You would think the answer to our headline question is obvious: Of course, they must. But there are exceptions, depending on whether the managers simultaneously perform an additional role--that of ministers. Read on for a fuller explanation.

What happened. Two ordained ministers supervised a group of five Indianapolis, Indiana, thrift shops for the Salvation Army. Each was paid about $150 a week regardless of the number of hours he or she worked. Eventually, they sued the Salvation Army for violating the Fair Labor Standards Act (FLSA) by failing to pay them minimum wage and compensating them for overtime work. They were promptly ejected from their jobs.

Strangely, however, they never took advantage of FLSA's antiretaliation provision, or any other law, for that matter. In court, they were only interested, it seemed, in recovering back pay under the law. But a federal district court judge ruled that the individuals were covered by FLSA's ministerial exception. They appealed to the 7th Circuit, which covers Illinois, Indiana, and Wisconsin.

What the court said. In a colorful and detailed opinion, Appellate Judge Richard Posner explained why the district court judge's ruling was correct. First, he noted, the purpose of the thrift shops was a dual one: Not only did they organize and sell donated merchandise to help fund Salvation Army activities but they also acted to help their employees recover from drug or alcohol addiction. To the latter end, the two ministers spent time conducting religious services and religious classes for, preaching to, and praying with their employees, who numbered between 20 and 40. In fact, the chain of shops was known in Salvation Army parlance as an Adult Rehabilitation Center.

Moreover, according to testimony, Posner said, "Ministers of the Salvation Army receive no wages, though they receive 'an allowance ... sufficient for basic needs.'" Posner likened that provision to "the vow of poverty [as] a hallowed religious observance." He continued that the purpose of the ministerial exception "is to avoid judicial involvement in religious matters, such as claims of discrimination that if vindicated would limit a church's ability to determine who shall be its ministers." The rehabilitation centers were clearly operated as churches. So the ministers' claim was again rejected. Schleicher v. The Salvation Army, U.S. Court of Appeals for the 7th Circuit, No. 07-1333 (2/28/08).

Point to remember: The thrift shop employees were all covered by FLSA and needed to be paid at least minimum wage, despite their additional religious activities.