New Report Shows Nonprofit View on Overtime Pay Rule Making

December 17, 2018

Thank you very much to the 400+ nonprofits from across Washington State that participated in our survey designed to assess the impact of the Washington State Department of Labor & Industries’ overtime pay proposal.  We are pleased to share the full report summary with you as well as our new position paper on the topic.

The Department of Labor & Industries extended its deadline for commenting to December 31, 2018. If you are able to, please submit a comment to their engagement site before the deadline. There is no set format for commenting; just share your organization’s view on the proposal either as a comment in their module or as a document that you upload (it can be on letterhead or not, whatever your organization’s style is). If you would like assistance with the process, please contact us.

Washington Nonprofits supports efforts to raise compensation for employees of nonprofit organizations in Washington State.  We recognize that in many industries, the important work being done by nonprofits is undervalued.  In order to work over the long term to improve wages and salaries in the nonprofit sector, Washington Nonprofits works to educate public and private funders about the true costs of providing community services and works to identify new revenue sources to increase nonprofit sustainability. Throughout this rulemaking process, we are making sure to emphasize that:

  • Nonprofits are people-driven organizations. Typically, staffing is the largest expense in nonprofit budgets. Therefore, increases in labor costs hit nonprofits particularly hard.
  • Nonprofits have been doing more with less for many years. Most nonprofits have worked hard to fundraise to maintain services even as costs increase and many revenue sources are flat.
  • We can’t expect private philanthropy to fill the gap. Charitable giving, particularly to human services, may decline because of the 2017 federal tax reform.  In addition, philanthropic and public sources generally refuse to fully fund administrative costs.
  • Most nonprofits operate on a thin margin and have very little financial reserves. Our nonprofits have been under-resourced—starved—for many years. An economic recession or other environmental factors could be devastating for our sector.  In order to ensure that nonprofits can continue to serve our communities, we need to improve their financial stability.

With regard to the current rulemaking process by the Washington State Department of Labor and Industries, we believe the following points are worthy of consideration.   We look forward to participating in discussions with our partners to address some of these concerns to improve the rule.

  1. Work with other state agencies to secure a commitment to raising contract rates to account for the increased cost of doing business, and to escalate on a similar schedule to wages in Washington State.
  2. Set the threshold at a reasonable level, recognizing that even the lower threshold proposed is a big stretch for most nonprofits, particularly those based outside King County.
  3. Phase in the new threshold over time to give nonprofits time to adjust.
  4. Include a provision for prorating the salary threshold for part-time exempt staff.
  5. Develop provisions that address the seasonal nature of some nonprofit work.
  6. Credit organizations for the value of benefits offered to employees to ensure that organizations don’t shift benefits costs to employees or eliminate benefits in order to have the funds to pay increased salaries and/or overtime.
  7. Once the rule is finished, partner with the nonprofit community to deliver compliance trainings statewide.

Click here to download our full position paper, which was informed by our survey results.

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