[OMS_MANAGERS] Department of Labor - Overtime Eligibility Rule

[STUART Sheri * OPRD]

Hi all - Cam mentioned that the new Department of Labor Overtime Eligibility Rule came up in discussion on a recent Mornings on Main call. This was recently discussed at at the National Main Street Coordinating Program meeting in Birmingham. Here's the summary of the discussion that Main Street America shared with me:

Department of Labor - Overtime Eligibility Rule

During the CP meeting in Birmingham, we heard a good question about a new rule from the U.S. Department of Labor on overtime eligibility. The new rule changes the threshold salary for a worker to be considered eligible for overtime pay (i.e. non-exempt employee). Here's more information:

  *   As of July 1, any employee with a salary less than $43,888 is eligible for overtime pay, meaning they must be paid 1.5x their hourly rate for any work over 40 hours/week. In January of 2025, this threshold will again increase to $58,656, meaning any employee making less than $58,656 will be eligible for overtime pay.
  *   According to the 2024 Main Street Trends Survey, approximately 50% of Main Street leaders are paid under these thresholds and may be impacted.
  *   Independent Sector has resources<https://independentsector.org/blog/what-does-the-new-dol-overtime-eligibility-rule-mean-for-nonprofits/?utm_medium=email&utm_campaign=May%202024%20Voices%20for%20Good&utm_content=May%202024%20Voices%20for%20Good+CID_7b465dd57b7ed2958e81291e281a2e06&utm_source=Email%20marketing%20software&utm_term=Read%20More> on this topic that could help your programs, specifically boards, understand the impact of this rule
     *   There are some "in the weeds" tests as to whether this applies to Main Street roles. We highly recommend the webinar from Independent Sector as helpful to Main Street boards: Overtime Eligibility Rule: Special April-May Policy Update 2024<https://www.youtube.com/watch?v=tBb2HfkIt20>
     *   Note: some states have different rules. Your state's organization for nonprofits may have more specific guidance. For example, all nonprofits are covered in North Carolina.
  *   What does this mean? Broadly, if you have Main Street managers who are salaried employees, but make $40,000/year (for example), that employee is entitled to overtime pay.
  *   What should Main Street organizations do?
     *   Pay Main Street managers appropriately. This may seem like a hard change for organizations, but it is essential that Main Street leaders are compensated. At a minimum, that compensation should be fair under the law. Ideally, boards should look to use this moment to raise the compensation of their staff leaders.
     *   Review organization budgets and roles. Preparing for change means taking an honest look at the actual hours worked by Main Street staff and their current status (exempt vs. non-exempt). Many Main Street leaders work more than 40 hours, but without documentation, it's difficult to assess needs and make the case for improved compensation.
     *   Build in higher salaries to budgets. Increasing compensation in budgets now for January 2025 will help give a more accurate picture of any gaps in budget needs. This could also help with fundraising requests or rationale for increasing contribution from the locality.
     *   Talk to funders about current changes. While it may be difficult for cities to allocate funding mid-year, private funders involved with the organization or local community foundations may be able to provide temporary support.
     *   Reaffirm the value of Main Street leadership. There are strategies to comply with this rule that include reducing hours, utilizing more part-time workers, or reducing services. Certainly, we should find ways to limit leadership time expended on activities that could be done via volunteers (moving orange barrels come to mind). But we should encourage boards to prioritize valuing their Main Street leaders instead of indicating that their work is not worth the investment of effort and resources to meet these changes.


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Sheri Stuart (she, her, hers) |  Oregon Main Street Coordinator
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Oregon Heritage, Oregon Parks and Recreation Department
Desk:  (503)986-0679 cell: (503)551-3705
725 Summer St NE, Ste C
Salem, Oregon 97301

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