Monday, November 28, 2016

As readers may recall from our Monthly Wire updates and memo to the field, Americans for the Arts has been tracking proposed changes to federal overtime rules and its impact to nonprofit arts organizations and employees.
Earlier this year, the U.S. Department of Labor (DOL) finalized changes to federal rules governing eligibility for overtime pay. The change more than doubled the salary threshold (from $23,660 to $47,476 per year) under which employees can receive overtime pay and was expected to bring millions more workers under overtime protections. Prior to this update, no changes had been made since 2004. 
During the review and comment process, the DOL received over 290,000 public comments, including many from nonprofits concerned about the potential impact to the services they could offer. Many nonprofit organizations requested modifications, including a phase-in period. 
Eight days prior to its scheduled date to take effect on December 1st, U.S. District Court Judge Amos L. Mazzant III issued a temporary injunction after two lawsuits were filed. His injunction prevents the rule from going into effect, nationwide, for now. The delay buys time for further legal consideration of the rule. 
Going forward, organizations now have more time to comply if needed. They can also choose to maintain their current compliance with overtime rules. If organizations are already ready to go but want to make adjustments, that is also possible, although it may be wise to seek advice on any upcoming salary adjustments already in progress. To everyone who undertook the time and work to get ready, there remains a wealth of resources available from the DOL, including data, for instance, showing that the current salary is below the poverty line for a family of four, and an estimated 7% of workers currently qualify for overtime protections based on salary, compared to 60+% in 1975.
This delay, for the moment, is just a temporary halt and prevents the DOL from implementing and enforcing the Overtime Final Rule as scheduled. Meanwhile, Congress has also been looking at ways to reverse the rule. And, with a change in Administration in January 2017, it is becoming more likely that this overtime update may be undone in the coming months ahead.