Are non-profit organizations exempt from the new Federal Overtime Ruling?
There are several aspects of the FLSA ruling for non-profit organizations (501(c)3). First, non-profit organizations that participate in business activities of $500,000 per year, or more, referred to as enterprise coverage, are covered under the FLSA rules. Business activities and the $500,000 in income does not apply to charitable donations. However, it does apply to all business activities, sales, and services of the non-profit. Additionally, certain nonprofit organizations are deemed as “enterprise coverage,” regardless of how much income they bring in in business activities. The classifications of enterprise coverage falls to include hospitals, schools and preschools, government agencies, and medical or nursing services organizations.
These organizations are considered enterprise coverage because they provide business applicable activities.
If the non-profit does not fall under the enterprise coverage, there is still a chance that individual employees may be covered the new federal overtime laws. Individual coverage applies to any employee that participates in interstate commerce or in the production of goods for interstate commerce. If the employee calls other states, ships to other states, or transports goods or persons to other states. This coverage is applicable, even if the activities are not for a business purpose.
One exception that not for profit organizations have is in their ability to receive volunteer hours. Volunteers can donate hours to a non profit as long as the non profit is not their employer non profit. Those hours do not fall under FLSA.