DOL Overtime Regulations

DOL Update to Overtime Regulations

UPDATE! November 2016

On November 22, Judge Amos Mazzant of the U.S. District Court of the Eastern District of Texas, an Obama-appointed judge, halted the implementation of the updated overtime regulations which would have increased the salary threshold for individuals required to receive overtime compensation. 

There have been several efforts to overturn or minimize the impact of this update to the Fair Labor Standards Act. If court consideration extends past January 20, a Republican-controlled Congress and the new administration could overturn the updated regulations. The injunction is being reviewed by the Department of Justice to determine next steps.

Dance groups and other nonprofits are in varying stages of preparation for this updated regulation, which would have gone into effect December 1. The Society of Human Resource Management suggests that, while employers can maintain the status quo come December 1, it may be hard to retract changes that have already been implemented.

Nonprofits did not oppose an update to the salary threshold, however, in comments submitted to the Department of Labor last year, Independent Sector (Dance/USA is a member), an organization that advocates on behalf of nonprofits, did request a phased-in implementation.

Dance/USA will continue to track this issue and provide updates as we learn more.

Helpful Resources on this injunction:


In May 2016, the U.S. Department of Labor finalized an update to the Fair Labor Standards Act (FLSA) that will have a dramatic impact on nonprofit organizations. The update will double the salary threshold that exempts employees from overtime compensation from $23,660/year to $47,476/year.

What You Should Know

  • Employees are only exempt from overtime compensation if they pass both the salary threshold and the duties test, also known as the white collar exemption.
  • The updated regulation goes into effect December 1, 2016.
  • Nonprofits are not exempt.
  • Dance/USA Resource on updated overtime regulation 

Who is Covered?

  • Employees of any organization that has $500,000 or more of business revenue are covered by FLSA. DOL provides an example of a gift shop as business revenue, while grants, private contributions, and cash and non-cash donations do not count towards this amount. (It is unclear whether revenue from ticket sales count.)
  • Employees that deal in interstate commerce are covered. Interstate commerce include sending and receiving emails and phone calls, making purchases, etc. This means that most employees will be covered.
  • Paying employees a fixed salary when their hours are fluctuating (as well as there is a mutual understanding) may be a possible important provision for performing arts groups. Because the salary is fixed, only half time payment (as opposed to time and half) would be owed for hours worked over the 40 hour work week. (Dance/USA is continuing to research this provision.)

Resources

Background
The Department of Labor proposed new rules during the 2015 summer, with the initial threshold increase set at $50,440. DOL accepted comments on the proposed regulations in September. Dance/USA signed on to a letter from Independent Sector (Dance/USA is a member) urging the Department to provide more time to prepare comments, as the nonprofit sector needed clarity on the language. That request for an extension was denied. Independent Sector filed comments on behalf of the charitable sector that urged the Department of Labor to:

1.Have a phased in implementation should this proposed rule be finalized;
2.Account for regional economic and market differences;
3.Have an open process for any changes to the duties test.

Dance/USA joined a small group of national nonprofits for a meeting at DOL in December 2015 and shared some of our questions around current overtime regulations.

Neither Dance/USA nor the nonprofit sector as opposed an increase to the salary threshold. The threshold was clearly overdue for an increase. Dance/USA does recognize that many nonprofits dance groups work on tight budgets and lean staff and a steep jump will be challenging. Dance/USA will continue to update this page as we learn more information about definitions and implementation.