Major Overtime Changes to Affect Nonprofits: Part 2
Time is dwindling before the new overtime change discussed in last month’s blog takes effect. In less than a month, the minimum salary for employees to be exempt from receiving overtime pay doubles for those who work more than 40 hours a week.
The basics regarding this change were discussed in our last blog. Now we’ll discuss other aspects of the new rule you should know before its Dec. 1 implementation date.
Something we emphasized previously bears repeating: almost every employee is affected—even those who work for nonprofits.
Not only does the status of an employee’s position come into play, but the exact type of work that employee does is also relevant.
Under the Fair Labor Standards Act (FLSA), two definitions of enterprises are regulated.
- According to the Department of Labor (DOL) Fact Sheet 14A, an enterprise is one that makes sales or does business of at least $500,000. So, unless your nonprofit organization operates a restaurant, gift shop, hotel, or other “business,” it may be exempt under this provision.
However, “hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies” are responsible under the FLSA regardless of their gross volume. This requirement isn’t an organizational test and no exception exists for those entities engaging in these activities even if the operator is a religious organization.
- Although an organization may be exempt under the enterprise coverage, employees who regularly engage in interstate commerce, or in the production of goods for interstate commerce, are still subject to FLSA provisions.
Note: this requirement is a test for each individual employee. Quoting from the DOL Fact Sheet 14: “Examples of employees who are involved in interstate commerce include those who:
- Produce goods (such as a worker assembling components in a factory or a secretary typing letters in an office) that will be sent out of State,
- Regularly make telephone calls to persons located in other States,
- Handle records of interstate transactions,
- Travel to other States on their jobs, and
- Do janitorial work in buildings where goods are produced for shipment outside the State.
- Also, domestic service workers (such as housekeepers, full-time babysitters, and cooks) are normally covered by the law.”
Others covered include employees who travel to other states in the performance of work duties, load or unload goods from out-of-state suppliers, or use electronic devices for credit card purchases (such as cashiers or wait staff).
Simply stated, this change impacts almost everyone: employers and employees, commercial enterprises and nonprofits. As always, The Online Stewardship Accounting & Consulting Services team is here to help you manage through this paradigm shift.
Contact us at Lynn@OnlineStewardship.com or 904-398-4747.
