How $15 Minimum Wage Will Impact Nonprofits

April 29th, 2016

On March 31st, Governor Andrew Cuomo signed the $15 minimum wage plan into law which can potentially lift the earnings of an estimated 2.3 million New Yorkers. While this is a victory for the city’s low-income population, how will it affect nonprofit organizations that struggle to meet indirect and programming costs?

According to the The FY17 budget plan, the wage increase will be phased in between now and 2020 then continue to increase on an indexed schedule set by the Director of the Division of Budget and the Department of Labor. What is missing from the new budget plan is mention of Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards issued by the federal Office of Management and Budget.1 This requires that agencies receiving and redistributing federal funds to nonprofit organizations pay an indirect cost rate of no less than 10 percent on contracts supported by federal dollars. These indirect cost rates have been negatively affecting nonprofits' bottom line and making it difficult to maintain their systems, infrastructure, facilities, and staff.

Click here to read more details on the new FY 17 budget.

1Code of Federal Regulations