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What You Need to Know About Proposed Overtime Rule Changes

Posted May 12, 2016 12:40 PM
Changes to the Fair Labor Standards Act (FLSA) proposed by the U.S. Department of Labor will redefine which employees are eligible to receive overtime compensation. These changes will affect nonprofits of all sizes. We encourage you to learn what you need to know about these new regulations by inviting you to attend a FREE webinar on June 16 from 1:00 to 2:00 p.m.

Please visit our update to this blog post with new tools and additional information.

The U.S. Department of Labor (DOL) has proposed new regulations in the Fair Labor Standards Act (FLSA) that determine which employees are eligible for overtime protections. These changes will affect workers employed by nonprofits, for-profit businesses, and governments alike.

If implemented, these new rules would redefine who is considered an “exempt” employee, resulting in the following:

  • Workers paid less than $913 per week (or $47,476 annually) must be compensated for overtime work, even if they have managerial or supervisory duties. This is an increase from the previous minimum level of $455 per week ($23,660 annually).
  • Highly compensated employees (HCEs) can be exempt from these rules if they make about $134,004 annually (an increase from $100,000), which is in the 90th percentile of weekly earnings of full-time salaried workers.
  • A mechanism will be in place to automatically update these two minimum salary levels in regards to inflation, which will preclude the need to regularly update these laws in the future.

501 Commons held a free informative session led by speaker Nancy Kasmar (Compensation Connections LLC, a Resource Directory partner) that outlined the details of these changes and how small nonprofits would be affected.

Audience members comprised of nonprofit professionals learned how to evaluate their current HR practices to determine the financial impact of these new regulations and received advice on what to do to prepare for these changes.

Click to download a helpful checklist that can help your nonprofit’s administrative team start planning for changes to the FLSA laws. You can also download a PDF of the infographic shared above.

501 Commons will also host a free webinar on June 16 from 1:00 to 2:00 p.m. that will cover the same material. Please encourage your colleagues and fellow nonprofit professionals to attend if they aren’t already familiar with the proposed new regulations.