If you work in nonprofit in the US, you have heard that new federal overtime laws/rules are coming. They affect how we categorize the professionals in our sector—“Exempt” or “Non-Exempt”—and how we pay them, whether through set salaries or through hourly wages that include overtime for hours worked over 40. If reading that sentence makes you want to hyperventilate into a paper bag for a few minutes, you’re not alone. Many people are freaking out about these new laws and how to comply with them, because they take effect this coming December!
By the way, since this post may be long and kind of dry, I’m going to insert more pictures of baby animals than normal to motivate you to keep reading. The baby animals have nothing to do with the content of this post.
The Basics
Basically, to be considered Exempt starting in December, an employee must now be paid $47,476, which is double the current level of $23,660. If an employee is paid less than $47,476, they cannot be considered Exempt and must be paid overtime for any extra hours worked.
Since I am not an expert on this subject, I checked in with colleagues and organizations who are better versed and will be quoting them heavily. I highly recommend you spend some time on this page, Adjusting to New Overtime Rules, by 501 Commons. It has work duties tests, a workbook to help you calculate whether to pay overtime or increase someone’s salary, a free recorded webinar training hosted by a compensation expert, a list of other resources, and FAQs.Continue reading →