I have heard a lot of concerns from nonprofit leaders regarding the news from the Department of Labor (DOL) on overtime pay changes. We celebrate these changes, as this will be a boost for salaried workers who routinely work overtime, and were not paid time-and-a-half because their annual salary was above $23,660. However, for those nonprofit employers whose business models assume the current OT level, this could be a challenge to find financially viable ways to address the new law.
The good news is there is time to manage the impact for your organization, as the new rules do not go into effect until December 1, 2016. I commend the DOL on providing information specific to nonprofits on how they can interpret the new regulations, and more importantly ideas on how to manage them.
This got me thinking: when a change like this comes, it is an opportunity to reflect on how your organization is managing the care and development of its most important asset – employees. Just as the Family Medical Leave Act and the Affordable Care Act provided guidelines on leave and health benefits, the new OT regulations impact decisions around hiring, employee job descriptions, schedules, and service delivery. Nonprofit leaders and their Board of Directors have important philosophical decisions to make around the care of their employee talent. For example:
- Even if an organization’s circumstance excludes it from some of these requirements, should they do it anyway?
- How often does an organization expect an employee to work overtime? Is it sustainable?
- What is the organization’s philosophy on compensation, and how does the OT rule change impact that philosophy?
- Are employee job descriptions clearly identified as exempt and non-exempt for overtime?
- Knowing that every three years the salary level will be adjusted under the OT regulations, what steps can be taken to raise operating revenue to meet those increases?
Before finalizing any decision, it is important to look at the quality of service delivery, and the financial, human resource, and labor law implications. There are many resources available to nonprofits, including local accounting and law firms who can assist with answering questions. DANA is promoting a webinar for nonprofits on June 7, and more learning sessions on this issue will be forthcoming.