Last Wednesday, the Department of Labor announced changes to overtime requirements in its Final Rule. In order for your non-profit organization to be subject to the minimum wage and overtime requirements, your non-profit must be covered in either of these two ways:

  1. Enterprise Coverage: To be considered a “covered enterprise,” your organization must generate sales from commercial activities (gift shops, thrift stores, etc.) of at least $500,000 annually. Many non-profits may not meet this test.
  2. Individual Coverage: If your non-profit is not considered a covered enterprise, an employee is individually covered by the Fair Labor Standards Act if he or she “engages in interstate commerce or in the production of goods for interstate commerce,” according to the Department of Labor’s (DOL) Guidance for Non-Profit Organizations.

Therefore, unless your organization generates $500,000 in sales annually from commercial activities, your organization is not a covered enterprise, so you need to evaluate your employees individually based upon the nature of their work. For more details and specific examples, read the DOL’s Guidance for Non-Profit Organizations or contact your non-profit advisors.