Note: For updated information about the new overtime rules announced in May of 2016, please click here.
The Department of Labor (DOL) is considering changes to the federal Fair Labor Standards Act (FLSA) that will require nonprofits to pay some currently exempt staff members time-and-a-half whenever they work more than 40 hours in a week.
There are three tests for determining if someone is exempt: 1) They must receive a predetermined salary rather than hourly pay; 2) They must primarily be engaged in administrative, executive or professional duties; and 3) They must be paid above a minimum salary. The proposed rules will more than double that minimum salary level at which a staff member is exempt from overtime from $455 to $970/week or $50,440 per year.
It is not uncommon for nonprofit staff to be salaried and have jobs that primarily include management or administrative roles but have salaries below $50,000. Does this apply to someone on your staff who frequently works more than 40 hours per week?
After receiving nearly 290,000 public comments during the 60-day comment period, it is anticipated that the DOL will implement these rule changes some time in 2016. While not official yet, nonprofits should plan for this change when budgeting and determining staffing plans. You may want to plan to add staff in order to avoid overtime pay. If someone regularly works more than 40 hours/week, you may want to raise their salary above the $970/week level rather than pay them overtime (time and one half).
Read the National Council of Nonprofits analysis and recommendations for a mission-based analysis of the impact of the proposal. Consider endorsing the Independent Sector’s advocacy statement. You can read comments submitted to the Department of Labor by the public here.