On November 21, 2025, the California Court of Appeal issued important guidance confirming that religious employers are not categorically exempt from wage and hour obligations under state law. In Lorenzo v. San Francisco Zen Center, the court addressed whether the First Amendment’s ministerial exception—a doctrine barring judicial intervention in certain employment disputes involving religious organizations—precludes wage claims brought by ministers. Significantly, the court held that California’s wage and hour statutes apply to religious staff engaged in commercial activities, absent specific evidence that enforcing these laws would infringe upon core religious governance or doctrine.
The plaintiff, Annette Lorenzo, worked as an apprentice and later as a staff member at the San Francisco Zen Center, a nonprofit religious organization that operated several temples and rented out overnight rooms and event spaces to the public. After her employment was terminated, Lorenzo brought claims before the Labor Commissioner for unpaid minimum wage, overtime, and related compensation under California law. The Labor Commissioner found the Center, as well as two individual directors, Galijan and Smith, personally liable under Labor Code section 558.1, awarding Lorenzo $149,177.15. On appeal, only the Center posted the required undertaking, resulting in the dismissal of the individuals’ appeals due to noncompliance with the bond requirement.
In its analysis, the Court of Appeal...
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