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No easy answers at Council’s DOL OT Forum

Nearly 80 nonprofit executives attended the Providers' Council's sold-out forum on the Department of Labor Overtime Final Rule at Plymouth Church in Framingham on Tuesday, June 28, bringing with them many questions about implementing and complying with the change to the salary exemption that goes into effect on Dec. 1.

The U.S. Department of Labor in May raised the overtime exemption, essentially doubling the threshold from $23,660 to $47,476 annually ($913/week) and creating a number of challenges for nonprofits. In his opening remarks, Council President and CEO Michael Weekes, who served as moderator, stated that while the change is long overdue and consistent with the Council's pro-workforce agenda supported by its members, the overtime mandate will place a financial burden on them.

Panelists Patricia Colarossi, Community Outreach and Resource Planning Specialist, U.S. Department of Labor; Bill Lyttle, President, The Key Program; and Peter Moser, attorney, Hirsch Roberts Weinstein LLP each made a brief presentation, then fielded about 20 questions from the audience.

Moser also addressed the DOL’s limited-time non-enforcement policy for some Medicaid-funded residences for the intellectually and developmentally disabled population, noting that while the DOL has its own non-enforcement policy, the law remains in effect and can still be enforced by state officials. If that happens, Massachusetts organizations remain liable for potential employee and consumer legal action. Those considering delayed implementation under that caveat should first speak with an attorney.

The questions ranged from:

  • Can managers/supervisors be classified as non-exempt? (Yes)
  • Do stipends paid in addition to salary count toward the exemption? (Potentially, if it’s non-discretionary); to
  • Do residential managers backfilling shifts and on-call time count toward the 40-hour week? (In both cases, it’s complicated).

The panelists noted that two of the biggest challenges for employers - after the cost of compliance - will be deciding how best to classify and pay affected employees (switching to non-exempt, hourly, etc ...) and how to comply with the law without damaging employee morale.

The Council is currently surveying members to determine the fiscal impact of the Overtime Final Rule. The DOL has issued Guidance for Nonprofit Organizations on Paying Overtime under the Fair Labor Standards Act, which explains different ways nonprofits can implement the new overtime requirements, including an explanation of the fluctuating work week. The Council will continue to share resources with our membership as they become available.

If you have questions about the Final Rule please email Bill Yelenak or call him at 617.428.3637, x122.