Policy Alert: Fair labor standards act overtime rule

May 19, 2016
| by Editor |

Yesterday, the long-awaited update to the U.S. Department of Labor’s overtime rules under the Fair Labor Standards Act was released. As expected, there is a substantial increase to the threshold at which eligible employees, regardless of duties, must be paid overtime. GCN will provide resources to the nonprofit community to assist employers with compliance with this rule.

Here are the facts and some resources:

The threshold for paying overtime has been increased from $23,660 to $47,476 per year. This means that most non-exempt organizations will need to pay overtime to employees making less than $47,476 annually for any hours worked in excess of 40 per week. In order to be subject to minimum wage and overtime requirements and thus qualify for the Act’s protections, employees must be “covered” by the Fair Labor Standards Act (FLSA).

Coverage under the FLSA is usually achieved in one of two ways:

  1. The organization is a covered enterprise; or

  2. A particular worker is individually covered.

While many nonprofit organizations may not be covered enterprises under the FLSA, most are likely to have some employees who are covered individually and are therefore entitled to the minimum wage and overtime protections guaranteed by the FLSA.

In addition to adhering to the increased salary threshold, there are numerous other compliance rules and regulations that nonprofits will need to follow.

The date by which employers need to comply is December 1, 2016.

Increased costs and record keeping will affect organizations across most nonprofit activity areas, and GCN will continue to raise the unique concerns of nonprofit employers with policy makers to make this transition sustainable for nonprofit employers.

We recognize that this is a substantial change and will require significant adjustment among GCN member organizations. We hope that you find these resources helpful in planning for this transition.

Additionally, GCN and our allies are preparing various resources for nonprofit employers to learn more about FLSA and the new rules. Here are some immediate ways to get up to speed on what you need to know.

Karen Beavor is President and CEO of GCN.



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