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Proposed Changes to Overtime Rules and Fixed Federal Grants

by Sarah Skillin Woodard

Does your organization rely on federal grants? Many in Maine do. As we at MANP have been saying, unless Congress votes to make changes by January 2020, we will see an increase in the salary-level threshold for white-collar exemptions to $35,308 per year up from the current $23,660.

Many non-profit organizations are concerned about this mandated labor-cost increase when the terms of their written agreements with governments for services do not allow for re-negotiation of reimbursement rates. This new policy expects nonprofits to absorb the costs. The consequence may very well be reduced services and programming.

The same is not true for for-profit business. The terms for government contracts typically allow businesses to seek changes to their contractual reimbursement rates. Nonprofits working under government grants do not have this right.

Several national nonprofits are using the opportunity of the overtime rulemaking to raise the urgent need to fix federal grants policy to allow nonprofits to reopen agreements when the government mandates labor-cost increases. The Nonprofit Joint Comments were submitted May 15 by Easterseals, National Council of Nonprofits, National Human Services Assembly, YMCA, and YWCA. Learn how your organization can join in the effort to fix this longstanding unfairness by reading the article, The Operations Side of Proposed Overtime Rules.

If you believe your organization will be impacted by this proposed change, we’d like to hear from you. Please contact Sarah Woodard, swoodard@nonprofitmaine.org.

2 thoughts on “Proposed Changes to Overtime Rules and Fixed Federal Grants

Joanne H says:

I have never know what exempt means although I have had positions that were classified as such. Can you define the term and more clearly explain what it means?

Molly O'Connell says:

Hi Joanne,

This classification has to do with whether the employee is entitled to overtime under the Fair Labor Standards Act (FSLA). You can learn more from the resources we have compiled here:
https://www.nonprofitmaine.org/answer/classification-conundrum-avoiding-exempt-vs-non-exempt-errors/.

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