By May 18, 2016 Blog

Today the U.S. Department of Labor (DOL) released its long awaited changes to the nation’s overtime rules. It is estimated that the changes will extend overtime pay protections to over 4 million workers next year. The rule change was requested in 2014 by President Barack Obama. Obama directed the DOL to update the regulations defining which white collar workers are protected by the Fair Labor Standards Act’s minimum wage and overtime standards. The main goal of the directive was to look for ways to modernize and simplify overtime regulations while ensuring that the FLSA’s intended overtime protections are fully implemented.

Key provisions of the new rules

The new DOL overtime rules focuses primarily on updating the salary and compensation levels needed for executive, administrative and professional workers to be exempt. Specifically, the new rules:


Additionally, the the new rules amend the salary basis test to allow employers to use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.


The DOL specifically addressed how these new rules may affect the nonprofit sector. Read that review here. They’ve also produced a nonprofit specific guide to the new rules.

What’s a nonprofit to do?

First, take a look at your current exempt qualifying positions. Review the job descriptions and actual duties those positions perform; determine how far off they are from the new salary level. Can you condense positions and transfer duties to other exempt positions?

Do the math

For example, perhaps it will cost less in the long run to increase several salaries to meet the new level, thereby avoiding hours of overtime each week.
Increase your headcount

If you have reduced exempt positions, you may need to hire additional hourly/nonexempt staff to ensure that the nonexempt duties are taken care of.

Be well versed in the FLSA recordkeeping laws

Those former exempt employees who didn’t track their time are now tracking each and every minute worked, as the law requires, AND you need to pay appropriately.

Think about communication

How are you going to get the word out? Let your employees know that these standards are set by the federal government and not on the discretion of your organization. Be aware that your employees may already be discussing these upcoming changes and anticipating positive or negative changes. Consider having both private and group discussions so there is less distrust. Education for all on the law may be your friend. Be as open and transparent as possible.

No matter what course you choose, there will be issues. Be ready to weather the rough spots with humor, communication and facts.

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