August 8, 2019; Crosscut
NPQ has written dozens of stories about the nonprofit sector’s unwillingness to pay all of its employees livable wages. For instance, in Delaware, nonprofit organizations are among the most vocal opponents of an increase in the state’s minimum wage. Recently, the CEO of a Goodwill threatened to fire disabled workers as a kind of a protest against a minimum wage raise statewide.
But overtime? That may be the touchiest of all nerves. Bad nonprofit attitudes about overtime were on display around 2016 when we wrote about public comments by nonprofits to the Department of Labor about a potential change to the rules around non-exempt employees:
Among the more than 270,000 comments the DOL received to the proposed (overtime) rule were many voices speaking for the nonprofit community, and they seemed to see only the negative impact on their operations; mission seemed to take a backseat to the difficulty of meeting a higher standard. Rick Cohen’s “brief review of one third of the posted comments found there was not one positive comment from a nonprofit.” The comments he saw predicted dire outcomes, staff reductions, service cuts, and even agency closings. No one seemed to see the increased pay for those earning low salaries as an important benefit to be supported.
Thus, when we hear that nonprofit organizations in Washington state oppose a new proposal that would increase the overtime threshold to $37.50 per hour of overtime, it comes as no surprise. Still, it’s a big disappointment, since we could have sworn that such attitudes were evolving.
The Washington State Department of Labor and Industries (L&I) has proposed an amendment to the state’s overtime rules, which have not been amended since 1976. Currently, only seven percent of the workforce is eligible for overtime pay, but under the new proposal more workers, including many nonprofit employees, would join them. Employers would generously have seven years to implement into the new regulations.
Labor lawyer Andy Schmidt addressed the nonprofit overtime issue in a 2016 article, “Is Exploiting Workers Key to Your Enterprise Model?” There, Schmidt writes that there are no good rationales for refusing to pay overtime when the work requires it.
Interestingly, the nonprofit organizations in Seattle that have been vocal in their opposition are some of the wealthiest in the area, and ones that have some of the highest executive compensation in the state. According to one of these organizations, the proposal “is unreasonably too high, and would negatively impact the arts and culture services and programs we offer to our communities.” The Seattle Opera argued that this proposal would require the organization to raise up to an additional $475,000 per year. Yet, this only represents a 1.1 percent increase from their 2017 budget. In other words, for a drop in the bucket, these organization could provide a much more equitable workplace.
In the end, it is not only immoral but unwise for nonprofit organizations to oppose legislation that would create fair working conditions for their employees, and part of fair working conditions are overtime provisions. Nick Hanauer says, “The way the rules stand now, nonprofit employees making more than $23,600 a year can be pitched a fake job title like ‘assistant manager of outreach’ and be forced to work 50, 60, or even 80 hours a week without being paid a penny more.”
Treating workers this way creates unstable workforces that ultimately place both those served and other stakeholders at risk. It is bad management, plain and simple.—Sheela Nimishakavi