3). That’s an important thing for churches to understand. If you have more than 25 employees, your escalation schedule is a year ahead of everybody else. So by 2023, you have to be at $15 an hour for minimum wage for your employees, which means $30 an hour minimum salary wage for your employees. It wasn’t too long ago it was $10 an hour minimum age. Double that was $20 an hour, but you’re talking about going from $20 to $30, that’s a 33% increase just to get into entry-level.

    Matt Steen: In a short period of time. We’ll have churches from California that will come to us and say, hey, we want to pay somebody $45,000 a year. And the conversation typically becomes, if you do that, you need to do that hourly. And if that even works out with minimum wage, but the thing that churches don’t necessarily think about is, if somebody goes on a retreat, you’re paying overtime for the vast majority of that. And that starts to escalate even quicker. We’re talking in September. This is kind of in that end run. We’re seeing budgeting season come up for many of our churches that are the January to December cycle. What would you say to executive pastors, lead pastors that are doing their budget? What advice are you going to give them right now to think through this?

    Dan Navarra: I think it’s critically important that you’re aware of your state’s wage laws, and not a lot of churches are in my experience. Because they’re all changing and they’re changing quick. Including the federal salary minimum, there’s been conversation about that moving for a long time. It hasn’t budged in years, so you just need to stay on top of those things so that when the calendar rolls over - because no matter what your fiscal calendar is, January 1 is the IRS calendar. You need to be prepared for whatever wage increases are coming for your state come January 1 and being able to get that approved by your elders and all of those things in advance of that.

    Matt Steen: That’s great. And that’s one of the joys of being the executive pastor is having to be up on all that kind of stuff and be able to just kind of keep aware of what those minimum wages are.

    Dan Navarra: Let me say one more thing about that real quick because there’s a phrase that’s foreign to a lot of churches that I think will help them in this time if they’re looking for help from people who maybe are on their church board or their finance team that have a business world acumen. It’s payroll banding, the idea that we’re looking at not just our minimum level employees who set up chairs or whatever they do for $13 an hour or whatever their minimum wage is. But you’re actually looking at when I raise this salary because of wage increases over here, what does that mean for the equitability of my staff? That’s a complicated question. We could always help out with that as well, but it’s really helpful to understand payroll banding for your organization.

    Matt Steen: Yeah. And to be clear, the payroll banding, what you’re talking about is you have your senior-level pay band that’s a range from this to that, and you have different quadrants that different qualifications will qualify for. So you need to work that for all levels of your church’s salaried employees and even your hourly employees as well. So that’s brilliant. We can definitely help churches think through that. Going back to some of the salary conversation, you’re gearing up to do the youth pastor compensation survey again. It’s just getting ready to roll, and we’ve got some information down below this, and we’re going to take part in that. Tell me what you’re watching through the years. You’ve done this, what year is this?

    Dan Navarra: Five.

    Matt Steen: This is five?

    Dan Navarra: Five.

    Matt Steen: So over five years, you’ve seen some changes. What trends are you seeing, and what gets you excited? What gets you nervous?

    Dan Navarra: The first trend I’ll say is the average is going up every single year by at least 2%.

    Matt Steen: That sounds like that’s a necessity.

    Dan Navarra: It really truly is, but for every person who is getting a 2% or a 4% or a 5% raise, there’s somebody who hasn’t seen a raise in five or six years. That’s an unfortunate thing that there’s never enough money to go around. That’s one thing. The number is moving up every single year for paying youth pastors. Another thing we’re seeing is, the vast majority of youth pastors, and this is a huge departure from a decade or two ago, the vast majority - and I’m talking over 80% - have at least a four-year degree, if not graduate work. 35% of the youth pastors that are taking my survey, and I’ve surveyed over 5,000 of them, they have a master’s. So we’re seeing the bar on professionalism really raised among the youth pastor community. That wasn’t necessarily a requirement to be a youth pastor not too long ago. But now just to get your foot in the door, you really have to have some qualifications on paper.

    Matt Steen: Oh yeah. And this is a season now, and I’m excited to see how this fleshes out over the course of this year’s survey, some of what we’ve been talking about anecdotally is so much of the youth ministry pool seems to have gotten younger over the last 6-8 months. It seems like there’s a qualification drain going, but churches are still expecting the degree and the experience and all that. It’s a fascinating time to be in youth ministry, especially if you’re well qualified, right?

    Dan Navarra: It really is. And I think what a lot of youth pastors are learning is that they’re being underpaid as youth pastors, but they’re qualified for more than that so they are jumping ship. Which is why the vast majority of youth pastors that take the survey have been in youth ministry 6 or less years and they’ve got a college degree. They’re getting to that magic place where they can go and do another ministry in the church. They’ve qualified themselves for it. That’s different than it was not too long ago.

    Matt Steen: Yeah. It’s going back to what you said initially. Everything’s changed.

    Dan Navarra: It really has.

    Matt Steen: In 18 months or however long it’s been, everything really has changed over the course of this season. So Dan, excited by the work that you’re doing here at Chemistry, excited about the churches that you’re getting to serve, love what you’re doing as far as the survey goes and really looking forward to those efforts. Before we wrap up, what word of wisdom would you pass along to people that are watching this today? What encouragement would you give, especially to some of the youth pastors that might be feeling the economic pinch.

    Dan Navarra: My word of advice to youth pastors is always the same. God has called you to where you are, but that doesn’t mean He’s called you there forever. So just understanding what the job landscape looks like in your area or an area you feel God is moving you to. There’s a lot of resources and help out there right now to help you understand. When I say value, I don’t mean “God’s value,” I mean the value that your position is worth on the market. There’s a lot of help for you on that out there.

    Matt Steen: That’s awesome. That’s awesome. Dan, thank you. If people want to get ahold of you, it’s dan.navarra@chemistrystaffing.com - we’ll last that down below. We’ll also drop a link to get on Dan’s calendar and spend some time talking through your next youth pastor search with him. Dan, thanks for the time, man.

    Dan Navarra: Hey, happy to help. Thanks a lot, guys.

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