How Are Nonprofits Coping with the New Overtime Reality?

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Overtime

overtime theater / jared k

October 27, 2016; New Haven Independent

Ever since the new overtime rules for exempt personnel were offered for comment, NPQ has looked at the nonprofit sector’s mixed reactions. Mission-driven and cash-strapped nonprofits have seen the new rules both as a moral imperative aiding those they serve and honoring the dedication of their staff and, at the same time, a threat to the very existence of some of their organizations.

With the change just weeks away, the debate over the wisdom of the change remains interesting. But more critical yet is what nonprofit organizations are doing to comply. Have they cut staff hours and reduced services to their clients, as some feared? Have they increased pay so staff can remain overtime-exempt and not worry about the length of their workweek? Have they converted full-timers to part-timers so that work schedules don’t have to change? Have they found funders willing to help them meet the costs of overtime while they continue to operate as they have?

The New Haven Independent’s Brian Slattery looked at the Connecticut nonprofit community’s response and found a range of strategies at play. Solar Youth, a small environmental education organization, reorganized its workweek in an attempt to prevent its staff from accumulating overtime hours but fears that it cannot fully avoid an economic hit. Joanne Sciulli, Solar Youth’s executive director, told Slattery that the organization “always had a very strong commitment to staff having a balance in their life and not overworking, but not in the frame of a seven-consecutive day period, and that is the biggest issue for us…We can’t live with the unpredictability of paying overtime.”

Solar Youth installed new software to make it easier to track work time. Putting more rigor into how the organization tracks time had an unintended benefit, clarifying the boundary between home and work, but it did not eliminate overtime. As Sciulli observed, “we have to somehow incorporate the cost of overtime into the costs when we are already having incredible struggles.”

For some organizations, the new rules have proved to be more smoke than fire. Neighborhood Music School (NMS) Executive Director Dan Gurvich said, “I kind of feel like we dodged a bullet on it. The impact on NMS is going to be minimal, but it’s just sort of lucky that works out that way for us.” Others appear to be taking a wait-and-see approach, choosing to make no changes until they have a clearer understanding of how the new rules will work in practice.

Dan Fitzmaurice, who directs another Connecticut music program, the Creative Arts Workshop, said he “sees the changes in labor law affecting how his organization does its work, as many people who work there are driven as much by passion as the paycheck. ‘When are we not working? A lot of what we do is in our DNA. When you’re at someone else’s event, is that working? When you’re networking, is that working?’ These questions matter when every hour needs to be counted to ensure that CAW is complying with the law, and the answer is unclear.”

We’d like to know how your organization is responding to the new rule. Have new systems been put in place? Have you changed jobs, job descriptions, or pay? Has the effectiveness of how you do your work been threatened? How have new costs been paid for? Please tell us.—Martin Levine

  • Sadly, I don’t think that many small business owners are aware of the new rule. So this is going to take lots of businesses by surprise, even though its been in the pipeline for a while.