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Not-for Profit Organizations and The Overtime Rule

If you work for a not-for-profit organization, most likely it will be impacted by the new overtime law. On May 18, 2016, the U.S. Department of Labor (DOL) published final regulations defining those employees exempt from overtime. The new rule (aka The Final Rule) updated the salary and compensation levels of executive, administrative and professional employees (EAP). Not-for-profit organizations were NOT provided an exemption from this rule.

The Final Rule focuses primarily on updating the salary and compensation levels needed for EAP workers to be exempt. Specifically,

      • Effective December 1, 2016, the rule has established: the standard salary level at $47,476 annually for a full-year worker;
      • the total annual compensation requirement for highly compensated employees subject to a minimal duties test to $134,004; and
      • a mechanism to automatically update the salary and compensation levels every three years.

The DOL has provided a specific release for not-for-profit organizations.

For more details related to the law read the DOL’s Fact Sheet.

Now is the time to evaluate the impact of this law. Discuss with your accountant and attorney the impact that this law will have on your operations and cash flows, as well as your options for complying with the new salary threshold.