Non-profits will not be exempt from the new overtime rules, as per a directive from the Department of Labor, so these organizations will need to adjust their budgets and resource allocation to comply by December 1.
Furthermore, the labor department said that the threshold will need to be increased from time to time, making it imperative for nonprofits to re-examine their work force and hiring strategies.
David J. Manbeck, director at Boyer & Ritter LLC and member of the firm’s nonprofit and government services groups, cited the need to assess the current workforce. He said nonprofits need to weigh the cost versus benefits of pushing salaries to the overtime threshold, providing bonuses to compensate for overtime pay, and other such issues.
Lining up volunteers to perform some tasks for non-profits is a good strategy too, Manbeck said. However, he stressed that under federal regulations, non-exempt employees can’t “volunteer” to work additional hours.
Manbeck likewise advised charities to check their grants and talk to their donors about dealing with the administrative cap of 10%. He noted that the December start for the overtime changes falls in the middle of the 2016-2017 fiscal year, thus making it challenging to reallocate resources to cope with the new overtime rule.
