The United States Department of Labor (the DOL) has issued updates to the Overtime rule effective December 1st, 2016. The updates include increases to the salary threshold of salaried workers entitled to overtime from $455 per week to $913 per week. According to the DOL, potentially 4.2 million workers will either gain new protections or get a raise.1
The Fair Labor Standards Act (the “FLSA”) is a long-standing federal law that established the basic minimum wage and overtime protections with which most people are familiar.2 Most nonprofit employees are entitled to the minimum wage and overtime protections guaranteed by the FLSA and the updates to the overtime rule do not change this fact. However nonprofit organizations are responsible for adhering to the rule by:
- Limit the employee’s hours to 40 or fewer each week. In this case, no overtime would be due and the organization could continue to pay the employee his or her current salary.
- Hire an additional worker to perform the extra hours.
- Pay the employee the overtime premium for hours beyond 40 in a week.
- Pay the new salary level to maintain the exemption.