The U.S. Department of Labor has proposed new regulations designed to expand overtime protections for millions of workers employed by nonprofits, for-profits, and governments. The draft regulations, which will not go into effect (if at all) until after a period of public comment and analysis, would more than double the minimum salary level that white-collar employees must be paid (from $23,660 to $50,400) to exempt them from overtime pay of time and half of wages for hours worked in excess of 40 in any week. The Labor Department is also proposing raising the minimum salary level for “highly compensated employees” from $100,000 to over $120,000 per year, and seeking comments on whether the government should establish a mechanism for automatically raising these salary levels in the future.
The National Council of Nonprofits encourages all nonprofits to conduct a mission-based analysis of these proposed regulations. That means answering questions about how the proposed increase in the minimum salary levels would affect operations, resources, and staffing, as well as what impact the draft regulations would have on persons relying on the services and the mission of the nonprofit. Nonprofits should share their answers to those questions with the Department of Labor in the form of comments to the proposed regulations. Comments are due by September 4, 2015.
What's Being Proposed?
The Department has issued proposed overtime regulations that would do three things, if implemented after a public comment period and further analysis. The Department proposes:
-Raising the standard minimum level for salaried workers from $455 per week ($23,660 per year) to what amounts to the 40th percentile of weekly earnings for full-time salaried workers. This amount for 2016 is estimated to be $970 per week, or $50,440 annually.
-Raising the standard salary minimum for highly compensated employees from $100,000 a year to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers, or about $122,148 annually.
-Implementing a mechanism for automatically updating these two minimum salary levels to adjust for inflation and preclude the need to regularly change the levels via future regulatory actions.
To read the regulations, go to: http://www.regulations.gov/#!docketDetail;D=WHD-2015-0001
DS support organizations should share their answers to those questions with the Department of Labor in the form of comments to the proposed regulations. Comments are due by September 4, 2015. Comment here: http://www.regulations.gov/#!docketDetail;D=WHD-2015-0001
To read more about the questions to pose to your organization's leadership and the background on the Fair Labor Standards Act (FSLA), read a very detailed article by the National Council of Nonprofits here: https://www.councilofnonprofits.org/trends-policy-issues/dol-proposed-overtime-reforms-and-the-impact-nonprofits